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A CNN Investigation into fraudulent drug rehabilitation clinics concluded that the populous Los Angeles region is one of the nation's top hot spots for health care fraud, and former state officials agree it is also ground zero for the rehab racket. To uncover this story on widespread fraud linked to California's drug rehab program, CNN's Special Investigations Unit has teamed up with the independent, nonprofit Center for Investigative Reporting as part of Anderson Cooper AC360's "Keeping them Honest" reports.

Investigative reporters were were stationed in parked cars outside the offices of Able Family Support in the San Fernando Valley, counting the people who came and went on April 4. The clinic, reimbursed by taxpayers for each client it sees, offers in-person drug and alcohol counseling. And Able Family is thriving, according to its billing records.

But according to the reporters, no more than 30 people trickle into the rehab center on April 4 until the doors are locked 10 hours later.

The counting resumed a month later when the clinic submitted its bill to Los Angeles County seeking reimbursement -- not for 30 people, but for 179. The government promptly paid it -- $6,400 for clients Able Family reported it saw April 4. When told of the April 4 stakeout at Able Family, county regulators said they now have questions about whether the payments were legitimate. The findings merit a closer review but "look very incriminating," said a spokeswoman for Los Angeles County's substance abuse department. Able Family operates a small satellite clinic near downtown, the county noted -- but a security guard there said about 25 people came to that office each day.

The simple stakeout on April 4 raises questions about the adequacy of government oversight of the program to help the poor and addicted, built on an honor system in which honor often is lacking. Oversight is marred by infrequent and cursory inspections and by a failure to act even when red flags appear. CIR and CNN have exposed how clinics use coercion and forgery to defraud a taxpayer-funded program meant to help struggling addicts..The investigation also found that people ineligible to run Medi-Cal clinics did not just slip through the cracks -- they walked through doors regulators left wide open.

The Able Family Support Clinic's director, Alexander Ferdman, would not explain the discrepancy. "I can't explain, because you will cut and paste and edit, and my answers will be to a totally different question," Ferdman said in a telephone interview, before hanging up. Felons are supposed to be blocked from running clinics. That didn't stop Ferdman. He entered the rehab racket two years after leaving a Texas prison, where he served time for orchestrating an organized crime scam. Over the course of a decade, he built his clinic into a $2 million-a-year operation -- all from taxpayer money. Prosecutors in Texas had pegged Ferdman as the ringleader of a scam that robbed auto insurers of millions. An indictment from the Travis County district attorney's office says a team of fixers staged crashes and recruited actual crash victims as pawns to generate fake legal and medical bills. One witness described Ferdman as the man who paid off operatives from a briefcase full of cash.

CNN claims that Drug Medi-Cal paid out $94 million in the past two fiscal years to 56 clinics in Southern California that have shown signs of deception or questionable billing practices, representing half of all public funding to the program, CIR and CNN found. Over the past six years, more than half a billion dollars have poured into the program statewide ...
/ 2013 News, Daily News
Excess workers comp insurance is a challenging line to underwrite because it guarantees the payment of catastrophic worker claims that can remain open for decades.

But it's precisely for that reason that self-insured employers want to purchase the excess coverage from an insurer that will be around for decades to come, experts say. It's also why few underwriters offer the insurance as a stand-alone product.

And now, American International Group Inc. disclosed in a 2012 Securities and Exchange Commission filing that it had ceased writing stand-alone excess workers comp cover because of its extremely long tail and risks that make it "one of the most challenging classes of business to reserve for."

Issues that escalate costs - such as obesity, opioid pain medication usage and Medicare set-aside requirements - have pushed excess workers comp underwriters to raise their prices and demand that clients assume greater retentions.

...
/ 2013 News, Daily News
A new California Workers' Compensation Institute (CWCI) report suggests that the number of work injury claims involving obesity could increase sharply, along with the associated costs, following the recent vote by the American Medical Association (AMA) to reclassify obesity as a treatable disease.

In mid-June, the AMA approved a resolution reclassifying obesity as "a disease state," effectively declaring that one third of all Americans suffer from a medical condition that requires treatment, a move that is widely expected to increase pressure on doctors to address the condition when treating obese patients, and on health care payers to pay for obesity consultations and treatment. And that designation, according to the report, will likely affect diverse areas of employment, including the Americans with Disability Act and Equal Employment Opportunity Commission claims; life, disability, and workers’ compensation insurance; weight bias; insurer and provider responsibility; physician reimbursement; and diagnostic and procedure coding.

In workers' compensation, obesity has historically been a co-morbidity - a condition that occurs at the same time, but usually independent of, an injury or illness. In the past, a medical provider might include an obesity co-morbidity code on their medical bill if they felt the condition needed to be addressed so that the work injury could be treated and the patient could recover and return to work (e.g., if an obese injured worker needed to lose weight before they could have back surgery.) Even as a co-morbidity, however, obesity in workers' compensation has gone largely unreported. A CWCI survey from 2011 found that even though 28% of injured workers reported that they were obese, only 0.9% of the job injury claims from those workers included an obesity co-morbidity diagnostic code, indicating that obesity has only infrequently been deemed a condition that needed to be addressed in order to treat most work injuries and illnesses.

CWCI says that may change, however, if medical providers feel a greater responsibility to counsel obese patients about their weight and to treat the condition, especially if there is a greater likelihood that they will be paid for doing so. Aside from its status as a comorbidity, obesity could become a primary workers’ comp diagnosis, particularly in sedentary jobs like office work, or long-haul trucking, according to the report.

