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University of Colorado Boulder researchers have discovered a brain signature that identifies fibromyalgia sufferers with 93 percent accuracy, a potential breakthrough for future clinical diagnosis and treatment of the highly prevalent condition.

Traumatic injuries are alleged to be the causative element in many fibromyalgia workers' compensation claims. It is commonly defined as chronic widespread musculoskeletal pain accompanied by symptoms such as fatigue, anxiety and mood disorders. The Centers for Disease Control and Prevention (CDC) estimates that fibromyalgia affects more than five million adults annually in the U.S., with significantly higher occurrence rates in women than in men.

Historically, fibromyalgia has been difficult to diagnose and treat due to a lack of a well-categorized tissue pathology and symptoms that overlap with other common chronic illnesses. Now there may be a new tool to help claim administrators evaluate fibromyalgia cases.

CU Boulder researchers used functional MRI scans (fMRI) to study brain activity in a group of 37 fibromyalgia patients and 35 control patients as they were exposed to a variety of non-painful visual, auditory and tactile cues as well as painful pressure.

The multisensory testing allowed the researchers to identify a series of three sub-markers, or neurological patterns, that correlated with the hypersensitivity to pain that characterizes fibromyalgia.

"The novelty of this study is that it provides potential neuroimaging-based tools that can be used with new patients to inform about the degree of certain neural pathology underlying their pain symptoms," said Marina López-Solà, a post-doctoral researcher in CU Boulder's Cognitive and Affective Control Laboratory and lead author of the new study. "The set of tools may be helpful to identify patient subtypes, which may be important for adjusting treatment selection on an individualized basis."

The findings were recently published in the journal PAIN, published by the International Association for the Study of Pain.

"Though many pain specialists have established clinical procedures for diagnosing fibromyalgia, the clinical label does not explain what is happening neurologically and it does not reflect the full individuality of patients' suffering," said Tor Wager, director of the Cognitive and Affective Control Laboratory. "The potential for brain measures like the ones we developed here is that they can tell us something about the particular brain abnormalities that drive an individual's suffering. That can help us both recognize fibromyalgia for what it is -- a disorder of the central nervous system -- and treat it more effectively."

If replicated and expanded upon in future studies, the results could eventually provide a neurological road map to brain activity that would inform diagnosis and therapeutic interventions for fibromyalgia.

"This is a helpful first step that builds off of other important previous work and is a natural step in the evolution of our understanding of fibromyalgia as a brain disorder" said López-Solà ...
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/ 2016 News, Daily News
Historically, the federal government has fought corporate health care fraud in two ways. First, the U.S. Department of Justice routinely intervenes in civil False Claims Act cases filed by qui tam relators. Second, the federal government typically has relied on individual U.S. Attorney’s Offices to initiate and prosecute criminal health care fraud cases.

Although the DOJ relied on tools such as the Medicare Fraud Strike Force to prosecute health care crimes in geographic areas that exhibited greater systemic abuse of the health care system, the focus of these efforts lay largely in individual prosecutions of Medicare fraud and abuse rather than corporate prosecutions.

According to the report by Law360, this approach changed late last year when DOJ formed a separate Corporate Health Care Fraud Unit ("CHCFU") within the Criminal Division’s Fraud Section. Staffed by experienced health care fraud prosecutors, the unit brings increased resources and a new, nationwide focus on the investigation and prosecution of health care fraud against corporations.

The unit’s prosecutors review all FCA cases filed across the country and evaluate whether the allegations support the initiation of criminal investigation and prosecution. Indeed, earlier this year, Assistant Attorney General Leslie R. Caldwell indicated in a speech that, as a result of the unit’s efforts, there were over a dozen active corporate investigations. AAG Caldwell also stated that the DOJ was steering additional prosecutorial resources to this area to support fighting health care fraud through parallel civil and criminal investigations in order to "maximize the department’s ability to secure the appropriate outcome in each matter - whether it be financial penalties, restitution, federal program exclusion or criminal prosecution of both corporations and individuals."

The DOJ’s efforts are already bearing fruit. Last month, the DOJ announced a settlement with Tenet Healthcare Corporation that signaled a shift in policy for health care fraud enforcement. The settlement represents one of the first returns on the DOJ’s investment of prosecutorial resources to combat health care fraud against corporations on a national level.

No longer satisfied to focus on fraud, even large-scale fraud, perpetuated by individual physicians, home health care providers, pharmacy owners, and medical supply company executives that were the traditional targets of the DOJ’s criminal task force efforts, the Tenet settlement makes clear that the DOJ is now bringing nationwide resources and expertise to the kind of corporate investigations and prosecutions historically left to regional U.S. Attorney’s Offices.

The Tenet settlement is an important development for health care companies because it demonstrates the impact of the DOJ’s expanded resources and nationwide focus on combating corporate health care fraud. In particular, the Tenet settlement offers four key takeaways:

1. The DOJ is no longer satisfied to prosecute individuals alone and is now, more than ever before, actively scrutinizing corporations for both civil and criminal health care fraud.
2. Health care companies operating in multiple jurisdictions are especially susceptible to the coordinated focus that comes with the DOJ’s involvement in the prosecution of corporate health care fraud.
3. The DOJ’s involvement opens the door to prosecutions in jurisdictions that do not have health care fraud expertise.
4. Corporations and individual executives alike should beware.

Well before Tenet resolved the corporate allegations, the DOJ secured pleas from two executives - Tracey Cota and Gary Lang - for their involvement in the kickback scheme. Cota and Lang each pled guilty to conspiracy to violate the Anti-Kickback Act by paying and receiving bribes in exchange for Medicaid patient referrals ...
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/ 2016 News, Daily News
The California Department of Insurance announced that the enforcement action taken against Zenefits for multiple insurance broker license violations has resulted in a $7 million penalty.

Zenefits was charged with allowing unlicensed employees to transact insurance and circumventing insurance agent education requirements. This is the largest penalty assessed by any commissioner against Zenefits and one of the largest penalties for licensing violations ever assessed in the department's history.

A 2013 start-up, Zenefits is a San Francisco based company whose business model was to provide online HR services to businesses and then encourage those same businesses to use Zenefits as an insurance broker.

