Former Carlsbad resident David Perez was sentenced in federal court to 30 months in custody for selling unapproved "Energy Wave" medical devices over the internet and mailing them to customers throughout the United States.

According to admissions in his plea agreement, Perez marketed the "Energy Wave" device using the website www.myenergywave.com. The Energy Wave device consists of a micro-current frequency generator with a digital readout, two stainless steel cylinders, two personal application plates with connectors and lead wire for the cylinders and plates. Users were provided with an operating manual and a list of Auto Codes that set forth over 450 digital settings for the device, directed to treat specific conditions from abdominal pain, AIDS and diabetes to stroke, ulcer and worms. The Auto Codes and Manuel advised users to connect the cylinders or plates to the machine, and touch them to the body for a recommended run time to treat each condition.

David Perez admitted selling each device for approximately $1,200-$1,500, and receiving gross proceeds of approximately $271,000. He also acknowledged that he intended to defraud and mislead the Food and Drug Administration by attempting to evade the agency’s oversight of medical claims made regarding the Energy Wave device by maintaining a separate website (rifecodes.com) to which he referred customers who needed to obtain the auto codes that allegedly were used to treat the various medical conditions. Perez admitted that he knew or should have known a number of his customers were vulnerable because they had purchased the device in an attempt to cure cancer, and that they were marketing the device without the proper FDA approvals.

"It’s unconscionable to sell useless medical devices to critically ill people who are hoping for a miracle," said U.S. Attorney Laura Duffy. "This sentence reflects the serious nature of this crime, and our commitment to protecting those who are most vulnerable to being preyed upon by heartless predators."

"This investigation uncovered a serious public health threat and should serve as a warning to those who put consumers at risk for their own financial gain," said Dave Shaw, special agent in charge for HSI San Diego. "HSI agents will continue to work with our law enforcement partners, both here and abroad, to investigate medical-related fraud over the Internet, especially when it involves an online marketing scam, such as this case in which unregulated medical devices were sold under false pretense."

"Consumers rely on the FDA to ensure that the medical products they use, including medical devices, actually treat the diseases or conditions they claim to. When criminals sell misbranded devices not cleared by the FDA, they put users’ health at risk," said Lisa L. Malinowski, Special Agent in Charge, FDA Office of Criminal Investigations’ Los Angeles Field Office. "We will continue to devote our resources to removing such threats to the public’s health from the U.S. marketplace." ...

Artificial disk replacement is a newer surgical procedure for relieving spine pain. Similar to hip or knee joint replacements, a disk replacement substitutes a mechanical device for an intervertebral disk in the spine. The device is meant to restore motion to the spine by replacing the worn, degenerated disk. It is an alternative to the commonly performed anterior cervical discectomy and fusion (ACDF), a surgical procedure that is designed to address the pathology by eliminating motion at the diseased disc level. Artificial disk replacement initially gained FDA approval for use in the U.S. in 2004. Over the past several years, numerous other disk replacement designs have been developed and are currently being tested. Development of these procedures first appeared in the lumbar spine, and more recently cervical total disc replacements (cTDR) at one level, and now at two levels.

The natural cervical intervertebral disc is an amazing mechanical structure from an engineering perspective. It has the ability to absorb a large compressive load while still providing an impressive range of motion between the bones in the neck. Duplicating the natural disc's form and function with a synthetic - or artificial - disc is challenging. However, several artificial cervical discs have been developed and are available as a surgical option for patients with symptomatic cervical disc problems.

One of the newer developments, Mobi-C is a cobalt chromium alloy and polyethylene mobile-bearing prosthesis specifically designed as a bone-sparing, cervical intervertebral disc replacement for both one and two-level indications. All other cervical disc prostheses are FDA approved for one-level use only. In addition to the unique mobile-bearing feature, Mobi-C offers a simplified surgical technique.

Although both ACDF and cTDR satisfactorily treat clinically symptomatic cervical pathology, fusion alters cervical mechanics by placing increased stresses on adjacent segments, which may contribute to the development of symptomatic degeneration at those adjacent levels. In comparison, at least in theory, by preserving the motion of the operated segment, cTDR places comparatively less stresses on adjacent levels, which may serve to protect those levels. Multilevel ACDF is biomechanically more demanding than single-level ACDF with concomitant greater stress distribution on adjacent levels. Additionally, reoperation rates are generally higher in multilevel versus single-level ACDF. Currently there is a paucity of medical evidence evaluating the outcome of multilevel cTDR procedures.

However this month there is a new published study. Five-year clinical results of cervical total disc replacement (cTDR) compared with anterior discectomy and fusion for treatment of two-level symptomatic degenerative disc disease: a prospective, randomized, controlled, multicenter investigational device exemption clinical trial has just been published by the Journal of Neurosurgery: Spine.

A total of 225 patients received the Mobi-C cervical total disc replacement device and 105 patients received ACDF. Both cervical total disc replacement and ACDF significantly improved general and disease-specific measures compared with baseline. However, there was significantly greater improvement in general and disease-specific outcome measures and a lower rate of reoperation in the 2-level disc replacement patients versus ACDF control patients.

In both groups, the overall rates of patient satisfaction were high. However, there was significantly higher reported patient satisfaction in the cTDR group versus the ACDF group. At 5 years, 96.4% of cTDR patients and 89.5% of ACDF patients reported being either very satisfied or somewhat satisfied with their treatment. At 5 years, 94.8% of patients in the cTDR group and 84.2% of patients in the ACDF group reported that they would definitely or probably recommend the surgery to a friend ...

Citing lower medical loss development, as well as indemnity and medical severities that continue to emerge below expectations, the insurer and public members of the WCIRB Governing Committee who were in attendance voted unanimously to authorize the WCIRB to submit a mid-year pure premium rate filing to the California Department of Insurance (CDI).

The filing will propose a July 1, 2016 average advisory pure premium rate of $2.30 per $100 of payroll which is -10.4% lower than the corresponding industry average filed pure premium rate of $2.57 as of January 1, 2016 and 5.0% less than the Insurance Commissioner's approved average January 1, 2016 advisory pure premium rate of $2.42.

The Governing Committee’s decision was based on the WCIRB Actuarial Committee’s analysis of insurer loss and loss adjustment experience as of December 31, 2015, which was reviewed at public meetings of the Actuarial Committee held on March 22 and April 5, 2016.

The Actuarial Committee noted that allocated loss adjustment expense in the post-SB 863 environment is emerging higher than projected and the count of liens increased sharply in 2015. In addition, cumulative trauma claims continue to increase, particularly in the Los Angeles region. Despite these upward pressures on system costs, the Governing Committee believed that lower frequency, lower medical severity and favorable loss development warranted a reduction in the industry average pure premium rate as of July 1, 2016.

The WCIRB anticipates submitting its filing to the CDI by April 11, 2016. The filing and all related documents will be available in the Publication and Filings section of the WCIRB website (www.wcirb.com) and the WCIRB will issue a Wire Story once the filing has been submitted.

Documents related to the Governing Committee meeting, including the agenda and materials displayed or distributed at the meeting, are available on the Committee Documents page of the WCIRB website (www.wcirb.com) ...