"In such scenarios the viability of the claim would likely hinge on proving that the work actually caused the obesity, which would be an issue ripe for dispute and which could lead to additional litigation," the report states. "In light of the increasing evidence of genetic pre-disposition for various medical conditions, defining causation and relative causation will be critical in claims involving obesity, and also may arise in other employment areas such as pre-employment screening."

The "disease" designation doesn’t bode well for employers or for long-term workers’ comp rates employers may be faced with paying if claims do rise, said Jerry Azevedo, a spokesman for the Workers’ Compensation Action Network, a group that represents the interests of employers. "The implications are grim, especially if statutory or case law proves ineffective in limiting employers’ liability to true industrial causation or direct compensable consequences," Azavedo said. "Unfortunately, there’s a tension created through litigation in the workers’ comp system, where plaintiffs’ lawyers want to make everything under the sun a part of the injury claim to run up the bills and inflate benefits. Employers are forced to defend against that and have fought hard for policies that reinforce what should really just be common sense - which is employers should pay for what was directly caused by the work injury. " ...
/ 2013 News, Daily News
Arthritis is a debilitating disorder with pain caused by inflammation and damage to joints. Yet, according to an article in Science Daily the condition is poorly managed in most patients, since adequate treatments are lacking -- and the therapies that do exist to ease arthritis pain often cause serious side effects, particularly when used long-term. Any hope for developing more-effective treatments for arthritis relies on understanding the processes driving this condition.

A new study in the Journal of Neuroscience by researchers at McGill University adds to a growing body of evidence that the nervous system and nerve-growth factor (NGF) play a major role in arthritis. The findings also support the idea that reducing elevated levels of NGF -- a protein that promotes the growth and survival of nerves, but also causes pain -- may be an important strategy for developing treatment of arthritis pain.

To investigate the role of these abnormal sympathetic fibres, the McGill researchers used an agent to block the fibres' function. They found that this reduced pain-related behaviour in the animals. "Our findings reinforce the idea that there is a neuropathic component to arthritis, and that sympathetic nerve fibres play a role in increasing the pain," said McGill doctoral student Geraldine Longo, who co-authored the paper with Prof. Afredo Ribeiro-da-Silva and postdoctoral fellow Maria Osikowicz.

"We are currently using drugs to prevent the production of elevated levels of NGF in arthritic rats; we hope that our research will serve as a basis for the development of a new treatment for arthritis in the clinic," said Prof. Ribeiro-da-Silva.

Apportionment of permanent disability in workers' compensation cases can be based upon causation. As more information about the causation of arthritis is known, opportunities for employers to seek apportionment is enhanced ...
/ 2013 News, Daily News
Michael Vincent Petronella owned several businesses, including The Reroofing Specialists, Inc., doing business as Petronella Roofing, Western Cleanoff, Inc., and Petronella Corporation. In September 2006, an SCIF claims adjuster received a telephone call from Petronella Roofing’s secretary, reporting an employee named Morales was still receiving workers’ compensation benefits although he had returned to work. The adjuster asked the secretary to provide documentation. She received a copy of Morales’s pay stub, reflecting he worked for Western. Noticing that Western had been reported to be dormant and removed from coverage under the policy, but was still listed as an active entity on the Secretary of State’s Web site, the adjuster reported the discrepancy to SCIF’s special investigations unit.

An SCIF claims manager compiled a list of 42 persons who filed workers’ compensation claims under Petronella Roofing’s policy whose payroll had not been reported to SCIF. A certified public accountant compared the payroll reports and audit documents defendant provided SCIF with the quarterly employee wage reports actually received by EDD. The accountant prepared a report reflecting the difference between the quarterly payroll defendant reported to EDD and the payroll reports he submitted to SCIF from the fourth quarter of 2000 to the fourth quarter of 2008. Over that 8-year span, the difference in payroll reported to EDD and that reported to SCIF exceeded $29 million.

The prosecution charged defendant with one count of grand theft, 36 counts of violating Insurance Code section 11880, subdivision (a), plus numerous tax evasion crimes. The information also alleged an enhancement under Penal Code section 186.11, subdivision (a). During trial, the court dismissed the grand theft charge at the prosecution’s request and granted defendant’s motion for acquittal on the bulk of the tax evasion charges. The jury found defendant guilty of 33 counts of violating Insurance Code section 11880, subdivision (a), but acquitted him on three other similar counts and the remaining tax evasion charges. As to counts 2 through 20, the jury returned true findings the prosecution of these charges began within four years of when the crime reasonably should have been discovered. Finally, the jury also found defendant engaged in a pattern of related fraudulent felony conduct resulting in over $500,000 in losses.

The superior court sentenced defendant to 10 years in state prison. It also and ordered him to pay $500,000 in restitution under Penal Code section 1202.4. Defendant appeals from the judgment raising numerous evidentiary, instructional, and sentencing issues. Both defendant and the People appeal from the trial court’s restitution award. The Court of Appeal reversed the trial court’s restitution order, but otherwise affirmed the judgment in the published case of The People v Michael Vincent Petronella.

