The Return-to-Work Supplement Program was established by the Legislature in Labor Code section 139.48, part of Senate Bill 863 to provide supplemental payments to workers whose Workers’ Compensation permanent disability benefits are disproportionately low in comparison to their earnings loss.
After Labor Code section 139.48 took effect on January 1, 2013, the Department, in coordination with the Commission on Health and Safety and Workers' Compensation, commissioned an implementation study from the Rand Corporation. Guided by the Rand study, which was completed in February 2014, the Department developed and adopted California Code of Regulations, title 8, sections 17300 through 17310 to implement the RTWS Program. These regulations went into effect on April 6, 2015, and the Department began accepting applications for RTWS benefits on April 13, 2015.
The California Applicants’ Attorneys Association "CAAA" then petitioned the Director of Industrial Relations in accordance with Government Code section 11340.6 asking for the changes which are the subject matter of these amendments.
CAAA’s petition stated that the requested extension to the application deadline was necessary, because injured workers who received a voucher on or before the April 13, 2015 implementation date of the RTWS application process would no longer be able to apply for an RTWS benefit after April 13, 2016. This was despite the fact that those individuals had not received notice of their eligibility to apply for an RTWS benefit when they received their Vouchers.
CAAA’s petition also notes that the Voucher form, which is supposed to provide notice of eligibility to apply an RTWS benefit, was not updated to include that notice until approximately December 1, 2015. Moreover, while section 17303 required claims administrators to provide notice of eligibility via a cover sheet accompanying all Vouchers issued until the Voucher form was amended by DWC, the Department has been informed that at least some vouchers issued prior to December 1, 2015 were not accompanied by the required notice.
CAAA believes that the lower than expected number of applicants to the RTWS Program in 2015 (less than 12,000 when at least 24,000 were projected by the Rand study which the Department relied on when developing the Program) was largely due to this lack of notice of eligibility. The Department conducted a public hearing on CAAA’s petition on April 15, 2016, and determined to proceed with rulemaking to amend section 17304.
The proposed amendment to section 17304 extends the RTWS application deadline for individuals who became eligible for the benefit prior to December 1, 2015, to address inadequate notice to some individuals within that group of their entitlement to the RTWS benefit.
A public hearing has been scheduled at 10 a.m. on Monday, October 31, 2016, in Room 7, second floor of the Elihu Harris Building, 1515 Clay Street, Oakland, CA 94612. Members of the public may also submit written comments until 5 p.m. that day.
Written comments can be sent by email to LC139.48Comments@dir.ca.gov or by fax to (510) 286-6997.
The proposed amendment, notice and the California Applicants’ Attorneys Association (CAAA) RTW Petition and Notice of Public Hearing on Petition to Amend Regulations can be found on the DIR website ...
After Labor Code section 139.48 took effect on January 1, 2013, the Department, in coordination with the Commission on Health and Safety and Workers' Compensation, commissioned an implementation study from the Rand Corporation. Guided by the Rand study, which was completed in February 2014, the Department developed and adopted California Code of Regulations, title 8, sections 17300 through 17310 to implement the RTWS Program. These regulations went into effect on April 6, 2015, and the Department began accepting applications for RTWS benefits on April 13, 2015.
The California Applicants’ Attorneys Association "CAAA" then petitioned the Director of Industrial Relations in accordance with Government Code section 11340.6 asking for the changes which are the subject matter of these amendments.
CAAA’s petition stated that the requested extension to the application deadline was necessary, because injured workers who received a voucher on or before the April 13, 2015 implementation date of the RTWS application process would no longer be able to apply for an RTWS benefit after April 13, 2016. This was despite the fact that those individuals had not received notice of their eligibility to apply for an RTWS benefit when they received their Vouchers.
CAAA’s petition also notes that the Voucher form, which is supposed to provide notice of eligibility to apply an RTWS benefit, was not updated to include that notice until approximately December 1, 2015. Moreover, while section 17303 required claims administrators to provide notice of eligibility via a cover sheet accompanying all Vouchers issued until the Voucher form was amended by DWC, the Department has been informed that at least some vouchers issued prior to December 1, 2015 were not accompanied by the required notice.
CAAA believes that the lower than expected number of applicants to the RTWS Program in 2015 (less than 12,000 when at least 24,000 were projected by the Rand study which the Department relied on when developing the Program) was largely due to this lack of notice of eligibility. The Department conducted a public hearing on CAAA’s petition on April 15, 2016, and determined to proceed with rulemaking to amend section 17304.
The proposed amendment to section 17304 extends the RTWS application deadline for individuals who became eligible for the benefit prior to December 1, 2015, to address inadequate notice to some individuals within that group of their entitlement to the RTWS benefit.
A public hearing has been scheduled at 10 a.m. on Monday, October 31, 2016, in Room 7, second floor of the Elihu Harris Building, 1515 Clay Street, Oakland, CA 94612. Members of the public may also submit written comments until 5 p.m. that day.
Written comments can be sent by email to LC139.48Comments@dir.ca.gov or by fax to (510) 286-6997.
The proposed amendment, notice and the California Applicants’ Attorneys Association (CAAA) RTW Petition and Notice of Public Hearing on Petition to Amend Regulations can be found on the DIR website ...
The connection between opiate pain pills and heroin addiction is now reached epidemic proportions according to state and federal health regulators. Yet it is uncommon for anyone in the workers' compensation claim industry to be aware of even a single case where an injured worker is involved in heroin or concurrent use of illegal substances. What what are the odds that workers' compensation claimants are free of illegal drug use?
A new study published in Spine, concludes that the odds are fairly high that people living with chronic low back pain (cLBP) are more likely to use illicit drugs -- including marijuana, cocaine, heroin, and methamphetamine -- compared to those without back pain.
In addition, cLBP patients with a history of illicit drug use are more likely to have a current prescription for opioid analgesic (pain-relieving) drugs, according to the new research by Dr. Anna Shmagel of University of Minnesota, Minneapolis, and colleagues. While it's not clear which direction the association runs, the patterns of illicit drug use may have implications for decisions about prescribing opioids for patients with back pain.
The researchers analyzed survey responses from more than 5,000 US adults (aged 20 to 69) from a nationally representative health study (the 2009-2010 National Health and Nutrition Examination Survey, or NHANES).
About 13 percent of respondents met the study definition of cLBP -- back pain present for three months or longer. The confidential survey also asked participants about their use of illicit drugs -- marijuana, cocaine, heroin, and methamphetamine.
The results suggested that back pain was linked to higher rates of illicit drug use. About 49 percent of adults with cLBP said they had ever used illicit drugs, compared to 43 percent of those without cLBP. Rates of current illicit drug use (within the past 30 days) were also higher in the cLBP group: 14 percent versus nine percent.
All four specific drugs in the survey were more commonly used by respondents with cLBP. Rates of lifetime use were about 46.5 versus 42 percent for marijuana, 22 versus 14 percent for cocaine, nine versus five percent for methamphetamine, and five versus two percent for heroin. After adjustment for other factors, participants with cLBP were more than twice as likely to report methamphetamine and heroin use.
The results also suggested a link between illicit drugs and prescription opioids among patients with cLBP. Subjects who had ever used illicit drugs were more likely to have an active prescription for opioid analgesics: 22.5 percent versus 15 percent. Current illicit drug users were also more likely to have an opioid prescription, although that difference was not statistically significant.
Prescription opioids are widely used by patients with cLBP, raising concerns about addiction, misuse, and accidental overdose. Previous studies have found that people with a history of illicit drug use are more likely to misuse prescription opioids. The new study is one of the first to focus on rates of illicit drug use among Americans with cLBP.
The nationwide data show that people with cLBP have higher rates of illicit drug use, and those with a past history of illicit drug use are more likely to be current users of opioid analgesics. The researchers note some important limitations of their study--including a lack of data on whether illicit drug use occurred before or after cLBP. They also suggest that the true scope of the problem may be even greater, since NHANES excludes some groups at high risk of illicit drug use.
Pending further research, doctors may want to consider theses associations when evaluating pain relief options for patients with cLBP, Dr. Shmagel and coauthors believe. They write, "As we face a prescription opioid addiction epidemic, careful assessment of illicit drug use history may aid prescribing decisions." ...
A new study published in Spine, concludes that the odds are fairly high that people living with chronic low back pain (cLBP) are more likely to use illicit drugs -- including marijuana, cocaine, heroin, and methamphetamine -- compared to those without back pain.
In addition, cLBP patients with a history of illicit drug use are more likely to have a current prescription for opioid analgesic (pain-relieving) drugs, according to the new research by Dr. Anna Shmagel of University of Minnesota, Minneapolis, and colleagues. While it's not clear which direction the association runs, the patterns of illicit drug use may have implications for decisions about prescribing opioids for patients with back pain.
The researchers analyzed survey responses from more than 5,000 US adults (aged 20 to 69) from a nationally representative health study (the 2009-2010 National Health and Nutrition Examination Survey, or NHANES).
About 13 percent of respondents met the study definition of cLBP -- back pain present for three months or longer. The confidential survey also asked participants about their use of illicit drugs -- marijuana, cocaine, heroin, and methamphetamine.
The results suggested that back pain was linked to higher rates of illicit drug use. About 49 percent of adults with cLBP said they had ever used illicit drugs, compared to 43 percent of those without cLBP. Rates of current illicit drug use (within the past 30 days) were also higher in the cLBP group: 14 percent versus nine percent.
All four specific drugs in the survey were more commonly used by respondents with cLBP. Rates of lifetime use were about 46.5 versus 42 percent for marijuana, 22 versus 14 percent for cocaine, nine versus five percent for methamphetamine, and five versus two percent for heroin. After adjustment for other factors, participants with cLBP were more than twice as likely to report methamphetamine and heroin use.