The California Department of Insurance launched an investigation in 2015, after receiving complaints that Zenefits employees were transacting insurance without a license. Shortly after the investigation into Zenefits’ business practices and compliance began, the company announced publicly that they were not complying with insurance laws and regulations, which was followed by the resignation of Zenefits’ CEO, Parker Conrad.

The California Department of Insurance ultimately claimed in its Order to Show Cause that "From January 2014, through November 2015, Respondent employed individuals within and outside of California who solicited, negotiated and sold insurance policies to customers located in California. According to Respondent's June 1, 2016 report, its employees sold 8,118 insurance policies to California consumers during the aforementioned time period. Of this total, at least 1,994 insurance policies were sold by employees who lacked the proper license required to transact insurance pursuant to CIC section 1631."

The settlement agreement obtained by the insurance commissioner includes a $3 million penalty for licensing violations, including allowing unlicensed employees to transact insurance, a $4 million penalty for subverting the pre-licensing education and study-hour requirements for agent and broker licensing, and a $160,000 payment to reimburse the Department of Insurance for investigation and examination expenses.

In recognition of the self-reporting and remedial actions already implemented by the company, including the replacement of the former CEO, retraining of all licensed producers, and implementation of an automated process to verify that only licensed individuals solicit and sell insurance products, the settlement provides that half of the total $7 million in monetary penalties are suspended.

The suspended portion of the monetary penalty will be reinstated if Zenefits fails to confirm continued compliance with licensing and regulatory mandates based on an examination of the company’s business practices to be conducted in 2018.

Zenefits has been investigated and fined in other states for similar compliance issues, including Texas, Massachusetts, Tennessee and Washington. In July Zenefits reached a settlement with the Tennessee Department of Insurance and Commerce, agreeing to pay a fine of $62,500. And the Texas insurance regulators have fined Zenefits, $550,000 for its past use of unlicensed health insurance brokers ...
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/ 2016 News, Daily News
Several new bills will become law on January 1, 2017 that will influence the management of workers’ compensation medical claims. The most important is SB 1160 which precludes the payment of medical bills when vendors have been accused or convicted of certain crimes such as workers' compensation fraud, Medi-Cal fraud, or Medicare fraud.

AB 1244 provides that If a vendor is convicted of fraud, then they are automatically suspended from treating in the worker's compensation system. The Administrative Director will create a list of all names on its website.

And other health care systems seem to be headed in the same direction.

It’s no secret that Medicare and Medicaid patients are crucial to the bottom line for many physicians. So being excluded from participating in the programs is a big deal and can sometimes mean the end of a medical practice.

Under the Social Security Act, the Office of the Inspector General is authorized to exclude individuals or entities that cause the submission of false or fraudulent claims to Federal health care programs. The exclusion law is applicable in nearly all conduct that forms the basis for a False Claims Act (FCA) action involving the Federal health care programs and serves to protect the integrity of these programs.

A recent 20-year exclusion issued by the HHS Office of Inspector General should serve as a cautionary tale for physicians and proof that the federal government is also keeping a close eye on physician conduct.

Labib Riachi, a New Jersey-based OB/GYN, was excluded for allegedly submitting thousands of fraudulent claims for pelvic floor therapy.

David Blank, a senior counsel with the OIG who represented the agency in the Riachi investigation, said the exclusion was one of the longest reached under the OIG’s permissive exclusion authority and the longest issued after an agency-initiated legal action.

Riachi reached a $5.25 million False Claims Act settlement in February over the false claims, but the OIG thought the settlement didn’t go far enough based on Riachi’s alleged actions.

The OIG set out to determine if Riachi required a corporate integrity agreement or exclusion, and Blank said it became readily apparent that exclusion was necessary.

In addition to the monetary loss Riachi caused to Medicare and Medicaid, the OIG determined his alleged actions carried a significant risk of patient harm. For example, Riachi allegedly provided electrical stimulus to patients with pacemakers and allowed unlicensed and unqualified staff to perform procedures.

An initial notice of proposed exclusion called for a 30-year exclusion for Riachi, but he ended up settling on a 20-year period rather than going before an administrative law judge, Blank said. While he agreed to the exclusion, Riachi denied any liability.

"Twenty years is a substantial period of exclusion and is a clear signal to physicians that they face significant consequences, beyond monetary penalties, for taking advantage of Federal health care programs and their beneficiaries," said Gregory E. Demske, Chief Counsel to the HHS Inspector General. "In cases such as this, collecting money from a wrongdoer is not sufficient and OIG will pursue exclusion to protect our patients and programs." ...
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/ 2016 News, Daily News
A coalition of 21 state attorneys general and governors successfully sued to block the Obama administration’s overtime rule which was set to go into effect December 1.

Nevada attorney general Adam Laxalt, in partnership with 20 other state attorneys general and governors, had sued to stop it, and the group was granted a preliminary injunction; now, the rule will not be implemented as litigation continues. Unless the Department of Labor engages in an unusually aggressive effort to expedite the response to Mazzant’s ruling, the litigation is likely to outlast the Obama administration - and, under a Trump administration, one can assume that Department of Labor officials will drop the litigation or roll back the rule.

The rule would have forced both public- and private-sector employers to pay time-and-a-half overtime to any hourly employees earning less than $47,476 per year, nearly double the old threshold of $23,660. Employees earning less than the threshold but performing "executive, administrative, or professional" duties were previously exempt from the DOL’s overtime requirements, but the new rule mandates that they receive time-and-half pay for extra work, too.

In so doing, it directly overrides the exemptions outlined by Congress in the Fair Labor Standards Act. In addition to modifying the threshold and eliminating the white-collar exemption, the Obama administration created an algorithmic method to automatically update the salary threshold every three years based on wage growth and other factors. Laxalt calls this algorithm "ratcheting," and it is a significant component of his lawsuit.

Laxalt and his coalition sued the Department of Labor on the grounds that the overtime rule overrode congressional authority by omitting white-collar exemptions; it violated the Tenth Amendment by forcing states to pay employees a specific salary, indirectly controlling state budgets; and it violated the Administrative Procedure Act by ratcheting up the salary threshold every three years.

The Judge, Amos L. Mazzant III of the Eastern District of Texas, ruled that the Obama administration had exceeded its authority by raising the overtime salary limit so significantly. The ruling was hailed by business groups who argued the new rules would be costly and result in fewer hours for workers.

