The Audit and Enforcement Unit of the Division of Workers’ Compensation will be noticing more target audits in 2016 to address utilization review (UR) complaints.
All claims administrators are required by law to have a utilization review program that is governed by written policies and procedures and used to decide whether or not a treatment recommended by an injured worker’s physician is medically necessary under evidence-based guidelines. All UR programs must have a medical director. Any medical decision that modifies or denies a medical treatment request must be made by a reviewing physician, and the services must be within that physician’s scope of practice.
As a reminder, the UR time limit for responding to a treatment request begins when the request for authorization (RFA) is first received, whether by the employer, claims administrator, or utilization review organization (URO).
The decision on an RFA submitted for prospective review must be made within five business days from first receipt of the request, unless additional reasonable medical information is needed to make the decision. In that case, the additional information must be requested by the fifth business day, then up to 14 calendar days from the date of receipt of the original RFA are allowed for making the decision on the RFA. If more than one treatment request is listed on an RFA, all of the treatment requests must be addressed within the applicable timeframe.
The penalties for failure to comply with the UR rules are set forth in California Code of Regulations, title 8, section 9792.12. For example, if an RFA is not answered, the mandatory penalty is $1,000 for each prospective review. There is also a $100 penalty for a late response to an RFA. If a non-physician delays, denies or modifies a treatment request, there is a $25,000 penalty. Claims administrators are advised to review the UR timeframes with their staff and UROs to ensure the crucial timeframes are being met ...
All claims administrators are required by law to have a utilization review program that is governed by written policies and procedures and used to decide whether or not a treatment recommended by an injured worker’s physician is medically necessary under evidence-based guidelines. All UR programs must have a medical director. Any medical decision that modifies or denies a medical treatment request must be made by a reviewing physician, and the services must be within that physician’s scope of practice.
As a reminder, the UR time limit for responding to a treatment request begins when the request for authorization (RFA) is first received, whether by the employer, claims administrator, or utilization review organization (URO).
The decision on an RFA submitted for prospective review must be made within five business days from first receipt of the request, unless additional reasonable medical information is needed to make the decision. In that case, the additional information must be requested by the fifth business day, then up to 14 calendar days from the date of receipt of the original RFA are allowed for making the decision on the RFA. If more than one treatment request is listed on an RFA, all of the treatment requests must be addressed within the applicable timeframe.
The penalties for failure to comply with the UR rules are set forth in California Code of Regulations, title 8, section 9792.12. For example, if an RFA is not answered, the mandatory penalty is $1,000 for each prospective review. There is also a $100 penalty for a late response to an RFA. If a non-physician delays, denies or modifies a treatment request, there is a $25,000 penalty. Claims administrators are advised to review the UR timeframes with their staff and UROs to ensure the crucial timeframes are being met ...
Jose Tinoco, while employed by Fresh Express, injured Javier Escobar by negligently operating a vehicle. Escobar thereafter received treatment at Santa Clara Valley Medical Center, a hospital owned and operated by the County of Santa Clara. The reasonable value of the care provided by the County was alleged to be $1,249,545.38. Escobar sued Tinoco and Fresh Express in Monterey County Superior Court, where he eventually recovered a judgment for $5,689.624.87.
The County asserted a lien against the judgment pursuant to Government Code section 23004.1. Escobar’s attorney, who had stipulated at trial that County’s bill reflected reasonable and necessary charges, now contended that County was not entitled to the full amount of its bill but only to some lesser amount in accordance with schedules promulgated by the WCAB. Fresh Express did not pay the County, but instead delivered a check in the amount of $1,249,545.38 to Escobar’s attorney, Joseph Carcione, Jr., payable to both County and Carcione’s firm.
The County filed suit to recover the full amount, and the trial court sustained the Fresh Express demurer without leave to amend ruling that "the County can no longer pursue its own action against Fresh Express . . . , but must instead seek enforcement of the lien," The court of appeal reversed in the published case of County of Santa Clara v Javier Escobar, and provided guidance on how lien rights are to be enforced.
The trial court concluded in essence that once a county’s lien has attached to a judgment, as it did here, the county’s independent right of action ceases to exist. The trial court took the language of Government Code section 23004.1 to mean in essence that a county’s right of action continues only as a lien. But the court of appeal disagreed noting that nothing in the language of the statute declares in definite language that the lien, once attached, is all that remains of the county’s original right of action. The manifest purpose of section 23004.1 is to provide counties with a source of recompense for the expenses incurred by them - and their taxpayers - in providing medical services necessitated by tortious conduct. "Obviously this purpose is ill served by permitting the tortfeasor to excuse itself from this obligation by turning control of the claimed funds over to the injured patient. The intent of the statute is best effectuated by providing counties with a straightforward remedy against the recalcitrant tortfeasor cum judgment creditor."
The court agreed that Fresh Express should have been able to disentangle itself from any dispute between Escobar and County, and to obtain a satisfaction of judgment by paying the full amount of the judgment, but did not agree that it could accomplish these objectives by simply writing a check payable to both of the competing claimants. There were and are far more suitable remedies for one in Fresh Express’s situation. It has simply failed to avail itself of them. It could, for example, bring an action against the conflicting claimants to compel them to interplead and litigate their several claims.
"We conclude that County’s right of action under section 23004.1 survived the attachment of its lien and that County was entitled to revive it, as it sought to do here, when Fresh Express surrendered control of the liened funds to Escobar’s attorney. It follows that the trial court erred by sustaining Fresh Express’s demurrer and that the judgment predicated on that ruling must be reversed." ...
The County asserted a lien against the judgment pursuant to Government Code section 23004.1. Escobar’s attorney, who had stipulated at trial that County’s bill reflected reasonable and necessary charges, now contended that County was not entitled to the full amount of its bill but only to some lesser amount in accordance with schedules promulgated by the WCAB. Fresh Express did not pay the County, but instead delivered a check in the amount of $1,249,545.38 to Escobar’s attorney, Joseph Carcione, Jr., payable to both County and Carcione’s firm.
The County filed suit to recover the full amount, and the trial court sustained the Fresh Express demurer without leave to amend ruling that "the County can no longer pursue its own action against Fresh Express . . . , but must instead seek enforcement of the lien," The court of appeal reversed in the published case of County of Santa Clara v Javier Escobar, and provided guidance on how lien rights are to be enforced.
The trial court concluded in essence that once a county’s lien has attached to a judgment, as it did here, the county’s independent right of action ceases to exist. The trial court took the language of Government Code section 23004.1 to mean in essence that a county’s right of action continues only as a lien. But the court of appeal disagreed noting that nothing in the language of the statute declares in definite language that the lien, once attached, is all that remains of the county’s original right of action. The manifest purpose of section 23004.1 is to provide counties with a source of recompense for the expenses incurred by them - and their taxpayers - in providing medical services necessitated by tortious conduct. "Obviously this purpose is ill served by permitting the tortfeasor to excuse itself from this obligation by turning control of the claimed funds over to the injured patient. The intent of the statute is best effectuated by providing counties with a straightforward remedy against the recalcitrant tortfeasor cum judgment creditor."
The court agreed that Fresh Express should have been able to disentangle itself from any dispute between Escobar and County, and to obtain a satisfaction of judgment by paying the full amount of the judgment, but did not agree that it could accomplish these objectives by simply writing a check payable to both of the competing claimants. There were and are far more suitable remedies for one in Fresh Express’s situation. It has simply failed to avail itself of them. It could, for example, bring an action against the conflicting claimants to compel them to interplead and litigate their several claims.
"We conclude that County’s right of action under section 23004.1 survived the attachment of its lien and that County was entitled to revive it, as it sought to do here, when Fresh Express surrendered control of the liened funds to Escobar’s attorney. It follows that the trial court erred by sustaining Fresh Express’s demurrer and that the judgment predicated on that ruling must be reversed." ...
A medical doctor who served as the face of a sham Los Angeles clinic pleaded guilty to federal drug trafficking and money laundering charges connected to her illegal distribution of the powerful painkiller best known by the brand name OxyContin. Dr. Madhu Garg, 64, of Glendora, pleaded guilty to one count of illegally distributing oxycodone and one count of money laundering for transferring the proceeds of criminal activity to a Malaysian bank account. A sentencing hearing is set for May 26. Garg faces a statutory maximum sentence of 30 years in federal prison.
Garg was arrested in January 2015, along with the other operators of the now-defunct Southfork Medical Clinic in Los Angeles. A federal grand jury indictment charged seven defendants with conspiring to sell medically unnecessary prescriptions for drugs that included oxycodone, hydrocodone (commonly sold under the brand names Vicodin, Norco and Lortab), alprazolam (best known by the brand name Xanax), carisoprodol (a muscle relaxant sold under the brand name Soma) and promethazine with codeine (a cough syrup sold on the street as "purple drank" and "sizzurp").
As part of her guilty plea, Garg admitted that she issued prescriptions for those drugs to Southfork "patients" at the instructions of the owner of the clinic, Jagehauel Gillespie, and that she knew the "patients" did not actually need the drugs. In a plea agreement filed in United States District Court, Garg "acknowledges that she intentionally prescribed the drugs outside the usual course of professional practice and without a legitimate medical purpose."
Records maintained by the State of California show that Garg issued more than 10,000 prescriptions for controlled drugs - the vast majority of which were for hydrocodone or alprazolam - over the year-long period that she worked at Southfork. Financial records show that, over the same time period, Garg received more than $300,000 in cash and transferred more than $90,000 to bank accounts held in Thailand and Malaysia.
During the investigation, Garg issued prescriptions for oxycodone and promethazine with codeine to undercover agents on eight occasions. During one of the meetings, Garg gave a prescription to an undercover witness, and then Garg agreed to issue a new prescription to the witness the following week under a false name.
"The abuse of prescriptions drugs continue to take a horrific toll on public health and safety in our communities," said Stephen G. Azzam, Acting Special Agent in Charge of DEA’s Los Angeles Field Division. "The DEA will continue to work with our partner agencies to identify and investigate doctors who are using their medical licenses to illegally deal drugs."
The conspirators also used Los Angeles as a base of operations to acquire and deliver bulk shipments of prescription drugs to Texas, according to court documents. Furthermore, according to court records, Garg continued to assist Gillespie in acquiring oxycodone from international wholesalers even after the Medical Board of California revoked Garg’s license in December 2013.
Previously in this case, five of the other defendants have pleaded guilty, including Gillespie, who was sentenced in November to six years in federal prison. One other defendant is pending trial, which is scheduled for later this year.
The investigation into Garg was conducted by the Drug Enforcement Administration’s Los Angeles and Houston field divisions, IRS - Criminal Investigation, the Los Angeles Police Department, the Los Angeles County Sheriff’s Department, the California Department of Justice, and the Texas Department of Public Safety ...
