Legislators were concerned about unmanageable workers' compensation losses by staffing companies who were "self insured" in California, and as part of SB 863 required them to become insured as of the end of this year. Perhaps this legislative premonition was well founded. Shares of Vancouver based staffing company Barrett Business Services Inc. were down more than 50 percent after the company announced a big quarterly loss late last month.The Company attributed the loss to an $80 million pretax increase in self insured workers’ compensation reserves, which effectively wiped out Barrett Business Services’ pretax earnings for the past five years. As a result of this news, the Company’s stock declined more than 58%, or $26.18 per share, to close at $18.28 per share on October 29, 2014, on unusually heavy volume.

The Vancouver, Wash. company, provides a variety of business management solutions for small and medium-sized companies with fifty locations in ten states and dozens of offices in Northern and Southern California. BBSI provides human resource outsourcing and professional management consulting, BBSI said the loss resulted from setting aside $80 million for old workers' compensation claims. "We have every reason to believe that the workers' compensation data we have presented in the third quarter will normalize over time, proving that the strengthening process and change in practice have had the intended effect," said CEO Michael Elich, in a news release. "Until then, we believe taking a conservative approach right now allows us to look forward and removes the obstacles of the unknowns within the model."

A number of attorneys are investigating the company, and at least one, Glancy Binkow and Goldberg LLP, representing investors of BBSI has filed a class action lawsuit in the United States District Court for the Western District of Washington on behalf of a class comprising purchasers of BBSI securities. The Complaint alleges that defendants made false and/or misleading statements and failed to disclose material adverse facts about the Company’s operations and financial performance and prospects. Specifically, the Complaint alleges that defendants made false and/or misleading statements and/or failed to disclose that: (1) the Company under accrued its self-insured workers’ compensation reserves; (2) as a result, the Company overstated its earnings; (3) the Company lacked adequate internal and financial controls; and (4), as a result of the foregoing, defendants’ statements were materially false and misleading at all relevant times. A Los Angeles law firm says it's investigating potential claims on behalf of shareholders of BBSI. The Wagner Firm says its investigation concerns "possible violations of federal securities laws" and focuses on statements the company made about its "financial results, operations and business prospects" as well as others across the nation. Several other law firms nationwide have issued similar press releases.

Established in 1965,BBSI offers both temporary and long-term staffing to some 1,750 small and midsized businesses. Its staffing services focus on light industrial, clerical, and technical businesses. Barrett also does business as a professional employment organization (PEO), providing outsourced human resource services, such as payroll management, benefits administration, risk management, recruiting, and placement for more than 1,500 clients. Each year about 90% of its PEO revenue comes from customers residing in the states of California and Oregon. Barrett depends mostly on the light-industrial sector for the majority of its staffing services revenue (the sector represented 86% of its total revenue in 20010). Its light-industrial workers operate machinery and perform manufacturing, loading and unloading, and construction-site cleanup tasks.

The Company is a self-insured employer with respect to workers’ compensation coverage for all of its employees (including employees co-employed through client service agreements) working in California, Oregon, Maryland, Delaware and Colorado, with some exceptions. The Company maintains excess workers’ compensation insurance through its wholly owned captive insurance company, Associated Insurance Company for Excess ("AICE"), with a per occurrence retention of $5.0 million, except in Maryland and Colorado.

In February, 2014, BBSI entered into a workers’ compensation insurance arrangement with ACE to provide coverage to BBSI employees in California beginning in the first quarter of 2014. The agreement will be effective through January 2015 with the potential for annual renewals thereafter.The arrangement, typically known as a fronted program, provides BBSI a licensed, admitted insurance carrier in California to issue policies on behalf of BBSI without the intention of transferring any of the worker’s compensation risk for the first $5.0 million per claim. The risk of loss up to the first $5.0 million per claim is retained by BBSI through an indemnity agreement. While this portion of the risk of loss remains with BBSI, ACE assumes credit risk should BBSI be unable to satisfy its indemnification obligations to ACE. ACE also bears the economic burden for all costs in excess of $5.0 million per claim. The arrangement with ACE addresses the requirements of legislation enacted in California in 2012 (Senate Bill 863) under which the Company cannot continue its self-insurance program in California beyond January 1, 2015 ...

In March 2009 Sally Wycoff was working for Paradise Unified school District as a cafeteria worker for approximately four hours per day, and as a food services manager for 3 hours 15 minutes per day. The job required the ability to "stand, stoop, reach and bend," the ability to "grasp and manipulate small objects," and to "lift, push and/or pull objects which may approximate 50 pounds and may occasionally weigh up to 100 pounds. She reported to her employer that she had sustained a right shoulder injury caused by repetitive use associated with her job and completed a workers' compensation claim form.

The employer admitted the injury. Wycoff had shoulder surgery on July 21, 2009. The District hired a substitute to fill Wycoff’s position as a cafeteria worker. A series of letters followed discussing her sick leave benefits, and other rights to illness and accident leave for employees who are part of classified employment. Wycoff met with several District employees to discuss her options in late October 2009. She was offered part-time work as a food services manager, which would not require pulling, pushing, or lifting. However, she would not receive health insurance for part-time work. She was also told she could ask the school board to extend her leave. During these discussions, Wycoff brought up the possibility of taking early retirement, which was something one of her friends had suggested. She ultimately applied for early retirement after her other efforts to return to work were unsuccessful.

Wycoff then filed a complaint against District alleging the following causes of action: (1) physical disability discrimination in violation of the Fair Employment and Housing Act (FEHA); (2) Retaliation because of a physical disability and because a workers’ compensation claim was filed; (3) intentional infliction of emotional distress; (4) negligent infliction of emotional distress; (5) negligent supervision; and (6) failure to accommodate a physical disability. Following District’s successful demurrer to the third, fourth, and fifth causes of action, the trial court dismissed those causes of action. Wycoff pleaded three causes of action that survived demurrer: (1) disability discrimination, (2) retaliation, and (3) failure to accommodate a physical condition. With regard to those three, the District’s summary judgment motion was granted by the trial court and her case was dismissed. The dismissal was affirmed by the Court of Appeal in the unpublished case of Wycoff v. Paradise Unified School Dist. CA3.

The trial court found that District offered and provided reasonable accommodation. The court also found that Wycoff’s immediate supervisor averred Wycoff was unable to do the basic and essential job duties of a cafeteria worker, and that there was no vacant position and no accommodation that would have allowed Wycoff to return to her position as a cafeteria worker without making other people do Wycoff’s job or hiring another employee to assist Wycoff in doing her job.

Wycoff’s release for work from her physician, dated October 22, 2009, placed the following restrictions on her ability to work: "no overhead work with right arm and no lifting over 20 lbs." Wycoff’s immediate supervisor stated that with those restrictions, Wycoff was not able to do the basic and essential job duties of a cafeteria worker, and that she was aware of no accommodation that would have made it possible for Wycoff to perform that job. Wycoff admitted in her deposition that "most if not all of [her] essential job functions were problematic for [her] right shoulder . . . ." She admitted there was no way she could have returned to work in her prior capacity in October 2009. She stated that at the time of the deposition (June 9, 2011) she still could not do the work that she did five years prior, and that it was still painful when she engaged in repetitive lifting, pushing, and pulling. At that time (June 9, 2011) she was still not allowed to do overhead work with her right arm or lift more than 20 pounds. Given this undisputed evidence, there was no requirement that District do more to ascertain Wycoff’s ability to perform her job. Under such circumstances there was no evidence that the District failed to participate in the interactive process as required by law ...

California voters soundly rejected two hotly contested propositions Tuesday night -- one that claims it would have halted excessive health care insurance rates and another that would have raised the state's 39-year-old cap on medical malpractice damage awards.