The results also suggested a link between illicit drugs and prescription opioids among patients with cLBP. Subjects who had ever used illicit drugs were more likely to have an active prescription for opioid analgesics: 22.5 percent versus 15 percent. Current illicit drug users were also more likely to have an opioid prescription, although that difference was not statistically significant.
Prescription opioids are widely used by patients with cLBP, raising concerns about addiction, misuse, and accidental overdose. Previous studies have found that people with a history of illicit drug use are more likely to misuse prescription opioids. The new study is one of the first to focus on rates of illicit drug use among Americans with cLBP.
The nationwide data show that people with cLBP have higher rates of illicit drug use, and those with a past history of illicit drug use are more likely to be current users of opioid analgesics. The researchers note some important limitations of their study--including a lack of data on whether illicit drug use occurred before or after cLBP. They also suggest that the true scope of the problem may be even greater, since NHANES excludes some groups at high risk of illicit drug use.
Pending further research, doctors may want to consider theses associations when evaluating pain relief options for patients with cLBP, Dr. Shmagel and coauthors believe. They write, "As we face a prescription opioid addiction epidemic, careful assessment of illicit drug use history may aid prescribing decisions." ...
The workers’ compensation market has likely entered a soft market phase based on a declining trend in price increases that began in 2013, according to a new special report from A.M. Best.
The Best’s Special Report titled, "State Funds’ Net Premiums Written Increased for Fifth Consecutive Year In 2015," cited rate declines in the first quarter of 2015 that have persisted through the second quarter of 2016, in tandem with the more competitive environment in property/casualty commercial lines in general.
This conclusion was drawn as part of A.M. Best’s annual report on the state workers’ compensation funds sector. Net premiums written (NPW) within this segment increased for the fifth consecutive year in 2015, growing 2.4% to $8.6 billion, the highest premium level since 2006, according to the report.
Although underwriting leverage measures for the competitive state funds composite are at low levels and indicate solid capitalization, the report cites concerns going forward such as the recent declining trend in workers’ compensation pricing, the prolonged low interest rate environment, the potential for less favorable reserve development and the uncertainties relating to potential workers’ compensation legislation and health care reform.
State funds mainly compete for workers’ compensation business while also serving as their respective state’s guaranteed market. Some businesses that find it more difficult to afford or secure coverage in the voluntary market during hard market conditions often turn to state funds. This was likely a contributing factor to the growth of state funds over the past several years.
Collectively, state funds’ NPW equated to 18% of the total U.S. workers’ compensation premium in 2015, flat in comparison with 18% in 2014, but above a low of 15% in 2011. The significance of state funds also is apparent in their respective state market shares. For 2015, seven of the 18 state funds had market shares of at least 50% in their respective states and each one ranked first in its state based on direct premiums written ...
The Best’s Special Report titled, "State Funds’ Net Premiums Written Increased for Fifth Consecutive Year In 2015," cited rate declines in the first quarter of 2015 that have persisted through the second quarter of 2016, in tandem with the more competitive environment in property/casualty commercial lines in general.
This conclusion was drawn as part of A.M. Best’s annual report on the state workers’ compensation funds sector. Net premiums written (NPW) within this segment increased for the fifth consecutive year in 2015, growing 2.4% to $8.6 billion, the highest premium level since 2006, according to the report.
Although underwriting leverage measures for the competitive state funds composite are at low levels and indicate solid capitalization, the report cites concerns going forward such as the recent declining trend in workers’ compensation pricing, the prolonged low interest rate environment, the potential for less favorable reserve development and the uncertainties relating to potential workers’ compensation legislation and health care reform.
State funds mainly compete for workers’ compensation business while also serving as their respective state’s guaranteed market. Some businesses that find it more difficult to afford or secure coverage in the voluntary market during hard market conditions often turn to state funds. This was likely a contributing factor to the growth of state funds over the past several years.
Collectively, state funds’ NPW equated to 18% of the total U.S. workers’ compensation premium in 2015, flat in comparison with 18% in 2014, but above a low of 15% in 2011. The significance of state funds also is apparent in their respective state market shares. For 2015, seven of the 18 state funds had market shares of at least 50% in their respective states and each one ranked first in its state based on direct premiums written ...
Thomas M. Calderon, a former member of the California State Assembly who became a political consultant, was sentenced this week to one year and one day of incarceration after he pleaded guilty to money laundering for allowing bribe money to be funneled through his firm.
Tom Calderon was sentenced by United States District Judge Christina A. Snyder, who ordered that the sentence be served half in federal prison and half in home detention. In addition to the period of incarceration, Judge Snyder ordered Tom Calderon to serve 100 hours of community service.
Tom Calderon, 62, of Montebello, pleaded guilty on June 6 to one count of money laundering and admitted that he agreed to conceal bribe payments coming from two undercover FBI agents by having the money go through his political consulting company, the Calderon Group.
The bribes were made to Tom Calderon’s brother, Ronald S. Calderon, who at the time was a California State Senator. Ron Calderon pleaded guilty on June 21 and admitted accepting bribes from the undercover agents and a businessman in exchange for performing official acts as a legislator. Ron Calderon, 59, also of Montebello, is scheduled to be sentenced by Judge Snyder next Monday, although he has asked to continue his sentencing date.
When he pleaded guilty, Tom Calderon specifically admitted that in 2013 he deposited a $30,000 bribe payment from an undercover agent into the Calderon Group’s bank account and then wrote a $9,000 check to Ron Calderon’s daughter.
"Tom Calderon was all too aware of the bribe payments to his brother and that his brother had agreed to a quid pro quo with the undercover agents," said United States Attorney Eileen M. Decker. "Tom Calderon facilitated these bribe payments by helping to conceal his brother’s corrupt activities from the public."
"Today's sentencing sends a message to those interested in using access to public office in order to reap personal benefits that they will be held responsible for their actions," said Deirdre Fike, the Assistant Director in Charge of the FBI’s Los Angeles Field Office. "Mr. Calderon used his family ties to benefit personally at the expense of the constituents represented by his brother’s office."
Tom Calderon and his brother were both indicted by a federal grand jury in 2014. Tom Calderon was charged with conspiring with his brother to commit money laundering and seven substantive counts of money laundering. The money laundering charge that Tom Calderon pleaded guilty to was count 22 in the indictment.
"IRS Criminal Investigation tirelessly untangled the web of illicit transactions that lead to Thomas Calderon being held accountable for his role in this scheme," stated IRS Criminal Investigation’s Acting Special Agent in Charge, Anthony J. Orlando. "IRS CI remains committed to investigating those who engage in political corruption and tarnish our democratic system."
...
Tom Calderon was sentenced by United States District Judge Christina A. Snyder, who ordered that the sentence be served half in federal prison and half in home detention. In addition to the period of incarceration, Judge Snyder ordered Tom Calderon to serve 100 hours of community service.
Tom Calderon, 62, of Montebello, pleaded guilty on June 6 to one count of money laundering and admitted that he agreed to conceal bribe payments coming from two undercover FBI agents by having the money go through his political consulting company, the Calderon Group.
The bribes were made to Tom Calderon’s brother, Ronald S. Calderon, who at the time was a California State Senator. Ron Calderon pleaded guilty on June 21 and admitted accepting bribes from the undercover agents and a businessman in exchange for performing official acts as a legislator. Ron Calderon, 59, also of Montebello, is scheduled to be sentenced by Judge Snyder next Monday, although he has asked to continue his sentencing date.
When he pleaded guilty, Tom Calderon specifically admitted that in 2013 he deposited a $30,000 bribe payment from an undercover agent into the Calderon Group’s bank account and then wrote a $9,000 check to Ron Calderon’s daughter.
"Tom Calderon was all too aware of the bribe payments to his brother and that his brother had agreed to a quid pro quo with the undercover agents," said United States Attorney Eileen M. Decker. "Tom Calderon facilitated these bribe payments by helping to conceal his brother’s corrupt activities from the public."
"Today's sentencing sends a message to those interested in using access to public office in order to reap personal benefits that they will be held responsible for their actions," said Deirdre Fike, the Assistant Director in Charge of the FBI’s Los Angeles Field Office. "Mr. Calderon used his family ties to benefit personally at the expense of the constituents represented by his brother’s office."
Tom Calderon and his brother were both indicted by a federal grand jury in 2014. Tom Calderon was charged with conspiring with his brother to commit money laundering and seven substantive counts of money laundering. The money laundering charge that Tom Calderon pleaded guilty to was count 22 in the indictment.
"IRS Criminal Investigation tirelessly untangled the web of illicit transactions that lead to Thomas Calderon being held accountable for his role in this scheme," stated IRS Criminal Investigation’s Acting Special Agent in Charge, Anthony J. Orlando. "IRS CI remains committed to investigating those who engage in political corruption and tarnish our democratic system."
...
Two states have laws that allow employers to opt-out of the state-regulated workers' compensation system: Oklahoma and Texas. Texas has always had this law; Oklahoma recently adopted a variation of it. Nearly 30 Oklahoma employers had been approved for the opt-out system by the end of 2014, with many others taking a wait-and-see approach. Tennessee lawmakers introduced their own version of opt-out legislation which failed to become law.
But now we are back to just one opt-out state - Texas.
The Oklahoma Supreme Court Tuesday struck down the "opt out" provision of the state's workers' compensation law, ruling it is an unconstitutional special law that gives employers the authority to single out injured workers for inequitable treatment.
In a 7-2 ruling, the state's highest court said the "opt out" provision "creates impermissible, unequal, disparate treatment" of injured workers and "does not guarantee members of the subject class, all employees, the same rights when a work related injury occurs," in violation of the Oklahoma Constitution. Only Texas and Oklahoma have "opt out" provisions in their workers' compensation systems.