Garg was arrested in January 2015, along with the other operators of the now-defunct Southfork Medical Clinic in Los Angeles. A federal grand jury indictment charged seven defendants with conspiring to sell medically unnecessary prescriptions for drugs that included oxycodone, hydrocodone (commonly sold under the brand names Vicodin, Norco and Lortab), alprazolam (best known by the brand name Xanax), carisoprodol (a muscle relaxant sold under the brand name Soma) and promethazine with codeine (a cough syrup sold on the street as "purple drank" and "sizzurp").
As part of her guilty plea, Garg admitted that she issued prescriptions for those drugs to Southfork "patients" at the instructions of the owner of the clinic, Jagehauel Gillespie, and that she knew the "patients" did not actually need the drugs. In a plea agreement filed in United States District Court, Garg "acknowledges that she intentionally prescribed the drugs outside the usual course of professional practice and without a legitimate medical purpose."
Records maintained by the State of California show that Garg issued more than 10,000 prescriptions for controlled drugs - the vast majority of which were for hydrocodone or alprazolam - over the year-long period that she worked at Southfork. Financial records show that, over the same time period, Garg received more than $300,000 in cash and transferred more than $90,000 to bank accounts held in Thailand and Malaysia.
During the investigation, Garg issued prescriptions for oxycodone and promethazine with codeine to undercover agents on eight occasions. During one of the meetings, Garg gave a prescription to an undercover witness, and then Garg agreed to issue a new prescription to the witness the following week under a false name.
"The abuse of prescriptions drugs continue to take a horrific toll on public health and safety in our communities," said Stephen G. Azzam, Acting Special Agent in Charge of DEA’s Los Angeles Field Division. "The DEA will continue to work with our partner agencies to identify and investigate doctors who are using their medical licenses to illegally deal drugs."
The conspirators also used Los Angeles as a base of operations to acquire and deliver bulk shipments of prescription drugs to Texas, according to court documents. Furthermore, according to court records, Garg continued to assist Gillespie in acquiring oxycodone from international wholesalers even after the Medical Board of California revoked Garg’s license in December 2013.
Previously in this case, five of the other defendants have pleaded guilty, including Gillespie, who was sentenced in November to six years in federal prison. One other defendant is pending trial, which is scheduled for later this year.
The investigation into Garg was conducted by the Drug Enforcement Administration’s Los Angeles and Houston field divisions, IRS - Criminal Investigation, the Los Angeles Police Department, the Los Angeles County Sheriff’s Department, the California Department of Justice, and the Texas Department of Public Safety ...
Maria Soto sustained an injury to her right shoulder, neck and low back while employed as an assembler by Sambrailo Packaging in Santa Maria. She was referred for treatment to Zenith's MPN in Santa Maria, Central Coast Industrial Care, where applicant lives and worked. Based upon her request for a referral from a primary treating physician to an orthopedic surgeon, Central Coast referred applicant to two orthopedic specialists in Solvang. Applicant states that the "MPN included 9 orthopedic doctors but only one would treat backs." Applicant therefore notified Zenith that the MPN did not meet the applicable access standards and selected Dr. Scheinberg, a non-MPN physician located in Santa Barbara, approximately 70 miles away, to treat her shoulder and back. Defendant declined to authorize such treatment outside the MPN.
The parties stipulated that the defendant had a validly formed MPN. At issue was whether the MPN complied with the MPN physician access standards of having three orthopedists willing to treat the applicant. They stipulated there was only one. At a subsequent hearing applicant agreed to treat with an MPN neurosurgeon, Dr. Kissel, but Dr. Kissel declined to accept the applicant.
Zenith contends that that under rural access standards it has 46 physicians within 30 miles or 60 minutes who are fully qualified to act as a primary treating physician in this case (even though they were not orthopedists.)
The WCJ held that Soto was entitled to obtain medical treatment outside defendant's MPN, finding defendant's MPN was not in compliance with the applicable access standards by not having three orthopedic specialists willing to treat applicant within the applicable geographic area. On reconsideration, the WCAB reversed in the panel decision of Soto v Sambrailo Packaging; Zenith Insurance Co.
The MPN is required to have "an adequate number and type of physicians . . . to treat common injuries experienced by injured employees based on the type of occupation or industry in which the employee is engaged, and the geographic area where the employees are employed." (Lab. Code, §4616(a)(l ).) The question is whether defendant's MPN provides the requisite selection of physicians available to assume the role of a primary treating physician. The Legislature intended that an injured worker will be able to select a primary treating physician who has the necessary specialization or expertise in treating her injury. Labor Code section 4616.3(d)(2) provides that "[t]reatment by a specialist who is not a member of the medical provider network may be permitted on a case-by-case basis if the medical provider network does not contain a physician who can provide the approved treatment and the treatment is approved by the employer or insurer."
A search of Zenith MPN physicians who were available within 60 miles of the employer's zip code identified 79 providers, and there were 33 physicians within 30 miles. Of those, applicant's condition could be treated by physicians who wished to practice as a primary treating physician who were familiar with treating the type of injury at issue. Thus, defendant has provided evidence that there are a sufficient number of available physicians within the rural geographic area with specialties capable of providing applicant's primary care, even if a physician with the specific specialty selected by applicant is unavailable. If applicant requires specialty medical treatment, applicant can be referred to specialist by her primary treating physician selected from within the MPN. If an MPN specialist is not available within the applicable rural access standards, applicant may be referred to a non-MPN specialist. However, applicant has not establish that defendant has violated the applicable rural access standards for selecting her primary treating physician. Therefore, applicant is not entitled to select a physician as her primary treating physician, at defendant's expense ...
The parties stipulated that the defendant had a validly formed MPN. At issue was whether the MPN complied with the MPN physician access standards of having three orthopedists willing to treat the applicant. They stipulated there was only one. At a subsequent hearing applicant agreed to treat with an MPN neurosurgeon, Dr. Kissel, but Dr. Kissel declined to accept the applicant.
Zenith contends that that under rural access standards it has 46 physicians within 30 miles or 60 minutes who are fully qualified to act as a primary treating physician in this case (even though they were not orthopedists.)
The WCJ held that Soto was entitled to obtain medical treatment outside defendant's MPN, finding defendant's MPN was not in compliance with the applicable access standards by not having three orthopedic specialists willing to treat applicant within the applicable geographic area. On reconsideration, the WCAB reversed in the panel decision of Soto v Sambrailo Packaging; Zenith Insurance Co.
The MPN is required to have "an adequate number and type of physicians . . . to treat common injuries experienced by injured employees based on the type of occupation or industry in which the employee is engaged, and the geographic area where the employees are employed." (Lab. Code, §4616(a)(l ).) The question is whether defendant's MPN provides the requisite selection of physicians available to assume the role of a primary treating physician. The Legislature intended that an injured worker will be able to select a primary treating physician who has the necessary specialization or expertise in treating her injury. Labor Code section 4616.3(d)(2) provides that "[t]reatment by a specialist who is not a member of the medical provider network may be permitted on a case-by-case basis if the medical provider network does not contain a physician who can provide the approved treatment and the treatment is approved by the employer or insurer."
A search of Zenith MPN physicians who were available within 60 miles of the employer's zip code identified 79 providers, and there were 33 physicians within 30 miles. Of those, applicant's condition could be treated by physicians who wished to practice as a primary treating physician who were familiar with treating the type of injury at issue. Thus, defendant has provided evidence that there are a sufficient number of available physicians within the rural geographic area with specialties capable of providing applicant's primary care, even if a physician with the specific specialty selected by applicant is unavailable. If applicant requires specialty medical treatment, applicant can be referred to specialist by her primary treating physician selected from within the MPN. If an MPN specialist is not available within the applicable rural access standards, applicant may be referred to a non-MPN specialist. However, applicant has not establish that defendant has violated the applicable rural access standards for selecting her primary treating physician. Therefore, applicant is not entitled to select a physician as her primary treating physician, at defendant's expense ...
The Division of Workers’ Compensation has announced the winners of the 2016 Carrie Nevans Community Service Award. Both recipients are commissioners on the Commission on Health and Safety and Workers’ Compensation (CHSWC). This year’s award recipient in Southern California is Martin Brady, the Schools Insurance Authority executive director. Christy Bouma, Capitol Connection president, is the Northern California recipient. The awards will be presented at the upcoming 23rd annual DWC educational conference luncheons.
Martin Brady is the executive director of the Schools Insurance Authority in Sacramento, where he has worked since 1998. He was appointed by the Governor to CHSWC in 2012 to represent employers. Over the course of his career, Mr. Brady has also served as a member of the California Joint Powers Authority, the California Coalition on Workers’ Compensation, the Public Agency Risk Managers Association, the Public School Risk Institute, the Association of Governmental Risk Pools, and the Public Risk Management Association. He has worked tirelessly to ensure that public employer needs and concerns are addressed in the workers’ compensation system, including in the SB 863 reforms, and he has been instrumental in supporting programs to prevent workers’ compensation injuries that have helped to reduce costs for employers and protect California employees.
Christy Bouma is the president of Capitol Connection in Sacramento. She was appointed by the Governor to CHSWC in 2012 to represent labor. Ms. Bouma has supported the California Professional Firefighters, the California School Employees Association government advocacy team, the State Building and Construction Trades Council, and the Service Employees International Union on special legislative projects. She is affiliated with the Institute of Government Advocates, the Leadership California Institute, and the CompScope Advisory Committee of the Workers’ Compensation Research Institute. She has been a critical partner in supporting the recent workers’ compensation reforms and preserving benefits for workers in the state, especially those involved in public safety.
The DWC’s 23rd annual educational conference is the largest workers’ compensation training in the state and allows claims administrators, attorneys, medical providers, return to work specialists, employers, and others to learn about the most recent developments in the system as well as ongoing DWC programs. The Los Angeles conference (February 25-26) at the LAX Marriott is almost sold out; registration is still open for the Oakland training (March 3-4) at the Oakland Marriott City Center Hotel ...
Martin Brady is the executive director of the Schools Insurance Authority in Sacramento, where he has worked since 1998. He was appointed by the Governor to CHSWC in 2012 to represent employers. Over the course of his career, Mr. Brady has also served as a member of the California Joint Powers Authority, the California Coalition on Workers’ Compensation, the Public Agency Risk Managers Association, the Public School Risk Institute, the Association of Governmental Risk Pools, and the Public Risk Management Association. He has worked tirelessly to ensure that public employer needs and concerns are addressed in the workers’ compensation system, including in the SB 863 reforms, and he has been instrumental in supporting programs to prevent workers’ compensation injuries that have helped to reduce costs for employers and protect California employees.