Proposition 45 would have given the state insurance commissioner the power to reject health insurance rate hikes for about six million Californians who buy their own policies or who work for small businesses. The measure would have required health insurance companies to publicly disclose rate changes and allowed California’s insurance commissioner to control rates. Supporters said the initiative would stem skyrocketing healthcare costs. It failed to pass by a wide margin. Insurance Commissioner Dave Jones won reelection Tuesday, but he's left with no real power over health insurance rates. Jones had invested significant political capital in campaigning for Proposition 45 and drew the ire of fellow Democrats at times for his criticism of Covered California. The commissioner called Tuesday's vote a major setback. "Health insurers flooded Californians with $57 million worth of false television commercials, radio ads and slick mailers," Jones said. "Our consumer coalition simply could not compete with that." Jones' backers see the fight returning to Sacramento. "We expect the rate regulation debate to return to the Legislature, possibly with more momentum," said Anthony Wright, executive director of Health Access. "We will continue to advocate the simple point that patients shouldn't have to pay premiums deemed unreasonable by regulators."

"Prop. 45 was an ill-conceived measure that would have been a step backwards against the progress made by the Affordable Care Act and our state's health exchange, by giving a politician power over health care decisions that should have involved doctors and their patients," Dr. John Maa of the San Francisco Medical Society, said in a statement. "California voters saw through this deceptive measure motivated by self-interest, and opposed it wholesale."

The Los Angeles Times laments the loss as a "boon for health insurers." The Times went to to say that "California's biggest health plans, led by Anthem Blue Cross and Kaiser Permanente, spent millions of dollars on ads portraying Proposition 45's rate regulation as a threat to implementation of the health law. In a lopsided result, 60% of voters joined the industry in opposition." Despite the stinging loss, supporters of rate regulation vowed to keep fighting on behalf of consumers in the courts, state Legislature and possibly again at the ballot box.

"It's incredible that an industry that's so unpopular could do so well in this election," said Robert Laszewski, a healthcare consultant who has closely tracked California's implementation of the health law. "Pro-Obamacare forces and anti-regulation folks formed a 60% coalition. It was a strange set of bedfellows."

Proposition 46, which would have raised the state's 39-year-old cap on medical malpractice damage awards, would have also required doctors to take random drug tests and mandate use of a database designed to reduce prescription drug abuse. It was a wide-ranging initiative that included raising the limit on pain and suffering damages in medical malpractice lawsuits. This proposition was also defeated Tuesday by a wide margin. Supporters had said the proposition would have detected and deterred medical negligence, over-prescribing of prescription drugs and drug and alcohol abuse by doctors and promoted justice for people who don't have an income -- including retirees, children and stay-at-home parents -- who are victims of medical malpractice.

"This was a battle worth fighting. But the battle doesn't stop here," Bob Pack, author of Proposition 46, said in a statement released late Tuesday night. He and his wife, Carmen, lost their two children Troy and Alana as a result of medical negligence. "Our coalition will continue to press for changes to end that cycle of preventable death, to put a dent in prescription drug abuse, ensure our doctors aren't operating under the influence and give malpractice victims a better shot at justice," Pack said.

The defeat of Proposition 46 came after a cascade of negative advertising financed by insurance and physician groups. They warned the change would send medical costs soaring and drive doctors from the state. "In this health care environment, undermining California’s long-standing malpractice cap is a political poison pill," Dustin Corcoran, chief executive of the California Medical Association and chairman of the No on 46 campaign, said in a statement. "Increasing payouts in medical lawsuits would have increased health care costs." Insurance companies, hospitals and physician groups depicted the proposal as a sugar-coated pill that’s really about fattening attorneys’ wallets ...

An investigation by the U.S. Department of Health and Human Services found that the federal insurance program paid nearly $300,000 to cover HIV drugs for about 160 people who were dead when their prescriptions were filled in 2012. The report, released last week, was a reminder that Medicare's struggles with fraud, waste and abuse remain a drain on the more than $580-billion insurance program.

Under the Medicare Part D program, the Centers for Medicare and Medicaid Services (CMS) contracts with private insurance companies, known as sponsors, to provide prescription drug coverage to beneficiaries who choose to enroll. The Office of Inspector General (OIG) says in the report that it "has had ongoing concerns about Medicare paying for drugs and services after a beneficiary has died. Drugs that treat the human immunodeficiency virus (HIV) can be a target for fraud, waste, and abuse, primarily because they can be very expensive. Although this report focuses on HIV drugs, the issues raised are relevant to all Part D drugs."

This study was based on an analysis of Prescription Drug Event (PDE) records for HIV drugs in 2012. Part D sponsors submit these records to CMS for each drug dispensed to beneficiaries enrolled in their plans. Each record contains information about the drug, beneficiary, pharmacy, and prescriber. Investigators used the Beneficiary Enrollment Database, the Social Security Administration’s Death Master File, and Accurint’s Death Records to identify beneficiaries’ dates of death.

Investigators discovered that Medicare paid for HIV drugs for over 150 deceased beneficiaries. CMS’s current practices allowed most of these payments to occur. Specifically, CMS has edits (i.e., systems processes) in place that reject PDE records for drugs with dates of service more than 32 days after death. CMS’s practices allow payment for drugs that do not meet Medicare Part D coverage requirements. Most of these drugs were dispensed by retail pharmacies. "This review looked only at HIV drugs, which account for one-quarter of one percent of all Part D drugs in 2012. However, our findings have implications for all drugs because Medicare processes PDE records for all drugs the same way. Considering the enormous number of Part D drugs, a change in practice would affect all Part D drugs and could result in significant cost savings for the program and for taxpayers."

Another recent OIG report found that nearly 1,600 Part D beneficiaries had questionable utilization patterns for HIV drugs in 2012. In total, Medicare paid $32 million for HIV drugs for these beneficiaries. These beneficiaries had no indication of HIV in their Medicare histories, received an excessive dose or supply of HIV drugs, received HIV drugs from a high number of pharmacies or prescribers, or received contraindicated drugs. These questionable patterns indicate that beneficiaries may be receiving inappropriate or unnecessary drugs. It may also indicate that a pharmacy is billing for drugs that a beneficiary never received, or that a beneficiary’s identification number has been stolen.

Another earlier OIG report looked at the extent to which CMS made monthly prospective payments in 2011 to Part C and D sponsors for deceased beneficiaries. According to CMS policy, Medicare pays the sponsor the full payment for the month in which a beneficiary dies. OIG found that in 2011, CMS made monthly payments to Part C and D sponsors totaling $21 million for deceased beneficiaries in the months after death.

Lastly, another OIG report found that in 2006 and 2007 CMS paid $3.6 million in monthly prospective payments to certain Part D sponsors for deceased beneficiaries. It found that although CMS had correctly stopped payments for the vast majority of deceased beneficiaries in 2006 and 2007, its systems did not always identify and prevent improper payments. In addition, CMS did not always recover on a timely basis the payments it had made on behalf of deceased beneficiaries.

So these problems appear again, in plain sight. Willie Sutton Jr. was a prolific American bank robber. Sutton is known, albeit apocryphally, for the urban legend that he said that he robbed banks "because that's where the money is." He died in 1980. He would probably be looking at Medicare today for his next heist were he still around ...

A new Northwestern Medicine® study has found that smokers are three times more likely than nonsmokers to develop chronic back pain, and dropping the habit may cut chances of developing this often debilitating condition. Since apportionment of permanent disability can be based upon causation, this study may be of interest to the workers' compensation community.

