Wayne Lu, 53 of Torrance is in custody on charges of alleged workers' compensation fraud associated with an injury received during his employment with the U.S. Postal Service. Detectives from the California Department of Insurance, with the assistance of U.S. Postal Inspectors, arrested Lu on Tuesday, April 8 in Manhattan Beach.

"Workers' compensation fraud is not a victimless crime," said Insurance Commissioner Dave Jones. "Fraudulent claims inflate premiums for all consumers and cast unnecessary doubt on workers that are truly injured and deserve timely treatment and rehabilitation."

California Department of Insurance Detectives and United States Postal Service Office of Inspector General Special Agents conducted a joint investigation and learned that Lu was working as a massage therapist despite his claims of shoulder injury. Surveillance and undercover operations by Fraud Division Detectives proved that Lu was a working massage therapist and failed to report said employment or improvement of condition to the United States Department of Labor, the entity that handles workers' compensation for the U.S. Postal Service.

Detectives from CDI's Fraud Division are currently part of a task force operated by the Office of Inspector General - Postal Inspection Unit, focused on investigating and arresting postal employees who are suspected of committing insurance fraud in the State of California. Wayne Lu is charged with one felony count of insurance fraud and the case will be prosecuted by the Los Angeles County District Attorney's Office ...

A Salinas trucking company owner was ordered to spend 300 days in jail and pay more than $60,000 in fines for falsifying the number of his employees and the scope of their work

Monterey County Superior Court Judge Russell Scott sentenced Ricardo Casillas, 33, on charges of insurance fraud, workers' compensation fraud and payroll tax evasion, the District Attorney's Office said.

Casillas owns Desert Express Transportation Lines and Casillas Transportation Services.

Casillas was also placed on probation for 10 years and ordered to pay about $350,000 in restitution to the state Employment Development Department for failing to file payroll taxes, prosecutors said. An insurance carrier is seeking another $108,000 in unpaid insurance premiums ...

On April 2, 2014, the Workers' Compensation Appeals Board issued an en banc decision in Navarro v. City of Montebello which invalidated part of QME Regulation 35.5(e) .

In 2009, Ismael Navarro filed an application and claim form alleging a cumulative injury from February 9, 2008 to February 9, 2009 to his back and ear and was evaluated by panel QME J. Yogaratnam, M.D., Then in 2010, applicant filed applications for adjudication with claim forms alleging a specific injury of June 1, 2010 to his back, lower extremities and legs and a specific injury of August 31, 2010 to his back and left leg.

In 2012, defendant petitioned to compel an evaluation of applicant’s two subsequent claims of injury by original panel QME Dr. Yogaratnam, but it did not seek to have applicant reevaluated regarding his previous claim of cumulative injury. Applicant objected. The WCJ found that applicant was entitled to a new panel QME in his specific injury cases and that QME Rule 35.5(e) that seems to require an applicant to return to the original QME did not apply. The WCAB agreed (using a slightly different rationale) and ruled that for subsequently filed claims, an applicant need no return to an original PQME.

Pursuant to the WCAB’s ruling that the applicable Labor Code provisions do not require an employee to return to t he same panel QME for an evaluation of a subsequent claim of injury, the DWC Medical Unit will now issue new QME panels for claims made after an evaluation has taken place. Initial QME panel requests must be submitted using QME Form 106 for represented cases or QME Form 105 for unrepresented cases.

To avoid unnecessary rejection of appropriate requests, in cases i n which additional panels are required in different specialties, parties and attorneys are reminded to use QME Form 31.7 ...

The Division of Workers’ Compensation (DWC) has posted a first 15-day notice of modification to the proposed hospital outpatient departments and ambulatory surgical centers (HOPD/ASC) fee schedule regulations to the DWC website.

Members of the public are invited to present written comments regarding the proposed modifications noticed in the first 15-day comment period until 5 p.m. on April 28, 2014. The proposed modifications include:

1. Updating the definitions of emergency room visit and surgical procedures to conform to Medicare and HCPCS coding changes.
2. Providing a base facility fee "formula" to give additional clarification regarding the payment methodology for "Other Services" that are determined solely on the non-facility practice expense relative value units.
3. Clarifying that the alternative payment methodology will be inapplicable for dates of service on or after the effective date of the proposed regulations.

The notice and text of the regulations can be found on the proposed regulations page ...

Crawford and Company today announced that it has appeared on this year’s InformationWeek Elite 100 - list of the top business technology innovators in the U.S. Crawford is being recognized by InformationWeek for a suite of innovative online and mobile tools that accelerate claims management;. The tools are accessed globally via an online portal called Crawford Desktop.

"We are honored to be recognized by InformationWeek for the sixth consecutive year for our creative development of very effective technology,' said Brian Flynn, Crawford executive vice president and global chief information officer. 'Crawford Desktop is a robust, flexible platform and its numerous features contribute directly and measurably to increasing claim processing efficiency."

Crawford Desktop uses mobile device geo-location to pinpoint the closest most qualified adjuster for a given claim site and claim type. The assignment is then electronically delivered to a qualified adjuster based on location, availability and performance scorecard. The adjuster accepts the assignment, travels to the site and documents each step of the claims management process (including uploading video, images and voice notes) to the Crawford Desktop portal from a mobile device.