The Labor Department said it "strongly disagreed" with the decision and was "considering all of our legal options," raising the possibility of an appeal. Ross Eisenbrey of the Economic Policy Institute, whose writings on the subject helped shape the administration’s regulation, called the ruling "a disappointment to millions of workers who are forced to work long hours with no extra compensation."

While the injunction is only a temporary measure that suspends the regulation until the judge can issue a ruling on the merits, many said the judge’s language indicated he was likely to strike down the regulation.

"We are, assuming that this preliminary injunction holds and there isn’t an appeal or some other thing that disrupts it, done with this regulation," said Marc Freedman, executive director of labor law policy at the U.S. Chamber of Commerce, which had challenged the rule ...
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/ 2016 News, Daily News
The workers' compensation community is bracing for the potential, and some say eventual, tidal wave of claims for medical marijuana as a form of treatment for pain related industrial injuries. But soon it may be possible to provide the claimed benefits of "medical" marijuana - without any marijuana at all!

Science Daily reports that Indiana University neuroscientist Andrea Hohmann took the stage at a press conference Nov. 14 in San Diego to discuss research conducted at IU that has found evidence that the brain's cannabis receptors may be used to treat chronic pain without the side effects associated with opioid-based pain relievers or medical marijuana.

The study was discussed during the annual meeting of the Society for Neuroscience, the world's largest source of emerging news about brain science and health. Hohmann was joined by three other international researchers whose work focuses on similar topics.

"The most exciting aspect of this research is the potential to produce the same therapeutic benefits as opioid-based pain relievers without side effects like addiction risk or increased tolerance over time," said Hohmann, a Linda and Jack Gill Chair of Neuroscience and professor in the IU Bloomington College of Arts and Sciences' Department of Psychological and Brain Sciences.

Chronic pain is estimated to affect nearly 50 million adults in the United States. The rise in opioid-based pain relievers to treat chronic pain has also contributed to an opioid addiction epidemic in the United States, with 19,000 deaths linked to prescription opioid abuse in 2014. In Indiana, the use of needles associated with prescription opioid abuse led to a major HIV outbreak in the state's southeastern region, prompting the governor to declare a public health emergency in 2015.

"The fact that deaths associated with prescription opioid abuse have surpassed cocaine and heroin overdose deaths combined is a significant factor in exploring cannabinoids as an alternative treatment for pain," said Richard Slivicki, a graduate student in Hohmann's lab who led the study. "It's a major epidemiological crisis, and one that helps motivate our work."

The IU study found that a compound that modulates the activity of the brain's receptors for THC and endocannabinoids reduced chronic pain in mice. THC, or tetrahydrocannabinol, is the main psychoactive ingredient in marijuana; endocannabinoids are natural pain-relieving compounds released by the brain.

These modulating compounds, called positive allosteric modulators, or PAMs, work by binding to a recently discovered site on a cannabinoid receptor in the brain called CB1, which is different from the site that binds THC. The PAMs were synthesized by Ganesh A. Thakur at Northeastern University, who is a collaborator on the study.

The IU scientists specifically tested the effects of CB1 PAM on neuropathic pain, a type of chronic pain caused by nerve damage, which is estimated to affect as many as 40 percent of cancer patients as a side effect of chemotherapy. The scientists gave mice paclitaxel, a chemotherapy drug known to damage nerves and cause pain, and then treated them with CB1 PAM.

After receiving paclitaxel, mice became hypersensitive to both mechanical and cold stimulations to the paw, indicating increased pain. After treatment with the CB1 PAM, the mice behaved like normal mice that did not experience pain.

The study also found evidence that the use of CB1 PAM amplified the therapeutic effect of endocannabinoids without the negative side effects of a "marijuana high," such as impaired motor function. The PAMs were administered in combination with a compound to increase endocannabinoid levels in the brain by preventing their breakdown in the body.

Moreover, the team found that the use of the CB1 PAM remained effective over time to prevent pain in mice, as opposed to THC and endocannabinoid breakdown inhibitors, both of which stopped working with repeated dosing.

"We found that the compound did not produce reward on its own, so it's unlikely that a CB1 PAM would be abused as a recreational drug," Hohmann added. "Our studies show that we can maintain or preserve therapeutic efficacy in ways that we haven't seen with some of the other classes of analgesics that are used in the clinic."

The event was titled "Targeting the Brain's Cannabinoid System." ...
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/ 2016 News, Daily News
Rebecca Gage applied for service-connected disability retirement with the Sacramento County Employees’ Retirement System (SCERS) on March 6, 2015. She requested section 4850.4 advance disability pension payments until her pension application was processed.

On June 29, the County informed Gage that her request for advance disability pension payments had been approved and the benefits were to commence effective May 8. The next day, Gage filed a petition for penalties for an unreasonable delay, noting the County had indicated the benefit check would not be sent until July 2 and Gage would not receive it until July 3 or 4.

The matter proceeded to trial. The issue was limited to whether section 5814 penalties were an appropriate remedy if the County failed to comply with the requirements of section 4850.4.

The WCJ found section 4850.4 advanced disability pension payments were "compensation" under section 3207 and therefore section 5814 penalties applied in the case of an unreasonable delay.

The WCAB granted reconsideration and reversed the order. It found that because advance disability retirement payments were not equivalent to regular workers’ compensation benefits, but are instead obligations of the applicable retirement system, a denial or delay in the payment of these benefits was not subject to a section 5814 penalty. One board member dissented, opining that section 4850.4 benefits fell within the clear statutory definition of compensation in section 3207. The County had the obligation to pay that compensation and the WCAB had jurisdiction to enforce that payment through the penalty provision of section 5814.

The Court of Appeal annulled the Order after Reconsideration and found jurisdiction to award the requested penalties in the unpublished case of Gage v WCAB and County of Sacramento.

The Court of Appeal concluded that "the Workers’ Compensation Appeals Board (WCAB) does indeed have jurisdiction to impose penalties under Labor Code section 5814 for the unreasonable delay or denial of advance disability pension payments, available under section 4850.4 to local peace officers who are disabled on the job" because: (1) such payments qualify as compensation under section 3207; (2) section 5814 penalties are available for unreasonable delay or denial of the payment of compensation; and (3) no other provision of the Labor Code evinces a legislative intent to exclude such payments from the penalty provisions of section 5814.