"Smoking affects the brain," said Bogdan Petre, lead author of the study and a technical scientist at Northwestern University Feinberg School of Medicine. "We found that it affects the way the brain responds to back pain and seems to make individuals less resilient to an episode of pain." This is the first evidence to link smoking and chronic pain with the part of the brain associated with addiction and reward. The study was published online in the journal Human Brain Mapping.

The results come from a longitudinal observational study of 160 adults with new cases of back pain. At five different times throughout the course of a year they were given MRI brain scans and were asked to rate the intensity of their back pain and fill out a questionnaire which asked about smoking status and other health issues. Thirty-five healthy control participants and 32 participants with chronic back pain were similarly monitored.

Scientists analyzed MRI activity between two brain areas (nucleus accumbens and medial prefrontal cortex, NAc-mPFC), which are involved in addictive behavior, and motivated learning. This circuitry is critical in development of chronic pain, the scientists found. These two regions of the brain "talk" to one another and scientists discovered that the strength of that connection helps determine who will become a chronic pain patient. By showing how a part of the brain involved in motivated learning allows tobacco addiction to interface with pain chronification, the findings hint at a potentially more general link between addiction and pain. "That circuit was very strong and active in the brain's of smokers," Petre said. "But we saw a dramatic drop in this circuit's activity in smokers who -- of their own will -- quit smoking during the study, so when they stopped smoking, their vulnerably to chronic pain also decreased."

Medication, such as anti-inflammatory drugs, did help study participants manage pain, but it didn't change the activity of the brain circuitry. In the future, behavioral interventions, such as smoking cessation programs, could be used to manipulate brain mechanisms as an effective strategy for chronic pain prevention and relief ...

In September life-science company Calico, which was set up by Google last year to investigate the aging process, joined with U.S. drugmaker AbbVie in committing an initial $250 million apiece to developing cures for age-related diseases. Away from the limelight, however, Switzerland's Novartis and Denmark's Novo Nordisk are already testing new roles for existing drugs, which could keep people alive for longer, as they look to cater to the ever larger numbers living into their 80s and beyond. "Everybody now is talking about the aging population and how to have a healthy old age," said Mads Krogsgaard Thomsen, Chief Science Officer at Novo Nordisk.

The goal is not to create some "elixir of life" pill to help people live ever longer, but rather to maximize healthy lifespan and reduce the period of end-of-life sickness and dependency.Alex Zhavoronkov, chief executive of Baltimore-based biotech company Insilico Medicine, believes shifting healthcare spending from treatment to prevention will be central to this.

Research into anti-ageing drugs has historically received little attention from Big Pharma, given the difficulties of running clinical trials to prove such an effect. Moreover, companies have been deterred by regulators in the United States and Europe who will only approve medicines for specific illnesses and not for something as broad as aging, which is not in itself defined as a treatable disease. Despite these obstacles, Novartis has completed a successful pilot trial examining its cancer drug everolimus as a potential treatment to reverse immunosenescence, or the gradual deterioration of the immune system that occurs with age and is a major cause of disease and death.

Encouraged by studies showing that the closely related drug rapamycin extended the lifespan of worms, flies and mice, Novartis looked for ways to assess whether everolimus could have a similar effect in humans. The hurdles were high. Aging is a gradual, decades-long process making it impractical to assess directly in clinical trials. "For aging you have to pick a target system that can be investigated in months or years, not decades," said Novartis's head of research Mark Fishman. The company's work-around is to focus on immunosenescence. It gave 218 people aged over 65 a six-week course of everolimus followed by a regular flu vaccine after two weeks.

Results showed that taking the drug improved the immune system response by more than 20 percent compared to placebo, potentially opening the door to use it as a treatment to increase the efficacy of vaccines and help stave off the infections associated with old age. While Fishman stresses the research is still early-stage, Novartis's work highlights the growing interest in aging as a biological process that can be manipulated, treated and delayed.

Given the regulatory barriers, experts believe re-purposing existing treatments in new indications will likely be the fastest way to get drugs with an anti-ageing benefit to market, since these medicines have already been proven safe. A study published in the journal Neuropharmacology this week found lixisenatide, a drug sold as Lyxumia by Sanofi to treat type 2 diabetes, could slow nerve cell damage in mice with some of the hallmarks of Alzheimer's disease. Other diabetes drugs may have a similar effect. Imperial College London is currently recruiting around 200 patients with mild Alzheimer's for a study with Novo Nordisk's diabetes drug liraglutide, or Victoza. "It would be fantastic if we were able to take a safe and simple type 2 diabetes medicine and use that in Alzheimer's," said Novo's Thomsen.

The Danish company, which is the world's biggest maker of insulin, is also working with academics at the University of Oxford, the Karolinska Institute and the University of Copenhagen on a new project looking at healthy aging. Its interest in the field has a scientific logic, since some of the genes that researchers are now exploring as factors in healthy aging have links to the body's insulin pathways.

Once again, scientific developments have to be considered when calculating long term claim reserves in life pension cases, and life time medical awards. The future is sure to be full of surprises ...

Opioids are potent respiratory depressants, and overdose is a leading cause of death among people who use them. Worldwide, an estimated 69 000 people die from opioid overdose each year. Among people who inject drugs, opioid overdose is the second most common cause of mortality after HIV/AIDS. A recent rise in opioid-overdose deaths in a number of countries is associated with an increase in the prescribing of opioids for chronic pain. In 2010, an estimated 16 651 people died from an overdose of prescription opioids in the United States of America alone.

New World Health Organization (WHO) guidelines, released this month aim to reduce the number of deaths from opioid overdose globally by providing evidence-based recommendations on the availability of naloxone for people likely to witness an opioid overdose along with advice on the resuscitation and post-resuscitation care of opioid overdose in the community. The guidelines recommend countries expand naloxone access to people likely to witness an overdose in their community, such as friends, family members, partners of people who use drugs, and social workers. In most countries, naloxone is currently accessible only through hospitals and ambulance crews who may not manage to get help to the people who need it fast enough

According to the Guideline, people dependent on opioids are the group most likely to experience an overdose. The incidence of fatal opioid overdose among opioid-dependent individuals is estimated at 0.65 per 100 person years. Non-fatal opioid overdoses are several times more common than fatal ones.Although people taking prescribed opioids are at lower risk of overdose than people using unprescribed opioids. The high number of people receiving prescribed opioids in many countries mean that they constitute a significant proportion of opioid overdose deaths, if not the majority. Risk factors for overdose in people taking prescribed opioids include higher prescribed dosage, male gender, older age, multiple prescriptions (including benzodiazepines), mental health disorders and lower socioeconomic status. The risk of overdose is significantly higher where the prescribed dose is 100 mg morphine equivalents daily or greater.

Opioids depress the respiratory drive and overdose is characterized by apnoea, myosis and stupor. A severely reduced respiration rate results in hypoxaemia, leading to cerebral hypoxia and impaired consciousness. Cardiac arrest is a late complication of opioid overdose and secondary to respiratory arrest and hypoventilation. Prolonged cerebral hypoxia is the mechanism for brain injury and death in opioid overdose, resulting from apnoea or cardiac dysrhythmias and cardiac arrest.

The Guideline concluded that death in opioid-overdose can be averted by emergency basic life support resuscitation and/or the timely administration of an opioid antagonist such as naloxone. Most opioid overdoses occur in private homes, and most of these are witnessed. Close friends, a partner or family members are most likely to witness an opioid overdose. The other key group of individuals likely to witness overdoses are people working with people who use drugs. They include trained health professionals and first responders, such as ambulance, police, fire and drug-treatment workers as well as outreach workers. Naloxone has been used in the management of opioid overdose for more than 40 years. It is a safe drug with a low risk of serious side effects. Any adult capable of learning basic life support can also learn to recognize an opioid overdose, and administer naloxone in time to save lives.