The Court concluded that "a review of the trial court’s reasons for awarding SCIF $500,000 in restitution clearly indicates it abused its discretion in reaching this decision." By " failing to consider all of the evidence presented to it concerning restitution and relying on irrelevant factors to pick a figure out of thin air that was less than what the jury found to have been SCIF’s loss..." The matter was remanded to the Superior Court for further proceedings on the restitution award ...
/ 2013 News, Daily News
The insurer and public members of the WCIRB Governing Committee voted unanimously to authorize the WCIRB to submit two filings to the California Department of Insurance. The first filing will contain proposed changes to the Insurance Commissioner’s January 1, 2014 and January 1, 2015 workers’ compensation regulations and will be submitted to the CDI on August 9, 2013. The second filing, which will be submitted to the CDI on or around August 19, 2013, will contain proposed January 1, 2014 advisory pure premium rates.

Traditionally, the WCIRB submitted a single filing containing proposed changes to both the regulations and advisory pure premium rates. This year, the CDI and the WCIRB developed a bifurcated filing process in order to allow insurers more time to modify their operational systems to reflect any approved regulatory changes.

The proposed January 1, 2014 advisory pure premium rates that will be included in the WCIRB filing average approximately $2.62 per $100 of payroll, which is 3.4% above the industry average filed pure premium rate of $2.53 per $100 of payroll as of July 1, 2013.

These proposed advisory pure premium rates reflect the WCIRB’s most current evaluation of Senate Bill No. 863 (published October 12, 2012); however, these proposed advisory pure premium rates do not reflect any provision for the impact of the new physician medical fee schedule which is based on the Resource Based Relative Value Scale (RBRVS) and is under consideration by the Division of Workers’ Compensation (DWC). If the DWC adopts the new schedule, the WCIRB anticipates modifying its proposed advisory pure premium rates based on its evaluation of the cost impact of the new schedule on policy year 2014 medical costs.

The WCIRB’s August 9, 2013 regulatory filing will include proposed amendments to the California Workers’ Compensation Uniform Statistical Reporting Plan - 1995 (USRP), the Miscellaneous Regulations for the Recording and Reporting of Data - 1995 (Miscellaneous Regs) and the California Workers’ Compensation Experience Rating Plan - 1995 (ERP) effective January 1, 2014. The amendments to the USRP include (1) changes to the Standard Classification System, (2) changes to data reporting requirements to conform to national data reporting specifications, and (3) an amendment to provide for the use of collective bargaining agreements to validate an employee’s hourly wage rate for purposes of assignment to a high wage dual classification for audits on policies with an expiration date on or after January 1, 2014. Additionally, a number of amendments will be proposed to the USRP, Miscellaneous Regs and the ERP to facilitate a bifurcated filing process and for clarity and consistency.

The WCIRB will also propose 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 intended to constrain the impact of a single claim incurred during the experience period to 25 percentage points ...
/ 2013 News, Daily News
About half of a small group of patients with fibromyalgia -- a common syndrome that causes chronic pain and other symptoms -- was found to have damage to nerve fibers in their skin and other evidence of a disease called small-fiber polyneuropathy (SFPN). Unlike fibromyalgia, which has had no known causes and few effective treatments, SFPN has a clear pathology and is known to be caused by specific medical conditions, some of which can be treated and sometimes cured. The study from Massachusetts General Hospital (MGH) researchers will appear in the journal PAIN and has been released online.

"This provides some of the first objective evidence of a mechanism behind some cases of fibromyalgia, and identifying an underlying cause is the first step towards finding better treatments," says Anne Louise Oaklander, MD, PhD, director of the Nerve Injury Unit in the MGH Department of Neurology and corresponding author of the Pain paper.

The term fibromyalgia describes a set of symptoms -- including chronic widespread pain, increased sensitivity to pressure, and fatigue -- that is believed to affect 1 to 5 percent of individuals in Western countries, more frequently women. While a diagnosis of fibromyalgia has been recognized by the National Institutes of Health and the American College of Rheumatology, its biologic basis has remained unknown. Fibromyalgia shares many symptoms with SFPN, a recognized cause of chronic widespread pain for which there are accepted, objective tests.

Designed to investigate possible connections between the two conditions, the current study enrolled 27 adult patients with fibromyalgia diagnoses and 30 healthy volunteers. Participants went through a battery of tests used to diagnose SFPN, including assessments of neuropathy based on a physical examination and responses to a questionnaire, skin biopsies to evaluate the number of nerve fibers in their lower legs, and tests of autonomic functions such as heart rate, blood pressure and sweating.

The questionnaires, exam assessments, and skin biopsies all found significant levels of neuropathy in the fibromyalgia patients but not in the control group. Of the 27 fibromyalgia patients, 13 had a marked reduction in nerve fiber density, abnormal autonomic function tests or both, indicating the presence of SFPN. Participants who met criteria for SFPN also underwent blood tests for known causes of the disorder, and while none of them had results suggestive of diabetes, a common cause of SFPN, two were found to have hepatitis C virus infection, which can be successfully treated, and more than half had evidence of some type of immune system dysfunction.

"Until now, there has been no good idea about what causes fibromyalgia, but now we have evidence for some but not all patients. Fibromyalgia is too complex for a 'one size fits all' explanation," says Oaklander, an associate professor of Neurology at Harvard Medical School. "The next step of independent confirmation of our findings from other laboratories is already happening, and we also need to follow those patients who didn't meet SFPN criteria to see if we can find other causes. Helping any of these people receive definitive diagnoses and better treatment would be a great accomplishment." ...
/ 2013 News, Daily News
The Division of Workers’ Compensation (DWC) has issued a 15 day notice of modifications to proposed physician fee schedule regulations. Comments on the modifications will be accepted until Aug. 19. Modifications to the proposed physician fee schedule were made following stakeholder comments provided during a comment period that ended with a public hearing on July 17.

