Menu Close

Category: Daily News

En Banc WCAB Adds Disabilities for SIBTF Calculation

Richard Todd, a former police officer, sustained a cumulative trauma injury arising out of and in the course of his employment with the City of Los Angeles to his kidneys, heart, psyche, and in the form of hypertension during the period from January 1, 1990 through November 25, 2009.

A Findings and Award issued on March 6, 2012 against the employer of 64% permanent disability as a result of applicant’s injury to his kidneys, heart, and in the form of hypertension. After filing a petition to reopen, the parties stipulated to 68% permanent disability, In addition, there had been five prior stipulated awards in unrelated cases. Together, Todd made an argument for a 100% permanent disability award against the Subsequent Injuries Benefits Trust Fund.

The WCJ found that the sum of applicant’s successive disabilities entitled applicant to permanent and total disability.

The sole issue presented by the SIBTF Petition for Reconsideration was whether the WCJ correctly combined applicant’s prior and subsequent permanent disabilities under section 4751 by adding them to find that applicant is permanently and totally disabled. The WCJ findings were affirmed in the en banc decision of Todd v Subsequent Injuries Benefits Trust Fund.

SIBTF is a state fund that provides benefits to employees with preexisting permanent disability who sustain subsequent industrial disability. The preexisting disability may be congenital, developmental, pathological, or due to either an industrial or nonindustrial accident. It must be “independently capable of supporting an award” of permanent disability, “as distinguished from [a] condition rendered disabling only as the result of ‘lighting up’ by the second injury.” There is no specific statute of limitations with respect to the filing of an application against SIBTF.

Once the threshold requirements are met, section L.C. 4751 provides that applicant “shall be paid in addition to the compensation due under this code for the permanent partial disability caused by the last injury compensation for the remainder of the combined permanent disability existing after the last injury . . . .”

The Court of Appeal’s decision in Bookout v. Workers’ Comp. Appeals Bd. (1976) 62 Cal.App.3d 214 [41 Cal.Comp.Cases 595], addressed the issue of how to determine the “combined permanent disability” as specified in section 4751.

The use of the MDT or CVC to combine multiple impairments or permanent disabilities with respect to the rating of single injuries, but not to combine successive permanent disabilities related to prior and subsequent injuries under section 4751. Under section 4751, non-overlapping successive permanent disabilities are to be added.

SIBTF is liable, under section 4751, for the total amount of the “combined permanent disability,” less the amount due to applicant from the subsequent injury and less credits allowable under section 4753.

WCIRB Expands Classification Inspection Report Program

The WCIRB collects and validates classification data for all California employers. This data is critical to ensuring that policyholders engaged in common industries are similarly classified. It is also key to the publication of accurate experience modifications and the use of the data for ratemaking.

As part of this effort, the WCIRB’s team of Field Representatives conducts on-site reviews at policyholders’ business locations to gather a detailed description of the operations and to verify the classifications that apply to their business. Based on this review, the Field Representative prepares a Classification Inspection Report that is sent to the both policyholder and their current insurer.

Effective July 1, 2020, the WCIRB is expanding its Special Inspection Report program to allow agents and brokers to request a WCIRB physical inspection of their clients’ California business operations. This new service is in response to frequent inquiries from agents and brokers for the WCIRB to conduct a physical inspection in order to affirm the standard classification applicable to an employer’s business. Prior to July 1, 2020, only the insurer of record could make a request of the WCIRB to conduct one of these Special Inspections.

The fee for conducting a Special Inspection is $200 per location inspected. The WCIRB will invoice the requesting insurer, agent or broker, once all location inspections are completed and the reports pub-lished. The WCIRB typically completes and publishes Special Inspections within 30 days of the request.

To request a Special Inspection, an agent or broker must complete the Agents/Brokers Request for WCIRB Inspection of Insured – Form 501a (available via WCIRB Connect®) and submit it electronically to the WCIRB Contact Center. For agent and broker requests, the Contact Center will initiate a digital authorization from the policyholder to ensure that the policyholder approves of the request.

