Category: Daily News

Once strictly the domain of research labs, gene-sequencing tests increasingly are being used to help understand the genetic causes of rare disease, putting insurance companies in the position of deciding whether to pay the $5,000 to $17,000 for the tests. But, according to an article in Reuters Health, a number of insurers, including Blue Cross Blue Shield, have reacted by putting the brakes on reimbursement. Insurers are demanding proof that the results will lead to meaningful treatments among the estimated 2 million Americans with a serious, undiagnosed disease, still an unlikely prospect in the majority of cases.

Genetics experts say that sequencing more than doubles the chances that families get a diagnosis, and saves spending on multiple tests of single genes. Even if no treatment is found, the tests can also end hugely expensive medical odysseys as parents frantically search for the cause of their child’s furtive illness.  Until the reimbursement issue is resolved, some smaller diagnostics players will likely stay on the sidelines, leaving the field to early adopters of the technology such as Ambry Genetics and Bio-Reference Laboratories’ GeneDx. And families short on resources will be left scrambling for funding.

Howard Jacob was the first to use gene-sequencing tools to unravel the mystery of a rare disease in 2009, leading to a bone marrow transplant that saved a little boy named Nic Volker. Five years later, Jacob’s molecular genetics lab at the Medical College of Wisconsin has done more than three dozen whole genome sequences, a test that reads the more than 3 billion letters that make up the human genetic code. They have sequenced 400 whole exomes, tests that look only at the protein-making segments of DNA known as exons, which represent 2 percent of the genome but account for 85 percent of disease-causing mutations.

Baylor College of Medicine in Houston, Texas, has handled 3,500 exome-sequencing cases since it started offering the test in 2011. A study of its first 250 cases showed whole exome sequencing identified the disease-causing gene in 25 percent of cases. Since the findings were published last October, the rate has increased to 28 percent as the list of known mutations has grown, said Dr. Christine Eng, who directs Baylor’s Whole Genome Sequencing Laboratory. Eng said insurance companies initially paid for most of the tests, but as volume has increased, more claims are getting denied. “There are some companies that are saying out and out, we won’t cover this test.”

Dr. Allen Bale, director of the DNA Diagnostic Lab at Yale School of Medicine in Connecticut, has seen a 500 percent increase in orders for exome sequencing since 2011. The lab does about 750 whole exome tests a year, and there, too, reimbursement is becoming an issue.

Dr. Julie Kessel, who directs coverage policy for Cigna, said sequencing requests were scarcely noticed five years ago. Now, “they’re very, very much on the radar.” Cigna generally does not cover whole genome or whole exome sequencing unless there is a clear clinical reason.

At Aetna Inc, Dr. James Cross, vice president of national medical policy and operations, said sequencing has gotten ahead of the evidence. Traditionally the company has made coverage decisions based on the individual test and whether it affects patient outcomes, he said. “With sequencing, you’ve got a lot of information that we don’t have that kind of evidence around.”

Last August, one of the industry’s biggest players, Blue Cross Blue Shield, issued a report saying exome sequencing might pinpoint the genetic cause of disease in up to half of patients, but only a fraction of those will be able to use that as guidance because treatments don’t exist yet. Since then, Blues plans in Louisiana, North Carolina and Pennsylvania have deemed exome sequencing “investigational,” meaning not eligible for coverage.

Insurers say their objections stem from a lack of evidence that the tests can improve patient care. But, there are some celebrated examples that it can, such as Alexis Beery of California, whose genetic defect left him with health problems similar to cerebral palsy. Genome sequencing led to highly effective treatments to replace the missing neurotransmitters that were causing the symptoms.

The legal difference between a Court of Appeal case that is published, or unpublished is not well known in the workers’ compensation community. The difference is the result of California Rules of Court section 8.1115. This Rule provides that “an opinion of a California Court of Appeal or superior court appellate division that is not certified for publication or ordered published must not be cited or relied on by a court or a party in any other action.” An attorney who refers to an unpublished opinion in a Court subject to the California Rules of Court violates the Rules, and is subject to sanctions. Thus, an unpublished opinion does not set precedent that can be used in similar litigation in a Court subject to the California Rules of Court.

However, the WCAB is not subject to the California Rules of Court. It has its own rules of Practice and Procedure. The WCAB does not have an equivalent to Rule 8.1115. For that reason, litigants can refer to an “unpublished” opinion at the WCAB trial level, and on Reconsideration, but not in cases that move to the Court of Appeal and above. LexisNexis publishes the California Compensation Cases, volumes containing California workers’ compensation Appeals Board decisions and appeals court cases. This publication includes the text of unpublished Court of Appeal opinions, and litigants can use the California Compensation Cases citation to unpublished cases that would otherwise not appear in the Official Reporter of the California Courts. The legal effect of an unpublished opinion in a workers’ compensation case as a result of this Court Rule is somewhat murky.