Under these proposed regulations
  • The maximum reasonable fee formulas are revised to apply average statewide geographic adjustment factors to the work, practice, and malpractice expense relative value units (RVUs) for procedures other than anesthesia.
  • A separate average statewide geographic adjustment factor will be applied to anesthesia services.
  • The transition conversion factors were revised in light of RAND’s refined modeling and application of the average statewide geographic adjustment factors.
  • The regulation was revised to clarify the applicability of the 1995 or 1997 evaluation and management documentation guidelines.
  • The proposed regulation was revised to clarify the hierarchy that should be used to determine payment for procedures with status indicator codes C, N, R, or I.
  • The proposed regulation was revised to clarify "AAs" are "certified anesthesiologist assistants" instead of the term used by Medicare, "anesthesia assistants." Added clarifying language regarding applicability of the MEI to the workers’ compensation specific codes and updated the maximum reasonable fees to estimated 2014.
Text of the proposed amendments to the physician fee schedule and related documents listed above to be posted on the DWC rulemaking webpage. Members of the public are invited to present written comments regarding the proposed modifications by 5 p.m. on Monday, Aug. 19. DWC will consider only comments it has received by that time ...
/ 2013 News, Daily News
Fitch Ratings affirmed the 'AA' rating on approximately $559.5 million in California Infrastructure and Economic Development Bank workers compensation relief bonds, series 2004A and 2004B. The bonds are limited obligations of the infrastructure bank, payable solely from pledged revenues consisting primarily of special bond assessments imposed by the California Insurance Guarantee Association (CIGA) upon all insurers providing workers compensation insurance policies in the state.The bonds are secured by a first lien on an unlimited, mandatory special assessment on all insurers writing workers compensation policies in the state. The special assessment is established annually at a level projected to provide 1.1x coverage, and supplemental assessments may be levied as necessary.

The bonds are secured by a first lien on a mandatory and unlimited special benefit assessment (SBA) charged to all insurers writing workers' compensation policies in California. CIGA sets the SBA rate annually at a level projected to cover expected debt service by 1.1x; if insufficient, supplemental SBAs may be levied as necessary to ensure coverage. The minimum levy is 1% of net direct premium. CIGA's calculation of the SBA includes a variance factor for series 2004B, which were issued as auction rate bonds and are held by the bank.

CIGA's regular assessment on workers compensation insurers, levied at 1% of net direct premium, and the SBA are deposited first to the trustee to meet debt service requirements; regular assessments are available to CIGA thereafter. By statute, CIGA may use other resources including its regular assessment to pay bonds, but these funds are not pledged. Moreover, if an insurer's payment is insufficient, amounts received are statutorily applied first to cover the SBA levy. Residual SBA revenues are held by the trustee and available for early bond repayment. A debt service reserve is also funded at maximum annual debt service.

Fitch noted that the California workers compensation system has undergone considerable reform over the last decade. Prior to reforms in 2003 and 2004, the market faced a high level of payouts, fierce price competition, and subsequent insurer insolvencies and voluntary departures from the market. Reforms included significant changes to medical delivery and treatment for injured workers, higher statutory deposit requirements for insurers, higher regular assessments on insurers, and authorization for up to $1.5 billion in bonds supported by the SBA.

The outstanding bonds were issued in 2004, with proceeds used by CIGA to pay claims on insolvent insurers. A second issuance, planned for 2006, was never undertaken. The remaining bond authorization, which was intended to expire in 2006, has been extended by the state's legislature. Interest on the auction rate bonds is calculated on a weekly basis, linked to one of two short-term reference rates. The authorization provides flexibility to CIGA to refund the 2004B auction rate bonds, if necessary, should interest rates rise significantly. Any additional issuance also requires levying a sufficient SBA as well as consent of the state insurance commissioner ...
/ 2013 News, Daily News
The Medical Board of California, Department of Consumer Affairs has filed an accusation against Ronald Glousman, M.D., of the Kerlan Jobe Orthopedic Clinic in Los Angeles alleging sexual misconduct while performing an evaluation of a workers' compensation claimant. The Accusation is a public record and contains the following information.

The alleged victim was identified as "patient R.A., a Spanish-speaking male, who sustained injuries at work when a rack toppled over and struck him on the right shoulder and right side of his head. As a result, patient R.A. filed a worker's compensation claim." He then suffered two additional injuries including to his spine while at work.

The patient was then allegedly seen by Philip A. Sobol, M.D., at the Sobol Orthopedic Medical Group, Inc. in 2008 for a worker's compensation evaluation. Dr. Sobol diagnosed R.A. with right shoulder sprain/strain/contusion/tendinitis, cervical sprain/strain with right upper extremity radiculitis, spondyolosis of the cervical spine at C4-C5, and a lumbar sprain/strain.

Because of the patient's continued complaints about his right shoulder Dr. Sobol requested a worker's compensation authorization for a surgical consultation with Ronald Glousman, M.D. (Respondent). Respondent is an orthopedic surgeon specializing in sports medicine, and shoulder, elbow, and knee injuries at Kerlan-Jobe Orthopaedic Clinic.

During the course of Glousman's treatment of the claimants shoulder, he allegedly conducted an examination of patient's hip and groin area on several occasions after asking the patient to remove his pants and underwear.