For more information about this service, please contact the WCIRB Contact Center at customerservice@wcirb.com or 888.229.2472. A detailed overview of the WCIRB Classification Inspection Report can be found in the Learning Center on the WCIRB website at wcirb.com.

PBS Documentary Investigates Opioid Drugmaker Corruption

What role have pharmaceutical companies played in fueling America’s epidemic of opioid addiction, and how have they and their stockholders profited?

This question has been answered by a new PBS documentary, Opioids Inc., documenting how one drug company bribed doctors, committed insurance fraud and made millions for Wall Street investors pushing a highly addictive opioid painkiller – and how it then became the first pharmaceutical company to have its CEO sentenced to prison time in federal court in connection with the opioid crisis.

The company was Insys Therapeutics, the CEO was John Kapoor, and the drug was Subsys, a fast-acting fentanyl-based spray that is 50 to 100 times stronger than heroin. Approved for treating cancer pain, it was prescribed much more generally, helping the company’s sales reach more than $300 million at their peak and stock prices on Wall Street surging.

Opioids, Inc. examines how federal prosecutors prepared the case against Insys by pursuing a novel strategy, using anti-racketeering laws designed to fight organized crime and working their way up the company’s ranks – and how they ultimately arrived at a “smoking gun”: a spreadsheet ordered by Kapoor that showed how Insys tracked the money that went to doctors, and what the company got in return.

The documentary tells the inside story of the corruption behind Insys’ spectacular rise – a scheme that federal prosecutors said went all the way to the top, and that involved paying doctors to prescribe extreme doses of Subsys to their patients – and how investors looked the other way.

A former sales representatives from Kapoor’s company describe a culture of unbridled greed, detailing how they targeted high-prescribing doctors and nurse practitioners known as “whales.”

“It wasn’t about cancer patients. It was about getting as many people as you could on the drug,” says former sales representative April Moore, adding, “Low doses aren’t that much money. Higher dose, more money.”

The company even held contests for the sales team: the higher the doses they got doctors to write, the larger the cash prize – despite the dangers to patients.

At the same time, the company was misleading insurers to approve prescriptions of the drug: “None of what we were saying was truthful,” a former prior authorization specialist says. “We’re just pocketing the money off of a prescription that should’ve never been approved anyway. That’s insurance fraud.”

Opioids, Inc. will be available to watch in full at pbs.org/frontline, on YouTube, and in the PBS Video App. An in-depth Financial Times story will publish at FT.com and at pbs.org/frontline.

DWC Sets Online MTUS Public Hearing for July 23

The Division of Workers’ Compensation has issued a notice of conference call public hearing for proposed evidence-based updates to the Medical Treatment Utilization Schedule (MTUS), which can be found at California Code of Regulations, title 8, section 9792.23.

The conference call public hearing is scheduled for Thursday, July 23 at 10 a.m. and members of the public may attend by calling 866-390-1828 and using access code 5497535#. Members of the public may review and comment on the proposed updates no later than July 23.

The proposed evidence-based updates to the MTUS incorporate by reference the latest published guidelines from American College of Occupational and Environmental Medicine (ACOEM) for the following:

— Occupational Interstitial Lung Disease Guideline (ACOEM November 8, 2019)
Knee Disorders Guideline (ACOEM December 3, 2019)
— Workplace Mental Health Guideline: Depressive Disorders (ACOEM February 13, 2020).
— Occupational/Work-Related Asthma Guideline (ACOEM June 5, 2020)

The proposed evidence-based updates to the MTUS regulations are exempt from Labor Code sections 5307.3 and 5307.4 and the rulemaking provisions of the Administrative Procedure Act. However, DWC is required under Labor Code section 5307.27 to have a 30-day public comment period, hold a public hearing, respond to all the comments received during the public comment period and publish the order adopting the updates online.

$1M Fees and Costs Awarded in FEHA Claim Following Industrial Injury

Noe Abarca worked for Citizens of Humanity in their quality control department, inspecting boxes of jeans. He suffered an an industrial injury with a work restriction. After the work restriction expired, Citizens fired Abarca.