The portal may accessed from a variety of mobile devices, including iPads®, iPhones®, BlackBerry® or Android® phones, with the adjuster’s data transferring to Crawford’s claims management system. Another unique feature of Crawford Desktop is the integration of social media into the claims management process, which provides collaboration with clients and Crawford employees, allowing adjusters in the field to solve problems interactively and in real-time.

This is InformationWeek’s 26th year identifying and honoring the nation's most innovative users of information technology. For 2014, this assessment was narrowed to a more elite 100 organizations. InformationWeek’s Elite 100 research tracks the technology-based investments, strategies, and results of some of the best-known organizations in the country. Unique among corporate rankings, the InformationWeek Elite 100 spotlights the power of business technology innovation. Additional details on the InformationWeek Elite 100 can be found online at the InformationWeek Website ...

A former Bell Gardens police officer accused of filing a false workplace injury claim pleaded no contest in a case alleging he committed workers' compensation fraud.

Deputy District Attorney Arunas Sodonis of the Healthcare Fraud Division said John Kovacs, 31, pleaded to one felony count of workers’ compensation insurance fraud. Los Angeles County Superior Court Judge Paul Suzuki ordered Kovacs to complete 400 hours of community service and pay a $4,000 fine to the state workers’ compensation fund. The defendant is scheduled to be sentenced on Oct. 2, 2014. Kovacs filed a false workers’ compensation claim for a knee injury he alleged occurred on the job. An internal investigation by his employer, however, revealed that Kovacs suffered the injury during off hours at a physical agility test for the Huntington Beach Police Department.

The case was investigated by the Bell Gardens Police Department and the District Attorney’s Bureau of Investigation ...

A San Francisco Municipal Transportation Agency bus driver was charged Monday with allegedly lying about being injured in a 2012 robbery - an attack that authorities said never happened.

The report in SFGate says that Velma Louise Jones, 61, of Vallejo told San Francisco police she was robbed while working a shift on June 1, 2012, prosecutors said. She filed a workers' compensation claim, saying she suffered head injuries.

But prosecutors said surveillance video from her bus contradicted her story. While three books of transfer tickets were stolen that day, Jones was allegedly taking a break away from the bus during the theft. The San Francisco district attorney's office said it began investigating the case after being contacted in August by the insurance company dealing with the workers' compensation claim.

Jones was charged with four felonies: workers' compensation fraud, filing a fraudulent insurance claim, submitting documents in support of a fraudulent insurance claim and making false statements in connection with an insurance claim. District Attorney George Gascón described Jones as a city employee who "attempted to take a paid vacation from work at the expense of San Francisco taxpayers."

Daniel Siegel, her attorney, said the case was a misunderstanding. Though Jones was not on the bus at the time of the attack, he said, she was outside it and the man who stole her transfers had shoved her out of the way, knocking her head against the bus. She withdrew her claim, Siegel said, when she "decided it wasn't that big of a deal."

Jones, released on $50,000 bail, appeared in court Monday. If convicted, she faces a maximum of eight years in state prison or county jail. She is on paid leave, according to the Municipal Transportation Agency ...

Chip Kyle Bolton, 33, of Arizona and formerly of Salinas, has been convicted by a jury of two counts of false/fraudulent statements in order to obtain workers’ compensation benefits, one count of insurance fraud, one count of attempted perjury, one count of perjury, one count of welfare fraud and one count of grand theft, according to Monterey County District Attorney Dean D. Flippo.

The conviction was based upon surveillance footage of Bolton taken at a YMCA when he was exercising and playing sports, after testifying in his deposition that he was not able to perform these activities.

The amount of restitution for the worker’s compensation fraud is approximately $60,000 and for the welfare fraud, approximately $19,000. Bolton was remanded into custody and will be sentenced on May 2 by Judge Russel D. Scot. Bolton’s maximum sentence is 9 years and 10 months and fines for workers’ compensation fraud can be greater than $150,00 or double the amount of the fraud. Additionally, in insurance fraud cases, state law provides restitution be ordered and can include expenses such as attorney’s fees and the cost of the investigation ...

Jeffrey Fujimoto claimed that he suffered a continuous trauma psychiatric injury while employed as a body technician for Caliber Collision Centers. The parties agreed to use Myron L. Nathan, M.D., as the AME in this case. Dr. Nathan attributed 90% apportionment of the causation of the Applicant's psychological injury to work-related stress. After a hearing in the case, the WCJ instructed the parties to obtain a definitive report from the AME, regarding factors of causation pursuant to [Rolda v. Pitney Bowes. Inc. (2001) 66 Cal. Comp.Cases 241, 247 (Appeals Board en banc)]."

Specifically the WCJ instructed Dr. Nathan as follows. "[P]lease provide a supplemental report that describes in detail, in accordance with Rolda, all the workplace and all the non-industrial related events and/or issues that combined caused the Applicant's psychological injury. You are then to assign a percentage of causation separately to each individual work-related and/or non-industrial event(s) and/or issue(s) that, when combined, equal 100% of the causation of the Applicant's psychological injury. You are not to combine percentages as to any multiple factors and/or issues, either industrial or non-industrial.