In 2002, the Legislature made these advance disability retirement payments mandatory. (Stats. 2002, ch. 189, § 1.) The county "shall make advanced disability pension payments in accordance with Section 4850.3 unless" a "physician determines that there no discernible injury to, or illness of, the employee," the "employee was incontrovertibly outside the course of his or her employment duties when the injury occurred," or there is proof of fraud. (§ 4850.4, subd. (a)).

The employer is required to make advanced disability payments if the employee files a timely application for disability retirement and fully cooperates in providing information and with the medical examination and evaluation process. The payments shall commence no later than 30 days after the latest of the employee’s last payment of wages or salary, benefits under section 4850, or sick leave.

"Compensation" under division 4 "includes every benefit or payment conferred by this division upon an injured employee, or in the event of his or her death, upon his or her dependents, without regard to negligence." (§ 3207.) ‘The term "compensation" is a technical one and includes all payments conferred by the act upon an injured employee.

The WCAB may impose penalties where payment of compensation is denied or unreasonably delayed ...
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/ 2016 News, Daily News
Prosecutors said Pasadena police Officer Jaime Robison, 39, was supposed to be on disability for a lower back injury when she participated in the Ice Bucket Challenge.

In a video posted online in July 2014, Robison was shown picking up a five-gallon bucket containing ice water and pouring it over a fellow police officer, according to the Los Angeles County district attorney’s office.

Many people drenched themselves in freezing water in the viral campaign known as the Ice Bucket Challenge, which raised money for ALS research.

The campaign swept the country with celebrities, children and law enforcement officials filming each other as buckets of ice were poured over their heads, later posting the videos on YouTube.

Prosecutors alleged Robison’s actions resulted in losses of up to $117,000.

The prosecution originally charged Robison with four counts of insurance fraud.

The prosecution also accused Robison of insurance fraud in 2012 when she received disability pay for more than a year. But the two counts stemming from that allegation were dismissed earlier this year.

However jurors acquitted Robison after a November Los Angeles courtroom trial.
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/ 2016 News, Daily News
Back in early 2014 California passed AB 1309 limiting most professional athletes from filing workers’ comp claims within the state.

The fallout was immediate: players from all over the US filed more than 1,000 injury claims, hoping to get treatment and compensation before the September, 2015 deadline. In the first two weeks of September, current and retired players filed 569 claims against NFL franchises, 283 claims against Major League Baseball clubs, 113 against National Hockey League teams and 79 against NBA squads, a Los Angeles Times analysis of state workers' compensation data found.

And after the September 2015 California deadline, the NFL players needed to find a new venue for their litigation. It may be the state of Florida.

The Miami Harold reports that this month Tony Gaiter along with 141 other former NFL players filed a federal lawsuit in Fort Lauderdale against the league, seeking workers’ compensation benefits for CTE (traumatic brain injury) symptoms. The players contend CTE is an occupational hazard of playing football and should be covered under workers’ compensation.

"Right now, these players are not getting any compensation for their injuries," said Tim Howard, the attorney representing the group. "There is no reason CTE shouldn’t fall under workers’ compensation."

The lawsuit names nearly 40 former NFL players, including many who have ties to South Florida. Among the group of plaintiffs listed in the suit: Former Detroit Lions player Sedrick Irvin; former Dallas Cowboys player Kevin Harris; former Washington Redskins player Lawrence Jones; former Tampa Bay Buccaneers player Shevin Smith; and former New England Patriots player Santonio Thomas.

The suit could affect the more than 19,000 retired NFL players who don’t qualify for benefits under the existing settlement.

CTE, or Chronic Traumatic Encephalopathy, is allegedly caused by repeated brain trauma and can lead to memory loss, depression and dementia. The disease can only be diagnosed after someone has died. Autopsies have linked CTE and former NFL players.

Howard maintains that scientific developments have demonstrated that CTE can be diagnosed when someone is alive and begins to show symptoms.

In April 2015, a federal court approved a $1 billion settlement between the NFL and the players, who accused the league of not warning players and hiding the damage of brain injury. Earlier this year, a handful of players rejected the settlement and filed an appeal with the U.S. Supreme Court, contending that some future cases would not be compensated.

The NFL could not be reached for comment.

Howard said the settlement does not compensate players living with CTE or the families of players who died from CTE after July 2014. "This is a way for the players to get justice," Howard said.

And these claims could not come at a worse time for Florida. On Sept. 27, the Florida Office of Insurance Regulation issued an order that will raise workers compensation rates by 14.5 percent. The hike applies to new and renewing policies, effective Dec. 1.

This change came in response to a recent judgment regarding personal injury trial lawyers and the fees they charge. Under current state law, attorneys are paid 20 percent for the first $5,000 and 15 percent of the next $5,000 of any benefits they help secure. But in April, the state Supreme Court ruled it unconstitutional to cap attorney fees ...
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/ 2016 News, Daily News
Labor Code Sections 62.5 and 62.6 authorize the Department of Industrial Relations to assess employers for the costs of the administration of the workers’ compensation, health and safety and labor standards enforcement programs.

Christine Baker, Director, Department of Industrial Relations, has circulated a worksheet detailing the methodology used to compute the Workers’ Compensation Administration Revolving Fund, Uninsured Employers Benefits Trust Fund, Subsequent Injuries Trust Fund, Occupational Safety and Health Fund, Labor Enforcement and Compliance Fund allocation and Workers’ Compensation Fraud Account Assessment and to allocate the assessment between insured and self-insured employers.

The total assessment for all payers for fiscal year 2016/2017 is as follows:

1) Workers’ Compensation Administration Revolving Fund (WCARF) - $452,328,500

2) Uninsured Employers Benefits Trust Fund (UEBTF) - $56,914,500

3) Subsequent Injuries Benefits Trust Fund (SIBTF) - $54,565,550

4) Occupational Safety and Health Fund (OSHF) - $106,128,662

5) Labor Enforcement and Compliance Fund (LECF) - $85,588,500

6) Workers’ Compensation Fraud Account (FRAUD) - $58,862,000

The Labor Code requires allocation of the total assessment between insured and self-insured employers in proportion to payroll for the most recent year available.

