Category: Daily News

KCRA reports that Todd Phillips, a 17-year veteran Folsom correctional officer, is accused of presenting false claims to the State Compensation Insurance Fund, according to court documents. After a brief court hearing Wednesday, he repeatedly gave the same answer when asked by KCRA 3 about these allegations. “No comment, sir,” Phillips said.

In court documents obtained by KCRA 3, workers’ compensation fraud investigators allege that Phillips repeatedly played in competitive softball tournaments while out on an injury claim. Phillips said he injured himself in November 2010 when he slipped on a prison stairwell, according to court documents. The allegations say the fraud took place between Dec. 27, 2011 and September 2012.

“Workers’ compensation fraud is a big issue in California,” said Nancy Kincade, a spokeswoman for the California Department of Insurance. Kincade would not speak to Phillips’ case specifically. But she said in the past year, the state has received 5,100 complaints of suspected workers’ compensation fraud. She said the estimated losses to employers, businesses and the state is $342 million in the past year alone. “This is something that everybody pays for in higher premiums. … It could keep you from getting a raise because of added cost to employers,” Kincade said.

Because of this issue, Kincade announced the state is granting more than $31 million in funds to district attorney’s offices statewide to prosecute suspected fraud cases. “We know this issue is much bigger than just the cases we hear about, and that’s why we need to put a stop to it,” Kincade said.

Angelotti Chiropractic, Mooney and Shamsbod Chiropractic, Christina-Arana and Associates, Joyce Altman Interpreters, Scandoc Imaging and Buena Vista Medical Services filed a lawsuit last July in the United States District Court contesting the constitutionality of certain provisions of SB 863, and seeking to avoid payment of millions of dollars in lien activation fees before the end of 2013. The suit requests declaratory, injunctive and other relief. Plaintiffs allege that they filed valid liens prior to December 31, 2013 that constitute “vested property rights.” They allege that the mandatory dismissal provisions of the activation fee law unconstitutionally interferes with those rights.

Christina Arana and Associates Inc. holds approximately 4,500 liens, Joyce Altman Interpreters, Inc. holds approximately 4,745 liens, Sandoc Imaging Inc. holds approximately 2,300 liens and Buena Vista Medical Services Inc. allege they hold approximately 20,888 liens. In total Plaintiffs allege they hold “tens of thousands of liens” which require activation fees in an amount of “more than $2 million” and the Plaintiffs allege they presently lack the ability to pay the lien activation fees.

In September, the Defendants Christine Baker, Ronnie Caplane and Destie Overpeck filed a motion to dismiss the lawsuit. The hearing was set for October 24.

With respect to the constitutional issue, the DIR argued that In order to state a claim under the Fifth Amendment’s takings clause of the US Constitution, “a plaintiff must establish that he possesses a constitutionally protected property interest” and that his property was taken without just compensation. Two categories of regulatory action generally will be deemed per se takings for Fifth Amendment purposes. First, where government requires an owner to suffer a permanent physical invasion of its property, it must provide just compensation. A second categorical rule applies to regulations that completely deprive an owner of all economically beneficial use of the property. The DIR argues that Plaintiffs’ liens are not protected property rights for purposes of the takings clause because, under California law,Plaintiffs’ rights to recover on the liens are not vested interests. Unlike a common law right, a statutory remedy does not vest until final judgment. When a pending workers’ compensation claim rests solely on a statutory basis, and when the rights under the statute have not vested in a final judgment, the legislature can modify or entirely repeal the right at any time. Numerous citations were given in the DIR brief to support this argument.

In October, the California Chamber of Commerce entered the litigation requesting a order allowing them to appear as “amicus” or friend of the court, and participate in the debate. Its Amicus Brief supports the arguments provided by the DIR. Essentially it argues that there is no vested property rights in a pre-judgment lien, and cites California Court of Appeal cases in support of this argument.

To balance the litigation, the California Society of Industrial Medicine and Surgery (CSIMS), and the California Workers’ Compensation Service Association, (CWCSA) also requested an order allowing it to appear as amicus in the case. Its filing claims that CSIMS is a non-profit organization comprised of individual physicians, medical service providers and medical groups that provide medical-legal evaluation and medical treatment to California’s injured workers. And CWCSA says it is a non-profit organization representing the individuals and entities that provide document recovery, reproduction, retention and management, language interpretation and translation services, medical transportation and other services to assist California’s injured workers.

CSIMS and CWCSA argue that implementation of the activation fee results In three separate acts of impermissible taking of property rights and also deprives the plaintiffs of due process. Because of the retroactive activation fee requirement it says that “many members of CSIMS and CWCSA will be deprived of their opportunity to be heard, because due to the financial costs, they will not even make it to Court and incur an automatic dismissal without a hearing.” The final section of its brief pleads “Don’t Destroy the System.” It goes on to claim that “amici believe that the retroactive application of an “activation” fee on individuals liens that span decades of time should be viewed as an impact that is so negative that the transactional instability resulting from the imposition of unforeseen costs would adversely impact the entire Act and cause all injured workers who require service to be shunned and viewed as undesirable.”