The accusation alleges that because "of what occurred in the last two follow up visits, the patient decided to record this examination. The patient positioned his cell phone's video camera to capture a majority of the examination room and table." Allegedly the patient obtained a video recording of sexual misconduct at the time of this visit, according to the allegations of the Accusation. Allegedly Dr. Glousman provided information to the Board about this event and "admitted that by the time he walked back into the examination room Respondent intended to engage in a sexual act with R.A."

According to the Board, the conduct constitutes "sexual exploitation of a patient" in violation of law, for which the Board seeks to revoke his Physicians and Surgeons Certificate in addition to other relief.

The Accusation is in the preliminary stages of litigation, and Dr. Glousman of course can have evidentiary hearings to disprove any or all of these allegations, and his license status will be determined at the end of any litigation process he may follow ...
/ 2013 News, Daily News
Attorneys representing John Pike and the University of California will try to reach a deal over the former UC Davis police lieutenant’s worker’s compensation claim, out of court and away from the media spotlight. The sides had been scheduled to take part in a mandatory settlement conference on Aug. 13 in Sacramento to discuss Pike’s claim of psychiatric injury. That hearing has been scratched from the calendar, according to State Department of Industrial Relations spokesman Peter Melton. The case will not go before a judge unless the sides fail to reach an agreement.

Pike, a former U.S. Marine with 17 years of law enforcement experience, gained worldwide notoriety after he pepper-sprayed seated, unarmed Occupy UC Davis protesters who blocked police on a Quad sidewalk on Nov. 18, 2011. Hackers posted his personal information online, and Pike received threatening calls and emails.

After the Davis Enterprise first reported Pike’s injury claim on its website July 25, the pepper-spraying regained regional and national attention. That may have pushed the sides back to the table.

Protesters with ties to Occupy UCD had planned to hold a tongue-in-cheek "support" rally for Pike outside the scheduled hearing, mocking an injury claim that would see the former cop "rewarded" for his actions, in the words of Davis attorney Bernie Goldsmith. Because the hearing was removed from the court calendar, another event, the Officer Pike Fiesta of Emotional Support has also been canceled. The fiesta was meant as an opportunity for a demonstration for those opposed to Pike receiving workers’ compensation.

Pike ceased to be a university employee in July 2012. He was fired, according to a Sacramento Bee account, despite a confidential internal affairs investigation finding his actions "reasonable" and recommending discipline, not termination. He remains entitled to retirement credit for his years of service, but he was to receive no other payout. He collected eight months of his $121,680 annual salary while being investigated by a separate task force that found both the police and UCD administration at fault.

Protesters pepper-sprayed or arrested that day split a $1 million settlement. Criminal charges were not filed against police or protesters ...
/ 2013 News, Daily News
A provision in bipartisan Senate postal reform legislation would overhaul workers’ compensation policies for all federal employees.

Titled the 2013 Workers’ Compensation Reform Act, the provision -- introduced by Sens. Tom Carper, D-Del., and Tom Coburn, R-Okla. -- would cut benefits for federal workers injured on the job once they reach retirement age. Currently, federal employees receive 66 2/3 percent of their basic salary tax-free, designed to approximately replicate their entire post-tax salary. That figure is bumped to 75 percent if the employee has dependents. Related medical expenses are also covered.

The new plan would trim the benefit to 50 percent of an employee’s salary, once that employee is eligible for retirement. Additional compensation for dependents would no longer be provided.

The changes would not affect individuals eligible for retirement on the date of the bill’s enactment, those with an exempted disability condition or those who "face financial hardship" -- such as workers eligible for food stamps. The proposal also contains a provision that would boost efforts to help employees on workers’ compensation return to work.

A similar proposal was included in the postal reform bill Carper sponsored last Congress, which cleared the Senate but died in the House. Some Democrats and federal employee unions opposed that measure.

Rep. Darrell Issa, R-Calif., chairman of the House Oversight and Government Reform Committee, has expressed support for previous Senate proposals to overhaul the federal workers’ compensation system. Issa’s own postal reform bill included changes for only postal workers’ compensation, but he said during the bill’s markup he only put them in so the final bill would adopt the Senate’s broader plan after going through conference negotiations ...
/ 2013 News, Daily News
San Diego Hospital Based Physicians (SDHBP) and its two owners, Dr. Maria Ramirez and Dr. Dalia Strauser, sued El Centro Regional Medical Center alleging the Hospital retaliated against plaintiffs for complaining about patient care practices. The Hospital is a municipal agency owned by the City of El Centro and is governed by a seven-person Board of Trustees. SDHBP is an entity that provides hospitalist personnel and services. SDHBP is owned by Dr. Strauser and Dr. Ramirez, who both specialize in internal medicine and hospital medicine. Dr. Strauser has practiced medicine for more than 20 years and Dr. Ramirez has practiced medicine for more than 15 years. Hospitalists are generally internal medicine doctors who treat hospitalized patients to ensure they receive proper care, including diagnosis and appropriate specialty referrals.

According to allegations in the complaint, the Hospital hired Team Health, Inc. to manage and operate the Hospital's emergency department. Shortly after, SDHBP became concerned about Team Health's practices and the nature of the contract between the Hospital and Team Health, which SDHBP believed negatively affected patient care. SDHBP doctors found that Team Health physicians frequently admitted patients into the Hospital (or sought to compel SDHBP physicians to do so) despite the fact that these patients were not properly stabilized, diagnosed, or treated in the emergency room and/or that they should have been transferred to other hospitals with available surgeons and/or necessary medical equipment.