Each self insured and carrier for an insured employer will be receiving an invoice for their share of these assessments.

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/ 2016 News, Daily News
California Department of Insurance detectives, assisted by multiple law enforcement agencies, arrested Chris Bathum and Kirsten Wallace on multiple felony counts of grand theft, and identity theft for allegedly conspiring to defraud patients and insurers out of more than $176 million through an elaborate conspiracy. Simultaneously, search warrants were also executed at 15 locations throughout Los Angeles and Orange County.

"Bathum and Wallace's alleged conspiracy victimized hundreds of people addicted to drugs and alcohol by keeping them in a never-ending cycle of treatment, addiction, and fraud - all the while lining their pockets with millions of dollars from allegedly fraudulent insurance claims," said Insurance Commissioner Dave Jones.

According to investigators, Bathum, the owner and CEO of Community Recovery of Los Angeles (CRLA) and Wallace, the CFO, are accused of luring vulnerable people addicted to drugs and alcohol to CRLA with a variety of treatment marketing schemes.

The Department of Insurance's investigation revealed Bathum and Wallace conspired to steal patient identities and buy health insurance policies for patients without their knowledge. After completing treatment, Bathum continued to bill insurance companies for treatment services.

Bathum and Wallace billed health insurance companies more than $176 million in fraudulent claims. The insurers, including Anthem Blue Cross, Blue Shield, Cigna, Health Net and Humana paid approximately $44 million in total before discovering the suspected fraud and stopping claim payments to CRLA.

Additional charges include enhancements for losses greater than $500,000 and for losses greater than $3.2 million.

"This is likely the first wave of indictments and charges in an ongoing investigation into one of the largest health insurance fraud cases in California," added Jones.

If convicted on all counts, Bathum and Wallace face more than 35 years in prison. Bail was requested at $2 million. Both are likely to be arraigned on November 14, 2016.

This case was investigated by the Department of Insurance and is being prosecuted by Los Angeles District Attorney Jackie Lacey. The Department of Insurance was assisted in the arrests and search warrants by the Los Angeles County District Attorney's Bureau of Investigations; the Los Angeles County Sheriff's Department; the Orange County District Attorney's Bureau of Investigation; and the Department of Health Care Services accompanied detectives to ensure any patients in CRLA facilities are transferred to licensed treatment locations ...
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/ 2016 News, Daily News
"The medical device area is particularly susceptible to kickbacks for physicians.....because there are so many different types of devices that there is more room for physicians’ discretionary decisions about whether or not to prescribe or recommend certain devices for their patients," says Sara Lord, a former Justice Department attorney.

She notes, for example, that incentives for doctors to use products, particularly new products, are rarely a direct payment for using a device. Instead, device companies or distributors may ask a prominent physician to try their product and then offer to pay them for spreading the word about it.

Providers also need to ensure that any discounts they receive from a manufacturer or distributor are reflected in Medicare billing. "Hospitals have to be scrupulous in their accounting and submission of claims," says Lord, adding that can require a lot of diligence about what products actually cost at the time they are purchased or ordered for patients.

It’s not just kickbacks and fraud that take a toll on Medicare. Recalls and high failure rates associated with just seven devices cost Medicare $1.5 billion and beneficiaries $140 million in out-of-pocket costs, according to a preliminary report by OIG. The OIG urged CMS to incorporate device-specific information on claims forms to identify and track costs related to defective or recalled devices.

To help prevent fraud, the Centers for Medicare & Medicaid Services issued guidance this summer warning physicians about kickbacks, billing Medicare for free samples, and sham consulting arrangements that aim to buy product loyalty. The agency also released a toolkit for avoiding fraud, waste, and abuse.

The Physician Payments Sunshine Act, part of the Affordable Care Act, requires device, drug, and biologics companies to publicly report all gratuities to physicians and teaching hospitals totaling more than $10. "If you are uncertain whether a conflict exists, apply the ‘newspaper test’ and ask yourself whether you would want the arrangement to appear on the front page of your local newspaper," the guidance says.

Overall, Lord believes hospitals and other providers are doing a good job of preventing medical device fraud. "I would say it’s prevalent, but ... what tends to happen is that the government focuses on a certain practice and the industry gets the idea pretty quickly that this is an area that they need to be very careful about," she says. "So they make sure that they’re being careful in their claims for those kinds of products or that type of conduct."

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/ 2016 News, Daily News
The Los Angeles Times reports that In 1998, Tigran Svadjian M.D. purchased the Southwest Medical Group from a man ensnared in a federal medical fraud investigation, according to court records. The man also had suspected ties to Armenian and Russian organized crime.

The man and dozens of other doctors were believed at the time to have overbilled the government at least $13 million for medical tests and procedures at its offices in Burbank, Ventura and San Francisco, news clippings from the time show.

Facing charges of healthcare fraud, Svadjian, a Newport Beach doctor, agreed to go undercover for federal prosecutors. But before he would wear a wire, he told them, he needed to visit his ailing mother in Russia.

He never returned. The day he was to appear in court in 2002, prosecutors received paperwork from a Russian morgue stating that, just a few days before on a Moscow street, Svadjian died of pneumonia. His remains were cremated and given to his mother, Margarita Petrosova.

More than 10 years passed before prosecutors asked a judge to dismiss the charges against Svadjian. In 2013, they discarded the evidence collected against him.The criminal case against Svadjian was over. His estate was divided up among creditors. His wife and children moved on with efforts to rebuild their lives.

But unbeknownst at the time, he actually ended up in the Egyptian town of Hurghada that had blossomed from a once-quiet fishing village stretching along the Red Sea to a beach resort that drew tourists with immaculate hotels and charming night life.

It was there, in late 2002, that Vasily Petrosov found a home and began earning a living as a part-time scuba instructor. He fell in love with a woman from Sochi, Russia, a resort city on the coast of the Black Sea. In 2012, the couple had their first child, a son. Things were looking up for Petrosov and by the end of last year, he expected a second child.

But this would be a difficult pregnancy, and would require a caesarean procedure. Petrosov’s girlfriend flew back to her hometown, where the medical care would be better. There she would wait for him.

