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On March 8, 2011, Clifford Mulford fell from a ladder while working for El Toro RV Inc. as a service writer. He sustained a catastrophic brain injury as a result of his fall and spent several months in the hospital. At the time of his release from the hospital, he was experiencing residual left side weakness, decreased memory, fatigue, and seizures.

Applicant was evaluated by H. Richard Adams, M.D., a neurologist. The parties appeared for a second expedited hearing on January 15, 2013 on the issue of the provision of home health care. At the hearing, applicant presented the WCJ and defendant with a note from Dr. Adams, dated January 14, 2013, that reads, "Home health or or [sic.] case manager RN to eval for ongoing home health assistance."

The workers' compensation administrative law judge found that applicant sustained industrial injury to his head and brain. The WCJ found that defendant was not liable for home health care from October 23, 2012 to the present,. In the accompanying Opinion on Decision, the WCJ explained that labor code section 4600(h) applied retroactively to applicant's injury, and that applicant had not met his burden of showing that his doctor had prescribed home health care.

Applicant timely sought reconsideration, contending that the WCJ erred in finding that defendant was not liable for home health care from October 23, 2012 to the present. Applicant argues that section 4600(h) does not apply to his case. Alternatively, applicant argues that if section 4600(h) does apply to his case, he has met his burden of proof under section 4600(h). Reconsideration was denied in the panel decision of Mulford v El Toro RV inc.

The WCAB agreed with the WCJ that the language in SB 863 "clearly indicates that [section 4600(h)) applies to all pending cases prospectively from the date the statute became effective regardless of the date of injury[.)" (Report, p. 4.) Accordingly, it was applicant's burden to prove that home health care services were "reasonably required to cure or relieve" applicant's injury, and "prescribed by a physician and surgeon." (Lab. Code, § 4600(h).)

Applicant has not done so. Dr. Adams's December 5, 2012 Report does not include a prescription for home health care services. To the contrary, it makes no mention of home health care. Similarly, Dr. Adams's January 14, 2013 note does not prescribe home health care services. Instead, it prescribes an evaluation to determine whether home health care services should be provided. Reconsideration was therefore denied.

Commissioner Sweeney in a dissenting opinion concurred with the majority that the recently-enacted Labor Code section 4600(h) applies to this case. However, "I would rescind the WCJ's finding and return the matter to the WCJ to develop the record and obtain a supplemental report from applicant's primary treating physician." ...
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Drugs are approved by the Food and Drug Administration (FDA) to treat specific diseases and conditions. While doctors are free to prescribe them for other diseases, drug companies are prohibited from promoting those other uses, since they have not been tested by the FDA.

Johnson and Johnson and its subsidiary, Janssen Pharmaceuticals Inc., were accused of marketing Risperdal for off-label uses, making false and misleading statements about its safety and paying illegal kickbacks to health care professionals and long-term care pharmacies to induce them to promote or prescribe Risperdal to patient populations, such as children, adolescents and the elderly, for which there was no FDA approval. The investigation resulted from four whistleblower lawsuits that alleged the companies paid illegal kickbacks to health care professionals and long-term care pharmacies.

These companies announced they have finalized settlement agreements with the U.S. Department of Justice (DOJ) and 45 states resolving federal investigations and state Medicaid claims related to past promotional practices of RISPERDAL® from 1999 through 2005, and other matters.The resolution includes total settlement amounts of approximately $2 billion to the federal government and state Medicaid programs.

As part of the resolution, Janssen will plead guilty to a single misdemeanor violation of the Food, Drug and Cosmetic Act for past promotional practices. Janssen accepts accountability for the actions described in the misdemeanor plea. The settlement of the civil allegations is not an admission of any liability or wrongdoing, and the Company expressly denies the government's civil allegations.

The resolution also includes a five-year corporate integrity agreement between the Office of Inspector General of the U.S. Department of Health and Human Services and Johnson and Johnson. Under the criminal resolution, Janssen will pay $400 million and plead guilty to a one-count misdemeanor misbranding charge. Under the civil settlement, Janssen and Scios will pay approximately $1.6 billion to settle three pending civil False Claims Act cases in federal district courts related to RISPERDAL and INVEGA, NATRECOR, and Omnicare.

But the consumer group Public Cititzen said the settlement was too lenient.

"Johnson and Johnson’s status as a repeat offender demonstrates that despite the seemingly large sums, the fines imposed on pharmaceutical companies for dangerous and illegal conduct pale in comparison to the profits generated from such activity," said Sammy Almashat, Researcher, Public Citizen’s Health Research Group. "Global sales of Risperdal totaled $24 billion between 2003 and 2010, ten times the settlement amount."

"Until more meaningful penalties and the prospect of jail time for company heads who are responsible for such activity become common, companies will continue defrauding the government and putting patients’ lives in danger," Almashat said. The settlement is nothing new for the company. According to a 2012 Public Citizen report, Johnson and Johnson racked up $2.3 billion in criminal and civil penalties for various allegations of wrongdoing from 1991 through July 18, 2012 ...
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Sutter Health, which operates one of the largest hospital chains in California, agreed to pay $46 million and implement historic changes in its billing and disclosure of anesthesia charges and services to its patients, insurers and other payers.

Sutter has over 20 hospitals in northern California, including California Pacific Medical Center in San Francisco, Sutter General Hospital in Sacramento, and Memorial Medical Center in Modesto. The settlement brings to a close a 2011 whistleblower lawsuit brought against Sutter by billing auditor, Rockville Recovery Associates. The California Insurance Commissioner joined the whistleblower in that lawsuit.