Oklahoma's Opt Out Act allows employers to "opt out" of the state's workers' compensation system and create their own plan. But employers who create their own plans can include conditions for recovery that make it more difficult for an injured worker to recover for a work-related injury than someone covered by the state's plan, according to the ruling.
"The statutory language itself demonstrates that injured workers under the Opt Out Act have no protection to the coverage, process or procedure afforded their fellow employees," it says.
The case involves a work-related injury sustained by an employee of Dillard's Department Stores, Jonnie Yvonne Vasquez, who alleged she injured her neck and shoulder while lifting shoe boxes while working on Sept. 11, 2014. The ruling states that it applies to Vasquez's case as well as all other cases on appeal and pending before the Workers Compensation Commission. Only 65 employers have elected to leave the state's workers' compensation system and create their own plans, said Vasquez's attorney, Bob Burke of Oklahoma City.
In a dissenting opinion, Justices James Winchester and Steven Taylor said they would not invalidate the "opt out" provisions but would require the Workers Compensation Commission to determine whether an employee covered by an employer's workers' compensation plan was denied benefits the employee would have received under the state's plan and require the employer plan to meet the requirements of the Opt Out Act.
In a statement, Oklahoma Attorney General Scott Pruitt said the Supreme Court's ruling was "out of touch" and an attempt to reverse legislative actions that he said had lowered the cost of workers' compensation insurance in the state. "Unfortunately, today's decision is yet another action by the Oklahoma Supreme Court that dismantles these reforms piece by piece," Pruitt said.
The ruling is the latest setback for sweeping Oklahoma workers' compensation guidelines adopted by the Legislature in 2013. In April, the Supreme Court invalidated provisions that allowed deferral of payments for permanent partial disability for workers who eventually return to their jobs.
Revamping the state's workers' compensation system has been a priority for Republican legislative leaders who claim the state's previous system was a detriment to business and industry in the state. Republican Gov. Mary Fallin has supported changes in the law.
But Burke said 38 separate provisions of the 2013 workers' compensation law have been found unconstitutional, inoperable or invalid since they went into effect.
"It's a great victory for the working men and women of this state," Burke said. "We can't allow the injured worker to be royally shafted like this." ...
But now we are back to just one opt-out state - Texas.
The Oklahoma Supreme Court Tuesday struck down the "opt out" provision of the state's workers' compensation law, ruling it is an unconstitutional special law that gives employers the authority to single out injured workers for inequitable treatment.
In a 7-2 ruling, the state's highest court said the "opt out" provision "creates impermissible, unequal, disparate treatment" of injured workers and "does not guarantee members of the subject class, all employees, the same rights when a work related injury occurs," in violation of the Oklahoma Constitution. Only Texas and Oklahoma have "opt out" provisions in their workers' compensation systems.
Oklahoma's Opt Out Act allows employers to "opt out" of the state's workers' compensation system and create their own plan. But employers who create their own plans can include conditions for recovery that make it more difficult for an injured worker to recover for a work-related injury than someone covered by the state's plan, according to the ruling.
"The statutory language itself demonstrates that injured workers under the Opt Out Act have no protection to the coverage, process or procedure afforded their fellow employees," it says.
The case involves a work-related injury sustained by an employee of Dillard's Department Stores, Jonnie Yvonne Vasquez, who alleged she injured her neck and shoulder while lifting shoe boxes while working on Sept. 11, 2014. The ruling states that it applies to Vasquez's case as well as all other cases on appeal and pending before the Workers Compensation Commission. Only 65 employers have elected to leave the state's workers' compensation system and create their own plans, said Vasquez's attorney, Bob Burke of Oklahoma City.
In a dissenting opinion, Justices James Winchester and Steven Taylor said they would not invalidate the "opt out" provisions but would require the Workers Compensation Commission to determine whether an employee covered by an employer's workers' compensation plan was denied benefits the employee would have received under the state's plan and require the employer plan to meet the requirements of the Opt Out Act.
In a statement, Oklahoma Attorney General Scott Pruitt said the Supreme Court's ruling was "out of touch" and an attempt to reverse legislative actions that he said had lowered the cost of workers' compensation insurance in the state. "Unfortunately, today's decision is yet another action by the Oklahoma Supreme Court that dismantles these reforms piece by piece," Pruitt said.
The ruling is the latest setback for sweeping Oklahoma workers' compensation guidelines adopted by the Legislature in 2013. In April, the Supreme Court invalidated provisions that allowed deferral of payments for permanent partial disability for workers who eventually return to their jobs.
Revamping the state's workers' compensation system has been a priority for Republican legislative leaders who claim the state's previous system was a detriment to business and industry in the state. Republican Gov. Mary Fallin has supported changes in the law.
But Burke said 38 separate provisions of the 2013 workers' compensation law have been found unconstitutional, inoperable or invalid since they went into effect.
"It's a great victory for the working men and women of this state," Burke said. "We can't allow the injured worker to be royally shafted like this." ...
Three days after Berkshire Hathaway Inc. subsidiaries Applied Underwriters and its California Insurance Co affiliate agreed to stop selling disputed workers' compensation policies in California, the company has again been has been sued now by a New York bicycle courier company over another alleged illegal scheme to cheat employers buying workers' compensation policies.
California’s insurance commissioner ruled against Berkshire in June over workers’ compensation policies after determining that the company duped a small business, Shasta Linen Supply, and circumvented a review of rates. Earlier this month, the company agreed to stop selling the policies in dispute in California. The regulator said the Berkshire businesses charged customers’ rates which hadn’t been approved by the regulator.
According to a Reuters report, the new civil complaint, filed late Friday by Breakaway Courier Systems, came as Berkshire's Applied Underwriters unit faces scrutiny over its workers' compensation policies, including some that have been banned by California, Vermont and Wisconsin.
Breakaway, with about 300 employees, accused Berkshire and Applied of "siphoning" premiums through a web of illegal shell companies, with diverted premiums going to unlicensed out-of-state insurers.
The plan amounted to a "reverse Ponzi scheme" where unsuspecting employers expecting to buy affordable policies instead bought costly "reinsurance" requiring them to cover each other's losses, leaving taxpayers on the hook for shortfalls when too many workers are injured on the job, Breakaway said.
"Breakaway thought it was purchasing a workers' comp policy with a profit-sharing component if its losses were low," Raymond Dowd, its lawyer, said in an interview. "Instead it purchased a complex derivative swap labeled misleadingly as a 'reinsurance participation agreement' that put all the risk on Breakaway.
"Berkshire's schemes break multiple laws, including that you cannot collect insurance premiums if you are not licensed," Dowd added.
Neither Berkshire nor Applied immediately responded to requests by Reuters for comment.
The lawsuit, filed in the state supreme court in Manhattan, seeks at least $18 million of damages, plus a declaration that the reinsurance participation agreements (RPAs) are void and against public policy.
It shines a spotlight on a lesser-known part of Berkshire's insurance operations, which also include Geico car insurance and General Re reinsurance.
In the recently settled California case, both insurers denied wrongdoing. California Insurance Commissioner Dave Jones said their sale of a policy to Shasta Linen Supply Inc of Sacramento subjected the employer of 63 to hundreds of thousands of dollars of extra costs.
Similarly, Breakaway's RPA put that company at "imminent financial risk," and was "not understandable" by ordinary purchasers, Martin Schwartzman, former first deputy superintendent of New York's insurance department, said in a filing accompanying the complaint.
The case is Breakaway Courier Corp d/b/a Breakaway Courier Systems v. Berkshire Hathaway Inc et al, New York State Supreme Court, New York County, No. 654806/2016 ...
California’s insurance commissioner ruled against Berkshire in June over workers’ compensation policies after determining that the company duped a small business, Shasta Linen Supply, and circumvented a review of rates. Earlier this month, the company agreed to stop selling the policies in dispute in California. The regulator said the Berkshire businesses charged customers’ rates which hadn’t been approved by the regulator.
According to a Reuters report, the new civil complaint, filed late Friday by Breakaway Courier Systems, came as Berkshire's Applied Underwriters unit faces scrutiny over its workers' compensation policies, including some that have been banned by California, Vermont and Wisconsin.
Breakaway, with about 300 employees, accused Berkshire and Applied of "siphoning" premiums through a web of illegal shell companies, with diverted premiums going to unlicensed out-of-state insurers.
The plan amounted to a "reverse Ponzi scheme" where unsuspecting employers expecting to buy affordable policies instead bought costly "reinsurance" requiring them to cover each other's losses, leaving taxpayers on the hook for shortfalls when too many workers are injured on the job, Breakaway said.
"Breakaway thought it was purchasing a workers' comp policy with a profit-sharing component if its losses were low," Raymond Dowd, its lawyer, said in an interview. "Instead it purchased a complex derivative swap labeled misleadingly as a 'reinsurance participation agreement' that put all the risk on Breakaway.
"Berkshire's schemes break multiple laws, including that you cannot collect insurance premiums if you are not licensed," Dowd added.
Neither Berkshire nor Applied immediately responded to requests by Reuters for comment.
The lawsuit, filed in the state supreme court in Manhattan, seeks at least $18 million of damages, plus a declaration that the reinsurance participation agreements (RPAs) are void and against public policy.
It shines a spotlight on a lesser-known part of Berkshire's insurance operations, which also include Geico car insurance and General Re reinsurance.
In the recently settled California case, both insurers denied wrongdoing. California Insurance Commissioner Dave Jones said their sale of a policy to Shasta Linen Supply Inc of Sacramento subjected the employer of 63 to hundreds of thousands of dollars of extra costs.
Similarly, Breakaway's RPA put that company at "imminent financial risk," and was "not understandable" by ordinary purchasers, Martin Schwartzman, former first deputy superintendent of New York's insurance department, said in a filing accompanying the complaint.
The case is Breakaway Courier Corp d/b/a Breakaway Courier Systems v. Berkshire Hathaway Inc et al, New York State Supreme Court, New York County, No. 654806/2016 ...