Petrosov did not have a passport. The one he had was fake, and authorities seized it when he tried to renew it in Russia years before. Petrosov contacted a Lithuanian friend in Hurghada and purchased another fake passport. Petrosov became Viktoras Cajevkis. A Lithuanian. Armed with his passport and other documents, Cajevkis left Egypt for Russia - with a stop in the Ukraine.

But authorities in Kiev soon realized his passport was fraudulent and sent him back to Hurghada, where Egyptian police arrested him on July 31. Determined to find out who he really was, they searched his apartment, which yielded a canceled American passport with another name. Tigran Svadjian.

Svadjian now sits in a federal holding cell in downtown L.A, where he faces only a single charge of unlawful flight to avoid prosecution, which carries a maximum five-year sentence - half what he faced before he vanished. Prosecutors said they expect to reach a plea agreement with Svadjian by mid-November and won’t prosecute him on the old, and much more serious, Medi-Cal fraud charges.

While Svadjian was abroad, the state Department of Health and Human Services sought a judge’s order to allow them to take his family’s home in a gated Newport Beach neighborhood. The state gave up its fight in 2005 and a year later, Emilya Svadjian divided her ex-husband’s $63,000 in assets among the family. Her claim on his life insurance was rejected.

But the FBI said she managed to empty out a Swiss bank account Svadjian maintained with $3 million ...
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/ 2016 News, Daily News
A rooftop fall severely injured a 29-year-old worker in Fontana, say state regulators who have filed five safety citations against a Jurupa Valley electrical firm.

The accident happened June 13 while the worker was installing solar panels on a roof at 11591 Etiwanda Avenue near the southwest corner of Fontana, according to Department of Industrial Relations officials.

The victim fell 29 feet through a skylight, suffering head injuries, cognitive impairment, pelvic fractures, broken ribs and a collapsed lung, regulators said in a written statement released Thursday. The agency is proposing penalties of $130,125 against Elite Electric Inc, 9415 Bellegrave Ave.

"Cal/OSHA investigators learned...there was no evidence of fall protection at the site, despite the hazards presented by more than 140 skylights on the roof of the building, a rooftop access hatch, and the unguarded edges of the roof," according to the statement. "The employee...did not receive any personal protective equipment from his employer."

Elite Electric managers knew the firm was required to protect employees who approached within six feet of any skylight during the solar panel installation, state officials say. They listed protections such as guardrails, personal fall protection systems, covers, screens or nets.

"Elite obtained payment for these protections," according to the statement, " which is evidence that company management was aware of the need for them."

The company hasn't received a copy of the citations yet, safety manager Steven deWalden said Thursday, but he emphasized that the firm has had a good safety record for 38 years.

As a result of this accident, he said, Elite already has tightened safety inspections and supervision at its job sites.

"We truly hope (the injured worker's) healing process is 100 percent," deWalden said. "And we look forward to the possibility of his returning and working with us again in some capacity as soon as possible."

"Falling is the leading cause of death in the construction industry," said Cal/OSHA Chief Juliann Sum. "It is critical for employers to prevent workers - especially those working from great heights - from being injured or killed from falls. This employer was aware of their responsibility and completely failed to fulfill it."

Cal/OSHA issued five workplace safety citations to Elite Electric this week, with proposed penalties of $130,125. One of the citations is general, three are serious, and one is willful-serious. A serious violation is cited when there is a realistic possibility that death or serious harm could result from the actual hazardous condition. A willful violation is cited when the employer is aware of the law and violates it nevertheless, or when the employer is aware of the hazardous condition and takes no reasonable steps to address it.

In this case, the willful-serious violation stems from Elite Electric’s failure to protect employees approaching within 6 feet of any skylight during the installation of solar panels from falling through them. It is a requirement that employers use such measures as guardrails, personal fall protection systems, covers, screens or nets. Elite obtained payment for these protections, which is evidence that company management was aware of the need for them ...
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/ 2016 News, Daily News
Robert Gaona claimed industrial injury. He was evaluated by Dr. Sherry Mendelson, the agreed medical evaluator, who opined that he should be evaluated by a chronic pain specialist and recommended Dr. Lawrence R. Miller. Dr. Miller recommended "24 hours 7-day a week home care assistance." His report was sent to Dr. Mendelson, who accepted his opinion and recommended that 24/7 care be provided.

Capital Builders later objected to the admissibility of Dr. Miller’s report. It then filed a petition to strike Dr. Mendelson’s reports and remove her as the AME in psychiatry pursuant to section 4062.3, subdivision (g). The petition alleged that there was no agreement to provide Dr. Miller’s report to the AME and that sending Dr. Miller’s report to Dr. Mendelson was an improper ex parte communication.

The WCJ denied Capital Builders’s petition to strike "without prejudice."

Capital Builders petitioned for removal or in the alternative for reconsideration. The appeals board found the WCJ’s decision to be an interlocutory procedural order that was not a final order and was therefore not the proper subject of a petition for reconsideration. The appeals board thus dismissed the petition for reconsideration. The appeals board also found that Capital Builders did not show substantial prejudice or irreparable harm and therefore denied the removal petition.

The Court of Appeal issued a writ of review on July 18, 2016. Simultaneously, it requested briefing on whether the appeals board’s decision was a final order, whether the appeals board’s decision is reviewable by way of a writ of review, and whether the Alvarez decision’s implied conclusion regarding reviewability was correct.

The appeals board responded by underscoring that the WCJ’s order was "‘without prejudice,’" supporting the conclusion that it was an interim procedural decision. Gaona replied by agreeing that the WCJ’s order was an "interim procedural discovery order that ha[d] no impact on the rights and liabilities of either party . . . ."

Capital Builders filed a reply contending that all decisions of the appeals board are subject to review by the appellate courts.

The Court of Appeal agreed that the ruling was not a final order and not subject to appeal,and dismissed the petition for writ of review in the published case of Capitol Builders Hardware v WCAB (Gaona).

Principally, because workers’ compensation proceedings are to be expeditious, inexpensive, and "‘without encumbrance of any character,’" certain threshold issues, if finally determined, qualify as final orders. (Safeway, supra, 104 Cal.App.3d at p. 533.) Examples of threshold issues are whether the injury arises out of and in the course of employment, the territorial jurisdiction of the appeals board, the existence of an employment relationship or statute of limitations issues. (Safeway, supra, at p. 533 & fn. 4.) Such issues, if finally determined, "may avoid the necessity of further litigation" (Id. at p. 534) and hence render workers’ compensation litigation more expeditious and inexpensive.