In 2015, the industry observed the emergence of "captive pharmacies," or pharmacies that enter arrangements to be owned or operated by pharmaceutical manufacturers. Captive pharmacies typically promote the manufacturer’s products instead of other lower-cost, equally effective medications. The intent is to circumvent formulary management programs designed to protect the patient and the plan sponsor from unnecessarily filling high-cost medications. The most high-profile captive pharmacy arrangements were between Valeant Pharmaceuticals International and Philidor Rx Services, and Horizon Pharma PLC and Linden Care Pharmacy.

Express Scripts Holding Co, the largest U.S. pharmacy benefit manager, is "reviewing and evaluating all similar captive pharmacy arrangements that we know of and will work to identify others," said Brian Henry, a spokesman for Express Scripts. He defined a captive pharmacy as one that derives the vast majority of prescription volume from one manufacturer or one product. CVS Health, the second-largest pharmacy benefit manager, also said it is continuing to investigate other pharmacies to uncover inappropriate billing and dispensing activities.

The New York Times reports that Valeant has encouraged doctors to submit prescriptions for its products to Philidor Rx Services, rather than send patients to the corner drugstore. That makes it more difficult for pharmacists and insurers to substitute a less expensive alternative. Co-payments are often subsidized, making it easier for the patients to agree to get the higher-priced Valeant drug. And Philidor handles the task of fighting for reimbursement from insurers, taking that off doctors’ hands. What has raised even more suspicion is that Valeant did not disclose its relationship with Philidor until recently, when word started to get around, even though it had paid $100 million for an option to acquire the pharmacy, for no additional payment. Valeant said the transaction was too small to be material.

Phildor Rx Services was denied a license to dispense drugs in California because, the state said, it had not been truthful identifying its owners and financial officers. When Philidor failed to get the license in California, entities affiliated with it bought stakes in at least two California pharmacies. One of those, R&O Pharmacy, has presented evidence in litigation that the entity that bought the stake tried to hide that it was a front for Philidor. It also claims that Philidor used R&O’s pharmacy identification numbers to help fill its own prescriptions.

R&O Pharmacy is a small storefront community pharmacy amid rows of low-slung office buildings in Camarillo, California. According to Bloomberg News, 64-year-old pharmacist Russell Reitz agreed to sell his business there to a Delaware-registered company for $350,000. Even before the sale agreement was executed, other pharmacies began using an R&O identification number to bill for prescriptions that R&O hadn’t filled, sometimes for drugs the store didn’t stock, according to the court documents. Reitz asked why R&O’s suitor had signed an insurance-company audit for the pharmacy that Reitz still controlled. The next day, he received surprise visitors from a firm called Philidor RX Services, whose links to the buyer Reitz struggled to understand. Increasingly alarmed as millions of dollars in payments flowed in, Reitz started stashing away the checks. Then he got sued. It wasn’t pocket change. Valeant’s general counsel, in a September 4 letter to Reitz, said R&O owed Valeant in connection with gross invoices of $69.9 million. He threatened to take "any and all actions" to ensure payment.

As a result of publicity following the R&O lawsuit Valeant finally revealed that it had a secret network of pharmacies pushing its products around the country. In March, 2016 Valeant announced the litigation between the parties has been resolved by a "confidential settlement agreement that resolves all claims between them." Reuters reported that Philidor Rx Services also has had questionable transactions with West Wilshire Pharmacy in Los Angeles.

One of the products dispensed by Philidor is Solodyn, a Valeant acne drug that costs more than $1,000 a month and is a formulation of an old generic antibiotic, minocycline. Another product is Jublia, an ointment for toenail fungus that costs more than $500 a bottle and is one of Valeant’s fastest-growing treatments. Philidor handled 44 percent of Valeant’s Jublia business in the third quarter ...

The "Daubert" standard is a rule of evidence regarding the admissibility of expert witnesses' testimony during United States federal legal proceedings, and litigation in many states. Pursuant to this standard, a party may raise a Daubert motion, which is a special case of motion in limine raised before or during trial to exclude the presentation of unqualified evidence to the jury.

The Daubert trilogy refers to the three United States Supreme Court cases that articulated the Daubert standard. Daubert v. Merrell Dow Pharmaceuticals, held in 1993 that Rule 702 of the Federal Rules of Evidence did not incorporate the Frye "general acceptance" test as a basis for assessing the admissibility of scientific expert testimony, but that the rule incorporated a flexible reliability standard instead. General Electric Co. v. Joiner held that a district court judge may exclude expert testimony when there are gaps between the evidence relied on by an expert and his conclusion, and that an abuse-of-discretion standard of review is the proper standard for appellate courts to use in reviewing a trial court's decision of whether it should admit expert testimony and Kumho Tire Co. v. Carmichael held in 1999 that the judge's gatekeeping function identified in Daubert applies to all expert testimony, including that which is non-scientific.

And here is how the Daubert standard works in litigation. Reuters Health reports that federal judge in Philadelphia dismissed more than 300 lawsuits against Pfizer Inc alleging that its antidepressant Zoloft caused birth defects in children born to women who took the drug while pregnant.

The decision from U.S. District Judge Cynthia Rufe in the Eastern District of Pennsylvania said that plaintiffs had not produced enough evidence to show a plausible scientific link between the drug and birth defects, following several previous decisions that excluded testimony from key expert witnesses for plaintiffs.

"The court recognizes that the final scientific verdict as to whether Zoloft can cause birth defects may not be delivered for many years," Rufe wrote. "Nevertheless, plaintiffs chose when to file their cases, and the court concludes that for the plaintiffs who have continued to pursue their claims, the litigation gates must be closed."

The ruling affects more than 300 lawsuits against Pfizer consolidated before Rufe in federal court.

A Pfizer spokeswoman, Neha Wadhwa, said the decision "affirms that plaintiffs have failed to produce any reliable scientific evidence demonstrating that Zoloft causes the injuries they alleged." Dianne Nast, a lead lawyer for the plaintiffs, did not immediately return a call for comment. Pfizer had previously prevailed in two trials involving Zoloft birth-defect claims in state courts in Philadelphia and Missouri.

California does not use the Daubert standard, It adheres to the more liberal "Frye" general acceptance test. Indeed, the court of appeal in the unpublished case of Star Insurance Company v WCAB and Maria Rosa Tavares specifically rejected the Daubert standard this January in workers' compensation cases. This explains why it is easier to win cases on weak science in California that would not likely succeed in federal courts or states that have adopted the Daubert rule ...

The California Supreme Court ruled that employers cannot deny a worker a place to sit just because they prefer the person stand, and they must consider the employee’s work station, not their overall duties, when determining whether to provide a seat. The court’s opinion stemmed from lawsuits brought by cashiers at the CVS drugstore chain and tellers at Chase Bank who said they were wrongly denied a place to sit while working. Experts called the opinion a victory for the cashiers and tellers.