Christy Bouma is the president of Capitol Connection in Sacramento. She was appointed by the Governor to CHSWC in 2012 to represent labor. Ms. Bouma has supported the California Professional Firefighters, the California School Employees Association government advocacy team, the State Building and Construction Trades Council, and the Service Employees International Union on special legislative projects. She is affiliated with the Institute of Government Advocates, the Leadership California Institute, and the CompScope Advisory Committee of the Workers’ Compensation Research Institute. She has been a critical partner in supporting the recent workers’ compensation reforms and preserving benefits for workers in the state, especially those involved in public safety.
The DWC’s 23rd annual educational conference is the largest workers’ compensation training in the state and allows claims administrators, attorneys, medical providers, return to work specialists, employers, and others to learn about the most recent developments in the system as well as ongoing DWC programs. The Los Angeles conference (February 25-26) at the LAX Marriott is almost sold out; registration is still open for the Oakland training (March 3-4) at the Oakland Marriott City Center Hotel ...
On August 14, 2013, the WCJ in the case of Trinh v Tzeng Long USA Inc. issued an Order For Costs And Sanctions against Professional Lien Services, Inc., (PLS), ordering it to pay defendant’s costs and attorney’s fees in the amount of $2,355 along with a separate court sanction of $1,000. The sanctions were imposed for PLS’s bad faith and frivolous conduct in pursuing a trial on the issues of penalty and interest when it did not offer evidence at the trial adequate to meet its initial burden of proof.
Neither PLS nor its representative, Mike Traw petitioned for reconsideration or otherwise appealed the August 14, 2013 Sanction Order and it is now final and binding for all purposes.
Deputy Commissioner Rick Dietrich, Secretary of the Appeals Board, notified PLS in October 2013 that payment of the $1,000 court sanction was expected within ten days and further advised that failure to pay the sanction was grounds for suspending the privilege of appearing before the WCAB pursuant to section 4907. PLS replied that it was petitioning for reconsideration, but that was not the case.
Defendant also made unsuccessful efforts to recover the costs and attorney’s fees that PLS is obligated to pay as part of the Sanction Order. Thus the En Banc panel concluded "None of the efforts by the Appeals Board and the defendant have resulted in voluntary compliance with the August 14, 2013 Sanction Order by PLS and Mr. Traw, and it appears they are willfully disobeying the August 14, 2013 Sanction Order."
Section 4907(a)(2) provides for suspension of the privilege of appearing before the WCAB for, "failure to pay final order of sanctions, attorney’s fees, or costs, issued under Section 5813." The failure to comply with an order or regulation of the WCAB, including an order to pay a sanction, is an interference with the judicial process that provides good cause for suspending or removing the privilege of appearing before the WCAB.
For this reason it was ordered last August that "that the Appeals Board intends to suspend the privilege of Professional Lien Services, Inc., and Mike Traw of appearing before the Workers’ Compensation Appeals Board for ninety (90) days unless good cause is shown why the suspensions should not be imposed."
Since then, no response to the Notice Of Intention was received from Mike Traw. The Appeals Board received a letter from Mark Blakely on the letterhead of PLS that stated that he acquired PLS from the prior owners and he requested a 60 day extension of the time which was granted. He requested a second 60 day extension which was also granted. No further response has been received from Mr. Blakely or PLS, and the two allowed extensions of time to respond have expired.
Thus, the WCAB sitting en banc issued its Decision After Removal, suspending the privilege of Mike Traw of appearing before the WCAB but did not suspend the privilege of Mark Blakely or PLS. However, the earlier ordered sanctions against PLS remain in full force and effect, and PLS continues to be liable sfor payment of those ordered sanctions ...
Neither PLS nor its representative, Mike Traw petitioned for reconsideration or otherwise appealed the August 14, 2013 Sanction Order and it is now final and binding for all purposes.
Deputy Commissioner Rick Dietrich, Secretary of the Appeals Board, notified PLS in October 2013 that payment of the $1,000 court sanction was expected within ten days and further advised that failure to pay the sanction was grounds for suspending the privilege of appearing before the WCAB pursuant to section 4907. PLS replied that it was petitioning for reconsideration, but that was not the case.
Defendant also made unsuccessful efforts to recover the costs and attorney’s fees that PLS is obligated to pay as part of the Sanction Order. Thus the En Banc panel concluded "None of the efforts by the Appeals Board and the defendant have resulted in voluntary compliance with the August 14, 2013 Sanction Order by PLS and Mr. Traw, and it appears they are willfully disobeying the August 14, 2013 Sanction Order."
Section 4907(a)(2) provides for suspension of the privilege of appearing before the WCAB for, "failure to pay final order of sanctions, attorney’s fees, or costs, issued under Section 5813." The failure to comply with an order or regulation of the WCAB, including an order to pay a sanction, is an interference with the judicial process that provides good cause for suspending or removing the privilege of appearing before the WCAB.
For this reason it was ordered last August that "that the Appeals Board intends to suspend the privilege of Professional Lien Services, Inc., and Mike Traw of appearing before the Workers’ Compensation Appeals Board for ninety (90) days unless good cause is shown why the suspensions should not be imposed."
Since then, no response to the Notice Of Intention was received from Mike Traw. The Appeals Board received a letter from Mark Blakely on the letterhead of PLS that stated that he acquired PLS from the prior owners and he requested a 60 day extension of the time which was granted. He requested a second 60 day extension which was also granted. No further response has been received from Mr. Blakely or PLS, and the two allowed extensions of time to respond have expired.
Thus, the WCAB sitting en banc issued its Decision After Removal, suspending the privilege of Mike Traw of appearing before the WCAB but did not suspend the privilege of Mark Blakely or PLS. However, the earlier ordered sanctions against PLS remain in full force and effect, and PLS continues to be liable sfor payment of those ordered sanctions ...
The medical treatment utilization schedule (MTUS) provides medical treatment guidelines for utilization review and an analytical framework for the evaluation and treatment of injured workers. It helps medical providers understand which evidenced-based treatments have been effective in providing improved medical outcomes to those workers, and guides the physicians involved in the UR and IMR process. In 2004 the Legislature charged the DWC administrative director (AD) with adopting an MTUS that would be presumed correct on the issue of extent and scope of medical treatment, and made the American College of Occupational and Environmental Medicine Practice Guidelines, 2nd Edition, (ACOEM) the standard until the adoption of an MTUS by the AD. Thus the ACOEM Guideline was a temporary solution.
After initial adoption, the MTUS is to be updated improving upon the original ACOEM edition. For example, the current version of the MTUS added new guidelines for chronic pain and postsurgical physical medicine treatment., topics not covered in the ACOEM Guideline. The MTUS was also reorganized to restructure the MTUS into a clinical topics format, which will allow for easier updates of the guidelines.
An continuing the effort to improve the Guideline, the Division of Workers’ Compensation has now posted the proposed Mental Illness and Stress Guideline to update the current Stress Related Conditions Guideline of the Medical Treatment Utilization Schedule set forth in section 9792.23.8 to its online forum.
Members of the public may review and comment on the proposals until February 16, 2016. The proposed amendment to the regulations incorporate by reference the March 25, 2015 version of the Official Disability Guideline’s "Mental Illness and Stress Guideline" which the DWC has adopted with permission from the publisher. The new guideline is 582 pages long! Previously the MTUS relied on the language of the Stress Related Conditions Chapter of the ACOEM Practice Guidelines, 2nd Edition (2004), Chapter 15. By contrast, the ACOEM guideline on mental heath issues was extremely vague and terse. The new effort addresses both of those criticisms.
As previously announced, the DWC will be updating all of the clinical topic medical treatment guidelines of the Medical Treatment Utilization Schedule. This online forum follows the October 2015 online forum which posted two new additional guidelines, the proposed Occupational Interstitial Lung Disease Guideline and the Occupational/Work Related Asthma Guideline. Once the online forums have been completed for each specific clinical topic, the DWC will combine all of the proposed regulatory updates and additions to section 9792.23 et seq. into one rulemaking package ...
After initial adoption, the MTUS is to be updated improving upon the original ACOEM edition. For example, the current version of the MTUS added new guidelines for chronic pain and postsurgical physical medicine treatment., topics not covered in the ACOEM Guideline. The MTUS was also reorganized to restructure the MTUS into a clinical topics format, which will allow for easier updates of the guidelines.
An continuing the effort to improve the Guideline, the Division of Workers’ Compensation has now posted the proposed Mental Illness and Stress Guideline to update the current Stress Related Conditions Guideline of the Medical Treatment Utilization Schedule set forth in section 9792.23.8 to its online forum.
Members of the public may review and comment on the proposals until February 16, 2016. The proposed amendment to the regulations incorporate by reference the March 25, 2015 version of the Official Disability Guideline’s "Mental Illness and Stress Guideline" which the DWC has adopted with permission from the publisher. The new guideline is 582 pages long! Previously the MTUS relied on the language of the Stress Related Conditions Chapter of the ACOEM Practice Guidelines, 2nd Edition (2004), Chapter 15. By contrast, the ACOEM guideline on mental heath issues was extremely vague and terse. The new effort addresses both of those criticisms.
As previously announced, the DWC will be updating all of the clinical topic medical treatment guidelines of the Medical Treatment Utilization Schedule. This online forum follows the October 2015 online forum which posted two new additional guidelines, the proposed Occupational Interstitial Lung Disease Guideline and the Occupational/Work Related Asthma Guideline. Once the online forums have been completed for each specific clinical topic, the DWC will combine all of the proposed regulatory updates and additions to section 9792.23 et seq. into one rulemaking package ...
MAXIMUS, is an American, for-profit, company that provides business process services to government health and human services agencies in the United States, Australia, Canada, Saudi Arabia and the United Kingdom. MAXIMUS focuses on administering government-sponsored programs, such as Medicaid, the Children's Health Insurance Program (CHIP), health care reform, welfare-to-work, Medicare, child support enforcement, and other government programs. It was selected by the DWC to provide IMR services for the California workers' compensation community. The company is based in Reston, Virginia, and has more than 13,000 employees.
And MAXIMUS is financially prospering. This week it reported the financial results for the three months that ended December 31, 2015. It claimed a revenue growth of 19% to $556.7 million compared to the same period last year. It had year-to-date signed contract awards of $665 million and new contracts pending (awarded but unsigned) of $285 million at December 31, 2015. The increase in revenue was primarily driven by the acquisitions of Acentia and Remploy and organic growth in the Health Services Segment.