It will ultimately be up to me to decide which workplace activities are actual events (i.e., which of the event(s) described by the Applicant happened or not) and whether those events that I have deemed to be actual events are otherwise legitimate, non-discriminatory, good faith personnel actions. Based on this, I can determine if the actual events of employment, if added together, will result in them being the predominant cause (i.e., more than 50%) of the Applicant's psychological injury and, whether those actual causes were substantially caused (i.e., 35% to 40%) by lawful, nondiscriminatory, good faith personnel actions." The instruction provided the format for the AME to list and number each industrial and non-industrial event and assign a separate percentage of causation to each numbered event.

In response to the WCJ's correspondence Dr. Nathan provided a list of 13 separately listed stressful events, and the percentage of causation of each event. After reviewing the evidence, and the 13 item list. the WCJ found that only item number 4 pertaining to a graffiti incident was an "actual event of employment" and this item caused 4% of the psychiatric injury according to the opinion of Dr Nathan. The WCJ issued his Findings of Fact and Order and Opinion on Decision finding that, in accordance with Labor Code § 3208.3(b)(1) and Rolda, that the Applicant did not sustain industrial injury to his psychological system.

The applicant's Petition for Reconsideration was denied in the panel decision of Jeffrey Fujimoto v Caliber Collision Centers; Hartford Accident and Indemnity Company.

A WCJ is not compelled to blindly accept the testimony of any witness deemed to be untruthful given that he or she is the ultimate finder of fact and is entitled to make his or her own credibility determinations. [Garza v. Workmen's Comp. Appeals Bd. (1970) 35 Cal. Comp. Cases 500, 505] While the WCAB may reject the findings of a WCJ and enter its own findings on the basis of its review of the record, [Labor Code § 5907] when a WCJ's findings are supported by solid, credible evidence, they are to be accorded great weight and should be rejected only on the basis of contrary evidence of considerable substantiality. [Lamb v. Workers' Comp. Appeals Bd. (1974) 39 Cal. Comp. Cases 310, 314]

The multilevel analysis to establish compensability for claims of injury based on personnel actions, in accordance with Rolda v. Pitney Bowes. Inc. (2001) 66 Cal. Comp. Cases 241, 247 (en banc), is as follows:
(1) whether the alleged psychological injury involves actual events of employment, a factual/legal determination;
(2) if so, whether such actual events were the predominant cause (i.e., accounting for 51% or more) of the psychological injury, a determination which requires medical evidence;
(3) if so, whether any of the actual employment events were personnel actions that were lawful, nondiscriminatory and in good faith, a factual/legal determination; and
(4) if so, whether the lawful, nondiscriminatory, good faith personnel action were a "substantial cause" (i.e., accounting for at least 35% to 40%) of the psychological injury, a determination which requires medical evidence.

Having reviewed all of Dr. Nathan's reports and considering the Applicant's lack of credibility in his testimony, the WCJ could not conclude that any of the Applicant's claimed employer actions, except the graffiti were 'actual events.' ...

The California Workers' Compensation system is often the scapegoat for the current (and past) statewide dismal business climate. This perception fuels the battle cry for more comp reform. So, let us look at the report card for the first quarter of 2014. Is Workers Compensation costs the singular issue of concern to state citizens? As of April 1st, 2014, according to a story on Breitbart News, California is noteworthy because it has:

• the third highest workers compensation costs,
• the most progressive personal income tax schedule,
• the highest state personal income and capital gains tax rate, and
• the highest state-only sales tax rate,
• the fourth highest state and local tax burden in the country,
• the fourth highest unemployment rate in the nation,
• the highest poverty rate in the nation,
• the third highest educational employee pay in the nation with the fourth lowest student test scores in the nation (according to Laffer Associates analysis of U.S. Department of Education NAEP test scores),
• the most restrictive regulatory burden,
• the California’s teachers union has been the single largest contributor to political campaigns in California over the past decade ($212 million)--double that of the next largest contributor, also a state government employees union.
• the seventh highest share of public employee unionization,
• the highest paid public employees, and
• the fourth worst highways in the country,
• the greatest net outflow of state adjusted gross income.

There is a lot of work to improve the problems shown on this report card in order to improve the business climate and the State economy as a whole. Certainly there are more problems other than Workers' Compensation.costs; This is a very painful report card to digest in 2014 as the rest of the country recovers from the great recession. A singular focus on Workers' Compensation reform is not the answer ...