Abarca sued Citizens and prevailed on his claims for retaliation, disability discrimination, failure to prevent discrimination and retaliation under the Fair Employment and Housing Act (FEHA), and wrongful termination.

The jury found that, while Citizens had other nondiscriminatory reasons for terminating Abarca, its ultimate decision to fire him was based on discrimination and constituted conduct that was malicious, oppressive, or fraudulent.

The jury awarded Abarca $100,000 in compensatory damages: $35,000 for past lost earnings; $20,000 in other past economic loss; $45,000 in past noneconomic loss including mental suffering; and nothing for future noneconomic loss. The jury also awarded Abarca $550,000 in punitive damages.

Abarca’s attorneys represented him on a contingency basis, with no retainer. Abarca moved for an award of attorney fees in the amount of $1,652,255, plus a multiplier of 2.0, for a total of $3,304,510 under Government Code section 12965, subdivision (b).

The trial court awarded Abarca attorney fees in the sum of $1,084,160 pursuant to Code of Civil Procedure sections 1032 and 1033.5 and Government Code section 12965, subdivision (b).

The trial court did not reduce the number of hours billed, finding them reasonable and noting that “[t]his case was litigated to the hilt. Defendant litigated every possible issue, in this court’s opinion, at times, excessively. If the number of hours here is exceptional, that is the reason why. An exceptional number of hours is required to overcome an exceptionally tenacious defense.”

The trial court did, however, find Abarca’s attorneys’ hourly rates excessive, reducing the hourly rates of three attorneys from $700 to $450, another’s rate from $700 to $500, an associate’s rate from $350 to $300, and the rate of two paralegals from $200 to $125. The trial court also denied Abarca’s request for a multiplier.

With the exception of clerical mathematical errors, the Court of Appeal affirmed the award of fees and costs in the unpublished case of Abarca v Citizens United.

A laundry list of errors were asserted by Citizens, and the discussion in the Opinion is an excellent treatise on the award of fees and costs in FEHA litigation. It concluded that “It is disingenuous to engage in aggressive litigation tactics and then complain about the fees those tactics generated from the opposing side.”

L.A. Pharmacist Charged with Price Gouging KN95 Masks

Misdemeanor price gouging charges have been filed by the California Attorney General against Katrin Golian, doing business as RxAll Pharmacy, an independently-owned business located at 1125 South Beverly Drive, Suite 100, Los Angeles, California.

On March 4, 2020, Governor Gavin Newsom declared a state of emergency in response to the COVID-19 pandemic, which triggered price gouging prohibitions statewide. The Governor later issued Executive Order N-44-20, which prohibits businesses that did not sell certain emergency-related items prior to the emergency declaration from charging a price for the items that is greater than 50 percent more than the seller’s cost of purchase.

The criminal complaint alleges that Ms. Golian, a licensed pharmacist, knowingly sold KN95 masks at prices exceeding the 50 percent mark-up permitted under the executive order. This is the first time that charges have been filed under Governor Newsom’s executive order on price gouging.

Following a consumer complaint against RxAll Pharmacy, an investigation conducted by the California Department of Justice revealed that Ms. Golian had been purchasing individual masks for $5 each and selling them at $10 each – 100 percent more than her cost for the masks – despite the Governor’s executive order.

After being warned by special agents that the price of the masks violated the Governor’s executive order, Ms. Golian acknowledged the warning and agreed to reduce the price on masks.

Several days later, special agents returned to RxAll Pharmacy and found that Ms. Golian was still selling masks at the same price she had previously been told violated the order. Ms. Golian sold undercover agents two masks at the unlawful price of $10 each.

Under California law it is unlawful to refuse or willfully neglect to obey any lawful order issued under the Emergency Services Act. Violation of this section is punishable as a misdemeanor, including imprisonment in county jail for not more than six months and/or a fine of not more than $1,000. This offense has a one-year statute of limitations.

Emergency Regulations Mandate Recalculation of Comp Premiums

The California Insurance Commissioner issued an Order adopting emergency workers’ compensation regulations in response to the COVID-19 pandemic.