Unfortunately, the Motion to Dismiss was not heard on October 24 as scheduled. Judge Wu continued the hearing to November 4, 2013 at 8:30 am. After reading the voluminous documents filed in this case by both sides thus far, it would seem that the Plaintiffs will have an uphill battle on that day as they attempt to convince a federal judge that there is good cause to proceed in federal court with a case that seeks to find the imposition of a lien filing fee by the WCAB to be a violation of the US Constitution.

A state workplace safety agency today announced it is resuming an investigation into a company building an elevator at the San Francisco 49ers’ planned new stadium in Santa Clara where a man was killed in June. The San Jose Mercury News says that the California Division of Occupational Safety and Health reported it had rescinded its decision giving Schindler Elevator a notice that no violation occurred in the June 11 death of Donald White, Cal-OSHA spokeswoman Erika Monterroza said.

Cal-OSHA also revealed some new details in the probes of the deaths of White and Edward Erving Lake Jr., who died at the Levi Stadium construction site on Oct. 14. The $1.3 billion Levi Stadium project is to serve as the new home for the 49ers when it is completed next summer. The choice Cal-OSHA made Tuesday to revive its investigation into White’s death came after “some questions were raised, so they are looking at the evidence,” Monterroza said.

The agency, which is not releasing the new questions concerning the White investigation, had mailed Schindler the notice of no violation on Oct. 14, Monterroza said. The agency has until Dec. 11, six months after the accident that killed White, to complete the investigation and decide whether Schindler violated state safety codes, according to Monterroza.

Cal-OSHA can fine a company $7,000 for general and regulatory violations, $25,000 for a serious violation and from $5,000 to $70,000 for a willful violation of occupational safety codes, according to Greg Siggins, a Cal/OSHA spokesman.

White, 63, an experienced mechanic for subcontractor Schindler, was killed while standing beneath the counterweight of an elevator at the stadium site, according to Cal-OSHA public information officer Kathleen Hennessy. Cal-OSHA has since revealed that before the fatal accident, White “was in communication with the person operating the elevator and was aware the elevator was in operation, but did not move,” Hennessy said.

“It’s still somewhat of a mystery” why White did not move while knowing the elevator was coming down toward him, Hennessy said.

The investigation into Lake, an employee of subcontractor Gerdau Ameristeel, found that the 61-year-old truck driver was killed when a bundle of rebar being unloaded from his truck by a forklift fell off the side of his truck and on top of him, Hennessy said. The 30-foot-long bundle contained 30 pieces of steel rebar, used to reinforce concrete, Hennessy said.

“This is another open investigation,” Hennessy said. “For the moment, no citations have been issued, but they might be.”

Jonathan Harvey, project co-director for Turner Devcon, the stadium project’s general contractor, said that Cal/OSHA had not released information to him about the investigations and so he could not comment.

On August 9, 2013, the WCIRB submitted its January 1, 2014 Regulatory Filing to the California Department of Insurance proposing changes to the Insurance Commissioner’s regulations contained in the California Workers’ Compensation Uniform Statistical Reporting Plan – 1995  (USRP), the California Workers’ Compensation Experience Rating Plan – 1995  (ERP), and the Miscellaneous Regulations for the Recording and Reporting of Data–1995  (Misc. Regs.). The Insurance Commissioner held a public hearing on September 30, 2013 to consider the proposed changes.

On October 17, 2013, the Commissioner issued a Decision approving all of the WCIRB’s proposed changes as filed. Among these changes approved effective January 1, 2014 are:

• ;Numerous changes to the Standard Classification System contained in Part 3 of the USRP
• Changes to data reporting requirements to conform to national data reporting specifications
• Amendments to the audit rules to allow for the use of collective bargaining agreements to validate an employee’s hourly wage rate for dual wage classification assignment purposes
• Amendments to facilitate the bifurcation of pure premium rate filings and regulatory filings

In addition, the Commissioner approved a number of regulatory changes to be effective on January 1, 2015 including amendments to the USRP pertaining to policy reporting requirements and significant amendments to the ERP limiting the impact on an employer’s experience modification of a single claim incurred during the experience period to 25 points.

The Commissioner’s Decision pertains only to the WCIRB’s January 1, 2014 Regulatory Filing and does not address the WCIRB’s January 1, 2014 Pure Premium Rate Filing which contains proposed changes to pure premium rates for 2014. The Commissioner has scheduled a public hearing regarding January 1, 2014 pure premium rates for October 28, 2013. See related story, Hearing Date Set for January 1, 2014 Pure Premium Rate Filing.

The WCIRB cannot issue experience modification for policies incepting January 1, 2014 and beyond until the Commissioner issues a Decision with respect to the pure premium rate filing.