"This settlement represents a ground breaking step in opening up hospital billing to public scrutiny," said Commissioner Jones. "The settlement requires Sutter to disclose on its Website every component of its anesthesia billing and what those services cost Sutter. ;Patients, insurers and the public will now be able to compare Sutter's costs to what it charges for anesthesia. They will see any mark-ups. I commend Sutter for agreeing to these reforms and this settlement. This new transparency should lead to lower prices and point the way to similar billing reforms for all types of hospital services."

The whistleblower lawsuit alleged that Sutter included a false and misleading charge in its surgery bills. Sutter patients or their insurers received three separate charges relating to anesthesia, including a charge by an outside anesthesiologist, a charge for the operating room and a charge under an obscure Code 37x Anesthesia. Sutter often charged thousands of dollars for Code 37x Anesthesia for each operation. Yet the services covered by that code were allegedly already captured in the operating room charge, itself a charge in the thousands of dollars. Sutter charged for anesthesia on a time-based or chronometric basis even when no Sutter employee, only the outside anesthesiologist, was present and overseeing anesthesia. Some hospitals also charged separately for anesthesia gasses using code 25x. Sutter's contracts with insurers also included a clause alleged to unduly restrict insurers from contesting the bills.

In March of this year, Time Magazine devoted a special issue to the problem of lack of transparency in hospital billing practices. "Bitter Pill: Why Medical Bills Are Killing Us" exposed hospital bills that sometimes include markups as high as 10,000%.

The settlement requires that Sutter 1) pay $46 million, 2) stop billing for anesthesia in the operating room on a chronometric basis and instead charge on a fully disclosed flat-fee basis, 3) describe every component of its anesthesia billing, 4) post on its Website and provide to insurers and the commissioner the cost to each Sutter hospital of its anesthesia services, updated annually, 5) clarify the relationship between its master schedule of charges (known as chargemasters in the health care industry) and the bills that consumers and insurers receive. This change will lead to an increase of transparency and accountability in hospital billing, and 5) more readily permit insurers and other payers to contest Sutter's bills.

Another defendant, Marin General Hospital, has agreed to implement the same changes to its procedures for billing anesthesia services. Marin General Hospital was a member of Sutter Health during the period of the misconduct alleged by the complaint. In 2010, Marin General Hospital became an independent hospital.

Today's settlement also includes defendants MultiPlan, Inc. ("Multiplan") and Private Healthcare Systems, Inc. ("PHCS"), whose provider contracts with Sutter included Sutter's audit policy that allegedly unduly restricted payers' ability to challenge Sutter's charges. In addition to paying $925,000, MultiPlan and PHCS agreed to continue to provide notifications to payers about their audit rights.

As required by the state's insurance whistleblower law, Sutter's settlement payment will be divided between the whistleblower, Rockville Recovery Associates, and the State of California. The state will receive $20 million, to be used to enhance the investigation and prevention of insurance fraud.Sutter and MultiPlan/PHCS do not admit to wrongdoing in the settlement agreement ...
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A 54-year-old Pacific Grove man pleaded guilty Friday to more than 30 felony and misdemeanor charges related to contracting-related fraud, the Monterey County District Attorney’s office said.

According to the report in the Californian,com Danny Jess Langley was arrested Aug. 27 and charged with 11 counts of premium insurance fraud, insurance fraud, five counts of using a false contractor’s license, filing a false document, grand theft, forgery and failing to register as an employing unit. He was also charged with 10 misdemeanors including two counts of failure to secure workers’ compensation insurance, five counts of contracting without a license, two counts of advertising as a contractor and failure to observe a stop order.

Langley also admitted to a special allegation that he suffered a prior violent felony conviction and that he committed felonies while out on bail. He previously served time in San Quentin Prison.

He has previously been found to be in violation of two misdemeanor probation cases.

Langley was placed on probation in 2011 for contracting without a license. In May 2012, he was again found to be contracting without a license, not having workers’ compensation insurance for employees and using a false contractor’s license.

Contractors State Licensing Board Investigator David Leary continued to receive information that Langley was committing the same and similar crimes by telling homeowners he was fully licensed and insured. In July, Langley was cited again and issued a stop work order. Further investigation revealed Langley made false statements to the State Compensation Insurance Fund to obtain a lower premium, filed a false document with the CSLB, used a false contractor’s license and committed grand theft and forgery.The defendant also stole personal checks and credit card information from one homeowner while working on her house. He has been in custody since his Aug. 27 arrest.

Langley recently has been advertising in online bulletin boards as a licensed contractor with positive reviews. He used a state contractor license number which was never issued to him. Langley also asks unsuspecting consumers to pull owner-builder construction permits from local building departments since he is unable to as an unlicensed individual. This places property owners at financial risk for project costs, employee payroll, and jobsite injuries ...
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The WCIRB has now submitted the 2013 SB 863 Cost Monitoring Report, which was prepared in conformance with the monitoring plan submitted to the California Department of Insurance earlier this year The WCIRB's plan to retrospectively monitor the cost impact of SB 863 based on emerging post-reform costs was published on March 27, 2013. Pursuant to this plan, this report summarizes the WCIRB's initial retrospective evaluation of the cost impact of a number of SB 863 provisions based on data emerging through the third quarter of 2013..

Indemnity claim frequency for the first six months of 2013 is 6.2% above the comparable 2012 frequency, which is significantly above the projected levels. It is not yet clear the extent to which the higher than expected claim frequency in 2013 is attributable to a greater than projected impact of SB 863 permanent disability benefit increases. Nevertheless, the sharp increase in claim frequency is concerning .

Early indications on lien filings based on Division of Workers’ Compensation (DWC) data through September 30, 2013 suggest that there may be a greater reduction than the 40% reduction projected by the WCIRB in 2012. Also, as projected, WCIRB lien survey data suggests that the greatest level of reduction is in liens for relatively small amounts.