These new regulations will mandate insurance companies to recompute premium charges for policyholders to reflect reduced risk of loss consistent with Commissioner Lara’s April 13 and May 15, 2020 Bulletins, and will result in savings for many policyholders as businesses continue to struggle financially during the COVID-19 pandemic.

The new regulations will go into effect on July 1, 2020.

Under these emergency regulations, employers are permitted to reclassify an employee if the employee’s duties have changed to a clerical classification that has reduced risk than the employee’s previous classification.

This reclassification will reduce the employer’s premiums for employees who are a lower risk because they are now working from home even though they may not have previously done so. This change would be retroactive to March 19, 2020, the first day of the Governor’s statewide stay-at-home order, and conclude 60 days after the order is lifted.

These emergency regulations also exclude from premium calculations the payments made to an employee, including sick or family leave, while the employee is not performing duties of any kind for the employer. Typically, these payments would be used as a basis for the employer’s workers’ compensation premium. This change will lower the employer’s rate by reducing the amount of payroll assessed, and the employer will not pay premium for paid workers who are otherwise being furloughed.

This new regulation will also exclude claims related to a COVID-19 diagnosis from being included in future rate calculations so that employers are not penalized with higher rates due to COVID-19 claims.

Insurers will also be required to report injuries involving a diagnosis of COVID-19 which will allow the Commissioner’s statistical agent – the WCIRB – to keep track of COVID-19 injuries, and will aid in the WCIRB’s future analyses of the workplace and market impacts.

Five Charged in Sober Living Facility Insurance Fraud

A joint effort by the California Department of Insurance and the Orange County District Attorney’s Office has led to charges against five defendants in connection with a fraud ring allegedly designed to traffic vulnerable substance abuse patients from outside California into treatment facilities in Orange and Riverside counties and to bilk insurance companies out of millions of dollars.

Authorities charged Jeremy Ryan, 42, of Orange, Daniel Reaman, 41, of Mount Rainier, Maryland, Richard Roberts, 61, of Stockton, Reiner Nusbaum, 54, of San Clemente, and Michael Castanon, 56, of San Juan Capistrano, with multiple felony counts including insurance fraud, money laundering, and conspiracy.

The defendants face between 12 years, 8 months and 21 years and four months in prison for their alleged involvement in a scheme that resulted in $60 million in fraudulent billing and $11.7 million in insurance losses.

Authorities allege that Ryan, Reaman, and five previously charged defendants used mass media marketing campaigns to identify addicted “clients” from across the country who were seeking treatment. The conspirators and their witting employees then falsified clients’ health care insurance applications to circumvent California residency requirements and closed enrollment periods, employed a money-laundering scheme they devised to conceal their involvement in paying clients’ insurance premiums, and trafficked their clients into Southern California treatment facilities.

The conspirators allegedly used their own nonprofit, Healthcare Relief Foundation, and exploited the unwitting non-profit, StopB4UStart, to conceal their involvement in funding their scheme.

Authorities further allege they conspired with the owners and employees of over 17 substance treatment facilities, including facilities owned by defendants Roberts, Nusbaum and Castanon, to traffic clients into these facilities in order to collect thousands of dollars on their investment in unlawful, per-client, kickbacks.

Roberts, Nusbaum, and previously charged conspirators owned and operated RNR Recovery and Diamond Recovery, both Orange and Riverside County businesses offering inpatient detox treatment and residential sober living and assistance. Castanon owned and operated Luminance Recovery Center, a San Juan Capistrano based treatment facility.

Deputy District Attorney James Bilek of the Insurance Fraud Unit at the Orange County District Attorney’s Office is prosecuting this case.

S.F. District Attorney Files DoorDash Misclassification Case

San Francisco’s District Attorney has joined a growing chorus of California regulators and enforcement officials taking aim at gig economy companies for what they see as the misclassification of workers as contractors.

The chief prosecutor announced the filing of an employee protection action against DoorDash alleging the company has and continues to illegally misclassify its delivery workers as independent contractors when, in fact, they are employees. The action seeks restitution for workers, an injunction requiring DoorDash to properly classify its delivery workers as employees, and civil penalties.