The WCIRB is currently updating the USRP, ERP and Misc. Regs. to reflect the Commissioner’s Decision. Once completed, copies of these documents will be posted to the Publications and Filings section of www.wcirb.com. In the interim, the WCIRB has created the Quick Reference Guide 2014 summarizing the approved changes to the regulations.

Swiss customs agents have seized one million fake tablets of anti-anxiety drug Xanax at the Zurich airport,authorities said on Friday. “Counterfeit medicine is one which is deliberately and fraudulently mislabeled with respect to identity and/or source,” states the World Health Organization (WHO). “Counterfeiting can apply to both branded and generic products and counterfeit products may include products with the correct ingredients or with the wrong ingredients, without active ingredients, with insufficient active ingredients or with fake packaging.”

The counterfeit tablets, packed in four crates and weighing 400kg, had originated in China, according to Swissmedic, the Swiss Agency for Therapeutic Products. “Analyses in the Swissmedic laboratory revealed that the drugs, which are prescribed to treat symptoms of acute anxiety, contained no active ingredients whatsoever,” Swissmedic said in a statement. The Swiss regulator said in June that it had already seized about 90 shipments this year representing a high-potential health risk. It also has ordered the shutdown of Internet websites trading drugs illegally. “According to experts, the drugs would be unrecognisable as counterfeits at a first glance.” Xanax is a drug manufactured by Pfizer used to treat severe anxiety or panic disorder. The fake tablets were destroyed.

Developing countries are a massive market for counterfeit medications, a massive trade worth billions of dollars that is often deadly. According to the WHO, fake drugs range from antibiotics to birth-control medicines, anti-tetanus serums, antimalarials, organ transplant drugs, heart disease and diabetes. In parts of Asia, Africa and Latin America, fraudulent medicines are thought to amount to as much as 30 per cent of the market, according to the UN drug agency.

Also making up a large part of medicines sold online, fake medicines can contain the wrong dose of active ingredients or toxic substances such as rat poison, according to the UN drug agency.

Back in July 2012, Chinese police seized $182 million worth of counterfeit medicine in one month during a countrywide sweep. Drugs found during the seizure included medication for diabetes, high blood pressure, and even rabies. Unlike drugs found at the Zurich airport, most of the medication did contain harmful substances.

Governments are fighting to safeguard the distribution of legitimate drugs and crack down on counterfeit products. Systematic checks of medical shipments are carried out every year, and imports of bogus medicines have been declining in Switzerland, Swissmedic said in June. Counterfeit drugs generated an estimated $75 billion in revenue in 2010, according to the National Association of Boards of Pharmacy. Each year more than 100,000 people around the world may die from substandard and counterfeit medications, according to an estimate by Amir Attaran, an associate professor at the University of Ottawa, and Roger Bate, an economist at the American Enterprise Institute.

The United States has a growing problem with counterfeit drugs. In 2012, tainted steroids killed 11 people near Boston and sickened another 100. In another case, vials of the cancer medicine Avastin were found to contain no active ingredients. The vials were sourced in Turkey, shipped to Switzerland, then Denmark, finally to the United Kingdom from which they were exported to U.S. wholesale distributors. The Wall Street Journal reported that the U.S. wholesale distributor was hired by Canada Drugs, which also owns CanadaDrugs.com, a retail pharmacy website that sells prescription medication internationally, with a focus on the American market.

In 2007-08, 149 Americans died from a contaminated blood thinner called Heparin that was legally imported into the United States. Investigated by the FDA Office of Criminal Investigations, the Albers Medical investigation is the most prolific example to date.

On August 21, 2005, the U.S. Attorney’s Office for the Western District of Missouri issued a press release announcing that three businesses and eleven individuals were indicted for their involvement in a $42 million conspiracy to sell counterfeit, smuggled and misbranded Lipitor and other drugs and for participating in a conspiracy to sell stolen drugs. As part of this investigation, FDA initiated a recall of more than 18 million Lipitor tablets, which ranks as the largest recall in the history of criminal investigations of counterfeit medications. Participants in this scheme conspired to purchase and sell counterfeit, misbranded and illegally imported drugs. Foreign versions of Lipitor and Celebrex were smuggled into the U.S. from South America and re-sold after being re-packaged to conceal the true origin of the drugs. Counterfeit Lipitor also was manufactured in South America and then smuggled into the U.S. where it was co-mingled with the genuine foreign Lipitor and sold in the U.S.

In addition, participants conspired to buy, sell and traffic almost eight million dollars worth of stolen Glaxo Smith Kline and Roche drugs, using fake pedigrees to launder the drugs and thereby concealing that they were stolen. There also were charges related to the sale of counterfeit Procrit, as well as counterfeit and misbranded Serostim and Neupogen. Procrit is an injectable drug used in the treatment of anemia and Neupogen is an injectable drug used by cancer patients to stimulate the production of white blood cells in order to decrease the incidence of infections.