The company focuses primarily on "operating government-sponsored programs for vulnerable populations" according to one of its earlier annual reports. The outsourcing of health and human services function to private for-profit firms raises significant concerns, at least according to non-profit research group In the Public Interest, a comprehensive resource center on privatization and responsible contracting,
Maximus has been a Private Sector member of the American Legislative Exchange Council (ALEC) at least from 1994 to 1995. The American Legislative Exchange Council (ALEC) describes itself as the largest "membership association of state legislators," but over 98% of its revenue comes from sources other than legislative dues, primarily from corporations and corporate foundations.
In March 2014, Maximus CEO Richard Montoni told Investors Business Daily that Maximus had booked $347 million in contracts related to the Affordable Care Act (Obamacare) in 2013 and that Maximus was expected to generate $200 million in annual revenue from work related to the ACA. In its 2013 annual statement, Maximus reported that 65 percent of its total revenue for that year came from its Health Services Segment and state that it expects health-sector-related revenue to continue to increase:
"We expect that demand for our core health and human services offerings will continue to increase over the next few years, driven by new legislation, austerity measures and increasing caseloads, as governments strive to deliver more services with fewer resources. Legislation, such as the Affordable Care Act in the United States as well as other health and welfare reform initiatives abroad, has created increased demand for our services, a trend we expect to continue over the next several years." ...
And MAXIMUS is financially prospering. This week it reported the financial results for the three months that ended December 31, 2015. It claimed a revenue growth of 19% to $556.7 million compared to the same period last year. It had year-to-date signed contract awards of $665 million and new contracts pending (awarded but unsigned) of $285 million at December 31, 2015. The increase in revenue was primarily driven by the acquisitions of Acentia and Remploy and organic growth in the Health Services Segment.
The company focuses primarily on "operating government-sponsored programs for vulnerable populations" according to one of its earlier annual reports. The outsourcing of health and human services function to private for-profit firms raises significant concerns, at least according to non-profit research group In the Public Interest, a comprehensive resource center on privatization and responsible contracting,
Maximus has been a Private Sector member of the American Legislative Exchange Council (ALEC) at least from 1994 to 1995. The American Legislative Exchange Council (ALEC) describes itself as the largest "membership association of state legislators," but over 98% of its revenue comes from sources other than legislative dues, primarily from corporations and corporate foundations.
In March 2014, Maximus CEO Richard Montoni told Investors Business Daily that Maximus had booked $347 million in contracts related to the Affordable Care Act (Obamacare) in 2013 and that Maximus was expected to generate $200 million in annual revenue from work related to the ACA. In its 2013 annual statement, Maximus reported that 65 percent of its total revenue for that year came from its Health Services Segment and state that it expects health-sector-related revenue to continue to increase:
"We expect that demand for our core health and human services offerings will continue to increase over the next few years, driven by new legislation, austerity measures and increasing caseloads, as governments strive to deliver more services with fewer resources. Legislation, such as the Affordable Care Act in the United States as well as other health and welfare reform initiatives abroad, has created increased demand for our services, a trend we expect to continue over the next several years." ...
The former owner and the former operator of a durable medical equipment supply company based in Long Beach, California, were sentenced today for their roles in a $1.5 million Medicare fraud scheme.
Amalya Cherniavsky, 41, and her husband, Vladislav Tcherniavsky, 46, both of Long Beach, were ordered to pay $614,418 in restitution. U.S. District Judge Terry J. Hatter Jr. of the Central District of California ordered Tcherniavsky to serve 51 months in prison. On Oct. 15, 2015, a federal jury convicted both defendants of one count of conspiracy to commit health care fraud and five counts of health care fraud.
The evidence at trial demonstrated that Cherniavsky owned JC Medical Supply, a purported durable medical equipment supply company that she co-operated with Tcherniavsky. Evidence further showed that the defendants paid illegal kickbacks to patient recruiters in exchange for patient referrals and paid kickbacks to physicians for fraudulent prescriptions - primarily for expensive, medically unnecessary power wheelchairs - which the defendants then used to support fraudulent bills to Medicare.
Between 2006 and 2013, the defendants submitted $1,520,727 in claims to Medicare and received $783,756 in reimbursement for those claims, according to evidence presented at trial.
The case was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office of the Central District of California. HHS-OIG’s Los Angeles Regional Office, the FBI and the California Department of Justice’s Bureau of Medi-Cal Fraud and Elder Abuse investigated the case. Attorneys Blanca Quintero and Kevin R. Gingras of the Criminal Division’s Fraud Section prosecuted the case ...
Amalya Cherniavsky, 41, and her husband, Vladislav Tcherniavsky, 46, both of Long Beach, were ordered to pay $614,418 in restitution. U.S. District Judge Terry J. Hatter Jr. of the Central District of California ordered Tcherniavsky to serve 51 months in prison. On Oct. 15, 2015, a federal jury convicted both defendants of one count of conspiracy to commit health care fraud and five counts of health care fraud.
The evidence at trial demonstrated that Cherniavsky owned JC Medical Supply, a purported durable medical equipment supply company that she co-operated with Tcherniavsky. Evidence further showed that the defendants paid illegal kickbacks to patient recruiters in exchange for patient referrals and paid kickbacks to physicians for fraudulent prescriptions - primarily for expensive, medically unnecessary power wheelchairs - which the defendants then used to support fraudulent bills to Medicare.
Between 2006 and 2013, the defendants submitted $1,520,727 in claims to Medicare and received $783,756 in reimbursement for those claims, according to evidence presented at trial.
The case was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office of the Central District of California. HHS-OIG’s Los Angeles Regional Office, the FBI and the California Department of Justice’s Bureau of Medi-Cal Fraud and Elder Abuse investigated the case. Attorneys Blanca Quintero and Kevin R. Gingras of the Criminal Division’s Fraud Section prosecuted the case ...
More than a dozen major healthcare organizations and associations have jumped into a Supreme Court case over the validity of a legal theory now used to bring many fraud lawsuits against them. The case has the potential to reduce - or increase - the number of False Claims Act suits brought against healthcare providers and other companies, depending on which way the high court rules.
The US Supreme Court has agreed to hear Universal Health Services v. United States ex rel Escobar. The case focuses on situations in which whistle-blowers allege providers have submitted false claims to government programs by failing to follow certain regulations. That legal theory is known as "implied certification" and has been accepted by some federal appeals courts and rejected by others.
Organizations found liable under the False Claims Act, also called Qui Tam litigation, face penalties and triple damages. In 2015, two-thirds of federal whistle-blower lawsuits targeted healthcare entities. That's prompted a number of healthcare organizations to file briefs siding with the Universal Health Services, which argues against the theory. Organizations that have filed briefs include the Pharmaceutical Research and Manufacturers of America, the Generic Pharmaceutical Association, the American Hospital Association and the Chamber of Commerce of the United States.
The American Medical Association argues in its brief that imperfect compliance is not the same as fraud. "The healthcare regulatory environment is especially complex, making it particularly inappropriate to use the hammer of (False Claims Act) liability to punish noncompliance," according to the brief.
In their brief, the American Hospital Association, Federation of American Hospitals and Association of American Medical Colleges say the healthcare field is already targeted by whistle-blowers seeking massive payouts. In False Claims Act cases, whistle-blowers are entitled to a percentage of whatever money the government recovers. They argue in the brief that the implied-certification theory has exacerbated the filing of meritless suits against healthcare organizations. The suits "try to tap into the extreme complexity of Medicare and Medicaid and use that as a basis for asserting all sorts of hospitals, healthcare providers and others - have committed fraud for what might be fairly minor regulatory missteps," said Jessica Ellsworth, a partner at Hogan Lovells who filed the brief on behalf of the hospital associations and medical college association.
The United States Chamber of Commerce claims that the theory "profoundly increases risk and uncertainty for government contractors, grantees, and program participants" and should be rejected.
But Patrick Burns, co-executive director of the Taxpayers Against Fraud Education Fund, a not-for-profit group that supports whistle-blower incentive programs, said implied certification is important for holding healthcare and other organizations accountable for doing the right thing - even if that right thing isn't explicitly stated in a contract with the government.
He said the facts of this case before the Supreme Court are a prime illustration. The Universal Health Services case was brought by the parents of a patient who died at a Massachusetts mental health clinic. Her parents alleged that the clinic's caregivers were not properly supervised and that the clinic did not employ a board-certified or board-eligible psychiatrist and a licensed psychologist, in violation of state Medicaid program regulations. The 1st U.S. Circuit Court of Appeals sided with the plaintiffs in that case.
It is difficult to understand how the facts of this case can be construed to be about "fairly minor regulatory missteps." The teen who died, Yarushka Rivera began seeing Universal Health Services counselor Maria Pereyra in 2007 after experiencing behavioral problems at school. Pereyra, though on staff at its Arbour satellite clinic, had no professional license to provide mental-health therapy. After hearing parent complaints about the quality of her care, Yarushka was transferred to another staff member, Diana Casado. Like Pereyra, Casado was unlicensed. In February 2009, Yarushka was once again assigned to a new therapist, Anna Fuchu. Fuchu held herself out as a psychologist with a Ph.D., though the parents later learned that she had trained at an unaccredited online school and that her application for a professional license had been rejected. Notwithstanding Fuchu's lack of essential credentials, she treated Yarushka and eventually diagnosed her with bipolar disorder.
Several months later, when Yarushka's behavioral problems had not abated, officials at her school informed the parents that she would be permitted to attend classes only if she saw a psychiatrist. When the parents told this to Fuchu, she referred Yarushka to Maribel Ortiz, another staff member at Arbour. Believing Ortiz to be a psychiatrist, the parents referred to her as "Dr. Ortiz." They eventually discovered, however, that she was not a psychiatrist, but rather a nurse, and that she was not under the supervision of the one Arbour staff psychiatrist, Maria Gaticales - herself not board-certified, or eligible for board certification, as contemplated by the regulations. Yarushka died after having a second seizure while under this care.
There is an old saying in the practice of appellate law "bad facts make bad law." Cases with bad facts should not be appealed. It is very difficult to see how the U.S. Supreme Court can construe what happened in this case to be nothing more than quibbling over vague and ambiguous regulations dealing with being properly trained, licensed and supervised to provide health care ...
The US Supreme Court has agreed to hear Universal Health Services v. United States ex rel Escobar. The case focuses on situations in which whistle-blowers allege providers have submitted false claims to government programs by failing to follow certain regulations. That legal theory is known as "implied certification" and has been accepted by some federal appeals courts and rejected by others.
Organizations found liable under the False Claims Act, also called Qui Tam litigation, face penalties and triple damages. In 2015, two-thirds of federal whistle-blower lawsuits targeted healthcare entities. That's prompted a number of healthcare organizations to file briefs siding with the Universal Health Services, which argues against the theory. Organizations that have filed briefs include the Pharmaceutical Research and Manufacturers of America, the Generic Pharmaceutical Association, the American Hospital Association and the Chamber of Commerce of the United States.