The appeals board dismissed the petition for reconsideration and denied the petition for removal. Because these orders leave issues for future consideration (Lyon v. Goss (1942) 19 Cal.2d 659, 670), under the usual understanding of the concept of a final judgment or order, they are not final. (Maranian, supra, 81 Cal.App.4th at p. 1075.)

These orders also do not qualify as orders finally disposing of threshold issues in workers’ compensation practice. The underlying issue, i.e., whether the communication was or was not ex parte and therefore prohibited by subdivision (g) of section 4062.3, will not avoid the necessity of further litigation ...
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/ 2016 News, Daily News
In 2009, Chany Lopez was an employee of the San Diego Unified School District. In late November 2009, while driving a district truck, defendant was sideswiped. Although defendant complained to coworkers that he was injured in the accident, he then declined any medical treatment and the matter was handled internally by the district. But in June 2011, Lopez submitted a workers' compensation claim for pain in his neck and lower back arising from the November 2009 accident.

Lopez denied having any prior injuries to his back and neck to his evaluating physicians, and to investigators. But later during a background search of Lopez that included subpoenaed records, The TPA found he had in fact submitted the following workers' compensation claims when employed by the City of San Diego: 1) May/June 1991 for left shoulder, left arm and upper back; 2) March 1993 for low back and both legs; and 3) January 1996 for low back.

A jury convicted Lopez of four counts of unlawfully making false and fraudulent statements to physicians and investigators in connection with workers' compensation claims (Ins. Code, § 1871.4, subd. (a)(1); counts 1-2, 4-5). The court granted a judgment of acquittal under Penal Code section 1118.1 as to count 3 because the People failed to present adequate foundational evidence of a false statement to another physician. The court granted Lopez probation for three years and imposed 180 days in local custody in a work furlough program.

In this appeal, Lopez challenges the court's order awarding York Risk Services restitution in the amount of $30,154.02 for expenses related to the workers' compensation claims. Lopez contends the court erred in ordering restitution for medical expenses not affected by his failure to disclose prior claims, for expenses associated with the denied claim, and for expenses incurred to obtain his medical records.

The Court of Appeal concluded that the court did not abuse its discretion in ordering restitution as a condition of probation and it affirmed the order in the unpublished case of People v Chany Lopez .

"The California Constitution gives crime victims a right to restitution and, consequently, requires a court to order a convicted wrongdoer to pay restitution in every case in which a crime victim suffers a loss. A number of statutes implement this constitutional right to restitution. Courts have interpreted Penal Code section 1202.4 as limiting restitution awards to those losses arising out of the criminal activity that formed the basis of the conviction.

But in cases where probation is granted, Penal Code section 1203.1, subdivision (a)(3), provides the court "shall provide for restitution in proper cases." Restitution ordered under this section is not limited to losses arising out of the conduct for which the defendant was convicted. Under certain circumstances, restitution has been found proper where the loss was caused by related conduct not resulting in a conviction. There is no requirement the restitution order be limited to the exact amount of the loss in which the defendant is actually found culpable, nor is there any requirement the order reflect the amount of damages that might be recoverable in a civil action.

In this case, the court granted Lopez probation. Restitution was ordered to York as a condition of probation. Therefore, the court had broad discretion to order restitution under section 1203.1 and the limitation of section 1202.4 does not apply ...
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/ 2016 News, Daily News
The Department of Industrial Relations (DIR) and its Division of Workers’ Compensation (DWC) posted a progress report today on the department’s continuing implementation of Independent Medical Review (IMR). IMR is the medical dispute resolution process that uses medical expertise to obtain consistent, evidence-based decisions and is one of the most important components of Senate Bill 863, Governor Brown’s landmark 2012 workers’ compensation reform.

"Independent Medical Review replaced a broken system where injured workers had to wait months for medical treatment while disputes over their care were litigated in court," said California Labor and Workforce Development Agency Secretary David M. Lanier. "It’s encouraging to see the marked improvements in the timeliness of IMR decisions as a result of the state’s ongoing efforts to improve the system."

The 2016 Independent Medical Review (IMR) Report charts the progress of IMR following its successful implementation in July 2013. In the second and third year of IMR, DIR and DWC took steps to reduce the average number of days to complete IMRs (from 56 days in late 2014 to 10 days by mid-2015), made enhancements to the program, and began to collect and analyze data to improve evidence-based medical decisions and outcomes for injured workers.

"The report shows IMR is working as intended," said Christine Baker, Director of the Department of Industrial Relations (DIR). "There is an effective process to support appropriate care and stop inappropriate care. The data is showing where further improvements are needed, particularly regarding medical treatment guidelines and education, and we will continue to make adjustments." Highlights of the report include the following:

System improvements: Working with IMR vendor Maximus, DIR has prioritized electronic filing of medical records, which led to faster resolutions of cases being reviewed and decided. Refinements in the data reporting also helped track disputed issues. DWC created a searchable database where it posts IMR decisions on its website. IMR application fees were reduced for cases that contain only pharmacy-related issues.

Who files for IMR: More than a quarter of IMR cases are filed in Los Angeles, with the Bay Area second with about 20 percent of the state total. Most injured workers with an IMR case are represented by an attorney. Ratios of case outcomes were almost identical for represented and unrepresented injured workers, with more than 80 percent of items and services deemed medically unnecessary by utilization review decision being upheld by IMR reviewers. The rate of treatment disputes overturned is between 9 and 11 percent.

What is in dispute: Pharmaceuticals were the most common treatment category in dispute (49 percent in 2015), with requests for rehabilitation services a distant second. The most requested drugs were opioids.

Further refinements: DWC is revising the IMR regulations to require electronic filing of applications and medical records, which will ensure the timeliness of decisions. The division has also launched an online physician continuing education course to improve understanding of the medical treatment utilization schedule (MTUS) and the IMR and utilization review (UR) processes.