Naloxone is a prescription medicine in almost all countries. In recent years, several countries in different regions have started distributing naloxone to people likely to witness an opioid overdose, initially in pilot programs, but now also in some cases state or national policy, demonstrating the feasibility of this approach and prompting calls for widespread adoption of this approach.

The California legislature passed Assembly Bill No. 1535 this year and it was signed by the Governor on September 15, 2014. The new law adds Section 4052.01 to the Business and Professions Code, relating to pharmacists. Existing law, generally, authorizes a California pharmacist to dispense or furnish drugs only pursuant to a valid prescription except for nicotine replacement products and emergency contraceptives and hormonal contraceptives. The new law would now also authorize a pharmacist to furnish naloxone hydrochloride in accordance with standardized procedures or protocols developed and approved by both the Pharmacy Board and the Medical Board of California, in consultation with specified entities. The new law would authorize the California State Board of Pharmacy to adopt emergency regulations to establish the standardized procedures or protocols that would remain in effect until the earlier of 180 days following their effective date or the effective date of regulations adopted as described above. California therefore will provide non prescription access to naloxone and will be on the forefront of these new WHO Guidelines. Claim examiners may wish to take advantage of this new law in cases where risk factors are high for overdose ...

A former U.S. Postal Service employee from South Lake Tahoe has received a one-year prison sentence for making a false statement to obtain workers’ compensation.

According to the Sacramento Bee, Mark E. Leung, 60, was sentenced Tuesday in Sacramento by U.S. District Judge John A. Mendez. In addition to the prison sentence, the judge ordered Leung to pay $160,000 in restitution, according to a U.S. Attorney’s Office news release.

Court documents indicate Leung worked for the U.S. Postal Service until 1987, when he claimed he suffered a work-related injury. He never returned to full-time employment with the Postal Service and began receiving workers’ compensation benefits in 1987.

From September 2007 through November 2012, Leung received approximately $160,000 in benefits from the Department of Labor, which administers the program for the U.S. Postal Service, authorities said. To obtain the benefits, Leung submitted an annual certification form and had his medical providers attest that he could not perform any work due to the pain that limited his mobility and range of movement.

But while claiming he was totally disabled for employment, Leung maintained a yearly ski pass for Heavenly Ski Resort, where he regularly skied at least 40 days per ski season, authorities said. In addition, they said, Leung was observed performing arduous physical labor on numerous days.

The case resulted from an investigation by the U.S. Postal Service, Office of Inspector General, and the Department of Labor, Office of Inspector General ...

Lab-grown tissues could one day provide new treatments for injuries and damage to the joints, including articular cartilage, tendons and ligaments. Cartilage, for example, is a hard material that caps the ends of bones and allows joints to work smoothly. UC Davis biomedical engineers, exploring ways to toughen up engineered cartilage and keep natural tissues strong outside the body, report new developments in the journal Proceedings of the National Academy of Sciences.

"The problem with engineered tissue is that the mechanical properties are far from those of native tissue," said Eleftherios Makris, a postdoctoral researcher at the UC Davis Department of Biomedical Engineering and first author on the paper. Makris is working under the supervision of Professor Kyriacos A. Athanasiou, a distinguished professor of biomedical engineering and orthopedic surgery, and chair of the Department of Biomedical Engineering.

While engineered cartilage has yet to be tested or approved for use in humans, a current method for treating serious joint problems is with transplants of native cartilage. But it is well known that this method is not sufficient as a long-term clinical solution, Makris said.

The major component of cartilage is a protein called collagen, which also provides strength and flexibility to the majority of our tissues, including ligaments, tendons, skin and bones. Collagen is produced by the cells and made up of long fibers that can be cross-linked together.

Researchers in the Athanasiou group have been maintaining native cartilage in the lab and culturing cartilage cells, or chondrocytes, to produce engineered cartilage. "In engineered tissues the cells produce initially an immature matrix, and the maturation process makes it tougher," Makris said.

Knee joints are normally low in oxygen, so the researchers looked at the effect of depriving native or engineered cartilage of oxygen. In both cases, low oxygen led to more cross-linking and stronger material. They also found that an enzyme called lysyl oxidase, which is triggered by low oxygen levels, promoted cross-linking and made the material stronger.

"The ramifications of the work presented in the PNAS paper are tremendous with respect to tissue grafts used in surgery, as well as new tissues fabricated using the principles of tissue engineering," Athanasiou said. Grafts such as cadaveric cartilage, tendons or ligaments - notorious for losing their mechanical characteristics in storage - can now be treated with the processes developed at UC Davis to make them stronger and fully functional, he said. Athanasiou also envisions that many tissue engineering methods will now be altered to take advantage of this strengthening technique.

The plethora of medical developments on the horizon pose a mixed dilemma for workers' compensation claims administrators when reserving long term medical costs and settlements. On one hand, the cost of exotic medical care will no doubt drive higher reserve estimates for these procedures in the future. On the other hand, if these treatments are successful, costs should at some point be reduced to the extent of less effective care that is no longer needed. An accurate reserve estimate may be somewhat difficult to establish between these forces ...

Richard Hamp Sr. worked as a ready-mix concrete driver for Hanson Aggregates Pacific Southwest, Inc. The job includes driving and delivering concrete material. The delivery responsibilities require the driver to load and unload concrete material through heavy chutes that must be removed from the truck frame, attached to the rear of the truck, and then reloaded on the truck after the delivery is complete. In July 2004, Hamp injured his back at work. He filed a workers compensation claim and was on medical leave for the next several years.

Hanson Pacific made a decision to terminate Hamp based on its asserted conclusion that Hamp's disabilities (as described in its workers compensation carrier's report) precluded him from performing the key functions of his job (including the heavy lifting and bending requirements). However, Hanson Pacific did not send a letter to Hamp notifying him of this decision. Hamp contacted Hanson Pacific and inquired about his employment status. At that time, he first learned that he had been terminated. The next month, in December 2007, Hanson Pacific wrote a letter to Hamp confirming his 2006 termination and stating that it had been willing to seek to accommodate his disabilities before it terminated him, but Hamp never responded to its inquires and letters. Hamp denied this version of events and maintained that he had asked for accommodations but Hanson Pacific never responded to his requests.

In January 2008, Hamp retained Harry Harrison Esq., to bring a lawsuit challenging his employment termination. During November 2008 and January 2009, Hanson Pacific's attorneys took Hamp's deposition over three different days. In his deposition testimony, Hamp acknowledged he still had back problems and never received medical clearance to return to his ready-mix driver job. When asked if he thinks he is "physically capable of returning to work as a ready mix driver . . . ," Hamp responded: "I can't answer that. I don't know." He said he is not sure whether the problem would "flare[ ] up" if he returns to his job. When Hanson Pacific's attorney asked Hamp about his PTPs certification to the EDD in June 2007 that he was not capable of returning to work because he could not perform the physical duties of the ready-mix driver job, Hamp indicated he agreed with that statement.

During the lawsuit, Harrison defeated Hanson Pacific's summary adjudication motion on Hamp's wrongful termination claim based on evidence showing Hanson Pacific failed to make efforts to accommodate Hamp's disability. About five or six months later, in February 2010, Harrison wrote an email to Hamp explaining the weaknesses in his case and urged Hamp to accept Hanson Pacific's $8,000 settlement offer. After Hamp refused to accept this offer, the attorney-client relationship broke down. Several months later, in May 2010, Harrison obtained the court's approval to withdraw from the representation.