The American Medical Association argues in its brief that imperfect compliance is not the same as fraud. "The healthcare regulatory environment is especially complex, making it particularly inappropriate to use the hammer of (False Claims Act) liability to punish noncompliance," according to the brief.
In their brief, the American Hospital Association, Federation of American Hospitals and Association of American Medical Colleges say the healthcare field is already targeted by whistle-blowers seeking massive payouts. In False Claims Act cases, whistle-blowers are entitled to a percentage of whatever money the government recovers. They argue in the brief that the implied-certification theory has exacerbated the filing of meritless suits against healthcare organizations. The suits "try to tap into the extreme complexity of Medicare and Medicaid and use that as a basis for asserting all sorts of hospitals, healthcare providers and others - have committed fraud for what might be fairly minor regulatory missteps," said Jessica Ellsworth, a partner at Hogan Lovells who filed the brief on behalf of the hospital associations and medical college association.
The United States Chamber of Commerce claims that the theory "profoundly increases risk and uncertainty for government contractors, grantees, and program participants" and should be rejected.
But Patrick Burns, co-executive director of the Taxpayers Against Fraud Education Fund, a not-for-profit group that supports whistle-blower incentive programs, said implied certification is important for holding healthcare and other organizations accountable for doing the right thing - even if that right thing isn't explicitly stated in a contract with the government.
He said the facts of this case before the Supreme Court are a prime illustration. The Universal Health Services case was brought by the parents of a patient who died at a Massachusetts mental health clinic. Her parents alleged that the clinic's caregivers were not properly supervised and that the clinic did not employ a board-certified or board-eligible psychiatrist and a licensed psychologist, in violation of state Medicaid program regulations. The 1st U.S. Circuit Court of Appeals sided with the plaintiffs in that case.
It is difficult to understand how the facts of this case can be construed to be about "fairly minor regulatory missteps." The teen who died, Yarushka Rivera began seeing Universal Health Services counselor Maria Pereyra in 2007 after experiencing behavioral problems at school. Pereyra, though on staff at its Arbour satellite clinic, had no professional license to provide mental-health therapy. After hearing parent complaints about the quality of her care, Yarushka was transferred to another staff member, Diana Casado. Like Pereyra, Casado was unlicensed. In February 2009, Yarushka was once again assigned to a new therapist, Anna Fuchu. Fuchu held herself out as a psychologist with a Ph.D., though the parents later learned that she had trained at an unaccredited online school and that her application for a professional license had been rejected. Notwithstanding Fuchu's lack of essential credentials, she treated Yarushka and eventually diagnosed her with bipolar disorder.
Several months later, when Yarushka's behavioral problems had not abated, officials at her school informed the parents that she would be permitted to attend classes only if she saw a psychiatrist. When the parents told this to Fuchu, she referred Yarushka to Maribel Ortiz, another staff member at Arbour. Believing Ortiz to be a psychiatrist, the parents referred to her as "Dr. Ortiz." They eventually discovered, however, that she was not a psychiatrist, but rather a nurse, and that she was not under the supervision of the one Arbour staff psychiatrist, Maria Gaticales - herself not board-certified, or eligible for board certification, as contemplated by the regulations. Yarushka died after having a second seizure while under this care.
There is an old saying in the practice of appellate law "bad facts make bad law." Cases with bad facts should not be appealed. It is very difficult to see how the U.S. Supreme Court can construe what happened in this case to be nothing more than quibbling over vague and ambiguous regulations dealing with being properly trained, licensed and supervised to provide health care ...
The average amount paid for an individual medical-legal service in the California workers’ compensation system rose 66 percent in the 8 years that followed the 2006 revisions to the medical-legal fee schedule, as the mix of medical-legal services shifted away from those reimbursed at a flat fee toward time-based services such as follow-ups within 9 months of a prior evaluation, comprehensive evaluations involving extraordinary circumstances and supplemental reports.
The findings are part of a new California Workers’ Compensation Institute (CWCI) study that reviews the legislative reforms, regulatory changes and judicial decisions that have reshaped the medical-legal process for resolving workers’ comp claim disputes over the past quarter century; provides an update on the quantity, mix and average payments for medical-legal services in the wake of the 2002-2004 reforms; and generates benchmark data for use in future studies on the impact of the 2012 reforms, which introduced independent medical review as a new means for resolving treatment disputes.
Among the key findings of the study determined:
1) The percent of indemnity claims with medical-legal services dropped from 24 percent in AY 2004 to 17 percent in AY 2005, after implementation of the 2002-2004 reforms, and has remained near that level.
2) In 2007, the first full year under the revised fee schedule that introduced new time-based billing codes for medical-legal testimony and supplemental evaluations, the average payment for an individual medical-legal service was $979. By 2014, the average had increased 66 percent to $1,628.
3) The increase in the overall average medical-legal payment from 2007 to 2014 reflects a continuing shift from services with flat fees to the following time-based services that are billed in 15-minute increments:
4) Follow-up evaluations within nine months of a prior evaluation (billing code ML 101), where the average payment increased 136.4 percent;
5) Comprehensive evaluations involving extraordinary circumstances (billing code ML 104), where the average payment increased 66.2 percent; and
6) Supplemental evaluations (ML 106) where the average payment rose 86.1 percent.
7) Invalid charges for supplemental reports have increased. The proportion of supplemental (ML 106) medical reports billed within 24 months of the injury absent an initial medical-legal evaluation increased from one in seven in AY 2007 to one in five in AY 2013.
CWCI has published its study, including additional details, tables and analyses in a Research Note, "The Changing Nature and Cost of the Medical-Legal Process in California Workers’ Compensation." CWCI members and members of the public who are CWCI research subscribers can access the full 20-page report as well as a 2-page summary Bulletin by logging in to the Institute’s website ...
The findings are part of a new California Workers’ Compensation Institute (CWCI) study that reviews the legislative reforms, regulatory changes and judicial decisions that have reshaped the medical-legal process for resolving workers’ comp claim disputes over the past quarter century; provides an update on the quantity, mix and average payments for medical-legal services in the wake of the 2002-2004 reforms; and generates benchmark data for use in future studies on the impact of the 2012 reforms, which introduced independent medical review as a new means for resolving treatment disputes.
Among the key findings of the study determined:
1) The percent of indemnity claims with medical-legal services dropped from 24 percent in AY 2004 to 17 percent in AY 2005, after implementation of the 2002-2004 reforms, and has remained near that level.
2) In 2007, the first full year under the revised fee schedule that introduced new time-based billing codes for medical-legal testimony and supplemental evaluations, the average payment for an individual medical-legal service was $979. By 2014, the average had increased 66 percent to $1,628.
3) The increase in the overall average medical-legal payment from 2007 to 2014 reflects a continuing shift from services with flat fees to the following time-based services that are billed in 15-minute increments:
4) Follow-up evaluations within nine months of a prior evaluation (billing code ML 101), where the average payment increased 136.4 percent;
5) Comprehensive evaluations involving extraordinary circumstances (billing code ML 104), where the average payment increased 66.2 percent; and
6) Supplemental evaluations (ML 106) where the average payment rose 86.1 percent.
7) Invalid charges for supplemental reports have increased. The proportion of supplemental (ML 106) medical reports billed within 24 months of the injury absent an initial medical-legal evaluation increased from one in seven in AY 2007 to one in five in AY 2013.
CWCI has published its study, including additional details, tables and analyses in a Research Note, "The Changing Nature and Cost of the Medical-Legal Process in California Workers’ Compensation." CWCI members and members of the public who are CWCI research subscribers can access the full 20-page report as well as a 2-page summary Bulletin by logging in to the Institute’s website ...
A federal appeals court ruled Monday that four patents related to Purdue Pharma's painkiller OxyContin are invalid, potentially bringing Teva Pharmaceutical Industries Ltd and others a step closer to introducing generic versions of the drug.
Reuters Health reports that privately owned, Connecticut-based Purdue had sued Teva, Amneal Pharmaceuticals, Epic Pharma and a U.S. arm of Mylan NV after they sought approval from the U.S. Food and Drug Administration to make generic OxyContin.
Monday's ruling by the Federal U.S. Circuit Court of Appeals upheld earlier orders from a lower court judge in favor of the generic drugmakers.Purdue said in a statement that it was reviewing the decision and considering what to do next. ;"Despite the court's ruling, Purdue has several other patents protecting OxyContin, and we do not anticipate generic manufacturers selling the product in the near future," it said.
Representatives of the generic drugmakers could not immediately be reached for comment.
Currently, the only generic versions of OxyContin on the market are so-called "authorized generics," which are exact copies of the brand-name version authorized by Purdue.
Three of the patents Purdue sought to enforce in its lawsuits are related to an improved formulation of oxycodone, the active ingredient in OxyContin.
The other patent describes technology designed to prevent abuse of the drug by making it difficult to crush and causing it to form a gel when dissolved in water so that it cannot be injected. Purdue licensed that technology from German pharmaceutical firm Grunenthal GmbH, which is also a plaintiff in the lawsuit.
Purdue's lawsuit against Teva went to a non-jury trial before U.S. District Judge Sidney Stein in Manhattan in 2013. In January 2014, Stein said that the patents were invalid because they did not add enough to what was already known. Stein subsequently dismissed the lawsuits against Mylan, Amneal and Epic as well, since they were based on the same patents. Purdue appealed all four cases to the Federal Circuit.
The case is Grunenthal GmbH et al v Teva Pharmaceuticals USA Inc, U.S. Court of Appeals, Federal Circuit, No. 2014-1311 ...
Reuters Health reports that privately owned, Connecticut-based Purdue had sued Teva, Amneal Pharmaceuticals, Epic Pharma and a U.S. arm of Mylan NV after they sought approval from the U.S. Food and Drug Administration to make generic OxyContin.
Monday's ruling by the Federal U.S. Circuit Court of Appeals upheld earlier orders from a lower court judge in favor of the generic drugmakers.Purdue said in a statement that it was reviewing the decision and considering what to do next. ;"Despite the court's ruling, Purdue has several other patents protecting OxyContin, and we do not anticipate generic manufacturers selling the product in the near future," it said.
Representatives of the generic drugmakers could not immediately be reached for comment.
Currently, the only generic versions of OxyContin on the market are so-called "authorized generics," which are exact copies of the brand-name version authorized by Purdue.
Three of the patents Purdue sought to enforce in its lawsuits are related to an improved formulation of oxycodone, the active ingredient in OxyContin.
The other patent describes technology designed to prevent abuse of the drug by making it difficult to crush and causing it to form a gel when dissolved in water so that it cannot be injected. Purdue licensed that technology from German pharmaceutical firm Grunenthal GmbH, which is also a plaintiff in the lawsuit.