In 2012, based on a California Workers' Compensation Institute analysis, the WCIRB estimated an approximate $20,000 per claim reduction on claims involving spinal implant hardware due to the SB 863 provisions related to duplicate reimbursement for spinal implant hardware. Preliminary WCIRB data suggests savings of more than $15,000 per claim on affected spinal surgery claims in 2013.

SB 863's reduction in maximum ambulatory surgical center faci lity fees was estimated to reduce those costs by 25%, which is consistent with the reductions observed based on preliminary WCIRB MDC estimates comparing 2013 reimbursements to pre-SB 863 levels.

A relatively small number of IMRs were filed during the first half of 2013. However, once IMR became effective for all injuries regardless of the accident date starting on July 1, 2013, IMR requests have increased significantly. If the higher volume of August (15,731) and September (14,990) IMR requests are indicative of filing rates for subsequent months, the number of IMRs requested per year would be over three times greater than that projected in the WCIRB's prospective cost estimate, potentially eliminating any savings in administrative costs due to IMR and also potentially negatively impacting medical treatment costs. Based on DWC information on early IMR decisions, approximately 75% of decisions have upheld the initial utilization review determination.

Although relatively few independent bill review (IBR) requests have been filed when compared to IMR filings, early estimates of IBR decisions show 60% of decisions favoring the provider for amounts significantly less than the IBR filing fee.

Preliminary estimates of medical provider network usage in 2013 show that network utilization in the first six months of 2013 is fairly consistent with that for prior years ...
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The DWC announced on September 19 that it would merge the Goleta WCAB office with its Oxnard location, about 45 miles south in neighboring Ventura County. The announcement was met with outcries from some industry pundits and stakeholders.

Decrying the lack of public outreach, the Goleta City Council voted unanimously at its October 15 meeting to send a letter to the department opposing the closure and requesting it be postponed until people can weigh in. "It’s really going to be troublesome," Mayor Roger Aceves said.

Megan Compton, an attorney for the Santa Barbara law firm Ghitterman, Ghitterman and Feld, which handles many workers’ compensation cases, said she worries how this closure will impede not only people with legal representation but also those without. And those with severe disabilities and/or without cars will be further hindered, she said, as the trip from Goleta to Oxnard would take more than three hours and four buses.

And the California Applicant Attorneys Association was not thrilled with the consolidation. It has called upon the DWC to either reverse its decision to close the Goleta WCAB at the end of November, or, at a minimum, continue to hold hearings in Goleta on injured workers’ insurance claims.

"The planned closure of the Goleta WCAB will impose considerable hardship on injured workers, particularly those without the ability to travel nearly one hour to Ventura or San Luis Obispo counties to pursue their insurance claims. For example, there is no public transportation that would get injured workers to Oxnard for an 8:30am hearing, which is customary," said Jill Singer, CAAA Central Coast Chapter president. "We call for the DWC to keep this board office open, or at a minimum, continue to hold hearings in Goleta, so that workers have access to the justice they deserve."

In an apparent change of direction, the Division of Workers’ Compensation now announced plans to open a satellite office in Santa Barbara to provide access to injured workers previously served by the Goleta district office.

The new Santa Barbara satellite office location has not yet been finalized, but is expected to open in December. DWC staff will include a judge, an Information and Assistance Officer, and a secretary. Initially, hearings will be scheduled four days a week. Additional details, including the satellite office address and hours, will be forthcoming.

Hearings will continue in Goleta through November 18. Once the calendaring process in Santa Barbara begins, parties may request that cases currently set in Oxnard be transferred to Santa Barbara. Attorneys are also encouraged to utilize Court Call, which is a service that enables appearance by phone at conferences. Further details regarding the rescheduling of hearings will be announced in the coming weeks ...
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An FBI affidavit, filed under seal in U.S. District Court in Sacramento,and obtained and now publicized by news media lays out part of the government’s case against California state Sen. Ronald Calderon in order to justify a raid of his office. According to the FBI affidavit, State Sen. Ronald Calderon allegedly accepted $60,000 in bribes from an undercover FBI agent during an elaborate sting operation. The document says there was also probable cause to believe that Calderon "participated in a separate bribery scheme with Michael D. Drobot," the chief executive officer of Pacific Hospital of Long Beach. The lawmaker allegedly accepted $28,000 from Drobot in exchange for "supporting legislation that would delay or limit changes in California's workers compensation laws." The affidavit alleges both Tom and Ron Calderon were involved in the bribery scheme with Michael Drobot, owner of Pacific Hospital of Long Beach, which specializes in spinal surgery for injured workers. The FBI said it believed Drobot was involved "in large-scale health care fraud," including paying kickbacks to surgeons who performed spinal fusion surgeries.

The alleged arrangement was that Ron Calderon would limit or kill workers’ compensation legislation that would restrict profitable spinal surgeries at the hospital, and Drobot would pay him $28,000 in bribes, "disguised" as payments for a job to Ron Calderon’s son, Zachary. The affidavit also notes that Drobot paid Tom Calderon $10,000 a month as a consultant.

The affidavit lists three bills the FBI alleges were influenced by Ron Calderon on behalf of Drobot. It said de León amended one bill at Calderon’s request so it would have less impact on Drobot’s business.

According to the Los Angeles Times, Jeffrey Rutherford, an attorney for Drobot, denied the allegations involving his client. "Any allegation that Mr. Drobot engaged in wrongdoing with respect to Ron Calderon is baseless," Rutherford said.