Nykeya Kilby worked for eight months as a customer service representative for CVS Pharmacy, Inc. During both the interview and training process, CVS told Kilby it expected her to stand while performing her various duties. Although actual duties varied by both store and shift, Kilby’s duties included operating a cash register, straightening and stocking shelves, organizing products in front of and behind the sales counter, cleaning the register, vacuuming, gathering shopping baskets, and removing trash. CVS did not provide Kilby a seat for these tasks. Kilby filed a federal class action lawsuit alleging CVS violated Wage Order No. 7-2001, applicable to the mercantile industry. The district court ruled that an employee’s "entire range of assigned duties" must be considered to determine whether the work permits the use of a seat or requires standing. It noted "there is no dispute that many of the duties performed by Clerk/Cashiers at CVS require the employee to stand while performing them . . . ." Accordingly, it granted summary judgment in favor of CVS and Kilby appealed.

Kemah Henderson and three other bank tellers worked at JPMorgan Chase Bank branches. They filed a class action suit against Chase for violating the suitable seating provision of Wage Order No. 4-2001, section 14, subdivision (A) (section 14(A)), applicable to "professional, technical, clerical, mechanical, and similar occupations." The district court noted that the job duties varied depending on the shift or branch location and whether the employee was a lead or regular teller. Based on these differences, the district court denied class certification and Henderson appealed.

The Ninth Circuit Court of Appeal certified three questions that needed clarification to the California Supreme Court involving California wage order requirements that an employer provide suitable seating for employees under certain circumstances which were answered in the case of Kilby v CVS Pharmacy.

Over a century ago, the Legislature responded to the problem of inadequate wages and poor working conditions by establishing the Industrial Welfare Commission (IWC), giving it authority to investigate various industries and promulgate wage orders establishing minimum wages, maximum work hours, and conditions of labor. Wage and hour claims are today governed by two complementary and occasionally overlapping sources of authority: the provisions of the Labor Code, enacted by the Legislature, and a series of 18 wage orders.The wage orders at issue here state that "[a]ll working employees shall be provided with suitable seats when the nature of the work reasonably permits the use of seats." (Cal. Code Regs., tit. 8, §§ 11040, subd. 14(A) (Wage Order No. 4-2001), 11070, subd. 14(A) (Wage Order No. 7-2001).)

The California Supreme Court answered the Questions posed by the federal Ninth Circuit Court of Appeals as follows:

(1) The "nature of the work" refers to an employee’s tasks performed at a given location for which a right to a suitable seat is claimed, rather than a "holistic" consideration of the entire range of an employee’s duties anywhere on the jobsite during a complete shift. If the tasks being performed at a given location reasonably permit sitting, and provision of a seat would not interfere with performance of any other tasks that may require standing, a seat is called for.
(2) Whether the nature of the work reasonably permits sitting is a question to be determined objectively based on the totality of the circumstances. An employer’s business judgment and the physical layout of the workplace are relevant but not dispositive factors. The inquiry focuses on the nature of the work, not an individual employee’s characteristics.
(3) The nature of the work aside, if an employer argues there is no suitable seat available, the burden is on the employer to prove unavailability.

With the answers to this questions, the matter will now be decided by the Ninth Circuit in due course. But Michael Rubin, an attorney for the plaintiffs, said the decision was a victory for all workers who have been denied a place to sit while they perform repetitive tasks in fixed locations. "For the millions of California worker in the retail industry, this is going to mean that in the next few weeks, their employers will start giving them seats, which will promote health and comfort," he said ...

Michael Green injured his spine, neck, right shoulder and hips at work in 2012. Dr. Jones, an authorized second opinion physician, sent a Request for Authorization ('RFA') dated April 17, 2015, which recommended artificial disc replacement arthroplasty at L4-L5 with a one to two day inpatient stay. The RF A was received by the insurance carrier via facsimile at 6: I 8 p.m. on Friday, April I 7, 2015. The procedure was denied by Howard Sturtz, M.D. in his UR letter of April 27, 2015 which was was served by facsimile only on April 27, 2015 just after 6:00 p.m. in the evening.

It is undisputed that the last business day for UR in this case was April 27, 2015.

The WCJ found that defendant's "Utilization Review [UR] denial of April 27, 15 2015 was untimely," and that the "(d]isc replacement/total disc arthroplasty procedure at L4-L5 16 requested by Dr. Jones under a Request for Authorization [RFA] of April 17, 2015 is reasonable and necessary" medical treatment and it was awarded.

The defendant's petition for reconsideration was granted, and the decision reversed in the split panel decision of Green v Elle Placement dba Golden Gate Staffing. It was held that Defendant timely made a UR determination and served it within the allowed time. Any further dispute of a valid UR denial is subject to the Independent Medical Review (IMR) process.

AD Rule 9792.9.l(a)(l) provides that when an RFA is submitted after 5:30 p.m., it is considered to be received on the next business day. (Cal. Code Regs., tit. 8, § 9792.l.9(a)(l).) In that the RFA in this case was submitted after 5:30 p.m. on Friday, April 17, 2015, as shown by the fax received date stamped on its face, it is properly deemed under AD Rule 9792.9.I(a)(I) to have been received the next business day on Monday April 20, 2015.

AD Rule 9792.9.l(c){l) states that "the first day in counting any timeframe requirement is the day after the receipt of the DWC form RFA ... " (Cal. Code Regs., tit. 8, § 9792.I.9(c)(l). The day after the date the RFA was received was Tuesday, April 21, 2015. The WCJ was correct in concluding that the Monday, April, 27, 2015 UR decision timely issued within five working days of that date because Saturday, April 25, 2015 and Sunday, April 26, 2015 are not "working days" as described in section 4610(g)(l).

Section 9792.1.9(3)(A) provides in pertinent part that a prospective UR decision like the one in this case "shall be communicated to the requesting physician within 24 hours of the decision ... initially by telephone or facsimile, and ... in writing ... within two business days of the decision ... as prescribed by the administrative director." AD Rule 9792.9.l(e) in tum provides that a prospective UR decision "shall be communicated to the requesting physician within 24 hours of the decision .. .initially by telephone, facsimile, or electronic mail ... followed by written notice ... "

Both of these regulations "plainly allow for communication of a UR decision 'within 24 hours of the decision,' and they do not include that time period within the time for making the decision. In this case, the decision was made on April 27, 2015, and it was communicated by facsimile to the treating physician on the same date, which was within 24 hours of the decision. The record shows that the UR decision was both timely made and timely communicated. As such, the UR is valid and there was no basis for the WCJ to award the disputed medical treatment."

Commissioner Caplan wrote a dissenting opinion. "Accepting defendant's contention that the time for sending a UR decision does not begin to run until the UR decision is made would expand the time within which UR is to be completed from five working/business days to five working/business days plus 24 hours. Such an expansion of the time for completion of UR is contrary to the Legislature's intention in establishing a fixed time frame for completion of UR, and it is contrary to the AD regulations that require completion of UR within five business days of the defendant's receipt of the RFA.
...

In Medicare, medical professionals may be banned from seeking money to see patients if they’ve been convicted of defrauding a health care program or fraud-related offenses. But according to a report by the Center for Investigative Reporting, those banned providers have no problem starting a second career in California’s workers’ compensation system.