Purdue's lawsuit against Teva went to a non-jury trial before U.S. District Judge Sidney Stein in Manhattan in 2013. In January 2014, Stein said that the patents were invalid because they did not add enough to what was already known. Stein subsequently dismissed the lawsuits against Mylan, Amneal and Epic as well, since they were based on the same patents. Purdue appealed all four cases to the Federal Circuit.
The case is Grunenthal GmbH et al v Teva Pharmaceuticals USA Inc, U.S. Court of Appeals, Federal Circuit, No. 2014-1311 ...
A decision by Turing Pharmaceuticals to increase profits by raising the price of a lifesaving drug by 5,000 percent drove some patient co-pays up to $16,000, according to excerpts of documents that congressional committee members made public on Tuesday.
The excerpts, highlighted in memos released by Democrats on the powerful U.S. House of Representatives Committee in Oversight and Government Reform, and summarized in an article by Reuters Health, give a rare behind-the-scenes glimpse into the business decisions behind drastic price increases at Turing and Canada-based Valeant Pharmaceuticals International Inc. The increases sparked a major public outcry. Both companies now face federal investigations over drug pricing.
The document excerpts show how Valeant bought two heart medicines for their "material pricing potential." The company increased the price of Isuprel by 525 percent and Nitropress, by 212 percent. The documents also suggest Valeant hiked the prices of another 20 drugs by more than 200 percent between 2014 and 2015.
In a statement, Valeant said it had responded to complaints about pricing by offering volume-based discounts of up to 30 percent.
Turing said in a statement it cut the price of Daraprim by up to 50 percent for hospitals. It said it used the funds from the price increase for research and development and patient access programs.
A lawyer for Martin Shkreli, Turing's former chief executive officer, did not respond to a request for comment. Shkreli, who also faces securities fraud charges, is slated to appear on Thursday before the House Oversight Committee with Valeant interim CEO Howard Schiller. Elijah Cummings, the panel's top Democrat, called for the probe.
Tuesday's excerpts show how Shkreli and Turing tried to maximize profits from Daraprim, while warding off potential public relations backlash from HIV patients who rely on the drug. The drug treats toxoplasmosis, a parasitic infection. "Very good. Nice work as usual. $1bn here we come," Shkreli wrote in a May email to the board.
Not long after Turing acquired the drug, reports began to pour in about patients with skyrocketing co-pays. In one August email, a Walgreens Boots Alliance executive wrote to ask if the company would grant exceptions for "those patients with a co-pay over the approved amount of $10,000." In another case, the company received a plea from Walgreens to reduce the price for a dog, who was "obviously not covered by insurance."
A Turing executive turned down the request and directed the pharmacy to a "vet meds website." ...
The excerpts, highlighted in memos released by Democrats on the powerful U.S. House of Representatives Committee in Oversight and Government Reform, and summarized in an article by Reuters Health, give a rare behind-the-scenes glimpse into the business decisions behind drastic price increases at Turing and Canada-based Valeant Pharmaceuticals International Inc. The increases sparked a major public outcry. Both companies now face federal investigations over drug pricing.
The document excerpts show how Valeant bought two heart medicines for their "material pricing potential." The company increased the price of Isuprel by 525 percent and Nitropress, by 212 percent. The documents also suggest Valeant hiked the prices of another 20 drugs by more than 200 percent between 2014 and 2015.
In a statement, Valeant said it had responded to complaints about pricing by offering volume-based discounts of up to 30 percent.
Turing said in a statement it cut the price of Daraprim by up to 50 percent for hospitals. It said it used the funds from the price increase for research and development and patient access programs.
A lawyer for Martin Shkreli, Turing's former chief executive officer, did not respond to a request for comment. Shkreli, who also faces securities fraud charges, is slated to appear on Thursday before the House Oversight Committee with Valeant interim CEO Howard Schiller. Elijah Cummings, the panel's top Democrat, called for the probe.
Tuesday's excerpts show how Shkreli and Turing tried to maximize profits from Daraprim, while warding off potential public relations backlash from HIV patients who rely on the drug. The drug treats toxoplasmosis, a parasitic infection. "Very good. Nice work as usual. $1bn here we come," Shkreli wrote in a May email to the board.
Not long after Turing acquired the drug, reports began to pour in about patients with skyrocketing co-pays. In one August email, a Walgreens Boots Alliance executive wrote to ask if the company would grant exceptions for "those patients with a co-pay over the approved amount of $10,000." In another case, the company received a plea from Walgreens to reduce the price for a dog, who was "obviously not covered by insurance."
A Turing executive turned down the request and directed the pharmacy to a "vet meds website." ...
Rodolfo Arroyo sustained industrial injury in 2000 to his back, knees and right big toe while working for Inland Concrete Enterprises as a concrete worker. The parties' Agreed Medical Evaluator (AME) Stuart Green, M.D., testified at his deposition in 2008 that it was medically reasonable for applicant to use a motorized scooter to relieve the effects of his industrial injury. Dr. Green reiterated that opinion in his comprehensive March 12, 2009 report of examination. Defendant accepted the opinion of the AME and provided applicant with a motorized scooter.
After approximately five years of use, the scooter began to break down. On February to, 2015, applicant's primary treating physician Jalil Rashti, M.D., reported to defendant that applicant's scooter was broken and he requested authorization to replace it with a new scooter in light of the costs of repair.
Defendant submitted the request for authorization to UR. However, the UR reviewer did not evaluate whether the scooter should be replaced or repaired. Instead, the timely UR decision addressed whether Arroyo should use a motorized scooter as a matter of medical necessity, and denied authorization to purchase one on the grounds that it was "not essential to care."
Applicant requested a hearing to challenge defendant's action, and the issues of "(n]eed for further medical treatment in the form of a motorized scooter" and "[s]ubject matter jurisdiction over the medical treatment dispute" were tried before the WCJ who issued his decision finding that the WCAB lacked subject matter jurisdiction over the treatment dispute because defendant issued a timely UR decision. The WCAB granted a petition for reconsideration and reversed this finding in the panel decision of Arroyo v Inland Concrete Enterprises.
The panel concluded that the WCJ correctly noted in his Report that the UR decision issued within the time allowed by Labor Code section 4610(g)(I), but he then incorrectly concludes from that fact that the WCAB has no jurisdiction over the treatment dispute. Contrary to the WCJ's conclusion, the WCAB does have jurisdiction over this dispute. Dr. Rashti requested authorization to replace the broken scooter that defendant previously provided, but the UR conducted by defendant did not address whether the broken scooter should be repaired or replaced. Instead, the UR considered whether provision of a scooter is medically supported, but that is not the issue raised by the request for authorization.
When a defendant authorizes a particular kind medical treatment it does not become obligated to provide that treatment forever. For example, the conduct of URs at reasonable intervals to address the ongoing use of a medication may be appropriate to determine if the medication continues to be effective and medically necessary. Similarly, the ongoing provision of physical therapy and chiropractic treatment may properly be evaluated through UR to determine if it is reasonable to continue to authorize those treatments. UR of other forms of medical treatment may also be supported when there is a change in the employee's circumstances or condition that raises a question about the necessity for continued provision of the treatment. But in all of these situations, the UR that is conducted must address the treatment for which authorization is requested or the medical treatment issue in dispute. That did not occur in this case.
Here, defendant did not conduct a timely UR of the treating physician's request for authorization to replace or repair the broken motor scooter. Thus, there is no valid UR concerning the request for authorization submitted by Dr. Rashti, and as held in Dubon II, the determination of whether the treatment should be authorized may be made by the WCAB based on substantial medical evidence consistent with Labor Code section 4604.5. Accordingly, the WCJ's October 28, 2015 decision is rescinded and the case is returned to the trial level for consideration of the reasonableness and necessity of repairing or replacing the broken scooter ...
After approximately five years of use, the scooter began to break down. On February to, 2015, applicant's primary treating physician Jalil Rashti, M.D., reported to defendant that applicant's scooter was broken and he requested authorization to replace it with a new scooter in light of the costs of repair.
Defendant submitted the request for authorization to UR. However, the UR reviewer did not evaluate whether the scooter should be replaced or repaired. Instead, the timely UR decision addressed whether Arroyo should use a motorized scooter as a matter of medical necessity, and denied authorization to purchase one on the grounds that it was "not essential to care."
Applicant requested a hearing to challenge defendant's action, and the issues of "(n]eed for further medical treatment in the form of a motorized scooter" and "[s]ubject matter jurisdiction over the medical treatment dispute" were tried before the WCJ who issued his decision finding that the WCAB lacked subject matter jurisdiction over the treatment dispute because defendant issued a timely UR decision. The WCAB granted a petition for reconsideration and reversed this finding in the panel decision of Arroyo v Inland Concrete Enterprises.
The panel concluded that the WCJ correctly noted in his Report that the UR decision issued within the time allowed by Labor Code section 4610(g)(I), but he then incorrectly concludes from that fact that the WCAB has no jurisdiction over the treatment dispute. Contrary to the WCJ's conclusion, the WCAB does have jurisdiction over this dispute. Dr. Rashti requested authorization to replace the broken scooter that defendant previously provided, but the UR conducted by defendant did not address whether the broken scooter should be repaired or replaced. Instead, the UR considered whether provision of a scooter is medically supported, but that is not the issue raised by the request for authorization.
When a defendant authorizes a particular kind medical treatment it does not become obligated to provide that treatment forever. For example, the conduct of URs at reasonable intervals to address the ongoing use of a medication may be appropriate to determine if the medication continues to be effective and medically necessary. Similarly, the ongoing provision of physical therapy and chiropractic treatment may properly be evaluated through UR to determine if it is reasonable to continue to authorize those treatments. UR of other forms of medical treatment may also be supported when there is a change in the employee's circumstances or condition that raises a question about the necessity for continued provision of the treatment. But in all of these situations, the UR that is conducted must address the treatment for which authorization is requested or the medical treatment issue in dispute. That did not occur in this case.
Here, defendant did not conduct a timely UR of the treating physician's request for authorization to replace or repair the broken motor scooter. Thus, there is no valid UR concerning the request for authorization submitted by Dr. Rashti, and as held in Dubon II, the determination of whether the treatment should be authorized may be made by the WCAB based on substantial medical evidence consistent with Labor Code section 4604.5. Accordingly, the WCJ's October 28, 2015 decision is rescinded and the case is returned to the trial level for consideration of the reasonableness and necessity of repairing or replacing the broken scooter ...
Division of Workers’ Compensation Administrative Director Destie Overpeck is leaving the Department of Industrial Relations to join the State Bar of California at its Office of the General Counsel. Ms. Overpeck’s last day with the DWC will be February 12, 2016. DWC Chief Counsel George Parisotto will assume the acting administrative director responsibilities.