Shortly after, Hamp obtained new counsel, but the court ultimately found in Hanson Pacific's favor on the accommodation issue and entered judgment for Hanson Pacific. Hamp then sued Harrison, and his firm Harrison Patterson O'Connor and Kinkead alleging breach of fiduciary duty and attorney malpractice. The primary focus of the complaint was on the Third Job Description produced by Hanson Pacific in the underlying lawsuit. Hamp alleged this job description "was entirely fraudulent and was produced . . . to defraud the court and prejudice the proceedings against the interest of [Hamp]." On the malpractice cause of action, Hamp alleged Harrison failed to identify and seek exclusion of the "fraudulent" job description. After considering the papers and conducting a hearing, the court granted Harrison's summary judgment motion, finding the undisputed facts showed Hamp could not prevail on any of his causes of action. The court also overruled the parties' numerous evidentiary objections. The dismissal of his malpractice claim was affirmed in the unpublished case of Hamp v Harrison Patterson etc.

The record of the underlying action shows Harrison's litigation strategy was to acknowledge that Hamp was disabled and could not perform the ready-mix job without accommodation, and to use these facts to support the theory that Harrison considered the strongest: Hanson Pacific breached legal duties by failing to engage in the legally-required interactive process to identify a position that would accommodate Hamp's disability. Under this strategy, the difference between the First Job Description and the Third Job Description was not material. Even assuming Hamp could not return to the ready-mix driver job, there is California law supporting that an employer must engage in an interactive process to determine whether any reasonable accommodation is possible. (See Wysinger v. Automobile Club of Southern California (2007) 157 Cal.App.4th 413, 424-425.) Whether Harrison's strategy was a competent one is not a matter of common knowledge. An expert witness was necessary to evaluate whether this litigation strategy was within the range of reasonable tactical decisions, particularly given Hamp's concessions at his deposition and his prelitigation admissions that he could not engage in the heavy lifting or repeated stooping and bending required for the job. Hamp did not present any expert evidence to support his theory that Harrison breached his duty by failing to challenge the Third Job Description. Generally, expert witness testimony is required in a professional negligence case to establish the applicable standard of care, whether that standard was met or breached by the defendant, and whether the defendant's negligence caused the plaintiff's damages ...

Spinal Solutions founder. Roger Williams spent 16 years in the orthopedic sales business with his father before he went out on his own. He started Spinal Solutions in 1999 and launched a firm selling knee and hip implants three years later. From nothing, he built an $18 million-a-year business based in Murrieta, California. Williams and his wife had a BMW, a Mercedes-Benz, a yacht named "Spare Change" and a 6,300-square-foot Murrieta home, according to court records and interviews. He ordered his seven-seat jet painted with stripes of Lakers purple and gold, and he and his wife sat courtside among celebrities at Laker games, according to interviews with former employees.

But Spinal Solutions also racked up big debts with hardware manufacturers and then refused to pay, according to industry executives and lawsuit allegations.The company increasingly relied on Lenders Funding LLC, a firm that fronted cash at an interest rate of 35 percent. By 2013, the company owed the lender about $35,000 per month - solely in interest payments - and imploded in debt.

Spinal Solutions could not have raked in millions or spread its products across the U.S. if not for doctors eager to do business. Roger Williams allegedly lured them with private plane rides, generous consulting contracts and even cash. Williams made it clear the consulting deals and free flights were tools to keep doctors hooked on his products, said Quin Rudin, a businessman who poured money into the company when it hit a cash crunch in 2012. "He said that many times. ‘In order to do business with these guys, I gotta take care of them,' " Rudin recalled from behind thick glass in a downtown Oakland jail, where he landed after pleading guilty in an unrelated fraud case.

Although the true extent of the caper remains buried in the necks and backs of people scattered around the U.S., it began to unravel in 2009 when evidence of the scheme landed in the receiving room of Ortho Sol, a surgical supply firm in South Africa. Ortho Sol makes precision screws for the most delicate of construction projects: spinal fusion. The company had repossessed some of its screws after Spinal Solutions LLC stopped paying its bills. Nestled with the returns, the brighter yellow luster of a few screws caught Richard Walker’s eye. Testing confirmed his fears. Some were not made of his firm’s medical-grade titanium. Their uneven threads showed potential for backing out or breaking, he said. He feared the laser-etched markings intended to make them look authentic could be toxic to patients.

More evidence - Derika Moses hefted a case of 2-liter soda bottles while setting up a grocery store display in 2007. Nothing helped. In desperation, Moses opted for spinal fusion surgery.The procedure offered little relief. Five years later, she had most of her spinal hardware removed, convinced that the erector set of metal in her spine was the source of ongoing problems. Attorneys contacted Moses after finding her name among Spinal Solutions’ sales records. CIR showed photos of Moses’ hardware to U and I, the South Korean company whose logo was etched on it. Company engineers noted the finishes and lot numbers on some of Moses’ screws and connectors did not match their product. But the dead giveaway was the logo, they said, which lacks the firm’s signature forward-leaning font. During an interview at the company’s U.S. office in Orange County, California, General Manager Sung Hwang identified three of Moses’ four screws as fakes. "This is obviously not what we did," Hwang said. "I feel sorry because (patients) got the surgery with improper devices, so they might suffer from it."

The screws, real or fake, all funneled into what lawsuits claim was a larger scheme to bilk California’s workers’ compensation system. Some hospitals billed insurance carriers as much as $12,500 a screw before a 2012 change in state law shut down the astronomical markups. From that, Spinal Solutions stood to reap several thousand dollars from the sale of a single screw.

The source of the counterfeits, plaintiffs’ attorneys allege, was 85-year-old machinist William Crowder. He owns a small office park machine shop in Southern California’s Inland Empire. He had experience working on parts for boats, planes and, it appears, the human body. In an interview with CIR, Crowder said Spinal Solutions’ operations manager, Jeff Fields, gave him professional-looking medical screws and asked for exact copies. "He might want 50 of this size and 40 of these," said Crowder, who has been named as a defendant in dozens of lawsuits. Plaintiffs’ attorneys believe that thousands of counterfeit screws went into unsuspecting patients, though Crowder testified in a recent deposition to making "maybe 500." Crowder also said he didn’t etch anything on the screws he made for Spinal Solutions. Instead, that trail seems to lead to another Spinal Solutions contractor, Ryan Zavilenski. On his YouTube page, Zavilenski boasts of owning a laser engraver. He also posted photos of spinal implants on his photo-sharing website. From behind the screen door of his Santa Rosa, California, apartment, Zavilenski confirmed to CIR that he did laser engraving for Spinal Solutions several years ago. He said he engraved only a few screws, however, which he called prototypes ...

The Division of Workers’ Compensation (DWC) has posted adjustments to the hospital outpatient departments and ambulatory surgical centers section of the official medical fee schedule (OMFS) to conform to changes in the Medicare payment system as required by Labor Code section 5307.1. The changes take effect December 1, 2014.

L.C. 5307.1(g)(1)(A)(i) provides that the annual inflation adjustment for outpatient hospital facility fees shall be determined solely by the estimated increase in the hospital market basket. Thus, in lieu of using the Medicare 2014 rates to determine the updated OMFS amounts, the estimated increase in the hospital market basket was applied to the 2013 OMFS rate. The 2013 unadjusted conversion factor was $70.761. The estimated increase in the market basket is 2.5%. The revised unadjusted conversion factor under the OMFS is $72.530 ($70.761 x 1.025).