Reuters News reports that U.S. regulators just approved a portable device to treat painkiller overdoses that people without medical training can use in emergency situations, a move to combat the rise of deaths from the abuse of opioids, including heroin. The Food and Drug Administration said making the cellphone-sized device with the recovery drug naloxone available for wider use could help save lives as opioid drug overdoses increase. The approval means emergency responders or even family members could have an easy-to-use treatment in cases of suspected overdose of opioids, which include pain drugs like oxycodone, morphine, codeine and hydrocodone as well as heroin. "It's really an effort to make this very usable," FDA Commissioner Margaret Hamburg said. More than 16,000 people die each year from prescription opioid overdose in the United States, according to the FDA and the device's maker, privately held drugmaker kaleo Inc. Opioid overdoses are mostly tied to those addicted to painkillers and heroin, but they can also happen accidentally in patients using the prescription medicines legitimately to treat pain. The hand-held device is called Evzio and automatically delivers a set dose of naloxone, a drug ingredient already approved to treat overdose patients that works by quickly restoring breathing. Naloxone is now typically given through a nasal spray or a syringe that must be injected under the skin or into the muscle, and has been limited mostly to medical professionals at hospitals and emergency rooms as well as a growing number of police officers and other emergency responders. The version approved on Thursday is small enough to be carried in a pocket, the FDA said. Relatives and caregivers would still need training and practice on how to use the device, and several doses may be needed to revive someone, the agency added. "Making this product available could save lives by facilitating earlier use of the drug in emergency situations," Bob Rappaport, head of the FDA division that reviews such products. Health experts and other advocates trying to combat the effects of drug addiction welcomed the device's approval in a conference call with the FDA, and some even suggested doctors prescribe it along with initial opioid painkiller prescriptions. But some also worried the injector could cause some people to dismiss the risks of opioid use because an antidote would be easier to access. FDA and other federal drug officials said Evzio was not a substitute for medical care and that it was essential that people who overdose still get quick medical attention. It was not immediately clear how much the injector would cost or whether health insurance companies, including the government's Medicare and Medicaid programs, would cover it. The device will require a prescription and will be available at pharmacies this summer, the company said, adding it had not yet set a price. Meghan Ralston of the Drug Policy Alliance advocacy group, expressed concern in a statement about costs and said people should use "whichever form of naloxone is most convenient and affordable for them." She called on manufacturers to ensure affordability. A growing number of municipalities have stocked other naloxone treatments and have begun training firefighters, police officers and other emergency medical personnel on how to deliver the antidote. Separately on Thursday, New York Attorney General Eric Schneiderman said the state would equip every law enforcement officer in the state with naloxone to help fight a surge in heroin overdoses. The effort would be funded with $5 million recovered from drug traffickers. Schneiderman cited data from police in Quincy, Massachusetts, which began requiring officers to carry naloxone in 2010. Since that time, the police department has used the drug 221 times and reversed overdoses in 95 percent of those cases. Last week, Massachusetts Governor Deval Patrick, in a speech declaring a public health emergency stemming from the abuse of opioids, said his state would also make naloxone more widely available ...

A former senior official with California's Division of Occupational Safety and Health (Cal/OSHA) filed a whistleblower complaint claiming the department overseeing the agency is misusing state and federal funds, possibly illegally.

Garrett Brown, former special assistant to the head of Cal/OSHA, filed the complaint with the California State Auditor, asking for a forensic audit of how the Department of Industrial Relations, the state agency that oversees Cal-OSHA , managed funds meant for the worker protection agency. Brown writes that he has "deep concern about improper, possibly illegal, diversion by the Department of Industrial Relations (DIR) of federal and state funds" he claims are supposed to go to Cal-OSHA but are instead going to pay for other things, such as rent on empty office space. Brown retired in January after a 20-year career with Cal-OSHA, 17 of them as a safety engineer. In February Brown claimed in a twenty-page report that Cal-OSHA is failing to protect California’s workers because of a "starvation diet" that is causing severe understaffing.

The complaint alleges that millions of dollars in state money meant to fund Cal-OSHA workers are sitting idle and not being allocated to the agency. Cal/OSHA draws no funds from the state's General Fund but rather receives money from Fed OSHA and from special state funds collecting money from employers. The main state fund - the Occupational Safety and Health Fund - has registered positive balances of more than $20 million every year for the last three years - money that could have been used to protect California workers, but has been left idle. The OSH Fund will receive an extra $8 million in the current state fiscal year. The OSH Fund is collected automatically every year and is designated for the sole purpose of supporting Cal/OSHA and protecting workers.

Brown complains about "severe understaffing." In December 2013, Cal/OSHA had only 170 enforcement field inspectors (called Compliance Safety and Health Officers or CSHOs) for the state's 18.6 million workers. This is below the 190 CSHOs on board at the end of the Schwarzenegger Administration in 2011 and fewer than the 253 California Fish and Game Wardens in the field. The ratio of inspector to worker is worse in California (1 inspector to 109,000 workers) than Fed OSHA's ratio (1to66,000) and much worse than Washington State (1 to 33,000) or Oregon (1to28,000).

Brown also questions why Cal/OSHA is on a "starvation diet." He claims that the political decision to not provide Cal/OSHA with the existing funding and staffing levels it needs to do its job comes from Governor Brown's "small government, austerity forever" approach and DIR Director Baker's "new paradigm" that prioritizes "compliance assistance" and partnerships with employers over enforcement of workplace health and safety regulations. The Governor's proposed 2014/15 budget does not even reach the year 2000 levels of enforcement staffing.

Brown says he is asking the state auditor to investigate the DIR because it has not been transparent when it comes to fiscal matters. "Only trained accountants familiar with state operations and procedures will be able to penetrate what has been an opaque 'black box'" of Cal/OSHA finances under DIR, he argues in the complaint.

DIR spokesman Peter Melton declined to comment on Brown's allegations. The state auditor's office did not return calls seeking comment.

Public Employees for Environmental Responsibility (PEER), a whistleblower group Brown is associated with, filed a complaint based on his report with the US Department of Labor asking it to sanction Cal-OSHA for allegedly failing to meet worker protection standards ...

A new survey released by Aflac found that 42 percent of all companies providing access to voluntary accident and disability insurance reported declines in their workers' compensation claims.