Dr. Ramirez and Dr. Strauser reported to Hospital administrators "at the highest levels" their concerns about patient care arising from Team Health practices and operations. The doctors identified approximately 35 specific cases of inadequate patient care. Later, SDHBP sent an email to Dr. George Hancock, the Hospital's chief of medicine (who became medical chief of staff on January 1, 2011), detailing 19 separate cases in which Team Health and Hospital practices allegedly negatively affected patient care in a substantial manner. SDHBP also sent the email to several other Hospital officials, including the Board president, the Hospital's chief of staff, and the Hospital's quality committee chair.

On March 22, 2011, the Hospital's Board held its monthly public meeting. During a closed (nonpublic) portion of this meeting, the Board voted to terminate the SDHBP Agreement "without cause." When Dr. Strauser asked Hospital official Virgen why the Agreement was terminated, he allegedly said " 'you turned on the light and all the cockroaches ran away scared.' "

Several months later, plaintiffs filed their lawsuit against the Hospital and Team Health. Plaintiffs alleged five causes of action against the Hospital. In the first three, plaintiffs alleged the Hospital violated statutes prohibiting retaliation against physicians for complaining about, or advocating for, patient care. The Hospital moved to strike the complaint under the anti-SLAPP statute. (§ 425.16.) The Hospital argued that plaintiffs' complaint arose from constitutionally protected activity because it was based on the Board's contract termination decision, which it said was a "quasi-legislative" act made at an "official proceeding." The trial court denied the motion, and the Hospital appealed. The Court of Appeal sustained the denial of the anti-SLAPP motion in the unpublished opinion of San Diego Hospital Based Physicians vs El Centro Regional Medical Center.

One of the elements required to reject an anti-SLAPP motion to dismiss is a determination that there is a "probability" that plaintiffs will prevail on its claims. In meeting this burden, the plaintiff cannot rely solely on the allegations in the complaint and must present evidence that would be admissible at trial. The Court of Appeal concluded that plaintiffs met this burden, and may proceed with their case ...
/ 2013 News, Daily News
The Insurance Journal reports that American Claims Management Inc., a national third party administrator (TPA), has been selected as the workers’ compensation TPA for El Camino Hospital in Northern California. Under the terms of the contract, which was effective July 1, 2013, ACM will manage claims, bill review, managed care, subrogation, investigation and other ancillary services for new claims. ACM will also take over the administration of approximately 300 existing claims from the prior TPA.

"After conducting a very thorough search, we are excited to work with ACM," said Sandra Speer, director of Employee and Labor Relations at El Camino Hospital. "ACM is well-suited to help us manage workers’ compensation claims while continuing to provide quality care for our employees."

"El Camino Hospital and ACM are a great match because both companies embrace innovation," says Deirdre Gonzalez, president of ACM’s Workers’ Compensation Division. "In fact, El Camino Hospital and its advanced robotics program were featured in a piece by 60 Minutes showcasing the economic impact of robots. So, it’s no surprise that the organization sought an equally forward-thinking TPA."

Since 1988, American Claims Management has been a nationwide third party claims administrator specializing in both commercial and personal lines ...
/ 2013 News, Daily News
CFO.com reports that nine states have seen significant workers' compensation reform bills signed into law in 2013. Oklahoma's workers' compensation reform laws have received the most attention lately because of the inclusion of an opt-out provision, known as the Oklahoma Option. The Oklahoma Option is significantly different from the Texas opt-out option. Employers that opt out in Texas cannot simply endorse their excess liability policy to cover Oklahoma. Rather, employers in Oklahoma that choose the option are required to provide a written benefit plan that serves as a replacement for the workers' compensation coverage. This benefit plan must provide for full replacement of all indemnity benefits offered in the workers' compensation system. The key component of the Oklahoma Option for employers is that it gives them full control of the medical treatment through their benefits plan. Unlike the Texas opt-out, the Oklahoma Option does not permit employees to pursue a negligence action through the civil courts.

The recently passed reform bill in Delaware was designed to control medical costs and encourage return-to-work efforts.

The use of physician-dispensed medication has been a significant issue in Florida workers' compensation. Physicians were charging several times what the same medication would cost from a retail pharmacy, and the costs were not regulated by a fee schedule. New law creates a maximum reimbursement rate for physician-dispensed medication of 112.5% of the average wholesale price, plus an $8 dispensing fee.

Legislation passed in Georgia should have a positive impact on workers' compensation costs for employers. Effective July 1, 2013, medical benefits for non-catastrophic cases are capped at 400 weeks from the date of accident, whereas previously, injured workers were entitled to lifetime medical benefits for all claims.In Indiana, legislation was passed that establishes a hospital fee schedule at 200% of Medicare rates. This is consistent with other states that base their fee schedules on Medicare rates.

Minnesota joined most other states in amending its statutes to allow for mental-mental injuries (a psychiatric disorder without a physical injury).

Missouri's reforms were focused on addressing the insolvent second injury fund and returning occupational disease claims to the workers' compensation system.

Recent legislative changes in New York will reduce employer costs by about $800 million annually. These savings are derived primarily by streamlining the assessment collection process and eliminating the 25-a fund and its associated assessments. New York's workers' compensation assessments are the highest in the nation, so employers welcome any relief in this area.

Tennessee and Oklahoma both moved its workers' compensation dispute resolution process from a court-based system to an administrative system, leaving Alabama as the only state that still uses the trial courts for all such litigation.