The Division of Workers’ Compensation (DWC) today posted amended draft regulations to implement a fee schedule for home health care services. Members of the public are invited to present written comments regarding the proposed modifications to dwcrules@dir.ca.gov until 5 p.m. on September 26, 2016.
The proposed regulations set forth a payment methodology and fees for services provided to injured workers in the home setting, including skilled care by licensed medical professionals as well as unskilled personal care and domestic services.
California Senate Bill 863 requires DWC’s Administrative Director to establish a fee schedule for home health care services, which range from skilled nursing and therapy services to unskilled personal care or domestic care services.
Following the Office of Administrative Law’s publication of DWC’s initial draft of these regulations, a public hearing was held November 30, 2015 for comment. Upon review of the comments received during the first 15-day comment period that ended on June 8, 2016, DWC has amended its regulations to provide additional detail and clarity. The regulations also refer to the Medical Treatment Utilization Schedule (MTUS), which covers home health care services. The MTUS rulemaking documents are posted online.
The updated notice and draft regulation text are posted online.
...
The proposed regulations set forth a payment methodology and fees for services provided to injured workers in the home setting, including skilled care by licensed medical professionals as well as unskilled personal care and domestic services.
California Senate Bill 863 requires DWC’s Administrative Director to establish a fee schedule for home health care services, which range from skilled nursing and therapy services to unskilled personal care or domestic care services.
Following the Office of Administrative Law’s publication of DWC’s initial draft of these regulations, a public hearing was held November 30, 2015 for comment. Upon review of the comments received during the first 15-day comment period that ended on June 8, 2016, DWC has amended its regulations to provide additional detail and clarity. The regulations also refer to the Medical Treatment Utilization Schedule (MTUS), which covers home health care services. The MTUS rulemaking documents are posted online.
The updated notice and draft regulation text are posted online.
...
Central Freight Lines Inc. and Trendsetter HR have settled a lawsuit over workers’ compensation, ending a three-year litigated dispute.
The carrier, based in Waco, Texas, signed a deal with Trendsetter in 2008 to perform administrative services for the company and its employees. For more than three years, Central Freight alleged Trendsetter accepted payments but failed to deposit the funds for workers’ compensation coverage.
Central Freight stopped making payments after it conducted an audit, and Trendsetter sued for breach of contract in 2013.
However, a jury in December 2015 ruled Trendsetter breached the contract and awarded Central Freight $1.85 million. Jurors found that Trendsetter-HR and its owner, D.W. Bobst, failed to honor the terms of the contract and wrongfully billed Central Freight for services and coverage that were never provided. Central Freight is asking that interest be added to the verdict amount, which could push the final award to more than $2 million.
"It’s rare to receive a verdict of this magnitude in a counterclaim, but Trendsetter’s failures and wrongs were particularly egregious," said attorney William Chamblee, who is with the Dallas firm of Chamblee Ryan, which represented Central Freight. "Trendsetter, its affiliates and its owner made numerous misstatements to my client in an effort to hide the facts and justify their wrongdoing," Chamblee said.
Trendsetter reportedly signed a contract with Central Freight in 2008 before adding several amendments to broaden the administrative services provided to the company and its employees, according to a statement from the law office. "For more than three years, Trendsetter accepted payments from Central Freight but failed to properly deposit the funds for workers’ compensation coverage," according to the statement.
Central Freight Lines ranks No. 94 on the Transport Topics Top 100 list of the largest U.S. and Canadian for-hire carriers, and has operations in California.
The case was on appeal when the deal was reached. "Central is satisfied that this settlement will allow both parties to move on." said its attorneys.
Trendsetter owner D.W. Bobst said in a statement that neither he nor any affiliates were implicated in any wrongdoing, calling this a resolution to a contract dispute.
Terms of the settlement were not disclosed
Trendsetter also sued AIG for failure to provide workers’ compensation to Central Freight Lines, claiming that it directed the insurer to do so. That case is ongoing ...
The carrier, based in Waco, Texas, signed a deal with Trendsetter in 2008 to perform administrative services for the company and its employees. For more than three years, Central Freight alleged Trendsetter accepted payments but failed to deposit the funds for workers’ compensation coverage.
Central Freight stopped making payments after it conducted an audit, and Trendsetter sued for breach of contract in 2013.
However, a jury in December 2015 ruled Trendsetter breached the contract and awarded Central Freight $1.85 million. Jurors found that Trendsetter-HR and its owner, D.W. Bobst, failed to honor the terms of the contract and wrongfully billed Central Freight for services and coverage that were never provided. Central Freight is asking that interest be added to the verdict amount, which could push the final award to more than $2 million.
"It’s rare to receive a verdict of this magnitude in a counterclaim, but Trendsetter’s failures and wrongs were particularly egregious," said attorney William Chamblee, who is with the Dallas firm of Chamblee Ryan, which represented Central Freight. "Trendsetter, its affiliates and its owner made numerous misstatements to my client in an effort to hide the facts and justify their wrongdoing," Chamblee said.
Trendsetter reportedly signed a contract with Central Freight in 2008 before adding several amendments to broaden the administrative services provided to the company and its employees, according to a statement from the law office. "For more than three years, Trendsetter accepted payments from Central Freight but failed to properly deposit the funds for workers’ compensation coverage," according to the statement.
Central Freight Lines ranks No. 94 on the Transport Topics Top 100 list of the largest U.S. and Canadian for-hire carriers, and has operations in California.
The case was on appeal when the deal was reached. "Central is satisfied that this settlement will allow both parties to move on." said its attorneys.
Trendsetter owner D.W. Bobst said in a statement that neither he nor any affiliates were implicated in any wrongdoing, calling this a resolution to a contract dispute.
Terms of the settlement were not disclosed
Trendsetter also sued AIG for failure to provide workers’ compensation to Central Freight Lines, claiming that it directed the insurer to do so. That case is ongoing ...
Reuters Health reports that Taro Pharmaceutical Industries Ltd and two of its senior officers received grand jury subpoenas last week in connection with a federal antitrust investigation into generic drug pricing. The company said in an SEC filing late on Friday it received subpoenas on Thursday from the U.S. Justice Department's Antitrust Division.
The SEC filing discloses that "On September 8, 2016, Taro Pharmaceuticals, U.S.A., Inc. ("Taro"), as well as two senior officers in its commercial team, received grand jury subpoenas from the United States Department of Justice, Antitrust Division, seeking documents relating to corporate and employee records, generic pharmaceutical products
and pricing, communications with competitors and others regarding the sale of generic pharmaceutical products, and certain other related matters."
"Taro intends to respond to the subpoena and otherwise cooperate with the Department of Justice investigation."
Taro is the maker of many popular generic over-the-counter ointments, including antibiotic pain relief and Hydrocortisone creams used to relieve itching and minor skin rashes.
It also manufacturers prescription creams such as Clobetasol, which treats a variety of skin disorders including eczema and psoriasis.
A story published by the Boston Globe last year highlighted concerns about the rising prices of some generic drugs, including Clobetasol, which is made by several companies. The newspaper reported that the price of Clobetasol rose to $4.15 a gram in 2015 from $0.26 in 2013.
It was not clear from Friday's filing whether Clobetasol is among the products being reviewed by the Justice Department.
The rising cost of prescription medications has become a high-profile issue over the past year, with various companies coming under scrutiny for drastically raising the prices of their drugs and devices.
Companies including Valeant Pharmaceuticals and Turing Pharmaceuticals were both targets of congressional investigations earlier this year for hiking the price of life-saving drugs, with Turing also facing antitrust probes by the Federal Trade Commission and the New York attorney general.
Separately, Valeant faces investigations by federal prosecutors into its pricing and distribution.
More recently, Mylan NV has come under fire for raising the price of its allergy auto-injector Epipen. The New York attorney general disclosed earlier this month he had launched an antitrust probe into the company's contracts to provide Epipens to schools. The company is also facing congressional probes.
The issue has also resonated on the campaign trail, with Democratic presidential nominee Hillary Clinton saying that if elected in November, she would create an oversight panel to protect U.S. consumers from large price hikes on long-available life-saving drugs ...
The SEC filing discloses that "On September 8, 2016, Taro Pharmaceuticals, U.S.A., Inc. ("Taro"), as well as two senior officers in its commercial team, received grand jury subpoenas from the United States Department of Justice, Antitrust Division, seeking documents relating to corporate and employee records, generic pharmaceutical products
and pricing, communications with competitors and others regarding the sale of generic pharmaceutical products, and certain other related matters."
"Taro intends to respond to the subpoena and otherwise cooperate with the Department of Justice investigation."
Taro is the maker of many popular generic over-the-counter ointments, including antibiotic pain relief and Hydrocortisone creams used to relieve itching and minor skin rashes.
It also manufacturers prescription creams such as Clobetasol, which treats a variety of skin disorders including eczema and psoriasis.
A story published by the Boston Globe last year highlighted concerns about the rising prices of some generic drugs, including Clobetasol, which is made by several companies. The newspaper reported that the price of Clobetasol rose to $4.15 a gram in 2015 from $0.26 in 2013.
It was not clear from Friday's filing whether Clobetasol is among the products being reviewed by the Justice Department.
The rising cost of prescription medications has become a high-profile issue over the past year, with various companies coming under scrutiny for drastically raising the prices of their drugs and devices.
Companies including Valeant Pharmaceuticals and Turing Pharmaceuticals were both targets of congressional investigations earlier this year for hiking the price of life-saving drugs, with Turing also facing antitrust probes by the Federal Trade Commission and the New York attorney general.
Separately, Valeant faces investigations by federal prosecutors into its pricing and distribution.