The FBI affidavit also alleges that Ron and Tom Calderon had a meeting with Sen. Ted Lieu, D-Torrance, and persuaded him to drop a second bill that "would have disrupted Drobot’s health care fraud scheme." The Calderons’ brother, then an assemblyman, made the August 2012 motion to have the bill sent to the inactive file, according to the affidavit.

A third bill, carried in 2012 by de León, allowed separate reimbursements for spinal devices to continue through 2013. The bill passed overwhelmingly, and Ron Calderon was one of the few lawmakers to oppose it. But he allegedly told the FBI undercover agent that he and Tom Calderon had been influential in getting language inserted that was more advantageous to Drobot.

Ultimately, Ron Calderon allegedly asked the undercover agent to make a political contribution to de Leon at a fundraiser, scheduled in conjunction with a prize fight in Las Vegas. According to the agent, Calderon made the suggestion because de León had complained that he had not been rewarded for dropping the implant legislation. "I don’t mind helping, but I haven’t seen any help," Calderon quoted de León as saying, according to the affidavit.

"That’s false and the investigation will bear that out," de León’s chief of staff Dan Reeves told The Sacramento Bee. He said the U.S. attorney has "made clear" that de León is not a target of the investigation.

No charges have been brought against anyone and no arrests have been made at this time ...
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The owners and supervisor of Alpha Ambulance Inc. (Alpha), a now-defunct Los Angeles-area ambulance transportation company, have pleaded guilty in connection with an ambulance fraud scheme.

Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division; U.S. Attorney André Birotte, Jr. of the Central District of California; Special Agent in Charge Glenn R. Ferry of the Los Angeles Region of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG); and Assistant Director in Charge Bill L. Lewis of the FBI’s Los Angeles Field Office made the announcement.

Alex Kapri, aka Alex Kapriyelov or Alexander Kapriyelov, 56; Aleksey Muratov, aka Russ Muratov, 32; and Danielle Hartsell Medina, 36, pleaded guilty on October 28, 2013, before U.S. District Court Judge Audrey B. Collins in the Central District of California to conspiracy to commit health care fraud. They face a maximum penalty of 10 years in prison when they are sentenced on February 24, 2014.

Kapri and Muratov were owners and operators of Alpha, an ambulance transportation company that operated in the greater Los Angeles area and that specialized in the provision of non-emergency ambulance transportation services to Medicare-eligible beneficiaries, primarily dialysis patients. Medina was employed by Alpha and ultimately supervised the training and education of its employees.

According to court documents, Kapri, Muratov, and Medina knowingly provided non-emergency ambulance transportation services to Medicare beneficiaries whose medical condition at that time did not require those services. With Kapri’s knowledge, Muratov and Medina instructed certain Alpha employees to conceal the Medicare beneficiaries’ medical conditions by altering requisite paperwork and creating fraudulent reasons that justified, on paper, the transportation services. Based on these medically unnecessary transportation services, the defendants caused Alpha to submit false and fraudulent claims to Medicare.

Additionally, as the defendants were submitting false and fraudulent claims to Medicare, Medicare notified Alpha the company would be subject to a Medicare audit. In response to this notice, Muratov and Medina instructed Alpha employees - with Kapri’s knowledge - to alter requisite paperwork and create fraudulent reasons that justified, on paper, transportation services for the beneficiaries identified as the subject of Medicare’s audit.

From at least June 2008 through at least July 2012, Alpha submitted more than $49 million in claims for ambulance transportation services. As a result, Medicare paid Alpha more than $13 million for these claims, many of which were false and fraudulent.

The case was investigated by the FBI and HHS-OIG and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Central District of California. This case was prosecuted by Trial Attorneys Blanca Quintero and Alexander F. Porter and Assistant Chief O. Benton Curtis, III ...
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This month Swiss customs agents seized one million fake tablets of anti-anxiety drug Xanax at the Zurich airport. The story was one incident, of a growing international problem surrounding fake prescription medications reaching the hands of innocent consumers. So, this incident would raise questions about what else might be fake in health care delivery? Is there a problem with fake doctors?

On July 1, 2000, the California Medical Board was given the authority for four investigator positions that established the Operation Safe Medicine (OSM) unit whose sole purpose was to investigate complaints of unlicensed medical activity. This unit also worked with other regulatory and law enforcement agencies to find unlicensed facilities. The Board summarized the performance of OSM in the 2012 Sunset Review Report to the California Legislature. The Report said that the volume and seriousness of the cases thus far investigated by OSM underscores the importance of this unit. Cases that staff investigated include the unlicensed practice of midwifery (result: conviction); a subject stealing the identity of a physician assistant and forging documents (felony charges filed); the unlicensed practice of medicine resulting in burns to a patient from a cosmetic procedure (felony charges filed); and a myriad of other violations of law. OSM has developed such an excellent reputation as a group of highly skilled, specialized and effective investigators of unlicensed practice . It is now receiving referrals from other law enforcement agencies, including the Orange County and Los Angeles County District Attorney’s offices. The Report highlighted some examples of fake doctors.

The San Jose office investigated an unlicensed individual who was performing hemorrhoid surgery and almost killed a man when his colon was perforated with a prong.

In the San Francisco area, an unlicensed individual, Carlos Guzmangarza, 49, performed liposuction in an unsanitary office while smoking a cigar and not wearing gloves. The victim held her own IV bag because there was no assistant. Board investigators executed a search and arrest warrant . The subject was charged with over 35 felonies. Guzmangarza assumed the identity of a physician assistant who shared a similar name and ran Derma Clinic, a dermatology office on Mission Street in San Francisco. After an initial round of press coverage spurred additional victims to come forward, prosecutors filed amended charges against him. They included practicing medicine without a license, false impersonation, identity theft, rape and grand theft.