As administrative director, Ms. Overpeck managed the DWC and oversaw the implementation of several reforms to the workers’ compensation system, including California’s 2012 reform law, SB 863, which increased payments to injured workers while simultaneously reducing costs for employers.
"As a valued member of my executive team, Destie Overpeck guided the Division of Workers’ Compensation through the sweeping reforms of SB 863, and leaves behind a strong organizational structure and dedicated team at the division," said DIR Director Christine Baker.
Ms. Overpeck has been with DWC for 16 years. After five years as an attorney with the legal unit, Ms. Overpeck was appointed chief counsel in 2005. She became acting administrative director for two interim periods in 2009 and 2011, and again served as acting administrative director in 2012 and was appointed administrative director by Governor Brown in 2015.
Please join DIR in thanking and congratulating Administrative Director Destie Overpeck ...
As administrative director, Ms. Overpeck managed the DWC and oversaw the implementation of several reforms to the workers’ compensation system, including California’s 2012 reform law, SB 863, which increased payments to injured workers while simultaneously reducing costs for employers.
"As a valued member of my executive team, Destie Overpeck guided the Division of Workers’ Compensation through the sweeping reforms of SB 863, and leaves behind a strong organizational structure and dedicated team at the division," said DIR Director Christine Baker.
Ms. Overpeck has been with DWC for 16 years. After five years as an attorney with the legal unit, Ms. Overpeck was appointed chief counsel in 2005. She became acting administrative director for two interim periods in 2009 and 2011, and again served as acting administrative director in 2012 and was appointed administrative director by Governor Brown in 2015.
Please join DIR in thanking and congratulating Administrative Director Destie Overpeck ...
Jason Schmelzer CCWC Legislative Advocate has prepared and circulated an excellent forecast of the workers' compensation isssues likely to be raised this year by the California legislature.
The California State Legislature returned to Sacramento on January 4 to complete the remainder of the 2015-2016 legislative session. California’s workers’ compensation system hasn’t been a major focus for the legislature for the last few years. The Division of Workers’ Compensation, however, has been busy promulgating regulations to implement SB 863, and the legislature and governor have stayed focused on other issues like climate change, transportation infrastructure, the drought, and affordable housing.
The first order of business for the legislature was to deal with the bills remaining from 2015, which are still eligible for consideration in the early weeks of 2016. One bill, in particular, that CCWC opposed aggressively in 2015 was SB 563 by Senator Richard Pan (D-Sacramento). Previous versions of the bill sought to place significant roadblocks in front of employers seeking to perform legitimate utilization review. However, recent amendments narrow the scope of the bill to simply prohibit UR contracts with a payment structure that specifically incentivizes delays, denials, and/or modifications of treatment requests. While there are some small details to be worked out, it appears that most of the concerns with this bill have now been resolved.
This is likely to be a year in which the stakeholders once again engage with seriousness. The reforms contained in SB 863 have finally been implemented and, as a result, workers’ compensation costs for employers have essentially stabilized. Benefits for injured workers are once again considered "adequate" after SB 863 increased permanent disability benefits by approximately $1 billion per year. The data, although preliminary, indicates that SB 863 has done what it was intended to do - augment benefits and slow or stop the growth in employer costs.
SB 863 is over three years old, and stakeholders are realizing that maintenance needs to occur if the system is to stay in balance. With three years of experience under SB 863 and plenty of data to drive discussions it seems likely that policymakers will attempt to smooth out whatever rough edges remain with recent reforms; and maybe even tackle some of the big issues that still remain. Additionally, stakeholders are getting itchy. Governor Brown has taken a cautious approach to workers’ compensation legislation since signing SB 863 in 2012. The result has been a lack of progress on priority legislation for many stakeholders that are pursuing changes as a direct result of SB 863, or weren’t involved in the negotiations and have priorities that predate SB 863.
It is unclear whether the conditions exist to tackle the big issues in 2016 - cumulative trauma reform, utilization review frequency, and myriad other issues from every corner of the stakeholder world. CCWC continues to watch the situation and work with the legislature, administration, and stakeholders to develop a strategy to move beyond the accomplishments of SB 863 and lower employer costs in what is still, at last evaluation, the most expensive venue for workers’ compensation in the nation.
The legislature, however, may have other ideas. The first new workers’ compensation bill of the year, SB 897 by Senator Richard Roth (D-Riverside), would unquestionably increase costs considerably for cities, counties, and the state. Labor Code Section 4850 provides for one year of full salary replacement, in lieu of temporary disability, for certain law enforcement personnel and firefighters. This provision is a source of great expense for local governments and the state, and SB 897 would double the duration to two years ...
The California State Legislature returned to Sacramento on January 4 to complete the remainder of the 2015-2016 legislative session. California’s workers’ compensation system hasn’t been a major focus for the legislature for the last few years. The Division of Workers’ Compensation, however, has been busy promulgating regulations to implement SB 863, and the legislature and governor have stayed focused on other issues like climate change, transportation infrastructure, the drought, and affordable housing.
The first order of business for the legislature was to deal with the bills remaining from 2015, which are still eligible for consideration in the early weeks of 2016. One bill, in particular, that CCWC opposed aggressively in 2015 was SB 563 by Senator Richard Pan (D-Sacramento). Previous versions of the bill sought to place significant roadblocks in front of employers seeking to perform legitimate utilization review. However, recent amendments narrow the scope of the bill to simply prohibit UR contracts with a payment structure that specifically incentivizes delays, denials, and/or modifications of treatment requests. While there are some small details to be worked out, it appears that most of the concerns with this bill have now been resolved.
This is likely to be a year in which the stakeholders once again engage with seriousness. The reforms contained in SB 863 have finally been implemented and, as a result, workers’ compensation costs for employers have essentially stabilized. Benefits for injured workers are once again considered "adequate" after SB 863 increased permanent disability benefits by approximately $1 billion per year. The data, although preliminary, indicates that SB 863 has done what it was intended to do - augment benefits and slow or stop the growth in employer costs.
SB 863 is over three years old, and stakeholders are realizing that maintenance needs to occur if the system is to stay in balance. With three years of experience under SB 863 and plenty of data to drive discussions it seems likely that policymakers will attempt to smooth out whatever rough edges remain with recent reforms; and maybe even tackle some of the big issues that still remain. Additionally, stakeholders are getting itchy. Governor Brown has taken a cautious approach to workers’ compensation legislation since signing SB 863 in 2012. The result has been a lack of progress on priority legislation for many stakeholders that are pursuing changes as a direct result of SB 863, or weren’t involved in the negotiations and have priorities that predate SB 863.
It is unclear whether the conditions exist to tackle the big issues in 2016 - cumulative trauma reform, utilization review frequency, and myriad other issues from every corner of the stakeholder world. CCWC continues to watch the situation and work with the legislature, administration, and stakeholders to develop a strategy to move beyond the accomplishments of SB 863 and lower employer costs in what is still, at last evaluation, the most expensive venue for workers’ compensation in the nation.
The legislature, however, may have other ideas. The first new workers’ compensation bill of the year, SB 897 by Senator Richard Roth (D-Riverside), would unquestionably increase costs considerably for cities, counties, and the state. Labor Code Section 4850 provides for one year of full salary replacement, in lieu of temporary disability, for certain law enforcement personnel and firefighters. This provision is a source of great expense for local governments and the state, and SB 897 would double the duration to two years ...
The Division of Workers’ Compensation invites interested members of the public to discuss the adoption and implementation of a drug formulary. The meeting is scheduled from 10 a.m. until noon on Wednesday, February 17, in the auditorium of the Elihu Harris State Office Building, 1515 Clay Street, Oakland, CA 94612.
At its most basic level, a formulary is a list of medicines. Traditionally, a formulary contained a collection of formulas for the compounding and testing of medication (a resource closer to what would be referred to as a pharmacopoeia today). Today, the main function of a prescription formulary is to specify particular medications that are approved to be prescribed at a particular hospital, in a particular health system, or under a particular health insurance policy. The development of prescription formularies is based on evaluations of efficacy, safety, and cost-effectiveness of drugs. Depending on the individual formulary, it may also contain additional clinical information, such as side effects, contraindications, and doses.
Assembly Bill 1124, which became effective January 1, 2016, requires the adoption of a workers’ compensation formulary by July 1, 2017. The overarching goal of the formulary and related rules is to expeditiously provide high quality evidence-based care to injured workers while minimizing administrative burden and cost. DWC will facilitate public discussion on how best to achieve the goal, including the following:
1) Design of the formulary (how to maximize evidence-based drug selection and transparency)
2) Integration of the formulary with existing Medical Treatment Utilization Schedule
3) Adoption of rules to improve the efficiency of utilization review, including ways to reduce the need for elevated utilization review and independent medical review
A Newsline will be issued in the near future to announce the posting of an agenda and background material on the DWC Forum. ...
At its most basic level, a formulary is a list of medicines. Traditionally, a formulary contained a collection of formulas for the compounding and testing of medication (a resource closer to what would be referred to as a pharmacopoeia today). Today, the main function of a prescription formulary is to specify particular medications that are approved to be prescribed at a particular hospital, in a particular health system, or under a particular health insurance policy. The development of prescription formularies is based on evaluations of efficacy, safety, and cost-effectiveness of drugs. Depending on the individual formulary, it may also contain additional clinical information, such as side effects, contraindications, and doses.
Assembly Bill 1124, which became effective January 1, 2016, requires the adoption of a workers’ compensation formulary by July 1, 2017. The overarching goal of the formulary and related rules is to expeditiously provide high quality evidence-based care to injured workers while minimizing administrative burden and cost. DWC will facilitate public discussion on how best to achieve the goal, including the following:
1) Design of the formulary (how to maximize evidence-based drug selection and transparency)
2) Integration of the formulary with existing Medical Treatment Utilization Schedule
3) Adoption of rules to improve the efficiency of utilization review, including ways to reduce the need for elevated utilization review and independent medical review
A Newsline will be issued in the near future to announce the posting of an agenda and background material on the DWC Forum. ...
The San Diego County District Attorney announced 13 new indictments against defendants in one of the largest workers’ compensation health care insurance bribery schemes ever uncovered in San Diego County. The defendants include a radiologist, a pain management physician, two chiropractors, a medical equipment provider, a medical clinic administrator and a medical marketer. Eight defendants, including doctors and their associates were indicted in connection with the same bribery scheme in November by the U.S. Attorney’s Office.