...
/ 2013 News, Daily News
EMPLOYERS Insurance celebrated its 100th anniversary on July 31, 2013. In recognition and celebration of its rich history, EMPLOYERS hosted commemorative events at its Reno, Nevada headquarters and at its offices across the country.

The company originated in 1913 as Nevada’s State Fund as a means to increase workplace safety for the state’s workers and provide insurance for the state’s businesses. After a successful and industry-leading privatization in 2000, the organization transformed in 2005 into a mutual holding company, the first ever in Nevada. In 2007, EMPLOYERS demutualized and completed an initial public offering to become a publicly traded company listed on the New York Stock Exchange. The company has continually added to and expanded its operations to better meet the needs of more small businesses, as well as to increase the ease of doing business with insurance agents. Today, the company operates in 31 states and the District of Columbia.

"EMPLOYERS’ growth and evolution from a monopolistic state fund to a publicly traded company is impressive. Its 100-year anniversary is a tremendous milestone, and it couldn’t have been achieved without the support of our dedicated and talented employees, as well as our valued policyholders, agents, partners, and shareholders. Together, we have delivered on an ambitious vision," stated Douglas D. Dirks, president and chief executive officer. Dirks added: "I’m very proud of what we have accomplished as an organization and am confident of our future as we continue to help America’s small businesses succeed."

Employers Holdings, Inc. is headquartered in Reno, Nevada and listed on the New York Stock Exchange. EMPLOYERS is a holding company with subsidiaries that are specialty providers of workers' compensation insurance and services focused on select small businesses engaged in low-to-medium hazard industries. The company, through its subsidiaries, operates coast to coast. Insurance is offered by Employers Insurance Company of Nevada, Employers Compensation Insurance Company, Employers Preferred Insurance Company, and Employers Assurance Company, all rated A- (Excellent) by A.M. Best Company ...
/ 2013 News, Daily News
In the first effort of its kind, the nonprofit publisher of Consumer Reports magazine released ratings of 2,463 U.S. hospitals in all 50 states on Wednesday, based on the quality of surgical care. The group used two measures: the percentage of Medicare patients who died in the hospital during or after their surgery, and the percentage who stayed in the hospital longer than expected based on standards of care for their condition. Both are indicators of complications and overall quality of care, said Dr John Santa, medical director of Consumer Reports Health.

According to the story in Reuters Health, the ratings will surely ignite debate, especially since many nationally renowned hospitals earned only mediocre ratings. The Cleveland Clinic, some Mayo Clinic hospitals in Minnesota, and Johns Hopkins Hospital in Baltimore, for instance, rated no better than midway between "better" and "worse" on the CU scale, worse than many small hospitals. Because CU had only limited access to data, the ratings also underline the difficulty patients have finding objective information on the quality of care at a given facility.

Nevertheless, "this is a step in the right direction," said Paul Levy, former president of Beth Israel Deaconess Medical Center in Boston, who was not involved in the project. "To whatever extent you can empower patients to get better care and become partners in pushing the healthcare system to make improvements is to the good."

CU's ratings are based on Medicare claims and clinical records data from 2009 to 2011 for 86 kinds of surgery, including back operations, knee and hip replacements, and angioplasty. The rates are adjusted to account for the fact that some hospitals treat older or sicker patients, and exclude data on patients who were transferred from other hospitals. These are often difficult cases that, CU felt, should not be counted against the receiving hospital.

Although the ratings do not explicitly incorporate complications such as infections, heart attacks, strokes, or other problems after surgery, the length-of-stay data captures those problems, said Santa.

Some of the findings are counterintuitive. Many teaching hospitals, widely regarded as pinnacles of excellence and usually found at the top of rankings like those of U.S. News and World Report, fell in the middle of the pack.

"This isn't the first time we've seen this sort of surprise," said Dr Marty Makary, a surgeon at Johns Hopkins Hospital and author of the 2012 book, "Unaccountable: What Hospitals Won't Tell You and How Transparency Can Revolutionize Health Care." "For a complex procedure you're probably better off at a well-known academic hospital, but for many common operations less-known, smaller hospitals have mastered the procedures and may do even better" with post-surgical care.

CU also found that several urban hospitals did well despite serving many poorer, sicker patients, including Mount Sinai Hospital in New York and University Hospitals Case Medical Center in Cleveland. Rural hospitals did better, on average, than other hospitals, and many hospitals practically unknown beyond their zip code outranked famous ones, including Kenmore Mercy near Buffalo, New York; Arrowhead in Glendale, Arizona; Sacramento Medical Center in California; and Arkansas Heart in Little Rock ...
/ 2013 News, Daily News
The owner and operator of a durable medical equipment (DME) supply company was sentenced yesterday to serve 24 months in prison for conspiring to submit nearly $1 million in fraudulent claims to Medicare.

Tigran Aklyan, 37, of Van Nuys, California, was sentenced today by U.S. District Judge Michael W. Fitzgerald in the Central District of California. In addition to his prison term, Aklyan was sentenced to serve three years of supervised release and ordered to pay $653,461 in restitution.