In the San Jose area, a disbarred attorney was practicing medicine at Shiny Toes clinics in San Francisco and San Ramon using a laser to cure toenail fungus. One child’s toenails fell off because of the treatment. Search and arrest warrants were served. The subject was convicted of 19 felonies. Cary Silberman was sentenced to four years and eight months on charges of practicing medicine without a license

In the Pleasant Hill office, an unlicensed individual was convicted after injecting an unknown substance into the faces of female victims, causing permanent disfigurement.

In the San Jose area, an unlicensed individual was convicted and is serving seven years in prison for performing face lifts with Exacto knives.

Other cases investigated by the unit have focused on vendors selling "big eye" contact lenses in Los Angeles. The lenses are popular in Asia and make the iris of the eye appear larger, but they can also cause eye damage.

Other states have had a similar problem. William Hamman shared millions in grants, had university and hospital posts, and bragged of work for prestigious medical groups. An Associated Press story featured him leading a teamwork training session at an American College of Cardiology convention. He duped hospitals, universities and even the AMA. But it turns out Hamman isn't a cardiologist or even a doctor. The AP found he had no medical residency, fellowship, doctoral degree or the 15 years of clinical experience he claimed. He attended medical school for a few years but withdrew and didn't graduate. Ernest Addo stole a physician's identity and pretended to be a doctor for a year in South Carolina. He was hired as a general practitioner and provided the kind of exams patients would receive during a visit to the family doctor. Authorities said he also wrote prescriptions, including some for himself. also worked as a contract doctor for the South Carolina Department of Mental Health, filling in for a doctor on medical leave. After he made a small mistake on a death certificate. South Carolina health officials trying to fix the error contacted the doctor Addo was impersonating. He told them he hadn't practiced medicine for a year in the state. This month an Annapolis woman was accused of faking medical license and treating pediatric patients. The Huffington Post has a page of fake doctor stories.

It would seem prudent claims practice in this climate to check and double check the identity and licensure of unknown treating physicians. The Medical Board of California website allows public access to license information and is a good starting point. Other professions such as chiropractors, and psychologists can similarly have license status verified online ...
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The U.S. Food and Drug Administration is taking two actions to further enhance the agency’s ongoing efforts to prevent and resolve drug shortages, a significant public health threat that can delay, and in some cases even deny, critical care for patients. Following the President’s 2011 Executive Order on reducing drug shortages, the number of new shortages in 2012 was 117, down from 251 in 2011.

The FDA released a strategic plan called for in the Food and Drug Administration Safety and Innovation Act (FDASIA) of 2012 to improve the agency’s response to imminent or existing shortages, and for longer term approaches for addressing the underlying causes of drug shortages. The plan also highlights opportunities for drug manufacturers and others to prevent drug shortages by promoting and sustaining quality manufacturing.

Second, the FDA issued a proposed rule requiring all manufacturers of certain medically important prescription drugs to notify the FDA of a permanent discontinuance or a temporary interruption of manufacturing likely to disrupt their supply. The rule also extends this requirement to manufacturers of medically important biologic products. The proposed rule implements the expanded early notification requirements included in FDASIA.

"The complex issue of drug shortages continues to be a high priority for the FDA, and early notification is a critical tool that helps mitigate or prevent looming shortages," said Janet Woodcock, M.D., director of the FDA’s Center for Drug Evaluation and Research (CDER). "The FDA continues to take all steps it can within its authority, but the FDA alone cannot solve shortages. Success depends upon a commitment from all stakeholders."

Most drug shortages are the result of quality control problems. The agency said it plans to work with manufacturers to fix such problems and "encourage" them to engage in practices that could avoid or mitigate shortages.

The FDA recommended that companies, among other things, design programs to ensure supply is available in the event of a shortage. It also recommended companies build up inventory before major manufacturing changes and that they communicate with contract manufacturers to anticipate problems.

The agency said it cannot require companies to build in extra manufacturing capacity to guard against shortages, or order a company to make a product if it is not profitable, but it invited "other stakeholders" to consider how to reward high manufacturing standards ...
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The Division of Workers’ Compensation (DWC) is pleased to announce a Carve-out Agreement between seven Southern California United Food and Commercial Workers (UFCW) local unions, Vons and Super A Foods. The agreement covers an estimated 20,000 workers in the region. These workers increase the total California workforce covered by such programs over 55 percent. There are a total of 32 active Labor-Management Carve-out agreements in California, eleven of them active Labor Code 3201.7 Non-Construction Carve-out programs.

Carve-out programs allow employers and unionized workforces to create their own alternatives for workers' compensation benefit delivery and dispute resolution under a collective bargaining agreement. Since 2004 carve-out programs in California have handled over 25,000 injured workers’ claims . Eligibility of parties to participate in a program must be approved by the administrative director of the Division of Workers' Compensation.

With Senate Bill (SB) 983 (Chapter 117, Statutes of 1993), the California Legislature established the "Construction Carve-Out Program" under Labor Code section 3201.5. In doing so, it permitted employers, groups of employers, and employee organizations involved in the construction industry to use collective bargaining as a way to create alternatives to the traditional workers’ compensation dispute resolution process. The passage of SB 228 (Chapter 639, Statutes of 2003) amended Labor Code section 3201.7 to allow non-construction employers, groups of employers, and employee organizations to participate in carve-out programs. In 2013 SB 863 added "The State of California" to industries that can establish carve-outs.