"We continue to evaluate IMR decisions to ensure optimal care for patients, particularly with opioids," said DWC Executive Medical Director Dr. Raymond Meister. "Helping physicians understand and follow the MTUS will improve results for injured workers." ...
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/ 2016 News, Daily News
A new study shows that when it comes to purchasing prescription medications, it really pays to shop around. The cost of generic drugs that treat heart failure can vary so wildly, even among pharmacies within one area, that uninsured patients may not be able to afford them, according to research reported at the American Heart Association medical meeting in New Orleans on Tuesday.

According to the story in Reuters Health, researchers found that the combined cost for a month's supply of three commonly prescribed generic heart failure drugs ranged from $12 to $400, with an average price of about $70 in the greater St. Louis area, putting them out of reach for some patients who desperately need them.

About 5.7 million Americans are living with heart failure, according to the AHA. The condition, in which the heart no longer pumps efficiently enough to supply the body's blood and oxygen needs, is one of the most common causes of hospitalization in people aged 65 and older and often requires treatment with multiple medications.

Prompted by a 25-year-old patient who said he could not afford to fill his prescription for digoxin at $100 for a 30-day supply, Dr. Paul Hauptman decided to look into the variable cost of supposedly cheaper generic heart failure medicines.

"I think a lot of doctors assume that if you're writing a prescription for a generic drug, that it will be affordable," said Hauptman, a heart failure specialist at St. Louis University School of Medicine.

Researchers surveyed 175 pharmacies in the St. Louis area to see how much they charged uninsured customers for digoxin, lisinopril and carvedilol. The researchers found no apparent link between price and type of pharmacy or the average income in a particular neighborhood. They even found that two major pharmacy chains did not have consistent pricing between their stores.

"We do not know where the major pricing problem lies in the journey that a generic drug for heart failure takes from generic company to distributor to retail pharmacy and then to patient. There is no transparency here," Hauptman said.

Uninsured patients typically do not shop around for lower prices, Hauptman said, adding that if a patient finds a drug too expensive, "they don't fill the prescription."

He suggested this type of study be replicated in other parts of the country and for other medical conditions.

Former AHA President Dr. Clyde Yancy, who was not involved with this research, said the issue affects everyday life of patients he treats who are on fixed incomes.

"There's no reason why this kind of variability should exist within markets," he said ...
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/ 2016 News, Daily News
The Wall Street Journal reports that workplace injury is one of the main reasons doctors prescribe opioids, and dependence has become an expensive problem for those paying workers’ comp claims. Workers’ compensation payers spent $1.54 billion on opioids in 2015, or 13% of total U.S. spending on opioids, according to an analysis by CompPharma LLC.

Companies that handle claims for those injuries are trying new programs that push workers toward alternative pain treatments and that make it harder to get prescriptions for potentially addictive drugs - all intended to get people back to work without getting hooked, companies say.

Workers compensation brokers, insurers and administrators, such as Lockton Companies LLC., Liberty Mutual Group Inc. and Broadspire Services Inc. are using predictive algorithms and behavioral health screens to assess an individual’s risk for dependency, and steering some injured workers to alternate treatments such as over-the-counter drugs and mental-health counseling in lieu of prescription opioids. Such programs are aimed at preventing abuse, rather than treating it after the fact.

"We were not capturing opioids early enough. We were catching them once they were already at a high dosage," said Jacob Lazarovic, chief medical officer of Broadspire, which administers workers comp claims for self-insured employers and insurers.

When an injured worker is first prescribed a drug like Fentanyl, Broadspire mails an opioid education packet to both patient and doctor, and tracks refills. Claims are reviewed after 10 weeks to check whether the patient is still taking opioids. Broadspire then works with the physician to make plans for weaning the patient off the drugs, he says.

In a test of the program, opioid prescriptions fell by 14% compared with a control group, the company says.

Insurer Travelers Cos. has developed an algorithm that analyzes thousands of claims and identifies the likelihood that an injured employee will develop chronic pain. Certain conditions, such as a prior case history of anxiety or depression, increase the chance that a patient will experience chronic pain, said Adam Seidner, Travelers’ medical director.

Those deemed at risk for chronic pain and addiction receive recommendations for alternate therapies, such as physical therapy and mental-health counseling, Dr. Seidner said.

Travelers says it cannot prevent a physician from prescribing opioids for at-risk patients, but it does urge care providers to follow a plan for alternate therapies and can refuse to authorize payment for a painkiller prescription, depending on state law.

Travelers says its algorithm, used in 20,000 cases in the past year, has helped reduce individual claim costs by as much as 50%. The predictive model and other efforts have helped reduce opioid prescriptions by 23% in the past 12 months among covered workers, according to the company.

To some extent, the industry is trying to solve a problem it helped create. Researchers found that about 65% to 85% of injured workers received narcotic painkillers under workers comp, according to an analysis of 264,000 claims by the Workers Compensation Research Institute.

Insurance broker Lockton has piloted a program in which injured workers undergo behavioral health and other screenings to assess risk of developing long-term pain or addiction. Workers with telltale traits - such as a tendency to view situations in catastrophic terms - may be steered toward less-powerful drugs to treat pain or referred to therapists able to treat the underlying sources of pain, said Keith Rosenblum, a senior workers' compensation strategist at Lockton.

"You are creating zombies when you give [injured workers] opioids and sedatives," Mr. Rosenblum said. "This is preventable." ...
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/ 2016 News, Daily News
The Division of Workers’ Compensation (DWC) is now accepting nominations for the 2017 Carrie Nevans Community Service Awards which will be presented at the 24th annual educational conference luncheons in February (Los Angeles) and March (Oakland) of 2017.

The awards, which began in 2010, were renamed in memory and honor of Carrie Nevans, the much respected acting administrative director who passed away in 2011.

Nominations should be made for those individuals who have made a significant contribution to the betterment of the workers’ compensation community in the highest professional manner. DWC will honor the Southern California recipient in Los Angeles and the Northern California recipient in Oakland during an award ceremony at the educational conference luncheons.

Last year both recipients were commissioners on the Commission on Health and Safety and Workers’ Compensation (CHSWC). This 2016 award recipient in Southern California was Martin Brady, the Schools Insurance Authority executive director. And Christy Bouma, Capitol Connection president, was the Northern California recipient.

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

Please complete the 2017 nomination form for next years award, and send to Wendy So at no later than January 13, 2017 ...
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/ 2016 News, Daily News