Medicare banned Dr. Thomas Heric in 2006 after he pleaded guilty to charges related to writing reports based on diagnostic tests that turned out to be fraudulent. In his letter to the judge who sentenced him, Heric pledged that going forward, he would use "whatever talents I may have in service to the community." Heric then found a new line of work in the workers’ compensation medical system. His job was to review data on injured workers’ sleep patterns and issue reports needed to bill insurers.

Five years later, prosecutors accused Heric of fraud again. They say he was writing virtually identical reports that gave rise to sham billing. One expert testified in court that Heric’s sleep-study reports were so bad that they failed to address one worker’s serious breathing problems for months, a lapse that he said could harm "the general public."

That case is pending in Orange County Superior Court. Heric’s attorney, Robert Moest, said Heric stands by the reports and is fighting the charges. "There are different opinions in the scientific community," Moest said. "It shouldn’t be the matter of a criminal charge."

A Center for Investigative Reporting analysis of public records found that several other chiropractors and doctors banned by Medicare moved their career to workers’ compensation.

Among them: chiropractor David C. Nguyen. Medicare banned him in 2005 over an insurance fraud conviction. Earlier this year, San Diego prosecutors indicted him for insurance fraud again, this time for passing along bribes from a chiropractor to a therapy center - both workers’ compensation medical providers.

And Medicare doesn’t bar just doctors, pharmacists and chiropractors with histories of fraud. It also takes a look at who’s in charge. Officials with the Department of Health and Human Services’ inspector general’s office will investigate clinic operators’ ownership and ban those with a 5 percent or greater stake who have a history of certain fraud convictions, according to Jason Weinstock. The rule covers direct and indirect ownership.

No such rule exists in workers’ comp. State labor department officials said they do not have the authority to review the practices of medical professionals. Instead, they said in a statement, the boards that issue licenses to medical providers are the "appropriate authority for regulation and review." Yet no board or commission checks who’s running workers’ compensation clinics.

The state’s chiropractic board stripped Fred Khalili of his license and denied his attempt to get it back in 2013. But he still signs physicians’ paychecks at two Los Angeles County workers’ compensation clinics. Khalili’s legal problems started in 1995, when an FBI agent informed him that he was under investigation for paying $135,000 in kickbacks to auto-injury lawyers. Khalili was seeing a steady flow of patients who’d been hurt in car crashes, court records say.

Facing an indictment, he began to work undercover for the FBI. He recorded phone conversations with lawyers who demanded a cut of his medical treatment income in exchange for a parade of patients. He even went to the office of one lawyer who was believed to be a member of a Russian gang and kept a gun in his desk drawer, according to court records.

Khalili ultimately pleaded guilty to wire fraud and tax evasion and lost his chiropractic license in 2000. Twelve years later, he returned to the chiropractic board, hoping to get his license reinstated. The board refused, citing subsequent arrests for vandalism, a hit-and-run collision, driving without a license and making harassing phone calls. He appealed the decision to a higher court but lost.

Khalili remains heavily involved in workers’ compensation clinics, something that would draw scrutiny under Medicare’s rules as a fraud prevention measure. In the vacuum of such oversight in workers’ compensation, prosecutors now are pursuing charges against Khalili.

He was accused in February of insurance fraud for accepting kickbacks on behalf of First Choice Healthcare Medical Group clinics in Los Angeles and Panorama City. In exchange for the kickbacks, he directed staff at the clinics to dispense expensive pain creams to injured workers, the case alleges.

The charges against Khalili say he directed an attorney in 2009 to put the clinic ownership in the name of a physician, but Khalili controls the bank accounts. Attorney Malcolm McNeil, who advises First Choice, said Khalili does not own the clinics.

Khalili has not entered a plea in the case, and his criminal attorney did not return calls for comment ...

LIfe Insurance companies usually go to inordinate lengths to demonstrate their dullness. That makes MetLife’s chief executive, Steven Kandarian, extraordinary. He did what the head of no other big American financial firm has dared to: challenge head-on the legitimacy of the business-shaping decisions made with increasing frequency by regulators in the wake of the financial crisis. More remarkable still, he won. On March 30th a federal court in Washington DC (Case 1:15-cv-00045) ordered the Financial Stability Oversight Council (FSOC), a new regulatory committee, to rescind its designation of MetLife as a "strategically important financial institution" or SIFI - a label that required it to have a bigger, and thus more expensive, cushion of capital.

According to the story in the Economist, MetLife is one of only four non-banks to have been declared a SIFI. Prudential Insurance, one of the other three, acceded after grumbling a bit. General Electric said little but has since dispensed with much of its financial operations. AIG, another insurer, seemed to accept the new status, perhaps because being a SIFI is seen as being synonymous with being too big to fail, and thus implies a government backstop. AIG’s implosion had been at the centre of the financial crisis: any inkling that the government stood behind it would do much to reassure customers debating whether to pay upfront for a product that will not be delivered for many years.

MetLife, however, had come through the financial crisis in good shape, earning the confidence of its customers. It judged that whatever additional reassurance they might glean from implicit government backing was outweighed by the costs, in terms both of using extra capital and of additional scrutiny from regulators. Moreover, it maintained that it was not sufficiently intertwined with other institutions to be considered systemic. Insurers, after all, make long-term investments, and are not normally subject to the sorts of panics and runs that afflict banks. The criteria for FSOC’s decision, MetLife argued, had been vague and arbitrary.

Initially, like other financial firms, it voiced these objections only privately. When that did not work, it complained publicly, again to no avail. The only member of FSOC with experience in the insurance business appeared sympathetic, but did not sway his colleagues. In frustration, MetLife turned to the courts.

"From the beginning, MetLife has said that its business model does not pose a threat to the financial stability of the United States," Mr Kandarian said in a statement. "This decision is a win for MetLife’s customers, employees and shareholders." Jack Lew, the treasury secretary, who chairs FSOC, released a statement saying it strongly disagreed and would defend its "designation process", without specifying whether it would appeal. The court has not yet released its reasoning, which will presumably only add to the pressure on FSOC to clarify its procedures.

The ruling only applies to MetLife; no similar cases are pending. Yet the ramifications are enormous. The following day GE asked FSOC to rescind its SIFI label, given its recent restructuring. Until now, other financial firms felt they had little recourse against regulatory decisions, regardless of how much they disagreed. Rather than resort to the courts, they hired lobbyists in the hope of persuading the government to go easy. This may now change. Ironically, the decision comes a little too late for MetLife itself, which is spinning off its American life-insurance business, in part to ward off FSOC. Mr Kandarian says this divestment will still go ahead. But MetLife’s victory may give other financial firms the luxury of a little more breathing-room before making such decisions ...