More recently, Mylan NV has come under fire for raising the price of its allergy auto-injector Epipen. The New York attorney general disclosed earlier this month he had launched an antitrust probe into the company's contracts to provide Epipens to schools. The company is also facing congressional probes.
The issue has also resonated on the campaign trail, with Democratic presidential nominee Hillary Clinton saying that if elected in November, she would create an oversight panel to protect U.S. consumers from large price hikes on long-available life-saving drugs ...
Los Angeles County Superior Court ruled in favor of Allstate Insurance Company and the State of California in a lawsuit topping more than $2.3 million that ends the illegal ownership, kickbacks and fraudulent operation of two medical clinics in Los Angeles.
In its lawsuit, Allstate alleged chiropractor Byum Suk Kim violated the state's Insurance Frauds Prevention Act when he submitted to Allstate more than 90 claims for treatment of patients at the two clinics that were illegally owned in violation of California's Moscone Knox Professional Corporation Act. In its complaint, Allstate alleged the two clinics, Wilshire Spinal Disc Clinic, Inc. and Allied Medical, Inc. were held out to the public as legitimate medical clinics incorporated in the State of California, but were actually owned and operated by Byum Suk Kim, D.C. in violation of the Moscone Knox Professional Corporation Act and Business & Professions Code sections 2052, and 2400, commonly referred to as the "corporate practice of medicine bar." Both clinics are no longer operating.
Judge Terry A. Green agreed with Allstate and ordered Kim to pay $1.8 million in penalties, plus over $582,000 in assessments and fees - a $2.3 million judgment.
"Submitting even one false insurance claim is more than just a bad idea; it's fraud, and insurance fraud is a crime," said Allstate's California Field Senior Vice President Phil Telgenhoff. "Fraud drives up the cost we all pay for insurance by stealing millions of dollars from insurers. This cannot and will not be tolerated in California or anywhere. Allstate will fight fraud to help protect our customers and keep insurance costs down."
Allstate's suit identified Kim as a chiropractor owning and operating the two medical clinics. The judgment was based on evidence submitted by Allstate showing Kim engaged in clinical and billing fraud in connection with claims that were submitted to Allstate, which included hundreds of individual violations of California Penal Code section 550. Specifically, the evidence showed Kim was responsible for the preparation of 91 separate reports for patients allegedly treated by him at Wilshire and Allied, each of which contained misrepresentations in violation of section 550 regarding the level and type of treatment purportedly provided.
Additionally, the billing records for the treatment allegedly provided were likewise fraudulent, as the evidence presented by Allstate showed there was illegal "up-coding" for services. The judgment was based on Allstate proving the medical records, narrative reports, and bills of patients purportedly treated by Kim amounted to billing and clinical frauds perpetrated and carried out by Kim on a systematic basis at both Wilshire Spinal Disc Clinic, Inc. and Allied Medical, Inc.
This is the second multimillion-dollar ruling against insurance fraud that Allstate has successfully argued in Los Angeles County Superior Court in 2016 ...
In its lawsuit, Allstate alleged chiropractor Byum Suk Kim violated the state's Insurance Frauds Prevention Act when he submitted to Allstate more than 90 claims for treatment of patients at the two clinics that were illegally owned in violation of California's Moscone Knox Professional Corporation Act. In its complaint, Allstate alleged the two clinics, Wilshire Spinal Disc Clinic, Inc. and Allied Medical, Inc. were held out to the public as legitimate medical clinics incorporated in the State of California, but were actually owned and operated by Byum Suk Kim, D.C. in violation of the Moscone Knox Professional Corporation Act and Business & Professions Code sections 2052, and 2400, commonly referred to as the "corporate practice of medicine bar." Both clinics are no longer operating.
Judge Terry A. Green agreed with Allstate and ordered Kim to pay $1.8 million in penalties, plus over $582,000 in assessments and fees - a $2.3 million judgment.
"Submitting even one false insurance claim is more than just a bad idea; it's fraud, and insurance fraud is a crime," said Allstate's California Field Senior Vice President Phil Telgenhoff. "Fraud drives up the cost we all pay for insurance by stealing millions of dollars from insurers. This cannot and will not be tolerated in California or anywhere. Allstate will fight fraud to help protect our customers and keep insurance costs down."
Allstate's suit identified Kim as a chiropractor owning and operating the two medical clinics. The judgment was based on evidence submitted by Allstate showing Kim engaged in clinical and billing fraud in connection with claims that were submitted to Allstate, which included hundreds of individual violations of California Penal Code section 550. Specifically, the evidence showed Kim was responsible for the preparation of 91 separate reports for patients allegedly treated by him at Wilshire and Allied, each of which contained misrepresentations in violation of section 550 regarding the level and type of treatment purportedly provided.
Additionally, the billing records for the treatment allegedly provided were likewise fraudulent, as the evidence presented by Allstate showed there was illegal "up-coding" for services. The judgment was based on Allstate proving the medical records, narrative reports, and bills of patients purportedly treated by Kim amounted to billing and clinical frauds perpetrated and carried out by Kim on a systematic basis at both Wilshire Spinal Disc Clinic, Inc. and Allied Medical, Inc.
This is the second multimillion-dollar ruling against insurance fraud that Allstate has successfully argued in Los Angeles County Superior Court in 2016 ...
The Insurance Journal reports that the governing committee of California’s Workers’ Compensation Insurance Rating Bureau on Wednesday approved an amended, and reduced, rate filing for Jan. 1, 2017 workers’ compensation rates. It did so based on the hope that California Gov. Jerry Brown signs two bills into law, and that those bills end up producing a cost savings in the state’s massive workers’ comp system.
All bets are off if Brown doesn’t sign them.
"Nothing set in stone for sure unless the governor signs both of those bills," said Jerry Azevedo with the Workers’ Compensation Action Network, a group that represents the interests of employers.
The committee on Wednesday recommended a 4.3 percent reduction. Just a month earlier it had recommended a 2.6 percent reduction, which it sent to the California Department of Insurance. The move by the WCIRB committee was surprising for some.
"I’m kind of surprised that the two new bills that are likely to be signed would work into any immediate savings," said John Norwood, a lobbyist and managing partner of Sacramento-based Norwood and Associates.
The bills WCIRB is pinning its hopes on are Senate Bill 1160 and Assembly Bill 1244.
AB 1244 is designed to remove from the workers’ comp system doctors found to have committed a felony or misdemeanor involving fraud or abuse of the Medi-Cal program, Medicare or the workers’ comp system itself. The bill would also keep those doctors from filing liens.
According to the Department of Workers’ Compensation, 10 percent of liens filed between 2011 and 2015 were filed by providers with fraud indictments or convictions.
The other bill, SB 1160, places limitations on the utilization review (UR) process, and also would stay any physician or provider lien upon the filing of criminal charges against them for specified offenses involving medical fraud.
Impact projections from the WCIRB shows an estimated reduction in UR costs from SB 1160 but an increase in medical costs.
...
All bets are off if Brown doesn’t sign them.
"Nothing set in stone for sure unless the governor signs both of those bills," said Jerry Azevedo with the Workers’ Compensation Action Network, a group that represents the interests of employers.
The committee on Wednesday recommended a 4.3 percent reduction. Just a month earlier it had recommended a 2.6 percent reduction, which it sent to the California Department of Insurance. The move by the WCIRB committee was surprising for some.
"I’m kind of surprised that the two new bills that are likely to be signed would work into any immediate savings," said John Norwood, a lobbyist and managing partner of Sacramento-based Norwood and Associates.
The bills WCIRB is pinning its hopes on are Senate Bill 1160 and Assembly Bill 1244.
AB 1244 is designed to remove from the workers’ comp system doctors found to have committed a felony or misdemeanor involving fraud or abuse of the Medi-Cal program, Medicare or the workers’ comp system itself. The bill would also keep those doctors from filing liens.
According to the Department of Workers’ Compensation, 10 percent of liens filed between 2011 and 2015 were filed by providers with fraud indictments or convictions.
The other bill, SB 1160, places limitations on the utilization review (UR) process, and also would stay any physician or provider lien upon the filing of criminal charges against them for specified offenses involving medical fraud.
Impact projections from the WCIRB shows an estimated reduction in UR costs from SB 1160 but an increase in medical costs.
...
Uber won a courtroom victory on Wednesday when an appeals court ruled that drivers are subject to individual arbitration in a lawsuit over background checks, a ruling that might help the ride-hailing company fend off another costly class action lawsuit filed by its drivers.
While the Ninth U.S. Circuit Court of Appeals found that agreements signed by two former drivers for the service over background checks "clearly and unmistakably" require legal disputes be settled by a private arbiter, the reasoning may be applied to another class action lawsuit filed by drivers over the company's employment classifications.
Uber agreed to settle that classification lawsuit earlier this year -- an agreement that was rejected by a federal judge last month. Arbitration is a method frequently used by companies for resolving legal conflicts outside of the court system.
Uber Technologies Inc.’s message to the judge who was asked to approve its $100 million settlement with drivers last month was clear: take it or leave it. Bloomberg reports there is an escalating game of courtroom brinkmanship, Uber has hit what was an impasse with U.S. District Judge Edward Chen who presides over the federal class action suit pending in San Francisco, its demand that, as part of the deal, he erase his own order intended to protect the ride-hailing company’s drivers.
And indeed Judge Chen rejected the proposed settlement in August. Uber drivers contended in the lawsuit they should be deemed employees and reimbursed for expenses such as gasoline and vehicle maintenance. Those expenses are now borne by the drivers. The proposed settlement would have kept drivers classified as independent contractors. Several drivers who were part of the class filed objections with the court, particularly because the proposed amount was well below the total potential damages in the case of roughly $850 million.
In an order handed down last August in San Francisco, US District Judge Edward Chen said that, despite changes to its policies that Uber was ready to enact, the proposed settlement on the whole "is not fair, adequate, and reasonable." Had it been approved, the agreement would have impacted about 385,000 Uber drivers California and Massachusetts involved in the class-action suit.