The Aflac Workers' Compensation Report, an online survey conducted by Lieberman Research Worldwide on behalf of Aflac, asked 600 employers from small, medium and large U.S. companies if they provided employees with access to accident or disability insurance and, if so, whether they noted a corresponding decline in workers' compensation claims. When responses were broken down by company size, the survey found that 55 percent of large companies that provide access to accident insurance experienced declines in workers' compensation claims, while 34 percent of small- and medium-sized companies each reported declines. These findings are important considering workers' compensation benefits paid to injured workers in 2011 rose, costing American employers $77.1 billion.

"For years, insurance agents and brokers have heard anecdotal rumors linking voluntary accident and disability insurance to reduced workers' compensation claims, and we learned the anecdotes are true based on our recent study results," said Tye Elliott, Aflac vice president of Core Broker Sales. "These findings confirm the correlation between accident and disability insurance and reduced workers' compensation claims. Employers can now weigh the potential positive financial effects of offering accident and disability insurance against the costs of workers' compensation claims."

This study has been reported in main stream media, most of the insurance journals, and the Wall Street Journal. Unfortunately, the study does not provide a financial analysis. Assuming the declines in workers' compensation claims reduced employer costs, on the other side of the equation, providing voluntary accident and disability insurance to all employees would be an increased cost for employers who do not provide this benefit. The analysis needs to determine if the additional cost is offset by the projected savings. If there is no savings, the concept seems more like cost shifting than cost savings ...

Last month the DWC posted proposed regulations to transition the states workers' compensation system from the decades old ICD-9 to ICD-10 in anticipation of a national transition to ICD-10 which was scheduled to occur next October. But things change quickly in D.C. This week the U.S. Senate approved a house bill that will delay the national transition another year, or until at least October 2015. An the health care industry reacted badly to this news. It took the Senate nearly five hours Monday to debate and approve a bill that would temporarily fix the sustainable growth rate for docs and also delay ICD-10 one year. The curious -- and disconcerting -- thing is, during that time not a single Senator made mention of the ICD-10 provision included in the bill, leaving many industry officials questioning: Do they even know what they just voted on? Either way, overall the folks in healthcare were not very happy.

The American Health Information Management Association expressed "deep disappointment" that the Senate approved H.R. 4302, the Protecting Access to Medicare Act of 2014, which included language delaying the ICD-10 deadline until October 1, 2015. "It has been estimated that another one-year delay of ICD-10 would likely cost the industry an additional $1 billion to $6.6 billion on top of the already incurred costs from the previous one-year delay," according to the AHIMA statement. "This does not include the lost opportunity costs of failing to move to a more effective code set." AHIMA CEO Lynne Thomas Gordon said that the organization is seeking immediate clarification on a number of technical issues including the exact length of the delay, given that the bill states that the Department of Health and Human Services cannot adopt the ICD-10 code set as the standard "until at least" October 1, 2015.

Similarly, the College of Healthcare Information Management Executives issued a statement that it was "extremely disappointed" by the Senate’s vote to join the House in approving legislation that delays ICD-10 implementation until 2015. "We understand the considerable hours, resources, and money CHIME members and their organizations have spent preparing for the transition," stated the organization. "This pause in momentum discredits the significant work our industry has spent training staff, conducting testing, and converting systems; not to mention the hold on improving care quality and accuracy, advancing clinical reporting and research, and patient safety outcomes." In its statement, CHIME said that the Centers for Medicare and Medicaid Services "must now provide new guidance to the industry on what the delay means for providers, vendors, clearinghouses and other concerned parties" due to the fact that "the delay leaves numerous unanswered questions from testing, training and revamping the agency’s education resources, such as the CMS eHealth University, designed to help providers understand, implement, and successfully participate in the conversion process."

H.R. 4302, the so-called "Doc-Fix" bill, also suspends Medicare's sustainable growth rate (SGR) formula that would have cut the physician reimbursement rate this year by nearly 24 percent. Ardis Dee Hoven, M.D., president of the American Medical Association, said in a statement that AMA was "deeply disappointed" by the Senate’s decision to enact a 17th patch to fix the flawed SGR formula. Congress has spent more taxpayer money on temporary patches than it would cost to solve the problem for good," Hoven said. "This bill perpetuates an environment of uncertainty for physicians, making it harder for them to implement new innovative systems to better coordinate care and improve quality of care for patients."

The American Coalition for Healthcare Claims Integrity, which represents Recovery Audit Contractors and other government auditing contractors, also released a statement charging that the legislation "absolves" inpatient hospitals--which account for 91 percent of over-billings to Medicare--from oversight by the RAC program, which has recovered over $8 billion since 2009. "Our coalition supports the ongoing improvement of Medicare integrity programs. However, by sanctioning the loss of billions to waste, fraud and abuse, this ‘doc fix’ falls short of that goal," said Becky Reeves, coalition spokeswoman.

Although it has not been announced, the DWC will likely delay its proposed rule making on ICD-10 to conform to federal timelines ...

Workers’ compensation has seen a steady increase in prescriptions for topical compounded preparations, and prescriptions for sterile compounded drugs are appearing as well. In fact, the use of compounded drugs in workers’ compensation has increased nearly five-fold in the past five years. Along with increased use, the prices charged for compounds have risen, dramatically.