The charges in this case are the result of Operation Backlash, an extensive FBI led undercover investigation that revealed a widespread kickback scheme, including attorneys, doctors and medical providers who referred patients for health services in exchange for money. The defendants paid kickback payments to the owners and operators of chiropractic clinics in San Diego, Escondido and Calexico, in exchange for the patient referrals. A grand jury returned indictments on charges involving approximately $450,000 in kickback payments, resulting in millions of dollars in fraudulent workers’ compensation insurance claims.
The sheer scale of this fraud makes it one of the largest insurance bribery schemes in workers’ compensation ever uncovered in San Diego County. "When law enforcement became aware of the scam, we began following the trail of dirty money and it took us in many different directions," DA Bonnie Dumanis said. "The circle of criminal conduct continues to widen with today’s charges, and we expect additional indictments and arrests in the future."
Yesterday, law enforcement fanned out across three counties in a sweeping, early morning take down of more players. Dozens of District Attorney Investigators joined law enforcement in making arrests and serving search warrants at seven locations. At the end of the day, nine defendants were arrested.
Operation Backlash was first announced in November when the initial round of federal indictments was handed down. San Diego chiropractor Steven J. Rigler and San Diego workers’ compensation attorney Sean O’Keefe previously pleaded guilty to federal charges. In addition to today’s state charges, the U.S. Attorney’s Office announced federal indictments against three additional defendants. They include patient recruiters, Fermin Iglesias, Carlos Arguello, Miguel Morales and four corporations. The corporations are Providence Scheduling, Inc., Medex Solutions, Inc., Prime Holdings International, Inc. and Meridian Medical Resources, Inc., doing business as Meridian Rehab Care. The three federal defendants are accused of recruiting individuals to file workers’ compensation claims resulting from an on-the-job injury. The defendants then directed these patients to specific chiropractors who, in exchange for dozens of new workers’ compensation patients each month, agreed to meet a quota set by the defendants for referrals of the new patients for ancillary goods and services such as MRIs and durable medical equipment from specific providers.
The defendants either operated the companies that provided the durable medical equipment the chiropractors were required to use or were paid by the ancillary-procedure providers for the referrals for MRIs and other tests. If the chiropractors failed to average a certain quota of referrals per applicant, the pipeline of new applicants was cut off, according to court records.
"This wave of indictments reinforces the FBI’s commitment to working as a team with our state and local partners in rooting out corruption in our healthcare system," said FBI Special Agent in Charge Eric S. Birnbaum. "The FBI will continue to use our investigative expertise and intelligence capabilities to detect, deter and disrupt sophisticated fraudulent criminal conspiracies that undermine our health care system and jeopardize patient care." ...
The charges in this case are the result of Operation Backlash, an extensive FBI led undercover investigation that revealed a widespread kickback scheme, including attorneys, doctors and medical providers who referred patients for health services in exchange for money. The defendants paid kickback payments to the owners and operators of chiropractic clinics in San Diego, Escondido and Calexico, in exchange for the patient referrals. A grand jury returned indictments on charges involving approximately $450,000 in kickback payments, resulting in millions of dollars in fraudulent workers’ compensation insurance claims.
The sheer scale of this fraud makes it one of the largest insurance bribery schemes in workers’ compensation ever uncovered in San Diego County. "When law enforcement became aware of the scam, we began following the trail of dirty money and it took us in many different directions," DA Bonnie Dumanis said. "The circle of criminal conduct continues to widen with today’s charges, and we expect additional indictments and arrests in the future."
Yesterday, law enforcement fanned out across three counties in a sweeping, early morning take down of more players. Dozens of District Attorney Investigators joined law enforcement in making arrests and serving search warrants at seven locations. At the end of the day, nine defendants were arrested.
Operation Backlash was first announced in November when the initial round of federal indictments was handed down. San Diego chiropractor Steven J. Rigler and San Diego workers’ compensation attorney Sean O’Keefe previously pleaded guilty to federal charges. In addition to today’s state charges, the U.S. Attorney’s Office announced federal indictments against three additional defendants. They include patient recruiters, Fermin Iglesias, Carlos Arguello, Miguel Morales and four corporations. The corporations are Providence Scheduling, Inc., Medex Solutions, Inc., Prime Holdings International, Inc. and Meridian Medical Resources, Inc., doing business as Meridian Rehab Care. The three federal defendants are accused of recruiting individuals to file workers’ compensation claims resulting from an on-the-job injury. The defendants then directed these patients to specific chiropractors who, in exchange for dozens of new workers’ compensation patients each month, agreed to meet a quota set by the defendants for referrals of the new patients for ancillary goods and services such as MRIs and durable medical equipment from specific providers.
The defendants either operated the companies that provided the durable medical equipment the chiropractors were required to use or were paid by the ancillary-procedure providers for the referrals for MRIs and other tests. If the chiropractors failed to average a certain quota of referrals per applicant, the pipeline of new applicants was cut off, according to court records.
"This wave of indictments reinforces the FBI’s commitment to working as a team with our state and local partners in rooting out corruption in our healthcare system," said FBI Special Agent in Charge Eric S. Birnbaum. "The FBI will continue to use our investigative expertise and intelligence capabilities to detect, deter and disrupt sophisticated fraudulent criminal conspiracies that undermine our health care system and jeopardize patient care." ...
A Hemet man was arraigned on insurance fraud charges Thursday following an investigation conducted by the San Bernardino County District Attorney’s Workers’ Compensation Insurance Fraud Unit.
Raymond Chastain, 23, is charged with one felony count of Insurance Fraud and has plead not guilty. His preliminary hearing is set for Feb. 3 in San Bernardino County Superior Court. He is accused of failing to report income while receiving disability benefits, according to a San Bernardino County District Attorney's Office news release.
On Oct. 26, 2012, Chastain filed a workers’ compensation claim alleging that he sustained injuries while performing his job duties as a worker for TPG Staffing.
"Our investigation revealed that Mr. Chastain failed to report additional earned income while receiving total temporary disability benefits," said Senior District Attorney Investigator Rodney Tamparong, who is assigned to the case.
After obtaining an arrest warrant, investigators arrested Chastain at his place of residence in Nov. 2015. He was booked into the West Valley Detention Center on $50,000 bail.
This case is being prosecuted by Deputy District Attorney Scott Byrd ...
Raymond Chastain, 23, is charged with one felony count of Insurance Fraud and has plead not guilty. His preliminary hearing is set for Feb. 3 in San Bernardino County Superior Court. He is accused of failing to report income while receiving disability benefits, according to a San Bernardino County District Attorney's Office news release.
On Oct. 26, 2012, Chastain filed a workers’ compensation claim alleging that he sustained injuries while performing his job duties as a worker for TPG Staffing.
"Our investigation revealed that Mr. Chastain failed to report additional earned income while receiving total temporary disability benefits," said Senior District Attorney Investigator Rodney Tamparong, who is assigned to the case.
After obtaining an arrest warrant, investigators arrested Chastain at his place of residence in Nov. 2015. He was booked into the West Valley Detention Center on $50,000 bail.
This case is being prosecuted by Deputy District Attorney Scott Byrd ...
The Division of Workers’ Compensation announced that Administrative Director Destie Overpeck has selected Paige S. Levy as chief judge, beginning February 1, 2016.
As chief judge, Levy will work closely with the administrative director, the associate chief judges and presiding judges to oversee more than 160 workers’ compensation administrative law judges at the Division’s 24 district offices and satellites. The chief judge also establishes and monitors procedures for effective maintenance of case calendars, and assists in the coordination of the judicial, legal, medical and related operational activities of the Division.
"I’m confident that Judge Levy will successfully accomplish the goal of improving benefit delivery to injured workers," said Christine Baker, director of the Department of Industrial Relations.
Judge Levy has served as the presiding judge in Marina del Rey since 2012 and as a workers' compensation administrative law judge since 2005. She was chair of the Workers’ Compensation State Bar Executive Committee for the 2013-2014 term and served on the committee for five years. She has been a board member for the California Conference of Workers’ Compensation Judges. Judge Levy was the project manager for the 2013 revisions to the DWC Policy and Procedural Manual, and is currently a member of the DWC Ethics Advisory Committee.
Over the last 10 years she has spoken on numerous topics including the application of the AMA Guides, Case Law update, Utilization Review, WCAB policy and procedure, ethics, specialization exam prep, liens, and litigation tips for attorneys. Judge Levy was the 2013 California Applicants’ Attorneys Association (CAAA) Judge of the Year, the 2012 WorkCompCentral Magna Comp Laude Award Winner, and a 2014 DWC Employee of the Year Recipient. She became a certified workers’ compensation specialist in 2000.
"Judge Levy will make an excellent chief judge. Her experience as a workers’ compensation judge and presiding judge, as well as her many years participating in judge training, will serve as a firm foundation for her new position. Please join me in congratulating Judge Levy and wishing her well in her new assignment," said Destie Overpeck, DWC administrative director.
The DWC also took the opportunity to thank Associate Chief Judge Tom Clarke for his work as acting chief judge for the past several months ...
As chief judge, Levy will work closely with the administrative director, the associate chief judges and presiding judges to oversee more than 160 workers’ compensation administrative law judges at the Division’s 24 district offices and satellites. The chief judge also establishes and monitors procedures for effective maintenance of case calendars, and assists in the coordination of the judicial, legal, medical and related operational activities of the Division.
"I’m confident that Judge Levy will successfully accomplish the goal of improving benefit delivery to injured workers," said Christine Baker, director of the Department of Industrial Relations.
Judge Levy has served as the presiding judge in Marina del Rey since 2012 and as a workers' compensation administrative law judge since 2005. She was chair of the Workers’ Compensation State Bar Executive Committee for the 2013-2014 term and served on the committee for five years. She has been a board member for the California Conference of Workers’ Compensation Judges. Judge Levy was the project manager for the 2013 revisions to the DWC Policy and Procedural Manual, and is currently a member of the DWC Ethics Advisory Committee.
Over the last 10 years she has spoken on numerous topics including the application of the AMA Guides, Case Law update, Utilization Review, WCAB policy and procedure, ethics, specialization exam prep, liens, and litigation tips for attorneys. Judge Levy was the 2013 California Applicants’ Attorneys Association (CAAA) Judge of the Year, the 2012 WorkCompCentral Magna Comp Laude Award Winner, and a 2014 DWC Employee of the Year Recipient. She became a certified workers’ compensation specialist in 2000.
"Judge Levy will make an excellent chief judge. Her experience as a workers’ compensation judge and presiding judge, as well as her many years participating in judge training, will serve as a firm foundation for her new position. Please join me in congratulating Judge Levy and wishing her well in her new assignment," said Destie Overpeck, DWC administrative director.
The DWC also took the opportunity to thank Associate Chief Judge Tom Clarke for his work as acting chief judge for the past several months ...