In April 2013, Aklyan pleaded guilty to conspiracy to commit health care fraud. In his plea agreement, Aklyan admitted that he was the owner and president of Las Tunas, a DME supply company located in San Gabriel, California. Aklyan admitted that from in or around October 2007 through in or around May 2009 he conspired with others to commit health care fraud by providing medically unnecessary power wheelchairs and other DME to Medicare beneficiaries and submitting false and fraudulent claims to Medicare. Aklyan admitted that he paid the owners and operators of fraudulent medical clinics to provide him with prescriptions and supporting medical documentation for the power wheelchairs and DME that he billed to Medicare. Aklyan knew that the prescriptions and medical documents that the clinics produced were fraudulent, yet he certified to Medicare with the submission of each claim that the DME was medically necessary. Aklyan also admitted that he knew that it was illegal for him to pay for prescriptions, but he did so anyway.

From on or about December 17, 2007, through on or about February 20, 2009, Aklyan, through Las Tunas, submitted approximately $910,377 in fraudulent claims to Medicare for PWCs and related services, and Medicare paid Las Tunas approximately $653,461 on those claims.

The case was investigated by the FBI and the Los Angeles Region of HHS-OIG and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Central District of California. This case is being prosecuted by Assistant Chief Benton Curtis and Trial Attorneys David M. Maria and Blanca Quintero of the Criminal Division’s Fraud Section ...
/ 2013 News, Daily News
Angelotti Chiropractic, Mooney and Shamsbod Chiropractic, Christina-Arana and Associates, Joyce Altman Interpreters, Scandoc Imaging and Buena Vista Medical Services filed a lawsuit yesterday in the United States District Court, Central District of California seeking to avoid payment of millions of dollars in lien activation fees before the end of 2013. The Defendants are Edmund G. Brown (Governor), Kamala D. Harris (Attorney General), Christine Baker (DIR Director), Ronnie Caplane (WCAB Chair) and Destie Overpeck (DWC Acting Director)

The suit requests declaratory, injunctive and other relief and challenges the constitutionality of certain provisions of SB 863 that retroactively impose a $100 "activation" fee on workers' compensation liens filed prior to January 1, 2013. 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 interfere with those rights.

The Plaintiffs also complain that other "large holders of workers' compensation liens are arbitrarily exempted from the fee" such as insurance companies, HMOs and labor union benefit plans. Thus they say that SB 863 "specifically targets independent providers of services to workers' compensation claimants and was adopted with the purpose of destroying their liens."

Thus, they allege that these "provisions of SB863 are unconstitutional under the Takings, Due Process and Equal Protection Clauses of the United States Constitution. Accordingly, this action seeks preliminary and permanent injunction preventing Defendants from enforcing these provisions of SB863."

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.

The complaint will now be served on the defendants, who will likely demur the complaint. This will test the legal validity of the Plaintiff's' constitutional theories before a federal judge. After that step, should they survive the demurrer, it is likely that the case will be submitted by way of the summary judgment process inasmuch as there are no substantial disputes as to the facts. This case will move rapidly through the federal system, at least at the trial level ...
/ 2013 News, Daily News
Despite guidelines to treat back pain conservatively, the proportion of people prescribed powerful painkillers or referred for surgery and other specialty care has increased in recent years, according to a new study reported in Reuters Health. "This is kind of concerning," said Dr. Steven Cohen, an anesthesiologist and critical care doctor at the Johns Hopkins School of Medicine in Baltimore who didn't participate in the research. Surgery, injections and scans for back pain "have all gone up pretty dramatically," he told Reuters Health. "We have increased utilization, yet we don't have better treatment outcomes."

The American College of Physicians and the American Pain Society recommend that people with low back pain consider treatment with Tylenol or non-steroidal anti-inflammatory drugs (NSAIDs), as well as heating pads and exercise. The groups say doctors should only order CT and other scans when they suspect nerve damage. Opioids are only recommended for patients with "severe, disabling pain" that doesn't get better with over-the-counter medicines - and their risks, such as for abuse and addiction, should be weighed against potential benefits.

For the new study, Dr. Bruce Landon from the Harvard Medical School in Boston and his colleagues tracked nationally-representative data on outpatient visits for back and neck pain collected between 1999 and 2010. The researchers had information on about 24,000 visits, which represented a total of 440 million appointments across the U.S.

During that span, they found the proportion of patients prescribed Tylenol and NSAIDs dropped from 37 percent to 25 percent. At the same time, the proportion given narcotics rose from 19 percent to 29 percent. About 11 percent of people with back pain had a CT or MRI scan in 2009 and 2010, compared to seven percent in 1999 and 2000. Finally, although the rate of referrals to physical therapy held steady during the study period, the proportion of patients referred to another doctor - likely for surgery or other treatments - doubled from seven to 14 percent, the researchers reported Monday in JAMA Internal Medicine. "Physicians want to offer patients treatments that are going to work sooner and patients are demanding them and sometimes it's just easier to order the MRI or order the referral," Landon said. But, he added, "They often lead to things that are unnecessary and expensive and maybe not better in the long run and maybe even worse," such as surgery or injections that haven't proven to be effective.

According to the National Institutes of Health, eight out of ten people have back pain at some point in their lives. One of the difficulties of treating back pain, Cohen said, is that there are so many possible causes - including disc, joint and nerve problems. He said the strongest evidence supports treating the pain with exercise, including stretching and some aerobic activity. Landon said 95 percent of patients will recover from back pain with a little bit of time and conservative treatment. "They key thing for patients is, give it time," he told Reuters Health. "Patients expect and want it to get better in seconds and that's not always going to happen. But if you give it time, work on it, do stretching and physical therapy exercises, that's what's going to make it better in the long run." ...
/ 2013 News, Daily News