Carlos Ivan Rodas worked as a dishwasher at Guido’s Restaurant. In 2012, Rodas took the trash from the restaurant to the dumpster located approximately 300 feet away from the restaurant. A patron later found Rodas unresponsive and bloodied in Guido’s parking lot. Rodas was pronounced dead at the scene by emergency personnel. The autopsy report concluded that Rodas’s death was caused by a hemorrhage from an invasive pulmonary aspergillosis as sequelae of treated cavitary tuberculosis. In lay terms he died from a pulmonary hemorrhage while taking out the garbage at work. Rodas’s arteries were prone to bleed because of lesions caused by tuberculosis.

Internist Ronald Zlotolow, M.D. opined that either coughing, brought about by refuse odors, or lifting the garbage caused the bleeding.

The WCJ concluded that Rodas sustained injury arising out of and occurring in the course of his employment that resulted in death. However, a split panel decision reversed and concluded that Dr. Zlotolow’s opinion was based on surmise, speculation, conjecture, or guess and therefore was not substantial evidence that Rodas’s work contributed to the cause of his pulmonary injury and death.

The Court of Appeal reversed, and based on the expert medical testimony of Dr. Zlotolow found that the injury that led to Rodas’s death arose out of and in the course of employment in the unpublished case of Rodas v WCAB.

In the context of this case, the Court noted that the question of what caused the intrathoracic pressure can be answered only by circumstantial evidence since direct evidence is obviously unavailable. "Circumstantial evidence is sufficient to support an award of the commission, and it may be based upon the reasonable inferences that arise from the reasonable probabilities flowing from the evidence; neither absolute certainty nor demonstration is required." (Pacific Employers Ins. Co. v. Industrial Acci. Com. (1942) 19 Cal.2d 622, 629.)

Thus the Court concluded that In the case of death occurring at work, the difficulty in proving industrial causation is "no reason to deny an award if the evidence warrants it." (Clemmens v. Workers’ Comp. Appeals Bd. (1968) 261 Cal.App.2d 1, 7.) All reasonable doubts as to whether an injury is compensable are to be resolved in favor of the employee. (Id. at p. 8.) This is consistent with the mandate that the workers’ compensation laws "shall be liberally construed by the courts with the purpose of extending their benefits for the protection of persons injured in the course of their employment." (Lab. Code, § 3202.)

The Court of Appeal did not discuss the application of labor code section 3202.5 which was added to the Labor Code in 1993 after Clemmens (and other early cases defining the application of "liberal construction") were decided. In adoption section 3202.5 in 1993 the Legislature expressly provided that "[n]othing contained in Section 3202 shall be construed as relieving a party from meeting the evidentiary burden of proof by a preponderance of the evidence." Section 3202.5 was at the time part of a legislative reform package resolving long standing concerns over various issues by all stakeholders. Employers had for decades voiced concern about courts using liberal construction to decide the outcome of litigation, and the legislature addressed this concern in 1993 by limiting the application of liberal construction to resolve evidentiary disputes by enacting 3202.5. An appellate decision after the adoption of 3202.5 that resolves an evidentiary dispute by citing 3202 alone, without at the same time citing 3202.5 and discussing and reconciling both statutes does not seem to afford employers the benefit of the legislative process that attempted to balance the rights of employers and employees in workers compensation litigation. When a court cites decisions applying liberal construction before 1993 without noting there was a change in the law makes it seem as though section 3202.5 was never adopted by the legislature and does not exist. Indeed the Court of Appeal cites here in Rodas the recent Supreme Court case of South Coast Framing, Inc. v. Workers’ Comp. Appeals Bd. (2015) 61 Cal.4th 291 as support for this decision. But even in South Coast Framing, the California Supreme Court in 2015 cites section 3202, but makes no mention of how that should be reconciled with section 3202.5.

The Rodas decision is just another of many examples of courts applying "liberal construction" to resolve a factual dispute without consideration of what happens after 1993 when section 3202.5 was adopted ...

A San Gabriel Valley doctor has agreed to plead guilty to a federal drug trafficking charge for illegally distributing the powerful painkiller best known by the brand name OxyContin.

Dr. Daniel Cham, 48, of Covina, has agreed to plead guilty to one count of distribution of oxycodone and one count of money laundering.

In the plea agreement, Cham admits to unlawfully prescribing oxycodone to an undercover agent posing as a patient in March 2014 in exchange for $300 in money orders, which Cham then deposited into a bank account held in the name of another business. Cham made the deposit "knowing that the transaction was designed to conceal and disguise the nature and source of the money orders," according to the plea agreement.

Cham was initially charged in this case in October 2014 when a federal grand jury returned an indictment alleging narcotics trafficking, money laundering, fraud and making false statement to authorities. The indictment focused on prescriptions Cham wrote at various locations, including his medical offices in La Puente and Artesia.

As part of the investigation investigators in May 2014 executed federal search warrants at 13 locations, including Cham’s residence and medical offices. According to the affidavit in support of the search warrants, 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. Over the course of a 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 in 2014, 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.

The drug trafficking and money laundering charges that Cham has agreed to plead guilty to each count carry a statutory maximum penalty of 20 years in federal prison. In his plea agreement, Cham also agrees to forfeit to the government more than $60,000 in cash that he admits are "proceeds of [his] illegal activity."

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.

The California Medical Board shows three disciplinary actions taken against Cham starting in 2010. His license status is shown as "Delinquent - License renewal fee has not been paid. No practice is permitted." ...

The Division of Workers’ Compensation finally announce the release of the 137 Page fourth edition of the Physician’s Guide to Medical Practice in the California Workers’ Compensation System. This comprehensive guide helps physicians and other health care providers dispense care to injured workers while complying with the statutes and regulations that are applicable to medical providers.

This edition of the Physician’s Guide to Medical Practice in the California Workers’ Compensation System has been developed by the Division of Workers’ Compensation to continue the mission set forth in the first three editions of the Physician’s Guide, namely, to assist physicians in understanding the many complexities in the California workers’ compensation system in order to provide optimal care to ill and injured workers.

"The physician’s guide was last revised in 2001, and much has happened in the last 15 years," said DWC Acting Administrative Director George Parisotto. "The guide provides up-to-date information that will help practitioners apply the reforms set forth in SB 863."

"Physician understanding of the workers’ compensation system is critical to helping deliver appropriate care to injured workers," said DWC Acting Executive Medical Director Dr. Raymond Meister.

The manual contains 16 chapters, revising material from the third edition and providing new chapters on the following subjects:

1) Parties to the System
2) Benefits and Payments to Employees
3) Reports and Timelines in the System
4) Evidence-Based Medicine and the MTUS
5) Utilization Review and IMR
6) Physician Payment and the OMFS

The Physician’s Guide is intended as an educational and reference tool to supplement the reader’s professional experience. While intended primarily for treating providers, others in the workers’ compensation community may also find the information helpful, particularly Qualified Medical Evaluators (QMEs) and those preparing for the QME certification exam which is set for April 16th.

Claims administrators who encounter physicians who are having difficulty navigating and complying with the workers' compensation system may find it expeditious to send a PDF copy of this Guide to the physician, pointing out the chapter that is most applicable for the physician to read in order to learn about how the system works. Physicians would be well served to look over this Guide in its entirety and have it handy as a reference source when questions arise ...