Disputes between employers and injured workers over benefits under the carve-out program are generally heard in arbitration and/or mediation. In 2011, carve-out programs reported resolving 19 claims using litigation. Fourteen claims were resolved at mediation, one at arbitration, four at the WCAB, and none at the Court of Appeals. Of the litigated claims, non-construction programs litigated only four claims at mediation; the rest were litigated by construction carve-outs

The requirements to participate and the elements required to be in carve-out programs are contained in Labor Code section 3201.5 for the construction industry and Labor Code section 3201.7 for all other industries, as well as California Code of Regulations, title 8, sections 10200 - 10204 . Reports covering prior years o f the program, which has been in force for construction trades since 1993 and for non - construction workforces since 2004 are available on DWC’s informational page ...
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There remains a great number of unanswered questions about the IMR process. Now there is a convenient opportunity to answer some of these questions.The DWC has scheduled a free webinar on the Independent Medical Review Electronic Submission Feature on Tuesday, Nov. 5 , 2013 from 10 AM to 12 PM. The DWC and Maximus Federal Services invite claims administrators and others to attend a two-hour web training on the Independent Medical Review ( IMR ) process .

This webinar provides attendees with a working concept for the planned IMR electronic submission feature. Space is limited and pre-registration is required to attend this free webinar meeting. The meeting will use the GoToMeeting web platform. Thus, claims administrators across the country can attend provided they have a suitable computer and web access.

DWC and Maximus Federal Services will also address questions that relate to the current IMR process during the webinar. Please submit questions prior to the webinar by sending an email to LouWShields@maximus.com no later than Friday , Nov. 1 , 2013 ...
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Scott Lowery was employed as a heating and air conditioning technician in the HVAC department of Pierce College in Woodland Hills. On March 1, 2006, Lowery experienced sharp pain in his lower back during a two-day project fitting sound-deadening panels on electrical generating equipment, a task that required lifting and prolonged and repetitive squatting. Lowery filed a worker’s compensation claim form for his March 1, 2006 back injury. After working for the next eighteen months with varying degrees of accommodation for his inability to lift heavy tools and equipment and to work in difficult positions and locations, the employer placed the technician on disability leave, to which he was entitled under his collective bargaining agreement.

In 2007 Dr. Grahek the PTP, gave permanent work restrictions of no bending, kneeling, or squatting that causes pain, and no lifting over 30 pounds. Because permanent work restrictions had been prescribed, the District scheduled an interactive meeting for October 8, 2007 to determine whether the permanent work restrictions can be accommodated based on the essential functions of his job, and if they cannot, to evaluate alternative positions.

There was conflicting testimony about what occurred at this meeting. Lowery was provided with a copy of his work restrictions taken from Dr. Grahek’s Permanent and Stationary Report, and reviewed the job function analysis, function-by-function. A number of participants reported that Lowery did not express any objections or disagreements with Dr. Grahek’s restrictions. Lowery testified at trial that he had told everyone at the meeting that the work restriction information was wrong - that he "was doing a lot more than this already. I didn’t realize those restrictions were enforced at the time." The District concluded that the HVAC department had accommodated Lowery’s work restrictions for 18 months, but it was not reasonably feasible to continue doing so on a permanent basis. Lowery was removed from his modified duty position at the October 8, 2007 interactive process meeting, and was placed on paid industrial injury leave for 36 months, until October 2010. He was advised by letter on a number of occasions about other possible positions, and to respond with his resume and any additional medical information, but did not.

But, on November 29, 2007 Dr. Grahek responded to a letter sent by the claims administrator indicating that he had removed all the restrictions that would have required accommodation. This information was not sent to the employer until 2009. Nonetheless the trial court charged the employer with constructive knowledge of this information as of November 29, 2007.

Lowery was aware that his workers’ compensation attorneys had scheduled him for six Agreed Medical Examinations (AME’s) between August 2010 and November 2011 (including an AME by a court-appointed workers’ compensation doctor). However, he declined to attend any of them, because he did not believe they would help him recover his job, and because one of these examinations was scheduled during a time he was caring for his mother. He had been told by other workers that the AME’s purpose was not to get his job back—which was his goal—but to obtain a job rating in order to prepare for a settlement and dismissal of his workers’ compensation claim.

By letter dated May 21, 2010, Lowery was advised that his leave was nearing an end, and offered him four options. The first option was to return to work "ith or without request for accommodation." The other three options involved his resignation and/or retirement. Lowery did not respond.

Lowery sued the District and the TPA for damages under FEHA. The TPA was dismissed before trial. The trial court found that Lowery was able to perform the essential functions of his HVAC Technician position "with or without reasonable accommodation"; that the District failed to provide reasonable accommodations; that Lowery’s disability was a motivating factor in the District’s failure to accommodate and failure to reinstate Lowery to his position; and that the District’s failure to accommodate caused Lowery harm. ordered back-pay and non-economic damages totaling $437,460, and ordering his reinstatement to his position as an HVAC Technician at Pierce College, as of January 1, 2012, in lieu of front-pay. The District Appealed.

The Court of Appeal in the unpublished case of Lowery v. LA Community College Dist. found that the trial court’s decision as to the employer’s failure to engage in a good faith interactive process supported in part, but the decision as to the employee’s claims for wrongful discharge and failure to accommodate were unsupported.

It was Lowery’s burden to present evidence that he was able to perform the essential duties of his position, with or without reasonable accommodation. The record contains no substantial evidence that on October 8, 2007, Lowery was able to perform the essential duties of his position, with or without reasonable accommodation. All the District could do was to compare those work restrictions with the job’s essential functions identified by those in charge of the college facilities and the HVAC department (to which Lowery had voiced no dispute, and had presented no contrary evidence), and to hear from those in charge that the HVAC department could not permanently accommodate a technician who could perform only under those restrictions. The evidence did not identify any reasonable accommodation that would have enabled Lowery to perform all the essential functions of his position as of October 8, 2007. However, there was such evidence that was constructively received by the TPA after that date The damages awarded by the trial court, both for back pay and for noneconomic damages, must be reversed for redetermination of the damages to which Lowery is entitled as a result of the District’s breach of its obligation to engage in the good faith interactive process after November 29, 2007 ...
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The firm of Floyd, Skeren and Kelly is pleased and excited to announce that Senior Partner, John Langevin, will be establishing his office in the firms facility in Long Beach.