Last month the Court of Appeal decided in the then unpublished case of The Regents of the University of California v WCAB and Shirley Lappi that Labor Code section 5708 sets forth a general rule authorizing the WCAB to adopt its own “rules of practice and procedures” and specifies that in the conduct of hearings and investigations, the WCAB “shall not be bound by the common law or statutory rules of evidence and procedure.” However, when it comes to the treatment of privileged information specifically, division 8 of the Evidence Code trumps this provision of the Labor Code. Division 8 expressly applies to “any action, hearing, investigation, inquest or inquiry (whether conducted by a court, administrative agency, hearing officer, arbitrator, legislative body, or any other person authorized by law) in which . . . testimony can be compelled . . . .” Moreover, Evidence Code section 910 explicitly overrides any other statute which might otherwise be viewed as limiting application of the “rules of evidence” generally: “The provisions of any statute making rules of evidence inapplicable in particular proceedings, or limiting the applicability of rules of evidence in particular proceedings, do not make this division inapplicable to such proceedings.”

The Court of Appeal concluded that “In light of these provisions, it is clear that while the WCAB is free to adopt rules of practice and procedures which ignore the “rules of evidence” set forth in the Evidence Code, it nonetheless remains bound by the statutory requirements for dealing with privilege found in division 8 of that code, including section 915. As a consequence, the WCAB erred in this case when it ordered an in camera review of the University’s allegedly privileged documents by a special master for the purpose of assessing the merits of that privilege claim.”

Fortunately, the Court of Appeal recognized the importance of this previously unpublished opinion. On June 17, it issued the following order. “The opinion in this matter filed on May 23, 2014, was not certified for publication. Requests have been received to order publication of the opinion and it appears that our opinion meets the standards set forth in California Rules of Court, rule 8.1105(c). The requests are GRANTED. The opinion is ordered published in the Official Reports.”

The decision can now be cited at the WCAB level and above, and has become binding precedent on all lower courts and judges.

The health of the workers’ compensation system in California and statewide economic trends likely to impact the system in the future were among the topics discussed at this months Annual WCIRB Workers’ Compensation Conference in San Francisco. The Conference is an opportunity for WCIRB members and other industry stakeholders to discuss issues of common concern and to hear from leading voices in the California workers’ compensation system.

WCIRB President and CEO Bill Mudge opened the Conference with a “health checkup” on the State’s 101 year old workers’ compensation system from the perspective of injured workers, employers and insurers. Based on Mr. Mudge’s observations, “vital signs” for the California system are mixed.

1) For injured workers, fewer injuries and timely access to care and benefits are balanced by concerns over the level of wage replacement, the problems associated with high rates of long-term opioid use and delays getting back to work.
2) For employers, fewer injuries, numerous insurance choices and a charged rate level that remains approximately 50% below what it was a decade ago are balanced against a litigious, costly and complex workers’ compensation system.
3) For insurers, the size of the workers’ compensation market, pricing flexibility and competition are balanced against volatile insurer results, unpredictable outcomes, and a complex benefit delivery system.

Overall there has been an 83% reduction in claim frequency in the past 50 years. 85% of injured workers who responded to a survey were satisfied with the medical care they received. Yet California has 47% of lost time claims with permanent disability. This ranks as the seventh highest state. California is among the top ten states with longer term opiate use.

A multi-agency task force led by the California Department of Insurance, consisting of more than 100 detectives and investigators focused on curbing California’s underground economy, conducted a sweep across major metropolitan areas statewide issuing more than 60 citations for various violations and six work stop-orders. Investigators also took the opportunity to educate homeowners about their responsibility to verify contractors have a license and workers’ compensation insurance before they hire them.

Homeowners who hire contractors or vendors that do not have proper licenses or workers’ compensation insurance may risk their home and assets if someone is injured on their property or shoddy work results in damage to their home. Many homeowner policies have a criminal activity clause that means the insurance company may not cover damage caused by shoddy work performed by an unlicensed contractor or liability coverage if a worker is injured and the contractor does not have workers’ compensation insurance.

“Homeowners must be aware of their obligation to verify that contractors they hire have proper licenses and valid workers’ compensation insurance,” said Insurance Commissioner Dave Jones. “It is not worth risking your home or other assets because you hired an unlicensed contractor or didn’t take the time to verify their license and insurance coverage. A few minutes spent ensuring your contractor or vendor is following the law is a small investment to protect yourself and your assets.”

At a private home in the Los Angele area investigators found a sub-contractor working on the job site without workers’ compensation insurance. According to detectives, the homeowner was surprised to learn he was responsible for verifying not only the general contractor’s workers’ compensation insurance, which he had done, but also for all sub-contractors. Other violations found among the nearly 100 businesses contacted included no workers’ compensation insurance, no valid contractor’s license, serious safety violations cited by the Division of Occupational Safety and Health, including one with an estimated $20,000 regulatory fine. The Contractors State License Board found six violations, ranging from advertising to safety issues. The Employment Development Department identified 15 possible administrative violations.