The Division of Workers’ Compensation has posted an order adjusting the Durable Medical Equipment, Prosthetics, Orthotics and Supplies (DMEPOS) section of the Official Medical Fee Schedule to conform to the second quarter 2016 changes in the Medicare payment system as required by Labor Code section 5307.1.

The update includes all changes identified in Center for Medicare and Medicaid Services Change Request (CR) number 9554. The April 2016 DMEPOS Rural ZIP code file containing Quarter 2, 2016 rural ZIP Code changes, will replace the January 2016 DMEPOS Rural ZIP code file, for services rendered on or after April 1, 2016. There are no other changes to the DMEPOS fee schedule for the second quarter of 2016.

The order adopting the adjustment can be found on the DWC website. The fee schedule classifies most DMEPOS into one of the six categories:

1) Inexpensive or other routinely purchased DME (IRP)
2) Items requiring frequent and substantial servicing
3) Customized items
4) Other prosthetic and orthotic devices
5) Capped rental items
6) Oxygen and oxygen equipment

The DMEPOS Competitive Bidding Program (CBP) implemented by CMS was mandated by Congress through the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA). The statute requires that Medicare replace the older fee schedule payment methodology for DMEPOS items with a competitive bid process. The intent was to improve the effectiveness of the Medicare methodology for setting DMEPOS payment amounts.CMS is required by law to recompete contracts under the DMEPOS Competitive Bidding Program at least once every three years. The Round 2 and national mail-order program contract periods expire on June 30, 2016. Round 2 Recompete and the national mail-order recompete contracts are scheduled to become effective on July 1, 2016, and will expire on December 31, 2018.

But some are very critical of this CMS Compteitive Bid Program. A recent article in Forbes characterizes the CMS competitive bidding process as a "fiasco." It reasons "The CMS award model allows it to re-set pricing based on a formula that is tied to the standard deviations observed across the most competitive bids. In other words, the bidders are not bound by their own bids. The CMS award calculus is based on a "musical chairs" philosophy. Low bidders don’t win based on price or by providing evidence that supports their price, they win based on where their price happens to fall "relative to peers" when the auction ends. A supplier could bid $30 for a product or service and "win" at a price set by the CMS at $42."

This outcome is the result of the language of the CBP which states "Contracts are awarded to the Medicare suppliers who offer the best price and meet applicable quality and financial standards. Contracted suppliers will be paid the bid price amount. The bid price amount is derived from the median of all winning bids for an item." ...

A biosimilar drug (also known as follow-on biologic or subsequent entry biologic) is a biologic medical product which is almost an identical copy of an original product that is manufactured by a different company. Biosimilars are officially approved versions of original "innovator" products, and can be manufactured when the original product's patent expires. Reference to the innovator product is an integral component of the approval.

And lower-cost copies of these complex biotech drugs could save the United States and Europe's five top markets as much as 98 billion euros ($110 bln) by 2020, a new analysis showed on Tuesday as reported in an article by Reuters Health. Realizing those savings, however, depends on effective doctor education and healthcare providers adopting smart market access strategies, the report by IMS Institute for Healthcare Informatics said.

The potential for copycats to take business from original biotech brands is increasingly grabbing the attention of investors, with many worried about the impact on profits at companies like Roche and AbbVie. It also presents an opportunity for an emerging group of biosimilar specialists, such as South Korea's Celltrion and large generic drugmakers with biotech know-how, like Novartis' unit Sandoz.

A saving of 98 billion euros is based on eight major branded biotech drugs, including AbbVie's Humira and Roche's Herceptin, that are set to lose patent protection over the next five years. It also assumes an average biosimilar price discount of 40 percent, and savings would fall to 74 billion euros at a 30 percent discount and 49 billion at 20 percent. The IMS forecast covers Germany, France, Italy, Britain, Spain and the United States.

The European regulatory authorities led with a specially adapted approval procedure to authorize subsequent versions of previously approved biologics, termed "similar biological medicinal products", or biosimilars. This procedure is based on a thorough demonstration of "comparability" of the "similar" product to an existing approved product. In the United States, the Food and Drug Administration (FDA) held that new legislation was required to enable them to approve biosimilars to those biologics originally approved through the PHS Act pathway. The FDA gained the authority to approve biosimilars (including interchangeables that are substitutable with their reference product) as part of the Patient Protection and Affordable Care Act signed by President Obama on March 23, 2010; on March 6, 2015, Zarxio obtained the first approval of FDA.

Interest in biosimilars has grown significantly in the past two years thanks to the arrival of copies of sophisticated antibody drugs that are among the world's biggest-selling prescription medicines. Europe has lengthy experience with biosimilars, having approved the first such products 10 years ago, but uptake still varies widely from country to country, depending on local market conditions ...

With a nod to his own drug use as a young man, President Barack Obama on Tuesday called for more funding and a new approach to help people addicted to heroin and prescription drugs, seeking to shine a public spotlight on an increasingly deadly killer.

Reuters Health reports that during an appearance at a drug abuse summit in Atlanta, Obama said opioid overdoses killed more people in the United States than traffic accidents did. "It's costing lives and it's devastating communities," Obama said while participating in a panel with addicts in recovery and medical professionals. He said efforts to fight the epidemic were grossly underfunded.

Obama, who earlier this year asked the U.S. Congress for $1.1 billion in new funding over two years to expand treatment for the epidemic, has faced criticism for not doing more to fight the problem sooner. Opioid addiction has become an issue in the 2016 presidential campaign.

Obama wrote about using marijuana and cocaine in his book "Dreams from my Father." He said on Tuesday he was lucky addiction had not overcome him earlier in life beyond his use of cigarettes, and he pressed for the issue to be framed as a medical problem rather than a legal one. "For too long we have viewed the problem of drug abuse generally in our society through the lens of the criminal justice system,” he said.

In 2014, a record number of Americans died from drug overdoses, with the highest rates seen in West Virginia, New Mexico, New Hampshire, Kentucky and Ohio.

Obama said he needs Congress to open the purse strings to help expand treatment, particularly in rural areas, and applauded bipartisan legislation designed to combat the problem. Meanwhile his administration announced $11 million in grants for up to 11 states to help expand medication-assisted treatment, and another $11 million for states to buy and distribute naloxone, an overdose drug.

The Health and Human Services Department is also proposing a new rule for buprenorphine, a medication used to help addicted people reduce or quit their use of heroin or painkillers. The rule would allow physicians who are qualified to prescribe the medication to double their patient limit to 200. The White House said that measure would expand treatment for tens of thousands of people ...

Physician Robin Chorn, M.D. and workers’ compensation applicants Robert Kalestian, Tanya Vounov, and Latasha Buie petitioned the Court of Appeal for a writ of mandate asking it to enjoin the Workers’ Compensation Appeals Board from enforcing two recently enacted provisions of the Labor Code pertaining to the lien filing fees, sections 4903.05 and 4903.8.