His relocation, in conjunction with Managing Attorney Chris Lear, will augment the management team and facilitate the firms plans to create and establish the Long Beach office as one of the largest offices in the firm.

Concurrently with Mr. Langevin's move, the firm is pleased to announce that Juan Naranjo is promoted to Managing Attorney of the Riverside office and Zlatan Muminovic is promoted Assistant Managing Attorney of the Riverside office.

Juan has been the Assistant Managing Attorney since June 2013 and has been with firm since 2005 having joined the firm after several years as a Worker Compensation attorney. Given his experience and proven track record, the firm is confident that, with Zlatan’s assistance, it will see the Riverside office's continued growth.

Zlatan has been with the firm since 2005 and has demonstrated his ability to manage not only his case load, but to be a mentor to other associates as they mature with the firm.

Join with us in wishing Juan and Zlatan success as they take on the management challenges in Riverside and best wishes to the new Long Beach team as John and Chris implement the firms growth plans for the Long Beach Office ...
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In 2011, U.S. doctors wrote more than 131 million prescriptions for hydrocodone, making it the most prescribed drug in the country, according to government figures. The ingredient is found in blockbusters drugs like Vicodin as well as dozens of other generic formulations. The FDA has long supported the more lax prescribing classification for hydrocodone, which is also backed by professional societies like the American Medical Association.

But the agency's top drug regulator, Dr. Janet Woodcock, said "the FDA has become increasingly concerned about the abuse and misuse of opioid products, which have sadly reached epidemic proportions in certain parts of the United States." In a major policy shift, the FDA said in an online notice that hydrocodone-containing drugs should be subject to the same restrictions as other narcotic drugs like oxycodone and morphine.

The Controlled Substances Act, passed in 1970, put hydrocodone drugs in the Schedule III class, which is subject to fewer controls. Under that classification, a prescription for Vicodin can be refilled five times before the patient has to see a physician again. If the drug is reclassified to Schedule II, patients will only be able to receive one 90-day prescription, similar to drugs like OxyContin. The drug could also not be prescribed by nurses and physician assistants.

Over the past several years, the U.S. Food and Drug Administration (FDA) has been carefully evaluating and weighing the appropriate use of opioid analgesic drug products. For the millions of American patients experiencing an acute medical need or living with chronic pain, opioids, when prescribed appropriately, can allow patients to manage their pain as well as significantly improve their quality of life.

However, in recent years, the FDA has become increasingly concerned about the abuse and misuse of opioid products, which have sadly reached epidemic proportions in certain parts of the United States. While the value of and access to these drugs has been a consistent source of public debate, the FDA has been challenged with determining how to balance the need to ensure continued access to those patients who rely on continuous pain relief while addressing the ongoing concerns about abuse and misuse.

In 2009, the U.S. Drug Enforcement Administration (DEA) asked the U.S. Department of Health and Human Services (HHS) for a recommendation regarding whether to change the schedule for hydrocodone combination products, such as Vicodin. The proposed change was from Schedule III to Schedule II, which would increase the controls on these products. Due to the unique history of this issue and the tremendous amount of public interest, we are announcing the agency’s intent to recommend to HHS that hydrocodone combination products should be reclassified to a different and more restrictive schedule. This determination comes after a thorough and careful analysis of extensive scientific literature, review of hundreds of public comments on the issue, and several public meetings, during which we received input from a wide range of stakeholders, including patients, health care providers, outside experts, and other government entities.

By early December, FDA plans to submit our formal recommendation package to HHS to reclassify hydrocodone combination products into Schedule II. It anticipates that the National Institute on Drug Abuse (NIDA) will concur with FDA recommendation. This will begin a process that will lead to a final decision by the DEA on the appropriate scheduling of these products.

Going forward, the agency will continue working with professional organizations, consumer and patient groups, and industry to ensure that prescriber and patient education tools are readily available so that these products are properly prescribed and appropriately used by the patients who need them most ...
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The Riverside County District Attorney’s Office filed a criminal complaint against Donald Evans in September, and a Superior Court judge issued an arrest warrant earlier this month, charging him with one felony count of false workers’ compensation claims following a traffic accident while on the job. Evans, who had worked for RTA for two years, was arrested and released after posting $25,000 bail.

The alleged injuries occurred in December 2012 when a car struck the bumper of Evans’ Route 16 bus while it was parked at a Riverside bus stop. RTA’s immediate assessment of the accident revealed minor scratches to the bumper but otherwise no damage.

Evans did not report any pain or discomfort the day of the accident. The next day, RTA halted Evans’ bus driving after he complained about injuries to his head, neck and back, as well as his left ankle and arm as a result of the accident. Because Evans claimed he was unable to work, RTA paid nearly $5,000 in medical payments and temporary disability costs, as well as legal fees. On Jan. 11, 2013 a physician cleared Evans to resume full-duty work.

During that time, an RTA review of on-board video footage confirmed minimal contact between the vehicle and the bus and no jolting at the time of the impact. None of the passengers aboard the bus complained of any pain. Although Evans claimed that he was standing at the time of the accident to assist a disabled passenger, video footage showed him sitting in his seat. A physician concluded that Evan’s alleged injuries were not consistent with the type of accident in which he was involved.