The quality of the preparation and the safety and efficacy of these "custom" compounds are largely unknown. Usually formulated with four to six different ingredients, compounded medications can come with staggeringly high costs, running into thousands of dollars per prescription. Compound pharmacy marketing materials tout numerous benefits of topical compounds. Compounders claim that applying topical drugs to the site of the injury theoretically avoids systemic absorption and subsequent side effects, and that combining multiple agents into a single preparation reduces the number of tablets or capsules needed and helps patients who have trouble swallowing oral preparations. Compounds can omit ingredients that cause an allergic or other adverse reaction in the patient.

Workers’ compensation payers are questioning the cost of compounds and struggling with how to assess their efficacy and appropriateness and determine appropriate reimbursement. Professionals from CompPharma’s pharmacy benefit managers (PBMs) sought answers to questions regarding compounded drugs, and just published its 41 page report on compounding.

The most common compounds in workers’ compensation are "topicals" - creams, gels or ointments that are applied to the skin and are intended to manage pain. Despite their prevalence, the report says there is very limited evidence to support the use of these preparations. Sterile products are occasionally prescribed for injured workers. Most medications billed through PBMs within this population are for implantable pain pumps. The most common medications used include clonidine, morphine, bupivacaine, hydromorphone, fentanyl, and baclofen.

In recent years some compounding pharmacies have begun pushing the boundaries by marketing new uses for existing medications. The Internet abounds with compounding companies making "therapeutic" claims for their special topical formulations. These claims have no supporting evidence of safety and efficacy. Some feature anecdotes and testimonials, but none provide suitable references. This is especially true of compounded topical pain medications. Specific formulations are claimed to be effective for neuropathic pain, inflammation, and so on. In this respect, compounding pharmacies are acting more like manufacturers without the burden of having to conduct clinical drug trials to provide evidence to back their claims.

The determination of whether a compounded medication is being appropriately used requires a comprehensive understanding of information that needs to be gathered from a variety of stakeholders. Cooperation and input from prescribers, patients, pharmacists, and claims handlers are often necessary when determining the appropriateness of compounds.

CompPharma’s research has not revealed any evidence that topical compounds are safe or effective. In fact, the evidence indicates that there is significant variation between the stated potency of a compounded product and the actual ingredients. As long as there are no regulatory requirements related to testing and post-dispensing safety surveillance, the procurement of compounded medications is indeed a situation where the prescriber must beware. While a lack of information does not prove a lack of efficacy, the lack of research suggests that ineffective topical compounded drugs are being used instead of FDA-approved drugs that have been shown to be safe and effective. The data presented also begs the question: if no strong clinical research supports the use of compounded medications, is a custom compound the right thing to do for the patient?

The battle over control and safety of compounding drugs has pitted the FDA against state boards of pharmacy. On one side, the FDA seeks to regulate the compounding of drugs that go beyond traditional compounding (individually based, specific to patient needs) into the realm of mega, non-prescription compounding. On the other, the states, spurred on by the compounding drug industry, seek to keep control by issuing new rules and passing new regulations ...

The former owner of a Long Beach hospital pleaded not guilty Monday to charges related to his admitted role in what authorities have called the largest medical fraud case in state history. Despite the plea, according to the report in the Press Telegram, Michael Drobot, former owner of Pacific Hospital, is expected to formally plead guilty at some point in the near future. Monday’s hearing in federal district court was Drobot’s first court appearance since the U.S. Attorney’s Office announced the charges against him in February. After Drobot entered his not guilty plea, seemingly for procedural reasons that were not explained at length during the brief arraignment hearing, Judge Douglas McCormick acknowledged the court’s expectation that a guilty plea would be recorded during a future hearing. "Everyone understands what happens next," the judge said. The federal criminal case already contains a 35 page Plea Agreement signed by Dobrot and his attorneys on February 21.

The U.S. Attorney’s Office revealed in February that Drobot, who faces a 10-year prison sentence, has agreed to plead guilty to counts of conspiracy and payment of kickbacks for his activities in the scheme, which officials have said led to more than $500 million worth of fraudulent medical bills being filed. California’s worker’s compensation system ended up paying many of the fraudulent bills, according to officials. The case is also tied to an ongoing federal corruption case against state Sen. Ron Calderon, D-Montebello, and his brother, former Assemblyman Tom Calderon, who also held office while a member of the Democratic Party.

One of Drobot’s attorneys, Jeffrey H. Rutherford, said outside the courtroom that Drobot "has acknowledged and accepts responsibility for his actions. “He is providing information to assist the government in its expanding investigation," Rutherford added. Drobot left the courtroom after entering his plea to be processed by the U.S. Marshals Service. McCormick allowed Drobot to remain free during the course of legal proceedings, subject to a $5,000 bond and an agreement not to travel outside California, Oregon, Texas, Michigan or Colorado without permission. His next court appearance was scheduled for May 27.

Drobot is accused of paying kickbacks between $10,000 to $15,000 to doctors and others who referred patients to Pacific Hospital in Long Beach for spinal surgeries, even though the patients often lived closer to other medical facilities where they could have received care, according to the U.S. Attorney’s Office. Drobot and co-conspirators paid for the kickbacks by taking advantage of a loophole in state law that allowed them to artificially raise the reimbursable costs of spinal hardware used in the surgeries, according to court documents. Drobot has told authorities that he bribed Sen. Calderon to enlist the lawmaker’s aid in keeping the loophole on the books. In February, Calderon pleaded not guilty to charges stemming from his alleged acceptance of bribes from Drobot and for another case in which he allegedly took money from an undercover FBI agent who posed as a filmmaker seeking a change in California’s film tax credit law. Tom Calderon has also pleaded not guilty to the charges stemming from his alleged role in aiding his brother’s alleged corruption.