Petitioners contend that section 4903.05, which imposes a filing fee of $150 on certain medical liens filed in workers’ compensation cases, deprives them of their state constitutional rights to due process (Cal. Const., art. I, § 7), equal protection (Cal. Const., art. I, § 9), and petition for redress of grievances (Cal. Const., art. I, § 3). Petitioners claim that section 4903.8, which restricts payment of lien awards to individuals other than those who incurred the expenses, substantially impairs their constitutional right to contract. (Cal. Const., art. I, § 9.) Finally, they argue that both statutes contravene the constitutional mandate that workers’ compensation laws "accomplish substantial justice in all cases expeditiously, inexpensively, and without any encumbrance of any character." (Cal. Const., art. XIV, § 4.)

The Court of Appeal rejected the request in the published case of Chorn v WCAB and Kamala Harris and ruled that the challenged provisions of sections 4903.05 and 4903.8 do not violate any of the constitutional provisions identified in the petition.

Article XIV, "section 4 of the state Constitution 'affirms the legislative prerogative in the workers’ compensation realm in broad and sweeping language’ . . . . [Citation.]" (Stevens, supra, 241 Cal.App.4th at p. 1094.) "[T]he notion that . . . Section 4 itself imposes separate restraints on the plenary powers it confers on the Legislature has been decidedly rejected." (Ibid.) Likewise, the Legislature’s broad power to regulate and enact limitations upon workers’ compensation matters "has been repeatedly affirmed." (Ibid. [collecting cases].) Thus, "nearly any exercise of the Legislature’s plenary powers over workers’ compensation is permissible so long as the Legislature finds its action to be ‘necessary to the effectiveness of the system of workers’ compensation.’ (Greener v. Workers’ Comp. Appeals Bd., supra, 6 Cal.4th at p. 1038, fn. 8.)" (Stevens, supra, 241 Cal.App.4th at p. 1095.) "The California Constitution does not make a workers’ right to benefits absolute" (Rio Linda Union School District v. Workers’ Compensation Appeals Board (2005) 131 Cal.App.4th 517, 532), nor does it make lien claimants’ rights to reimbursement absolute, as their rights arise out of and are derivative of the underlying workers’ compensation claim (see Perrillo v. Picco & Presley (2007) 157 Cal.App.4th 914, 929).

Here, the Senate Rules Committee’s analysis of SB 863 states that the lien system was "out of control" and could be reined in by "re-enact[ing] a filing fee, so that potential filers of frivolous liens have a disincentive to file." "[F]ar from conflicting with Section 4’s mandate to provide substantial justice," the lien reforms implemented in sections 4903.05 and 4903.8 advance this goal by taking aim at problem liens that impede the functioning of the workers’ compensation system. (Stevens, supra, 241 Cal.App.4th at p. 1096.) "It is not our place under the state Constitution to ‘second-guess the wisdom of the Legislature’ in making these determinations. (Facundo-Guerrero v. Workers’ Comp. Appeals Bd., supra, 163 Cal.App.4th at p. 651 [ ].)" (Stevens, supra, 241 Cal.App.4th at p. 1096.) ...

U.S. Department of Labor Secretary Thomas Perez says his agency will use its "bully pulpit" to strike at what he calls "a disturbing trend" that leaves workers without medical care and wage replacement payments when they are injured on the job. In an interview with NPR, Perez also confirms a Labor Department investigation of an opt-out alternative to state-regulated workers' compensation that has saved employers millions of dollars but that he says is "undermining that basic bargain" for American workers.

According to the story in NPR, Perez says the probe focuses on a practice by thousands of employers in Texas and Oklahoma to opt out of conventional state workers' compensation in favor of benefits plans that provide lower and fewer payments, make it more difficult to qualify for benefits, control access to doctors and limit independent appeals of benefits decisions. "What opt-out programs really are all about is enabling employers to reduce benefits," Perez says. Opt-out programs "create really a pathway to poverty for people who get injured on the job."

Perez wouldn't provide any details. But last month, his agency sent a letter to Sen. Sherrod Brown, D-Ohio, disclosing "contact with the company cited in the ProPublica/National Public Radio report that is offering services to employers in Texas and Oklahoma" who opt out of workers' comp.

That description fits PartnerSource, a Dallas company that wrote and supports almost all opt-out plans in Oklahoma and about half the plans in Texas. An agency official, who declined to be named because he is not authorized to speak publicly, confirmed that PartnerSource plans are the focus of the investigation.

PartnerSource President Bill Minick has not responded to NPR's requests for comment about the probe.

For decades, Texas employers have been able to forgo workers' comp and its state-mandated benefits and regulations. Oklahoma employers began opting out in 2014. Minick has said he is trying to export the concept to a dozen states in the next decade. The two states combined have 1.5 million workers covered by these alternative plans instead of state-regulated workers' comp.

"If you work in a full-time job, you ought to be able to put food on the table," Perez says. "If you get hurt on that job, you still should be able to put food on the table, and these laws are really undermining that basic bargain."

Perez cautions that the Labor Department has limited authority to respond because workers' comp is a state-run program. The agency can't force employers to match state workers' comp benefits when they opt out of state systems, he says. But in both Oklahoma and Texas, and in other states that have considered opt-out laws, Minick and employers say that opt-out plans are governed by the federal Employee Retirement Income Security Act, or ERISA.

ERISA is regulated by the Labor Department, and the agency's investigation focuses on whether employers are violating ERISA with plans that restrict access to benefits. Perez cited plans that require mandatory arbitration for benefits disputes as an example. "Mandatory arbitration clauses I think more often than not work to the detriment of working people," Perez says.

He also cited plans that force workers to report injuries before the end of their shifts or within 24 hours, which "ends up being used by companies to deny all benefits," Perez says.

Last month, the agency sued U.S. Steel for suspending workers (in a non-opt-out state) who failed to report injuries immediately. The lawsuit argues that some injuries, like those involving muscles and soft tissue, are not immediately apparent or serious. Perez says the Labor Department has the authority to make sure that employers who opt out of workers' comp "have important procedural safeguards" required by ERISA. If violations are found, he says, the agency could demand procedural corrections, but employers would still be able to provide fewer benefits ...

It may be that Uber type competition is about to challenge the medical transportation industry in California, hopefully bringing lower prices and better service.

EMS Find, Inc. announced the launch of its updated website. The on-demand medical transportation mobile application developed by the Company is now available for download in Google Play Store and the updated version of it is now offered in Apple App Store.

Within one month the Company plans to release the desktop version of its software for scheduling and tracking of medical transport. Availability of iOS, Android and Desktop versions will facilitate the seamless integration between medical transporters and health care providers.

The Company says it is engaging in several strategic partnerships with the leading industry peers with focus to provide the ultimate solution to manage medical transportation fleet scheduling tasks as well as integration with the Uber Platform to allow any Uber Driver to assist in transportation to medical appointments of the patients who are not requiring ambulances or other specialized medical equipment.

The Company is also working on expanding its B2B solution by implementing the claim billing functionality along with an automatic verification of patient's eligibility to receive medical insurance compensation for transportation. EMS Find's solution offers many important features such as verification of validity of drivers' certifications to deliver the trip.

EMS Find App is designed to dramatically reduce the paper load and the time, currently burdening the social workers, case managers and other health care professionals in charge of scheduling, fraud reduction and elimination of the unpaid and empty trips by the ambulance companies.