DoorDash is a business that delivers food, beverages and other items from local restaurants and stores to nearby customers. It refers to its delivery workers as “Dashers” and employs them to pick up orders from merchants and deliver them to customers. DoorDash is headquartered in San Francisco.

According to the complaint, misclassification is a major issue negatively impacting California workers. The California Supreme Court has discussed that misclassification is a “very serious problem” that was depriving “millions of workers of the labor law protections to which they are entitled.”

The California Legislature has stated that misclassification contributes to the rise in income inequality and the shrinking of the middle class.

Additionally, the San Francisco Board of Supervisors recently adopted a Resolution urging “City Attorney Dennis Herrera and District Attorney Chesa Boudin to seek immediate injunctive relief to prevent the misclassification of San Francisco workers as they seek to access basic workplace rights like paid sick leave, unemployment insurance, and benefits provided under the San Francisco Health Care Security Ordinance.”

Under California’s protective labor laws, workers are presumed to be employees and it is the employer’s burden to justify classifying workers as independent contractors.

The District Attorney also claims that “properly classifying employees is especially important during the ongoing COVID-19 pandemic. Dashers were already performing dangerous work, forced to navigate traffic conditions as quickly as possible to make their deliveries or risk being suspended or terminated by DoorDash. The job of a Dasher became substantially more perilous during this pandemic. Dashers have been deemed essential workers yet DoorDash does not even provide them with workers’ compensation insurance and prevents them from having access to paid sick and disability leave under state laws.”

COVID-19 Distancing Rules Becoming a “Political Hazard”

The first wave of COVID-19 came slowly to San Joaquin County in the heart of California’s breadbasket, but the much-feared second surge is roaring through, sickening as many people in the two weeks since Memorial Day as in March and April combined.

In San Joaquin County, Health Officer Maggie Park attributes the rise in cases to two cherry packing plants where people are working in close proximity, and to families and friends gathering without wearing masks or physical distancing, along with recent moves to re-open the economy.

Hospitalizations have spiked by 40%, and the county is one of ten in the most populous U.S. state put on a watch list of places that might be ordered to lock down their economies again after weeks of careful reopening.

But Reuters reports that when Michael Tubbs, mayor of the county seat of Stockton, submitted an ordinance requiring residents to wear masks when they are in public, he did not get a single vote from the six other members of the city council.

It is “a political hazard to act in the interest of public health,” complained Tubbs, a liberal whose city has several conservatives on the council.

The pushback Tubbs experienced – and the spike in cases the county’s health director says was exacerbated when people celebrated Mothers Day and Memorial Day without following physical distancing rules – offers a glimpse into the complicated politics around lifting coronavirus restrictions.

Last week, the chief health officer for Orange County in Southern California resigned amid protests and personal attacks after she issued an order to wear masks in public. Four other health officers in California have resigned or retired in the last two months, as have two public health department directors, local media have reported as cases and deaths continue to rise in the state.

On Tuesday, the state reported nearly 160,000 confirmed COVID-19 cases and over 5,200 deaths.

Health directors and the U.S. Centers for Disease Control and Prevention say wearing face coverings in public is essential to slow the spread of the virus.

Public health restrictions run against the grain of individualism in American culture, and often generate resistance, said U.C. Berkeley epidemiologist Arthur Reingold. Chafing under rules requiring masks in public is reminiscent of prior health care emergencies, such as the uproar that followed efforts to close gay bath houses during the HIV epidemic, Reingold said.

Throughout the country, resistance to public health measures has also taken on a partisan tinge. A Reuters/Ipsos survey conducted last month found that just one-third of Republicans were “very concerned” about the virus, compared to nearly half of Democrats. Trump eschews wearing a mask in public, while his Democratic opponent in November, Joe Biden, generally wears one.

In California, Governor Gavin Newsom has loosened the state’s shutdown even as cases in some areas continue to rise. Stockton, which also has a number of conservative members of the county Board of Supervisors, is emblematic of places where wearing a mask has become politicized.