The U.S. 9th Circuit Court of Appeals in San Francisco said with Wednesday in the published case of Mohamed v Uber Technologies that drivers who signed up with Uber in 2013 and 2014 must go to arbitration, not the courts, to resolve disputes with the company. Judge Chen previously ruled in the companion classification case that the arbitration agreements were unenforceable and unconscionable. But the appeals panel said Chen lacked the authority to make that call because the contracts require an arbiter to decide "all matters."
The ruling on Wednesday applies directly to two drivers’ challenge of Uber’s background-check practices in a proposed class-action lawsuit. But it could have an effect on dozens of lawsuits across the nation. Uber drivers have used the threat of a class-action lawsuit to extract concessions from the San Francisco company. Having to go to arbitration largely takes the specter of mass litigation off the table.
Now, Uber could drop the settlement talks altogether in the classification case because the appeals court could go on to unwind Chen’s certification of a class of drivers, forcing most of the drivers to individual arbitration. One-one-one fights typically result in smaller benefits for complainants. The class currently includes some 240,000 drivers from California and Massachusetts. If the arbitration agreements are enforced, the class could be reduced to 8,000 people - those who had rejected the arbitration agreements when they joined Uber’s driver roster ...
While the Ninth U.S. Circuit Court of Appeals found that agreements signed by two former drivers for the service over background checks "clearly and unmistakably" require legal disputes be settled by a private arbiter, the reasoning may be applied to another class action lawsuit filed by drivers over the company's employment classifications.
Uber agreed to settle that classification lawsuit earlier this year -- an agreement that was rejected by a federal judge last month. Arbitration is a method frequently used by companies for resolving legal conflicts outside of the court system.
Uber Technologies Inc.’s message to the judge who was asked to approve its $100 million settlement with drivers last month was clear: take it or leave it. Bloomberg reports there is an escalating game of courtroom brinkmanship, Uber has hit what was an impasse with U.S. District Judge Edward Chen who presides over the federal class action suit pending in San Francisco, its demand that, as part of the deal, he erase his own order intended to protect the ride-hailing company’s drivers.
And indeed Judge Chen rejected the proposed settlement in August. Uber drivers contended in the lawsuit they should be deemed employees and reimbursed for expenses such as gasoline and vehicle maintenance. Those expenses are now borne by the drivers. The proposed settlement would have kept drivers classified as independent contractors. Several drivers who were part of the class filed objections with the court, particularly because the proposed amount was well below the total potential damages in the case of roughly $850 million.
In an order handed down last August in San Francisco, US District Judge Edward Chen said that, despite changes to its policies that Uber was ready to enact, the proposed settlement on the whole "is not fair, adequate, and reasonable." Had it been approved, the agreement would have impacted about 385,000 Uber drivers California and Massachusetts involved in the class-action suit.
The U.S. 9th Circuit Court of Appeals in San Francisco said with Wednesday in the published case of Mohamed v Uber Technologies that drivers who signed up with Uber in 2013 and 2014 must go to arbitration, not the courts, to resolve disputes with the company. Judge Chen previously ruled in the companion classification case that the arbitration agreements were unenforceable and unconscionable. But the appeals panel said Chen lacked the authority to make that call because the contracts require an arbiter to decide "all matters."
The ruling on Wednesday applies directly to two drivers’ challenge of Uber’s background-check practices in a proposed class-action lawsuit. But it could have an effect on dozens of lawsuits across the nation. Uber drivers have used the threat of a class-action lawsuit to extract concessions from the San Francisco company. Having to go to arbitration largely takes the specter of mass litigation off the table.
Now, Uber could drop the settlement talks altogether in the classification case because the appeals court could go on to unwind Chen’s certification of a class of drivers, forcing most of the drivers to individual arbitration. One-one-one fights typically result in smaller benefits for complainants. The class currently includes some 240,000 drivers from California and Massachusetts. If the arbitration agreements are enforced, the class could be reduced to 8,000 people - those who had rejected the arbitration agreements when they joined Uber’s driver roster ...
The Division of Workers’ Compensation (DWC) has posted an order adjusting the Official Medical Fee Schedule (OMFS) to conform to changes in the Medicare payment system as required by Labor Code section 5307.1.
The Physician and Non-Physician Practitioner Fee Schedule update Order adopts the following Medicare changes:
- CMS Medicare National Physician Fee Schedule Relative Value File RVU16D October 1, 2016 quarterly update
- National Correct Coding Initiative Physician/Practitioner Services CCI Edits October 1, 2016 quarterly update
- National Correct Coding Initiative Medically Unlikely Edits October 1, 2016 quarterly update
The order adopting the OMFS adjustments is effective for services rendered on or after October 1, 2016 ...
The Physician and Non-Physician Practitioner Fee Schedule update Order adopts the following Medicare changes:
- CMS Medicare National Physician Fee Schedule Relative Value File RVU16D October 1, 2016 quarterly update
- National Correct Coding Initiative Physician/Practitioner Services CCI Edits October 1, 2016 quarterly update
- National Correct Coding Initiative Medically Unlikely Edits October 1, 2016 quarterly update
The order adopting the OMFS adjustments is effective for services rendered on or after October 1, 2016 ...
The California Insurance Commissioner approved an order agreed to by California Insurance Company (CIC) and Applied Underwriters Captive Risk Assurance Company, Inc. (AUCRA), under which they will stop selling workers' compensation policies that the two Berkshire Hathaway companies used without filing key addendums to the policies (called EquityComp) with the Department of Insurance for the commissioner's review and approval, and will work with the department's actuaries to agree upon fair terms for calculating future claims that would apply to existing EquityComp policies.
The agreement to submit to a cease and desist order was in response to the commissioner's June 28, 2016 notice that a hearing would be held to decide whether CIC and AUCRA should be ordered to cease and desist from issuing new unapproved EquityComp policies.
The order halts the issuance of new EquityComp policies unless and until the commissioner approves them. The order also provides substantial relief under existing EquityComp policies, which includes eliminating punitive requirements for posting collateral, and specifying new, appropriate loss development factors. The order does not affect the ability of any employer to challenge the legality of the EquityComp policies.
Commissioner Jones' action stemmed from his precedential decision that a complex insurance scheme in the Shasta Linen case circumvented regulatory review and cannot be sold in California unless it is filed and approved. Shasta Linen, a small employer, purchased an EquityComp policy from CIC and AUCRA. Shasta Linen brought a case before the commissioner, challenging the legality of the policies.
The commissioner found that the insurance companies issued the policies and rates without his approval, as is required by law. The commissioner also ruled that the companies designed the unusual and complex program with the intent of avoiding the review of insurance regulators.
Among the most troubling features of the EquityComp policy was the imposition of unexpected and greatly excessive collateral requirements upon termination of the employers' policies. The collateral requirements had serious and unexpected consequences for many employers.
The policies also forced an employer who disputed the insurers' decisions to arbitrate their disputes in Tortola, British Virgin Islands, or in other locations outside of California. The expense of a remote arbitration made it unreasonably difficult for employers to challenge the insurers' decisions. The commissioner's order requires CIC/AUCRA to arbitrate disputes with the policyholders in California.
"Insurance companies are required to file rates and terms so we can make sure they are complying with the law," said Commissioner Jones. "These filing requirements were put in place to protect businesses from insurers seeking to take advantage of their market power - for example, the unfiled insurance scheme sold to small business Shasta Linen shifted the risk back to Shasta Linen, had prohibitively expensive renewal and cancellation penalties, and required disputes to be arbitrated in the British Virgin Islands." ...
The agreement to submit to a cease and desist order was in response to the commissioner's June 28, 2016 notice that a hearing would be held to decide whether CIC and AUCRA should be ordered to cease and desist from issuing new unapproved EquityComp policies.
The order halts the issuance of new EquityComp policies unless and until the commissioner approves them. The order also provides substantial relief under existing EquityComp policies, which includes eliminating punitive requirements for posting collateral, and specifying new, appropriate loss development factors. The order does not affect the ability of any employer to challenge the legality of the EquityComp policies.
Commissioner Jones' action stemmed from his precedential decision that a complex insurance scheme in the Shasta Linen case circumvented regulatory review and cannot be sold in California unless it is filed and approved. Shasta Linen, a small employer, purchased an EquityComp policy from CIC and AUCRA. Shasta Linen brought a case before the commissioner, challenging the legality of the policies.
The commissioner found that the insurance companies issued the policies and rates without his approval, as is required by law. The commissioner also ruled that the companies designed the unusual and complex program with the intent of avoiding the review of insurance regulators.
Among the most troubling features of the EquityComp policy was the imposition of unexpected and greatly excessive collateral requirements upon termination of the employers' policies. The collateral requirements had serious and unexpected consequences for many employers.
The policies also forced an employer who disputed the insurers' decisions to arbitrate their disputes in Tortola, British Virgin Islands, or in other locations outside of California. The expense of a remote arbitration made it unreasonably difficult for employers to challenge the insurers' decisions. The commissioner's order requires CIC/AUCRA to arbitrate disputes with the policyholders in California.
"Insurance companies are required to file rates and terms so we can make sure they are complying with the law," said Commissioner Jones. "These filing requirements were put in place to protect businesses from insurers seeking to take advantage of their market power - for example, the unfiled insurance scheme sold to small business Shasta Linen shifted the risk back to Shasta Linen, had prohibitively expensive renewal and cancellation penalties, and required disputes to be arbitrated in the British Virgin Islands." ...
A Rancho Mirage woman who was the executive director of a cosmetic surgery center has been named in a superseding indictment that adds new fraud and identity theft charges to a case in which she is accused of participating in a scheme that billed insurance companies $50 million for cosmetic surgeries that were falsely claimed to be "medically necessary."