The Company says it has been making progress with practical implementation of its business plans along with continuing its software development, . The recently announced pilot testing of its mobile app in California is expected to involve about 50 ambulances and other special medical vehicles interacting with several skilled care facilities in and around Los Angeles County with the goal of launching and growing commercial service in the greater Los Angeles and surrounding counties in 2-3 months.

The revenue model under development there will include per booked trip fees as well as principal transportation brokerage fees ...

Chuck Rosenberg, acting head of the Drug Enforcement Administration, told Congress earlier this week that four out of five heroin users started on pills, and many people who use or abuse opioid pain pills get them from a friend or relative's medicine cabinet, . "And that's why we have re-instituted our national take-back program."

Rosenberg noted that the most recent take-back day, in September 2015, was a big success, as measured in pounds: "I'll break it down a little bit, if I may. But in September of last year, we took in 749,000 pounds of unwanted and expired drugs. By some estimates, only 10 percent or so are opioids, but even if that's true, even if it's quote-unquote 'only 10 percent,' that's still about 74,000 pounds of opioids.

"So we think we're making a difference. We're going to continue these programs. Our next take-back will be April 30th of this year, so not that far away, about five weeks. And if it's like our last take-back program, it will be in 5,000 communities around the country." The other take-back day this year "will likely be in October," he said, "and I'm hoping we build on the success."

Rosenberg said the United States has five percent of the world's population, but consumes 99 percent of the world's hydrocodone. "And so I guess we shouldn't be surprised that the connection between pills and heroin is as strong as it is."

He said the DEA is approaching the opioid problem with a "360-degree" strategy, including keeping pain pills in the legitimate stream of commerce, attacking the supply side, and trying to reduce demand through education and treatment and prevention. "If we don't start knocking down the demand side, we can't possibly win against the supply side," Rosenberg said. The 360 program is now being tested in four cities -- Pittsburgh, St. Louis, West Memphis (Ark.) and Milwaukee.

"We looked at cities generally that had an uptick in crime, cities...that were large cities but not enormous cities and cities where we thought we could make an immediate difference. We're looking now at another round of cities, and we're trying to approach this sort of driven as much by statistics as we possibly can. Where do they need us, where has a problem gotten worse and where can we make a difference.

The FDA supports the responsible disposal of medicines from the home. Almost all medicines can be safely disposed of by using medicine take-back programs or using U.S. Drug Enforcement Agency (DEA)-authorized collectors. DEA-authorized collectors safely and securely collect and dispose of pharmaceutical controlled substances and other prescription drugs. Authorized collection sites may be retail pharmacies, hospital or clinic pharmacies, and law enforcement locations. Some pharmacies may also offer mail-back envelopes to assist consumers in safely disposing of their unused medicines through the U.S. Mail.

Consumers can visit the DEA’s website for more information about drug disposal and to locate an authorized collector in their area. Consumers may also call the DEA Office of Diversion Control’s Registration Call Center at 1-800-882-9539 to find an authorized collector in their community. Local law enforcement agencies may also sponsor medicine take-back programs in your community. Contact your city or county government for more information on local drug take-back programs ...

The Patient Protection and Affordable Care Act (ACA) created the Consumer Operated and Oriented Plan Program - known as the CO-OP Program. Under the CO-OP Program, the Department of Health and Human Services (HHS) distributed loans to consumer-governed, nonprofit health insurance issuers. A new Majority Staff Report of the U.S. Senate Permanent Subcommittee on Investigations says that HHS ultimately received $2.4 billion of taxpayer money to fund 23 CO-OPs that participated in the program. Twelve of those 23 CO-OPs have now failed, leaving 740,000 people in 14 states searching for new coverage and leaving the taxpayer little hope of recovering the $1.2 billion in loans HHS disbursed to those failed insurance businesses.

Congress initially allocated $6 billion for the Obamacare CO-OP program, with the goal of establishing CO-OPs in all 50 states as well as the District of Columbia. Subsequent legislation slashed some of this funding. The CO-OPs ultimately suffered $376 million in losses in 2014 and more than $1 billion in losses in 2015. By the end of 2014, the 12 collapsed insurance nonprofits had already exceeded their projected worst-case-scenarios by more than $263 million, four times more than what they initially projected.

None of the failed CO-OPs have repaid a single dollar, principal or interest, of the $1.2 billion in federal solvency and start-up loans they received. In addition, there remains substantial liability for unpaid claims including fully processed 2015 claims as well as incurred but unprocessed 2015 claims. The CO-OPs report that they continue to receive some 2015 medical claims through the first quarter of 2016, and many received claims are still being processed to determine coverage.

Based on the most recent balance sheets provided to the Subcommittee, the failed CO-OPs currently owe an estimated $742 million to doctors and hospitals for plan year 2015, including incurred claims. An insolvent health insurer’s debt to providers takes priority over other liabilities, so those claims are likely to be the first to be paid out of remaining assets. But if a CO-OP’s medical claims alone exceed assets, payment to providers can be in doubt. Based on their submissions, at least six CO-OPs currently owe more in medical claims alone than they hold in assets. Three of those CO-OPs - the Colorado CO-OP, the South Carolina CO-OP, and CoOportunity - have access to guaranty associations capable of paying some or all unpaid medical claims.

Guaranty associations serve as a mechanism to pay covered claims occurring as a result of an insurer’s insolvency. Associations were created to alleviate these problems and ensure the stability of the insurance market. The Colorado CO-OP projects that substantially all of its $96.6 million in unpaid medical claims will be paid by the state’s guaranty fund. Similarly, the South Carolina CO-OP estimates that all of its $48 million in unpaid claims will be paid by the state’s guaranty fund. The first CO-OP to close, CoOportunity, reports that $114.1 million of its unpaid medical claims have now been paid by the Iowa and Nebraska guaranty associations.

The other three CO-OPs with serious shortfalls, however, will not be bailed out by guaranty funds. The New York CO-OP reports that it had $379.5 million in unpaid medical claims and $157.54 million in assets as of December 31, 2015 - a $222 million shortfall, excluding any other liabilities. No portion of that shortfall will be covered by New York’s guaranty fund. Most of the New York CO-OP’s unpaid claims are owed to doctors and hospitals, and a non-negligible share - $373,000 as of January 31, 2016 - is owed directly to patients.

Similarly, the Louisiana CO-OP reports $34.4 million in assets and $43.3 million in unpaid medical claims as of January 31, 2016, and none of that $9 million shortfall will be covered by a guaranty fund. The same is true of the $7 million shortfall on the Kentucky CO-OP’s January 2016 balance sheet, which shows $77.5 million in unpaid claims and only $70.5 million in assets.

It is likely that some of the cost of these losses will translate to cost drivers in workers' compensation claims. Certainly, the guarantee funds will distribute the cost by way of assessments to other insurers who will in turn pass the costs to policyholders everywhere. Medical providers who are not paid in one system, will demand higher fees to compensate them in another system. The epic failure of the CO-OP Program is not good news for anyone ...