Ron Calderon, along with state Sens. Leland Yee, D-San Francisco, and Roderick Wright, D-Inglewood, have been suspended from the Legislature. Yee is charged in a federal case that includes accusations of taking bribes and arms trafficking, while Wright has already been convicted of voter fraud and perjury and awaits sentencing. Wright was convicted of living in a district other than the one he was elected to represent during the 2008 campaign. Gov. Jerry Brown, a Democrat, has asked all three senators to resign, ...

Not prescribing opioids first or as a long-term therapy for chronic, non-cancer pain and avoiding MRIs, CTs and X-rays for low-back pain are among the tests and treatments identified by American Society of Anesthesiologists (ASA) that are commonly ordered but not always necessary. As part of the ABIM Foundation's Choosing Wisely campaign, ASA today released its second list of five targeted, evidence-based recommendations that can support conversations between patients and physician anesthesiologists about what care is really necessary.

ASA's list identified the following recommendations:

1. Don't prescribe opioid analgesics as first-line therapy to treat chronic non-cancer pain. Physicians should consider multimodal therapy, including non-drug treatments such as behavioral and physical therapies prior to pharmacological intervention. If drug therapy appears indicated, non-opioid medication (e.g., NSAIDs, anticonvulsants, etc.) should be trialed prior to commencing opioids.

2. Don't prescribe opioid analgesics as long-term therapy to treat chronic non-cancer pain until the risks are considered and discussed with the patient. Patients should be informed of the risks of such treatment, including the potential for addiction. Physicians and patients should review and sign a written agreement that identifies the responsibilities of each party (e.g., urine drug testing) and the consequences of non-compliance with the agreement. Physicians should be cautious in co-prescribing opioids and benzodiazepines. Physicians should proactively evaluate and treat, if indicated, the nearly universal side effects of constipation and low testosterone or estrogen.

3. Avoid imaging studies (MRI, CT or X-rays) for acute low-back pain without specific indications. Imaging for low-back pain in the first six weeks after pain begins should be avoided in the absence of specific clinical indications (e.g., history of cancer with potential metastases, known aortic aneurysm, progressive neurologic deficit, etc.). Most low back pain does not need imaging and doing so may reveal incidental findings that divert attention and increase the risk of having unhelpful surgery.

4. Don't use intravenous sedation for diagnostic and therapeutic nerve blocks, or joint injections as a default practice. * Intravenous sedation, such as with propofol, midazolam, or ultrashort-acting opioid infusions for diagnostic and therapeutic nerve blocks, or joint injections, should not be used as the default practice. Ideally, diagnostic procedures should be performed with local anesthetic alone. Intravenous sedation can be used after evaluation and discussion of risks, including interference with assessing the acute pain-relieving effects of the procedure and the potential for false positive responses ASA Standards for Basic Anesthetic Monitoring should be followed in cases where moderate or deep sedation is provided or anticipated.

5. Avoid irreversible interventions for non-cancer pain that carry significant costs and/or risks. Irreversible interventions for non-cancer pain, such as peripheral chemical neurolytic blocks or peripheral radiofrequency ablation, should be avoided because they may carry significant long-term risks of weakness, numbness or increased pain.

The ASA Committee on Pain Medicine was charged with developing the Choosing Wisely list on pain medicine. Committee members submitted recommendations for the campaign, and from this list voted on which should be included in the Choosing Wisely list. The literature was then searched to provide supporting evidence. Once approved by the committee, the Choosing Wisely list was reviewed by ASA's Chair of the Section on Subspecialties, Vice President for Scientific Affairs, Executive Committee, and Administrative Council. The American Pain Society (APS) has endorsed ASA's Choosing Wisely list on pain medicine.

To learn more about Choosing Wisely and to view the complete lists and additional detail about the recommendations and evidence supporting them, visit ChoosingWisely.org ...

In California, the Medical Treatment Utilization Schedule adopted by the DWC is presumed to be correct. It is the starting point for the UR and IMR decision making process. An applicant would have to overcome that presumption with high quality scientific evidence. The Chronic Pain chapter of the MTUS does not approve medical marijuana. Under the heading "Cannabinoids" the MTUS states "Not recommended. In total, 11 states have approved the use of medical marijuana for the treatment of chronic pain, but there are no quality controlled clinical data with cannabinoids." Nonetheless, it is just a matter of time before the issue of "medical marijuana" becomes a problem for the comp industry.