Linda Morrow, 64, was named in a 31-count superseding indictment that was returned on August 31 by a federal grand jury. Morrow and her husband, who pleaded guilty earlier this year, were initially charged a year ago with participating in a scheme to defraud health insurance companies by submitting bills for more than $50 million for procedures that were claimed as "medically necessary" - but in fact were cosmetic procedures such as "tummy tucks,"and "nose jobs."
The superseding indictment adds nine new charges against Morrow - three new mail fraud charges, three counts of identity theft and three counts of aggravated identity theft charges. The new indictment expands on forfeiture allegations in the original indictment that would require Morrow, if she is convicted, to forfeit all of the ill-gotten gains obtained from the scheme, a figure that may exceed $20 million.
The superseding indictment outlines a scheme in which patients were lured to The Morrow Institute (TMI) in Rancho Mirage, where Morrow was the executive director, with promises that cosmetic procedures would be paid for by their union or PPO health insurance plans. TMI allegedly submitted bills to insurance companies seeking as much as $100,000 for individual surgeries, and as much as $700,000 for multiple surgeries. The indictment further alleges that some patients who underwent multiple surgeries at TMI suffered severe medical complications from the procedures.
"As part of the scheme charged in this indictment, the defendant allegedly used the names and signatures of patients without their knowledge to obtain payments for procedures that were not covered by insurance," said United States Attorney Eileen M. Decker. "Health care fraud schemes that defraud insurance companies in this manner victimize both the insurers and the insured who are forced to pay higher premiums. This case seeks both to punish the defendants and to deprive them of their illegal profits."
In March, Morrow’s husband - Dr. David M. Morrow, 71, of Rancho Mirage, a cosmetic surgeon and dermatologist who was the owner of TMI - pleaded guilty to conspiracy to commit mail fraud and filing a false tax return. Dr. Morrow agreed to pay more than $1 million in restitution to victims. When he pleaded guilty, Dr. Morrow admitted that he had altered a medical record by handwriting "hernias" over the original text in the document, which had correctly listed the cosmetic procedure of "abdominoplasty" (tummy tuck).
The victim health insurance companies included Anthem Blue Cross, Blue Cross/Blue Shield of California, Blue Cross/Blue Shield of Massachusetts, Regional Employer/Employee Partnership for Benefits, formerly known as Riverside Employer/Employee Partnership (REEP) and Cigna.
The superseding indictment further alleges that after the FBI executed a federal search warrant at TMI in March 2011, Morrow went to the home of a TMI employee and asked whether the employee had been "the mole" who had reported TMI to the FBI.
Dr. Morrow is scheduled to be sentenced by Judge Staton on December 2, at which time he will face a statutory maximum sentence of 23 years in federal prison ...
Linda Morrow, 64, was named in a 31-count superseding indictment that was returned on August 31 by a federal grand jury. Morrow and her husband, who pleaded guilty earlier this year, were initially charged a year ago with participating in a scheme to defraud health insurance companies by submitting bills for more than $50 million for procedures that were claimed as "medically necessary" - but in fact were cosmetic procedures such as "tummy tucks,"and "nose jobs."
The superseding indictment adds nine new charges against Morrow - three new mail fraud charges, three counts of identity theft and three counts of aggravated identity theft charges. The new indictment expands on forfeiture allegations in the original indictment that would require Morrow, if she is convicted, to forfeit all of the ill-gotten gains obtained from the scheme, a figure that may exceed $20 million.
The superseding indictment outlines a scheme in which patients were lured to The Morrow Institute (TMI) in Rancho Mirage, where Morrow was the executive director, with promises that cosmetic procedures would be paid for by their union or PPO health insurance plans. TMI allegedly submitted bills to insurance companies seeking as much as $100,000 for individual surgeries, and as much as $700,000 for multiple surgeries. The indictment further alleges that some patients who underwent multiple surgeries at TMI suffered severe medical complications from the procedures.
"As part of the scheme charged in this indictment, the defendant allegedly used the names and signatures of patients without their knowledge to obtain payments for procedures that were not covered by insurance," said United States Attorney Eileen M. Decker. "Health care fraud schemes that defraud insurance companies in this manner victimize both the insurers and the insured who are forced to pay higher premiums. This case seeks both to punish the defendants and to deprive them of their illegal profits."
In March, Morrow’s husband - Dr. David M. Morrow, 71, of Rancho Mirage, a cosmetic surgeon and dermatologist who was the owner of TMI - pleaded guilty to conspiracy to commit mail fraud and filing a false tax return. Dr. Morrow agreed to pay more than $1 million in restitution to victims. When he pleaded guilty, Dr. Morrow admitted that he had altered a medical record by handwriting "hernias" over the original text in the document, which had correctly listed the cosmetic procedure of "abdominoplasty" (tummy tuck).
The victim health insurance companies included Anthem Blue Cross, Blue Cross/Blue Shield of California, Blue Cross/Blue Shield of Massachusetts, Regional Employer/Employee Partnership for Benefits, formerly known as Riverside Employer/Employee Partnership (REEP) and Cigna.
The superseding indictment further alleges that after the FBI executed a federal search warrant at TMI in March 2011, Morrow went to the home of a TMI employee and asked whether the employee had been "the mole" who had reported TMI to the FBI.
Dr. Morrow is scheduled to be sentenced by Judge Staton on December 2, at which time he will face a statutory maximum sentence of 23 years in federal prison ...
The Racketeer Influenced and Corrupt Organizations Act, commonly referred to as the RICO Act or simply RICO, is a United States federal law that provides for extended criminal penalties and a civil cause of action for acts performed as part of an ongoing criminal organization.In order to prevail in a RICO action, a plaintiff must prove a "predicate offense" one of which is fraud. In addition to the predicate offense, a plaintiff must also prove a "pattern of racketeering activity" which requires a showing of at least two acts of racketeering activity. This second requirement opens the doors to fairly broad discovery rights covering practically any history of a target defendant that might prove a pattern of racketeering, an open ended discovery process. Federal RICO allows a successful plaintiff to recover treble damages, plus attorney fees.
The plaintiffs bar has sought to apply RICO laws as a penalty in workers' compensation claims for at least a decade with mixed results. Conceptually they allege that an employer, carrier or third party administrator concocts a fraudulent scheme that is used over and over to prevent workers from obtaining just benefits.
Plaintiff efforts to succeed at RICO in the federal 6th Circuit (Kentucky, Michigan, Ohio, and Tennessee) ultimately ended in failure. In one the the last tries, a Michigan claimant alleged that employer/carrier defrauded him with "false" medical testimony, and filed federal Racketeer Influenced and Corrupt Organizations Act RICO case, In that case, Brown v. Ajax Paving Industries, 752 F.3d 656 (2014), the United States Court of Appeals for the Sixth Circuit followed the prior ruling in Jackson v. Sedgwick Claims Management Services, a carbon copy of this case, 731 F.3d 556, 558 (6th Cir.2013) (en banc). Essentially in the 6th Circuit, RICO cannot be based on an underlying workers' compensation claim because the court held that "loss or diminution of benefits the plaintiff expects to receive under a workers' compensation scheme does not constitute an injury to 'business or property' under RICO."
The effort to win comp related RICO cases then moved to the 9th Circuit (nine western states including California and Arizona) arguably the most liberal Circuit in the federal system. In Laurie Miller et al. v. York Risk Services Group, nine plaintiffs worked as firefighters or engineers for the Phoenix fire department, and York adjusted the department's workers comp claims. The plaintiffs alleged, in part, that York worked with the City of Phoenix to wrongfully deny or delay their workers comp benefits in violation of the federal RICO Act. York moved to dismiss based partly on the en banc decision from the 6th U.S. Circuit Court of Appeals, which dismissed similar RICO claims against Sedgwick Claims Management Services Inc. That defense did not work in Arizona. Judge Sedwick ruled in 2013 that the employees "possess a property right in their workers compensation benefits under Arizona law," which allows them to have a property interest under RICO law and the case was allowed to proceed. Before the case went to trial, it was settled at the end of 2015. Thus the ruling was not tested in the 9th Circuit Court of Appeals.
Now they have lost another 9th Circuit RICO case this time filed in California.
John Black, and a group of police officers and fire fighters assert a RICO claim in their fourth amended complaint involving the City of Rialto and the City of Stockton, CorVel Enterprises, York Risk Services Group and others. These plaintiffs allege "York, CorVel, and Rialto engaged in a pattern of fraudulently denying and delaying legitimate claims in order to lower the liability of the city, while at the same time maximizing the TPA’s revenues (and allowing the TPA to maintain and obtain contracts with other public entities based on their 'outstanding' financial performance at the expense of public servants)"
At the end of April, the Federal Judge granted the defendant's motion to dismiss the third amended complaint, but gave the plaintiffs leave to amend for the fourth time. And on August 25, the federal judge reviewed the 4th amended complaint and dismissed the case without leave to amend. The decision was based in part upon a determination that a workers' compensation benefit is not a property right subject to RICO, a ruling consistent with the 6th Circuit.
Plaintiffs now have an opportunity to appeal the decision in the 9th Circuit Court of Appeals. Assuming a defense result in that tribunal, this would likely end the effort in the 6th and 9th Circuits, and these plaintiffs will have to go elsewhere.
It will be important to monitor the City of Rialto case until it reaches its ultimate conclusion ...
The plaintiffs bar has sought to apply RICO laws as a penalty in workers' compensation claims for at least a decade with mixed results. Conceptually they allege that an employer, carrier or third party administrator concocts a fraudulent scheme that is used over and over to prevent workers from obtaining just benefits.