Section 9789.34 Table A sets forth the wage index values and adjusted conversion factors that are applicable to ASCs. These conversion factors would also be applicable to any hospitals that are not in Table B (section 9789.35). Section 9789.35 Table B sets forth hospital-specific wage index values and adjusted conversion factors for services rendered on or after December 1, 2014. Table B reflects the additional 7.1% payment adjustment for services rendered by rural sole community hospitals and EACHs.

More information and the adjustments to the hospital outpatient departments and ambulatory surgical centers section of the OMFS can be found on the DWC OMFS page

...

A San Gabriel Valley doctor has pleaded not guilty to federal drug trafficking charges that allege he illegally distributed drugs that include the powerful and addictive painkiller oxycodone. Dr. Daniel Cham, 47, was arraigned on a 31-count indictment and a trial was scheduled for December 16. Bond was set at $140,000, and Cham was ordered to serve home detention while free on bond and was prohibited from practicing medicine. If convicted of the 31 counts in the indictment, Cham would face a statutory maximum sentence of 339 years in federal prison.

The indictment, which was returned by a federal grand jury on October 7 and unsealed when the defendant was arrested, charges Cham with drug trafficking, money laundering, fraud and making false statements to federal authorities. The indictment focuses on prescriptions Cham wrote at various locations, including his medical offices in La Puente and Artesia. The drugs involved in the allegedly illegal prescriptions include oxycodone (a powerful narcotic painkiller best known under the brand name OxyContin), hydrocodone (a narcotic painkiller often sold under the brand names Vicodin and Norco), alprazolam (commonly known by the brand name Xanax), and carisoprodol (as muscle relaxer best known as Soma).

In May 2014, investigators executed federal search warrants at 13 locations, including Cham’s residence and medical offices. According to the affidavit in support of the search warrants, which was unsealed at Cham’s arraignment, the doctor often saw patients between 8 p.m. and 2 a.m. on Fridays, Saturdays and Sundays, and he post-dated prescriptions to make them appear to have been written on weekdays. In the year that ended in March 2014, Cham issued more than 5,500 prescriptions for controlled substances - primarily for oxycodone, hydrocodone, alprazolam and carisoprodol - and he issued more than 42,000 such prescriptions since July 2010, according to the affidavit.

The affidavit also discussed how an undercover officer made three visits to Cham’s La Puente office earlier this year, and how Cham wrote prescriptions for controlled substances in exchange for $200 or $300 in cash or money orders. As discussed in the affidavit, Cham issued a prescription for oxycodone even though the undercover operative said he "had been high and drunk while receiving controlled substance prescriptions" previously from Cham. On another occasion, Cham prescribed oxycodone even though the undercover law enforcement officer presented, in lieu of photo identification, a written notice that his license had been suspended for driving under the influence.

In addition to counts related to the undercover operation, the indictment charges Cham with fraudulently issuing prescriptions for controlled substances to Tracy Townsend, who used at least five false identities. Townsend, 51, of Studio City, is also charged in the indictment, but his whereabouts are currently unknown.

An investigation by IRS - Criminal Investigation and the Drug Enforcement Administration’s Financial Investigation Group showed that Cham used at least four bank accounts to launder the proceeds of his illegal prescriptions. The indictment charges Cham with concealing proceeds derived from the undercover visits by depositing them into an account held in the name of a separate business.

The investigation into Cham was conducted by the Drug Enforcement Administration, IRS - Criminal Investigation, the Los Angeles County Sheriff’s Department’s Health Authority Law Enforcement Task Force, the Federal Bureau of Investigation, the California Medical Board and the Los Angeles Police Department ...

Early, proactive care from high-performing physicians produces superior outcomes at lower costs, according to information presented at the 2014 California Association of Joint Powers Authorities Conference held last month in Lake Tahoe, Calif.

The report in the Claims Journal says that speakers Gregory Moore, M.P.H., president and CEO of Harbor Health Systems, a One Call Care Management company, and Douglas Benner, M.D., chief medical officer of EK Health, presented both data and best practices to the audience of insurance-based risk sharing pool executives.

"The purpose of our study was to determine whether claims outcomes were impacted by delays in care, and whether accelerating care created unintended consequences," said Moore. "The message here is that claims operations leaders need to look at practices or inefficiencies that are delaying care delivery and consider the financial impact of those delays. We feel strongly this opens further conversation around the evidence that identifying high-performing doctors and letting them practice assertive medicine produces the best outcomes, lowers costs and shortens claims duration."

The findings demonstrated that the more aggressive approach to care by high-performing physicians had significant reductions in claim duration, indemnity costs and a lower incidence in litigation:

1) Reductions in claim duration from 13 - 20 percent;
2) Reductions in indemnity costs from 19 - 61 percent;
3) Reductions in litigation from 7.2 - 16 percent.

The following best practices should be followed to realize those benefits from proactive, early care:

1) When you can, identify providers that have a trusted track record and treat claims aggressively in order to decrease claim duration and total claim costs. Data shows that the longer the delay in care, the longer the claim duration and cost.
2) Integrate best-in-class physicians with the use of evidence-based guidelines in outcomes-based networks. Remember, guidelines are not absolute barriers on whether to approve care earlier - the key is to understand the patient and not delay care that is already identified as needed.
3) Break down the barriers involved in care coordination for efficiency, better results and faster return-to-work.

The presentation included data from a Harbor Health Systems study on the impact of aggressive care. The study reviewed information for more than 700,000 claims for four procedures: ACL (anterior cruciate ligament) repair, knee menesectomy, shoulder rotator cuff repair, and carpal tunnel injuries.

A free white paper highlighting the impact of aggressive medical care in workers’ compensation is now available ...

Ana Diaz filed an Application for Adjudication of Claim for injuries allegedly sustained to her right shoulder, right arm, right hand fingers, and lower back. Some of the alleged injuries were accepted by Zenith Insurance Company as industrial, and her claim was resolved by Compromise and Release approved on April 30, 2014.

Several outstanding lien claims remained unresolved, and the matter was set for lien conference on August 6, 2014. Hearing representative Javier Jimenez appeared at the lien conference on behalf of lien claimant California Imaging, who filed a lien for photocopying services. Zenith contended that California Imaging was not a properly licensed professional photocopier as required by the Business and Professions Code.

Hearing representative Javier Jimenez was unable to respond to defendant's contention and unaware of lien claimant's licensing status; was unable to explain billing characterized by the WCJ as "less than clear"; and was generally unable to respond to inquiries regarding the issues in dispute and appeared unfamiliar with the file. Mr. Jimenez advised the WCJ that his only authority .was to set the matter for lien trial. When asked by the WCJ to identify the person most knowledgeable at California Imaging regarding. 'the licensing and billing issues, Mr. Jimenez named Maria Rubio Trujillo, and further stated that Trujillo advised him that the "proper" name of lien claimant California Imaging is actually San Diego Imaging.

The WCJ then continued the lien conference to August 22, 2014, and ordered Trujillo to personally appear "in order to explain lien claimant's billing, address the licensing issue, and explain the relationship between California Imaging and San Diego Imaging to determine the true identity of the lien claimant." Trujillo's petition for reconsideration and for removal followed.

Trujillo contends in her petition that she has unspecified personal and family responsibilities as well as work duties that would be "severely and unreasonably impacted" in unspecified ways by her personal appearance in Oxnard, and contends in essence that the Order was an abuse of discretion and a product of bias against her and/or lien claimant California Imaging by the WCI.

The WCAB dismissed the petition for reconsideration as there was no final order subject to reconsideration, and denied removal in the case of Diaz v Sambrailio.