According to an article in Business Insurance America, the issue of medical marijuana in the workers’ comp arena is approaching a crucial "tipping point," and producers who haven’t taken action on behalf of their clients could be in for some nasty surprises. That’s the message from PRIUM Senior Vice President Mark Pew, a 30-year workers’ comp vet and opinion leader on the medical marijuana front. It’s also the message of an upcoming roundtable discussion at the 2014 CLM Annual Conference in Florida. Hosted by PRIUM’s Scott Yasko, the discussion will center on the clinical risks and benefits of medical marijuana, as well as potential legal liabilities and state-mandated payment. It’s all part of rampant industry-wide concern on medical marijuana and its future in workers’ compensation, Pew told Insurance Business. "It’s definitely a concern - especially given these stories that tug at the heartstrings about seizures that can only be controlled by marijuana," Pew said. "The question is, should there be constraints around it, or should it just be locally legalized?"

Pew said that while no carrier has admitted to making payouts for medical marijuana treatment, "water cooler talk" suggests many workers are already using insurance dollars to pay for the substance. And that could be a problem if agents don’t discuss the issues with employers up front - especially given the dissonance between state and federal law. "Brokers may need to proactively bring up medical marijuana - whether the employer will accept it as a treatment option, how it will be controlled, and how the PBM will enforce formularies," Pew said. "At the moment it’s not a strategic discussion, but it needs to be." If producers don’t take this first step of establishing consistent standards when it comes to medical marijuana, the employer could be left open to both federal lawsuits and workplace liabilities in which an employee using marijuana paid for by the employer injures themselves or another worker. Pew believes the industry as a whole is on a "tipping point," with at least 51% of workers’ comp professionals in favor of allowing medical marijuana as a treatment option. As such, employers and their insurance agents need to make strategic decisions ahead of time to protect both their workers and themselves. "Medical marijuana is a societal inevitability, and workers’ comp professionals need to figure out how they’ll deal with it," he said. "In many cases, the train has left the station and you’ll either be riding the train or driving the train, or you’re going to get run over by the train."

The roundtable discussion will be held April 10 at the Boca Raton Resort and Club in Boa, Raton, Fla ...

Acting on complaints from residents, police carried out compliance checks at six Azusa massage parlors issuing several citations but making no arrests, officials said. The San Gabriel Valley Tribune reports that police joined with officials from Azusa code enforcement, the California Employment Development Department, the California Department of Industrial Relations, and the Los Angeles County Sheriff’s Department’s Major Crimes Bureau’s licensing unit during the operation, Azusa police Lt. Mike Bertelsen said in a written statement.

"Azusa PD has received complaints that some massage parlors within the city may be offering sexual services to customers in addition to massages," Bertelsen said. "After learning of the complaints, Azusa PD detectives solicited the help of outside agencies with specific expertise in massage parlor operations to develop and execute this administrative compliance detail." In addition to verifying that all local, county and state laws and regulations were being followed, police said officials were also seeking to determine whether any victims of human trafficking were associated with any of the massage parlors.

"No victims of human trafficking were located, however numerous citations were issued for violations of various Azusa municipal codes, along with workers compensation insurance or minimum wage violations," Bertelsen said. "Some of the businesses involved face fines of several thousand dollars each. These investigations are ongoing, so none of the businesses are being identified." Bertelsen said similar "administrative inspections" are likely to be held again in the future ...

We are anticipating the DWC announced transition to ICD-10 at the end of this year. The DWC had public comment on the 16 pages of proposed new regulations from March 18, through March 28, 2014 and the comment period is now closed. Only one half page of comments were received. Most of the half page consisted of questions by one poster rather than comments, and the only substantive comment was made by Bennett Katz of Zenith Insurance Company and involved a technical error in the proposed regulations concerning the number of digits specified in the codes.

ICD-10 is not simply an upgrade of the current ICD-9 code, it is a total rewrite, intended to provide better detail and data collection for physicians, hospitals and payers.

This detail comes at a price. The sheer volume of these codes, increasing fourfold over the current ICD-9 standard, brings a real set of challenges for workers’ comp adjusters who are expected to quickly review these codes for appropriateness and relatedness on incoming bills. For these adjusters, any additional time spent deciphering these 68,000 codes means less time spent getting injured workers back to work, more jurisdictional penalties as delays impact payment, or higher medical spend as inappropriate bills sneak through.

ICD-10 will offer a much greater level of detail for companies ready to accept the additional data detail. One thing that ICD-10 will do is specify between right and left on bilateral body parts and make a distinction between acute and chronic treatments. This will increase the accuracy of the diagnosis and treatment which will reduce costs by cutting down on unnecessary testing. More detailed data may lead to better preventive safety protocols as a result of identifying the specific source of injury. This data is also helpful in forecasting or predicting trends in medicine. Medical technology and treatments are constantly evolving and improving, and ICD-10 accommodates new breakthroughs in treatments. ICD-10 can allow for comprehensive reporting which will be useful for determining risk and effectiveness of other programs. The impact of ICD-10 on adjusters will be significant if not managed properly.

Once the system is in full swing and everyone becomes more familiar with the codes it may help cut down fraud and abuse. Injured body parts will be more definitive and treatments will be more concise. It will make it harder for a doctor to add a CPT code that is completely unrelated because the ICD-10 will be so very specific. Technology can be a help to payers and adjusters, who need to embrace change and realize that evolving technology will decrease their workflow and enable them to close claims faster. Automating certain aspects of the system will allow adjusters to be two or three steps ahead of a claim to keep it from spiraling out of control rather than always being on the defensive end of a claim.

Whether you are a fan ICD-10 or not, it’s coming; there is no stopping it come October. Time will tell how this affects the workers’ compensation industry ...