“California’s underground economy results in a multi-billion dollar hit to California’s economy,” said Insurance Commissioner Dave Jones. “This fraudulent activity hurts legitimate businesses that play by the rules. The coordinated effort of this multi-agency task force is an ongoing effort to level the playing field by putting a stop to the illegal activities of business owners that cheat the system at the expense of law abiding businesses and consumers.”

Roque Neri Hernandez filed a claim against Geneva Staffing, Inc.as a result of a severe crush injury to his right dominant hand on July 11, 2011 During his initial hospitalization, applicant had three surgeries on his hand. Once he was home, he developed a serious infection in his hand, which necessitated a fourth surgery on September 19, 2011. Then, on December 20, 2011, he had a fifth surgery. Further surgery on applicant’s right hand has been recommended.

Applicant was cared for at his home by his spouse. A handwritten note on St. Mary’s Medical Center letterhead stated “This is to notify that Neri Hernandez Roque has been under the care of Dr. Charles K. Lee for severe injury to his right hand since 7-11-11 at which time he has needed constant care from his wife Adrianna Bayona. Mr. Neri Hernandez will need continuous care as his ongoing treatment goes on. [sic]” What appears to be a signature for Dr. Lee is scrawled on the bottom of the letter.

In his November 5, 2012 report, Dr. Gordon opined that: “As far as the second question which relates to an attendant, I do feel that it is reasonable for the patient to have support, transportation, and attendant care at the rate of six hours per day. There does not appear to be any particular need for skilled nursing as at this time there are no bandages or unusual care that is needed, and this would be at the unskilled level.”

Applicant sought an order for home health care services provided by his spouse; an award “for retroactive payment . . . to the date of injury payable to the applicant as a medical benefit;” and attorney’s fees. Applicant contended that his spouse’s testimony was an adequate basis to determine the hourly rate of reimbursement. Defendant contended that the November 11, 2011 report by Dr. Lee was not a valid prescription for home health care services as it did not specify the type of care or number of hours of care required; that neither Dr. Lee’s nor Dr. Gordon’s report was sufficient to determine the type of care required; and that Senate Bill [SB] 863 controlled.

A Findings and Award, found that applicant was entitled to medical treatment in the form of home health care services beginning on August 3, 2011 and continuing and awarded applicant payment for self-procured home health care services. He awarded services for 24 hours per day, 7 days per week from August 3, 2011 to November 4, 2012, and for 6 hours per day, 7 days per week from November 5, 2012 and continuing. He awarded payment based on applicant’s spouse’s regular hourly rate of pay at the day care center where she worked. Defendant sought reconsideration and contended that newly enacted Labor Code sections 4600(h) and 4603.2(b)(1) applied.

The WCAB reversed in the en banc decision of Hernandez v Geneva Staffing. With regard to the SB 863 additions and amendments to the Labor Code regarding home health care services, which became effective January 1, 2013, the Appeals Board held:

1) Sections 4600(h), 4603.2(b)(1), and 5307.8 apply to requests for home health care services in all cases which are not final regardless of date of injury or dates of service.
2) The prescription required by section 4600(h) is either an oral referral, recommendation or order for home health care services for an injured worker communicated directly by a physician to an employer and/or its agent; or, a signed and dated written referral, recommendation or order by a physician for home health care services for an injured worker.
3) Under section 4600(h) home health care services are subject to either section 5307.1 or section 5307.8; section 5307.1 applies where an official medical fee schedule or Medicare schedule covers the type of home health care services sought; and otherwise, section 5307.8 applies.

Section 4600(h) makes clear that home health care services are included in the definition of “medical treatment,” but it also limits an employer’s duty to provide that treatment by imposing two additional conditions which are part of an injured worker’s burden of proof. The first condition requires that home health care services be prescribed by a physician, and an employer may become liable for home health care services provided 14 days prior to receipt of a prescription. The second condition requires that an employer’s liability for home health care services is subject to either section 5307.1 or section 5307.8. Section 5307.1 applies where an official medical fee schedule or Medicare schedule covers the type of home health care services sought. When the type of services sought is not covered by an official medical fee schedule or Medicare schedule, section 5307.8 applies.

The WCAB concluded that the note written by Dr. Lee “is a prescription for home health care services within the meaning of section 4600(h).” But the WCAB went to on conclude “It may be that defendant received medical records from the hospital from before November 11, 2011 containing a referral or recommendation for home health care services or providing notice of applicant’s need for home health care services. Applicant’s spouse’s testimony suggests that Dr. Lee may have communicated with defendant about applicant’s need for home health services and at a minimum, raises an inference that defendant may have received notice of the need for home health care services such that it should have investigated. Thus, we are unable to determine based on the evidence in the record before us whether the liability period may have begun at an earlier time.” Thus “we rescind the Findings and Award and return the matter to the WCJ for further development of the record consistent with this opinion and a new decision.”