The Workers' Compensation Appeals Board and individual WCJs have broad power to do all things necessary or convenient to fully adjudicate the disputed issues and to ascertain the substantial rights of the parties and carry out justly the spirit and provisions of the Labor Code. This includes the inherent power to control the WCAB's practice and procedure to prevent frustration, abuse, or disregard of its processes which in tum includes the power to order the personal appearance of parties at hearings (Rule 10240( d); Henkel v. State Comp. Ins.Fund (2010) 38 Cal. Workers' Comp. Rptr. 218 (ADJ4197101, Appeals Board Panel Opinion)).

Rule l 0770.1 subdivision (e), provides in relevant part. that every party or representative appearing at a lien conference or lien trial "shall have sufficient knowledge of the lien dispute(s) to inform the Workers'. Compensation Appeals Board as to all relevant factual and/or legal issues in dispute." As explained by the WCJ in his Report, the representative for lien claimant California Imaging was unable to respond to reasonable inquiries regarding the licensing issue, nor was he able to provide more basic information such as an explanation or clarification of the disputed billing. Because the representative was unable to comply with Rule 10770.1 (e), the WCJ was unable to meaningfully discuss the issues with the parties or determine whether there were disputes that required a lien trial. It was within the WCJ's discretion to continue the matter to another date and to require lien claimant's person most knowledgeable to appear, so that a meaningful conference could be held. The Order for Trujillo to personally appear was not arbitrary, capricious, unreasonable, or improperly motivated ...

A panel discussion at the American Society for Healthcare Risk Management's annual conference in Anaheim this month covered the advantages and disadvantages of self administration of health care benefits for injured workers in the health care industry. According to the report in Business Insurance, self-administration of workers compensation claims can be a favorable option for health care organizations to track how their workers are being treated. At the same time, workers comp claims managers said third-party administrators can aid health systems that manage comp claims in multiple states.

Patrick Venditti, executive director of BJC Corporate Health Services in St. Louis, the risk management division of St. Louis-based BJC HealthCare, said the nonprofit health care provider used a TPA to manage workers comp claims before 2005. But it moved to administering its own workers comp claims because it allowed the parent of 12 hospitals and other medical facilities to effectively treat injured workers and reduce its costs, while the TPA previously focused primarily on costs, he said. "Being in a health care setting," Mr. Venditti said, "we are aligned with our physicians, we get to know a lot of physicians within the system." The health care provider is self-insured, and has 28,000 employees and about 5,000 volunteers eligible for workers comp, he said. "So we partnered with them and the goals that we have are aligned to get the best care we can for those patients."

Dan Nicholson, director of integrated disability management at Sutter Health in Sacramento, California, agreed that self-administration has been favorable for his company, which is self-insured and has about 50,000 employees. "When you're self administered in a health care setting, your goal is patient care," Mr. Nicholson said. "That's..... drilled down to the people in our claims staff because we're all there to facilitate care at the bedside. And to do that effectively, we need to make sure our injured clinicians get good, effective medical treatment and they get back to work as soon as practical."

Suzann M. Bylund, senior director of associate risk management programs at Ascension Risk Services in St. Louis, the risk management division of Ascension Health, said the health care provider's workers comp claims are administered by Sedgwick Claims Management Services Inc. Sedgwick has adjusters who work exclusively on Ascension claims at the health system's offices, and Ms. Bylund said they are treated as part of the Ascension staff. Working with a large TPA has helped Ascension manage the nuances and legal changes in workers comp systems across the country, Ms. Bylund said. The health system, which is self insured, has 155,000 employees in 23 states and Washington. "We've found it to work very well just because of the sheer size of the program," she said.

Mr. Nicholson said organizations that use TPAs to manage workers comp claims should follow Ascension's example by integrating TPA claims handlers with internal staff. "Make sure that you treat your claims staff like they were one of your own employees," he said. "Treat them well, recognize them when they do good work... and don't manage them with a hammer because it doesn't work."

Mark Walls, vice president of communications and strategic analysis for St. Louis-based workers comp insurer Safety National Casualty Corp., moderated the panel ...

Researchers at Western University have identified a specific gene that plays a key role in the degradation of cartilage in osteoarthritis (OA). The study, published online in the journal Arthritis and Rheumatology showed that when the gene, PPARdelta, was removed from cartilage the progression of post-traumatic osteoarthritis was considerably slowed. Study co-author Frank Beier, PhD, a professor in the Department of Physiology and Pharmacology at Western's Schulich School of Medicine and Dentistry, says this promising new research may be the first step to identifying new treatments. "What this tells us is that this gene is an important player in the pathogenesis of the disease and therefore might be a potential therapeutic target," Beier said.

According to a report by the Arthritis Alliance of Canada, more than 4.5 million adult Canadians currently live with OA, and it is estimated that it drives $10 billion in direct health care costs. Post-traumatic osteoarthritis, which is triggered by a specific injury, makes up 10 to 15 per cent of all cases of the disease and affects a younger, more active portion of the population.

"The current thinking is that what happens in those first hours after injury can have long-term impact," Beier said. "This research shows that we might have a window that we could give these drugs right after the injury happens and maybe slow the onset of the cartilage degradation associated with osteoarthritis."

These research findings may also help to explain the link between obesity and OA. It has long been known that obesity is one of the major risk factors for OA, and the conventional thinking was that the link was associated with the increased load on the joints. However, recent evidence suggests that chemical signals circulating in the body contribute to osteoarthritis risk in obese patients. Beier says that because PPARdelta is activated by fatty molecules, lipids from a high-fat diet could directly activate the pathway that allows PPARdelta to break down cartilage in the animal model.

"This also suggests that in the future, modulation of PPARdelta through diet changes, as opposed to drugs, could also be a strategy to prevent Osteoarthritis," Beier said.

Apportionment of permanent impairment in California Workers Compensation is based upon causation. Genetic research seems to be creating more and more opportunities to develop theories upon which apportionment can be based ...

The Berkeley city auditor presented a report to Berkeley City Council intended to help the Berkeley Police Department reduce its injuries and workers’ compensation claims, which cost BPD $2.4 million in fiscal year 2013. The Daily Californian reports that this study - initiated by the city auditor’s office as part of an annual risk assessment plan - recommended several ways that BPD could more efficiently document injuries, including sharing information with the human resources department and redefining how injuries are classified in reports. The new practices would help city management and BPD identify trends and develop measures to prevent future injuries, according to the report.

"Lowering the cost of claims will involve leadership, resources and better data," said City Auditor Ann-Marie Hogan, who commissioned the report. "Our audit clearly demonstrates the ways in which data collection and use of that data can be improved, and city management is committed to making those changes."

A contractor recently hired by the city found that BPD is among police departments with the lowest number of both dollar losses and claims when compared with five other police departments with similar characteristics and operations.

The audit is part of an effort to reduce workers’ compensation costs throughout the city. According to a Sept. 30 report by the city manager, in fiscal year 2013, the city spent more than $6 million on workers’ compensation and filed 200 new claims. Berkeley reduced its costs by 18 percent for fiscal year 2014, saving $1.1 million and filing 23 fewer claims. The report attributes the difference to several factors, including "aggressive and sustained emphasis" on employee safety training. "Resources will be needed to do the extra work required to improve systems and outreach to employees," Hogan said in an email. "With steadily shrinking available resources for the police department and all city departments, it will be a challenge to make the time available to complete the work."

Of the $2.4 million in BPD’s costs, approximately $1.9 million was paid to the city’s workers’ compensation fund, which acts as a type of insurance fund for current and past claims. The remaining $500,000 was spent on payroll costs for BPD employees on leave for injury.

While the audit was not aimed at reducing workers’ compensation fraud, Hogan said data gathered with the improved methods can help identify trends that could indicate fraudulent claims.