Investigators with the DA’s office began investigating the 59-year-old Moreno Valley man after receiving allegations of possible insurance fraud. During the investigation, RTA officials noted that Evans underwent a physical examination to renew his commercial driver’s license and falsely denied any prior workers’ compensation claims. If convicted, Evans faces up to four years in custody.

The incident follows one last spring when an RTA driver was arrested for workers’ compensation fraud. During that investigation, officials from the Riverside DA’s office concluded that the driver, who was receiving RTA disability benefits, was operating his own limousine service and videotaped driving; handling customer luggage; and lifting bags of ice, tire rims and cases of water ...
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Insurance Commissioner Dave Jones announced he has awarded $32 million in grants to district attorneys across 36 counties in California to combat workers' compensation fraud. The grants, funded through employer assessments, support law enforcement efforts in investigating and prosecuting workers' compensation insurance fraud.

"Last fiscal year 2012-13, my department received more than 5,000 referrals for suspected workers' compensation fraud, with losses totaling more than $340 million," said Commissioner Jones. "The impact of fraud is felt across California businesses and is a drain on our economy. These grants will assist district attorneys across the state in uncovering workers' compensation fraud schemes and prosecuting those who rip-off insurers and employers."

Grant funding is based on assessments from California employers. The California Department of Insurance leads the Workers' Compensation Grant Review Panel that reviews and makes grant funding recommendations based on multiple criteria such as previous year performance, applications, arrests and convictions. The panel sends a recommendation to the Insurance Commissioner who either accepts or amends the panel's recommendation. Upon completion, the Commissioner's recommendation is submitted to the Fraud Assessment Commission for their advice and consent, and then the grants are awarded.

Los Angeles County is at the top of the list with $5.8 million awarded. San Diego County will receive $4.5 million, Orange County $3.6 million, and San Bernardino $2.2 million.

In Fiscal Year 2011-12, the district attorneys reported a total of 819 arrests, which also included the majority of Fraud Division arrests. During the same timeframe, district attorneys prosecuted 1,332 cases with 1,565 suspects, resulting in 708 convictions. Restitution of $53,006,082 was ordered in connection with these convictions and $5,943,570 was collected during Fiscal Year 2011-12. The total chargeable fraud was $341,084,553, representing only a small portion of actual fraud since many fraudulent activities had not been identified or investigated.

Effective January 1, 2005, Assembly Bill 2866 (Frommer) enacted Insurance Code Section 1871.9 requiring the posting of all workers' compensation fraud convictions to the CDI website. One of the more notable convictions of 2013 was the case of Corinna Montenegro in San Bernardino County. This was a conviction for a violation of one count of PC 550(b)(1) for a failure to disclose material Information.

A traditional understanding of a "fraud case" is the assumption that the perpetrator must make an affirmative fraudulent statement that is not true. However, Penal Code section 550(b)(1) allows prosecutors to make a case against someone who does not affirmatively disclose information adverse to their claim. The codes states it is a crime to "conceal, or knowingly fail to disclose the occurrence of, an event that affects any person's initial or continued right or entitlement to any insurance benefit or payment, or the amount of any benefit or payment to which the person is entitled." Thus it would seem that a claimant that does not disclose prior injuries or illnesses that could result in apportionment of permanent disability, or collateral income sources that would be an offset to temporary disability runs the risk of criminal charges for a violation of this Penal Code provision ...
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KCRA reports that Todd Phillips, a 17-year veteran Folsom correctional officer, is accused of presenting false claims to the State Compensation Insurance Fund, according to court documents. After a brief court hearing Wednesday, he repeatedly gave the same answer when asked by KCRA 3 about these allegations. "No comment, sir," Phillips said.

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

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

Because of this issue, Kincade announced the state is granting more than $31 million in funds to district attorney's offices statewide to prosecute suspected fraud cases. "We know this issue is much bigger than just the cases we hear about, and that's why we need to put a stop to it," Kincade said ...
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The Monterey County District Attorney’s Office announced Monday its receipt of a California Department of Insurance grant to investigate and prosecute disability and healthcare fraud.

According to a release, the funding allows the DA’s office to launch a vertical prosecution team specifically directed at this specialized and complicated area of law. The funding will support the salaries for a senior prosecutor and an investigator to work closely with CDI, the California Medical Board, the state Department of Justice, the Employment Development Department and the state Department of Health Services.

The team’s purpose will be to investigate and prosecute cases including the use of another person’s identity to secure healthcare benefits, embezzlement, unlawful solicitations/referrals, fraudulent billing, inflated or falsified pharmacy billings, prescription fraud and abuse, out-patient surgery center fraud and fraudulent disability claims.

Deputy DA Amy Patterson has been selected as the vertical prosecutor for the Disability and Healthcare Fraud unit. She has prosecuted domestic violence, sexual assault and general felony crimes, including fraud cases, since 2006. As part of her new assignment, Patterson will develop an outreach program providing education to inform the public, medical providers, insurance companies and law enforcement agencies about fraud prevention.

An investigator will also be assigned to the unit in the near future.

California takes fraud cases seriously with extended statute of limitations and maximum prison sentences of five years plus substantial fines for various types of medical fraud ...
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Angelotti Chiropractic, Mooney and Shamsbod Chiropractic, Christina-Arana and Associates, Joyce Altman Interpreters, Scandoc Imaging and Buena Vista Medical Services filed a lawsuit last July in the United States District Court contesting the constitutionality of certain provisions of SB 863, and seeking to avoid payment of millions of dollars in lien activation fees before the end of 2013. The suit requests declaratory, injunctive and other relief. Plaintiffs allege that they filed valid liens prior to December 31, 2013 that constitute "vested property rights." They allege that the mandatory dismissal provisions of the activation fee law unconstitutionally interferes with those rights.

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

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

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

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

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

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

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