BPD currently classifies injuries in 14 different causal categories, including lack of skill or stress. Last year, the most frequent injuries sustained were during detention, arresting and booking procedures and from exposure to illness.

Some of the report’s recommendations, such as a citywide written guidance for reporting injuries, have been partially implemented, while all are expected by 2015 ...

Castro Valley orthopedic surgeon, Douglas J. Abeles, M.D., surrendered on an arrest warrant obtained by the Alameda County District Attorney's Office for his role in an insurance fraud scheme occurring out of his East Bay business office. He has been charged with 31 felony offenses following an investigation that was conducted jointly by the Alameda County District Attorney's Office and the California Department of Insurance.

Medical Board records do not show any disciplinary actions against him and also do not reflect that he is board certified in any specialty. He currently has unfettered rights to practice medicine. According to his website drabeles.com, "Abeles specializes in Sports Medicine, Spine Surgery, and General Orthopaedics. He completed fellowships at Georgetown University-Virginia Sports Medicine Institute and also USC-Rancho Los Amigos Spine Surgery in 1995. His residency was completed in 1993 at the prestigious New York Medical College-Brooklyn-Queens (previously known as Catholic Medical Center). He also rotated on the spine and pediatric services at the Hospital for Joint Disease in 1992".

The Criminal Complaint filed by authorities against Abeles and his office manager, Gabriela Cuevas, alleges that for several years he falsely and fraudulently billed insurance companies for medical services that were not provided. While Abeles, had an orthopedic medical practice in Castro Valley, he also owned and operated at least four medically-related businesses from an office located at the Castro Valley-Hayward border. These businesses included drug testing urine analysis for medical offices that contracted with him. It was through this business that he allegedly fraudulently billed insurance companies for lab reports.

Abeles allegedly formed Physicians RX Network, Inc. ("PRXN") in 2005 in a location other than his medical office. PRXN contracted with physicians in regards to the dispensing of prescribed drugs, including prescription compound creams, billing the insurance companies on behalf of the physicians for these drugs. In late 2010, Abeles went into the Urine Analysis ("UA") business, forming Redwood Laboratory Management, LP and Redwood Laboratory Associates, LLC ("RLM"). RLM contracted with physicians in regards to urine drug testing of patients and billing insurance companies on behalf of the physicians for this drug testing.PRXN and RLM operated in the same office and the two businesses overlapped and shared. In May of 2011, Abeles formed another business, PRXN Toxicology, LLC.

Abeles hired Gregg Gorski to be a sales representative, Roxanne Cecot to be the billing supervisor and Larry Davis to be the Chief Operating Officer of PRXN. All three had complained about improprieties in PRXN billings, particularly about over-billing insurance companies for prescription drug compounds. Roxanne Cecot learned that Douglas Abeles told the receptionist at PRXN and another PRXN employee to over-ride the billing software at PRXN and manually increase the prices When Roxanne Cecot complained to Abe!es about the billing improprieties Abeles allegedly replied "Screw them until they catch on." Abeles allegedly sent an email that said "if any employee further implies any wrong doing to anyone they are to be let go immediately on grounds of insubordination and liable. We cannot operate a successful company with this kind of mutiny .... "'

One document allegedly sent to insurance companies was was called a "Urine Toxicology Review'' report and it purported that the physician that ordered the urine test spent forty-five minutes reviewing medical records that had been submitted for the physician's review by PRXN. This activity allegedly did not take place and the billing was fraudulent In March of 2013, Gabrieia Cuevas' work computer was seized pursuant to a court ordered search. There were over 10,200 of these UTR's stored in her computer.

Abeles posted $355,000 bail and Gabriela Cuevas was released on her own recognizance. Arraignment is scheduled for Monday, November 3, 2014.

.Any medical professional or insurance company that believes it may have been a victim to this fraud is asked to contact the Alameda County District Attorney's Office, Alameda ADA Teresa Drenick: Teresa.drenick@acgov.org Facebook Twitter @AlamedaCountyDA. Phone: 510-272-6280 ...

Jonathan Duong sustained an industrial injury to his spine while employed by the Automobile Club of Southern California. The sole issue framed for trial on a discovery dispute was defendant's request for an order permitting it to provide surveillance videos to medical-legal evaluators, pursuant to Qualified Medical Evaluator Regulation 35(d). Applicant asserted that the films violate his right to privacy and, therefore, are not admissible and should not be provided to the doctors.

An investigator testified that he conducted surveillance of the applicant by following him first along the street and later by entering the driveway to a Mobile Home Park; that he entered and parked in the visitor parking space; that he entered onto the property three times and each time parked in the same location; that he filmed applicant entirely from the car; that there were no signs regarding private property or trespassing that he observed from the street when he entered the driveway; and that he understood that the Mobile Home Park was not applicant's place of residence. He also filmed him inside an Albertson's grocery store.The only evidence admitted at trial was a photograph containing an Albertson's logo and the words, "NO Videotaping, Photography, Audio Taping, anywhere on store premises without prior consent."

The owner of the Mobile Home Park; testified that that there are two signs at each entrance that read "Invitees and Guests Only. No Trespassing. Violators will be Prosecuted;" that there are also signs that say "Private Property;" that he did not invite the investigator onto the property; that he does not know if anyone else invited the investigator; that he did not give permission to the investigator to film on the property; that he did invite applicant to visit his property; that he is applicant's adoptive father; that his unit is the fifth mobile home from the street; and that there is guest parking as you enter into the park from the street.

The WCJ excluded the sub-rosa video evidence finding that "the filming was accomplished in a manner that violated the rules of both properties and the surveillance company itself." In her Report, the WCJ added that ''there is an important policy consideration to be factored in where the evidence is obtained in a manner which violates posted rules and company policies." The WCAB granted reconsideration and removal and reversed the ruling in the panel decision of Duong v. Automobile Club of Southern California. It issued a new Findings and Order ruling that that the sub-rosa video is admissible and ordering that it may be provided to any medical-legal evaluator or treating physician.

The panel reasoned that applicant did not establish any statutory restriction that prevents defendant's private investigators from obtaining sub-rosa video in apparent violation of rules posted by private property owners. (Cf. Lab. Code, § 435 (prohibiting employers from making video recordings of employees in limited circumstances); Pen. Code, § 6470) (prohibiting secret videotaping of persons in various stages of undress).)

The WCAB went on to state that "We are not persuaded by the argument that defendant violated Civil Code section 1708.84 (the so-called "anti-paparazzi" statute), where subsection (g) creates an exception for private investigators attempting to capture surveillance video of suspected fraudulent conduct. More importantly, Civil Code section 1708.8 addresses civil tort liability for the invasion of privacy. The proceedings before us do not pertain to civil tort liability but rather the admissibility of evidence before the Appeals Board. Therefore, Civil Code section 1708.8 appears to be inapplicable." It went on to state that "we do not agree that applicant had a reasonable expectation of privacy" in either the parking lot of the Mobile Home Park or inside of Albertson's. Generally, there is no reasonable expectation of privacy in settings where activities are conducted in an open and accessible space, within the sight and hearing of the general public or of customers or visitors to that open and accessible space, or in areas of commercial premises that are open to the public.

In this case, the private investigator filmed applicant in the parking area of a Mobile Home Park and inside an Albertson's grocery store. Applicant did not reside at the Mobile Home Park but was there visiting his adoptive father. There is no evidence that the Mobile Home Park is a gated community, that the general public is excluded by the use of a gate or security, or that the parking area is somehow shielded from view of the street. This is especially true where members of the public can freely drive into the common parking area and where the parking area of the home he was visiting was only five (5) houses from the street. "We find even Jess expectation of privacy at Albertson's where applicant was filmed in a commercial area open to the public."
...