Plaintiff efforts to succeed at RICO in the federal 6th Circuit (Kentucky, Michigan, Ohio, and Tennessee) ultimately ended in failure. In one the the last tries, a Michigan claimant alleged that employer/carrier defrauded him with "false" medical testimony, and filed federal Racketeer Influenced and Corrupt Organizations Act RICO case, In that case, Brown v. Ajax Paving Industries, 752 F.3d 656 (2014), the United States Court of Appeals for the Sixth Circuit followed the prior ruling in Jackson v. Sedgwick Claims Management Services, a carbon copy of this case, 731 F.3d 556, 558 (6th Cir.2013) (en banc). Essentially in the 6th Circuit, RICO cannot be based on an underlying workers' compensation claim because the court held that "loss or diminution of benefits the plaintiff expects to receive under a workers' compensation scheme does not constitute an injury to 'business or property' under RICO."
The effort to win comp related RICO cases then moved to the 9th Circuit (nine western states including California and Arizona) arguably the most liberal Circuit in the federal system. In Laurie Miller et al. v. York Risk Services Group, nine plaintiffs worked as firefighters or engineers for the Phoenix fire department, and York adjusted the department's workers comp claims. The plaintiffs alleged, in part, that York worked with the City of Phoenix to wrongfully deny or delay their workers comp benefits in violation of the federal RICO Act. York moved to dismiss based partly on the en banc decision from the 6th U.S. Circuit Court of Appeals, which dismissed similar RICO claims against Sedgwick Claims Management Services Inc. That defense did not work in Arizona. Judge Sedwick ruled in 2013 that the employees "possess a property right in their workers compensation benefits under Arizona law," which allows them to have a property interest under RICO law and the case was allowed to proceed. Before the case went to trial, it was settled at the end of 2015. Thus the ruling was not tested in the 9th Circuit Court of Appeals.
Now they have lost another 9th Circuit RICO case this time filed in California.
John Black, and a group of police officers and fire fighters assert a RICO claim in their fourth amended complaint involving the City of Rialto and the City of Stockton, CorVel Enterprises, York Risk Services Group and others. These plaintiffs allege "York, CorVel, and Rialto engaged in a pattern of fraudulently denying and delaying legitimate claims in order to lower the liability of the city, while at the same time maximizing the TPA’s revenues (and allowing the TPA to maintain and obtain contracts with other public entities based on their 'outstanding' financial performance at the expense of public servants)"
At the end of April, the Federal Judge granted the defendant's motion to dismiss the third amended complaint, but gave the plaintiffs leave to amend for the fourth time. And on August 25, the federal judge reviewed the 4th amended complaint and dismissed the case without leave to amend. The decision was based in part upon a determination that a workers' compensation benefit is not a property right subject to RICO, a ruling consistent with the 6th Circuit.
Plaintiffs now have an opportunity to appeal the decision in the 9th Circuit Court of Appeals. Assuming a defense result in that tribunal, this would likely end the effort in the 6th and 9th Circuits, and these plaintiffs will have to go elsewhere.
It will be important to monitor the City of Rialto case until it reaches its ultimate conclusion ...
After years of anticipation, the US Food and Drug Administration will hold a public, two-day meeting in November to review the extent to which so-called off-label information about medicines may be disseminated to physicians.
Off-label information is regulatory parlance for materials that describe unapproved uses of a drug. Doctors are, in fact, allowed to prescribe a medicine for an unapproved use, but drug makers have long chafed at restrictions on their ability to distribute such information - reprints of medical studies, for example - and have lobbied Congress and the FDA to loosen regulations.
Despite such efforts, the FDA has taken a firm stance toward the issue. A key concern is that public health could be jeopardized if a company were to distribute information about an unapproved use that had not been proven to be safe and effective, a standard for regulatory approval.
The issue became highly contentious, however, after a 2012 ruling by a federal appeals court that overturned the criminal conviction of a Jazz Pharmaceutical sales rep, who was prosecuted for encouraging doctors to prescribe a drug for unapproved uses. The court ruled his speech was protected, since the information was truthful and not misleading.
Since then, drug makers have argued that conveying certain types of information is protected by the First Amendment. The debate accelerated last year when Amarin filed a lawsuit arguing it had the right to off-label marketing, so long as the information provided to doctors is truthful and not misleading. A federal judge agreed with the company and the FDA recently reached a settlement with Amarin.
Throughout these events, the FDA indicated it would issue regulations on off-label marketing and hold a public meeting to review the myriad issues.
However, drug makers and their supporters have grown impatient and fear that various court rulings might become a de facto standard. Last winter, an independent review panel was floated as a way to address the issue. Last May, two lawmakers accused the US Department of Health and Human Services of delaying new rules and issued a draft bill that would allow companies to market products for unapproved uses.
The upcoming meeting, which will be held on Nov. 9 and 10 at FDA offices in Silver Spring, Md., is supposed to give the public a long-awaited chance to convey their opinions and debate the issue. In a notice published Wednesday in the Federal Register, the agency poses several potential questions for which it hopes to receive responses about the pros and cons of off-label marketing.
It’s not clear how long it will take the FDA to issue new regulations.
...
Off-label information is regulatory parlance for materials that describe unapproved uses of a drug. Doctors are, in fact, allowed to prescribe a medicine for an unapproved use, but drug makers have long chafed at restrictions on their ability to distribute such information - reprints of medical studies, for example - and have lobbied Congress and the FDA to loosen regulations.
Despite such efforts, the FDA has taken a firm stance toward the issue. A key concern is that public health could be jeopardized if a company were to distribute information about an unapproved use that had not been proven to be safe and effective, a standard for regulatory approval.
The issue became highly contentious, however, after a 2012 ruling by a federal appeals court that overturned the criminal conviction of a Jazz Pharmaceutical sales rep, who was prosecuted for encouraging doctors to prescribe a drug for unapproved uses. The court ruled his speech was protected, since the information was truthful and not misleading.
Since then, drug makers have argued that conveying certain types of information is protected by the First Amendment. The debate accelerated last year when Amarin filed a lawsuit arguing it had the right to off-label marketing, so long as the information provided to doctors is truthful and not misleading. A federal judge agreed with the company and the FDA recently reached a settlement with Amarin.
Throughout these events, the FDA indicated it would issue regulations on off-label marketing and hold a public meeting to review the myriad issues.
However, drug makers and their supporters have grown impatient and fear that various court rulings might become a de facto standard. Last winter, an independent review panel was floated as a way to address the issue. Last May, two lawmakers accused the US Department of Health and Human Services of delaying new rules and issued a draft bill that would allow companies to market products for unapproved uses.
The upcoming meeting, which will be held on Nov. 9 and 10 at FDA offices in Silver Spring, Md., is supposed to give the public a long-awaited chance to convey their opinions and debate the issue. In a notice published Wednesday in the Federal Register, the agency poses several potential questions for which it hopes to receive responses about the pros and cons of off-label marketing.
It’s not clear how long it will take the FDA to issue new regulations.
...
Physician Naga Raja Thota, a board certified anesthesiologist who works as a pain-control specialist with an office in El Cajon, was arrested and charged with distributing oxycodone and other highly addictive drugs without any legitimate medical purpose in exchange for sex acts. He has been licensed to practice in California since 1994.
The doctor was taken into custody by San Diego Drug Enforcement Administration agents at his place of work.
The criminal complaint said at least two young women received prescriptions for opioids without a legitimate medical purpose on numerous occasions in exchange for sex acts. The complaint also shows a pattern in which sexually-explicit texts are exchanged by the doctor and the women, followed by prescriptions written for them by Thota.
According to the complaint, one victim said she met Thota when she was hospitalized for withdrawal symptoms for Hydrocodone and Alprazolam. Thota agreed to treat her but documented that his treatment was for pain even though this victim did not suffer from any medical condition that caused chronic or ongoing pain. This victim also stated that Thota kept increasing the dosage.
This victim, who was twenty years old when she met Thota, said she felt that if she did not submit to sexual acts with Thota he would not have provided her with additional opioid prescriptions. After being exposed to greater dosage levels of opioids by Thota, the young woman started using an even stronger opioid - heroin.
About a dozen potential new victims have come forward following the arrest according to Amy Roderick of the U.S. Drug Enforcement Administration. Roderick said she could provide no details on those individuals or their allegations
Thota's arrest came at the conclusion of a several-year investigation Officials said he is accused of prescribing the alleged victims, ranging in age from early 20s to early 30s, various narcotics, including hydrocodone, methadone and oxycodone, and using his access to the narcotics a way to pressure them into sex acts.
During his arraignment, Assistant U.S. Attorney Orlando Gutierrez said a 20-year-old patient of Thota's reported that the doctor upped the dosage of a prescription she was taking without telling her and that she felt she couldn't get more of it unless she had sex with the defendant.
Another woman threatened to take allegations of abuse to the DEA, and Thota paid her money not to do so, the prosecutor alleged.
And this is not his first run-in with authorities. In 2014 the California Medical Board accusation claimed that he committed gross negligence in his care and treatment of patients. The specific allegations say he prescribed increasing doses of opiates to patients without any clear positive response. In November 2015 Thota entered into a stipulated settlement and disciplinary order which provided for the revocation of his license, however the revocation was stayed and he was placed on seven years probation with restrictions. He was therefore on probation when this current arrest was made.
"Prescription drug abuse and overdoses have reached alarming levels," said U.S. Attorney Laura Duffy. "We are going after doctors who abuse their power to prescribe and exploit the desperation of addicts for their own gratification."
"Doctors who exploit patients are the worst kind of predators." said DEA San Diego Special Agent in Charge William Sherman. "DEA recognizes the trust the citizens of San Diego place in their doctors. We will continue to ensure that physicians who are abusing that trust by bartering sex for prescriptions will be arrested and prosecuted."
If anyone has information regarding other victims or if you believe you were victimized by Dr. Thota, we urge you to contact DEA at (858) 616-4100 and ask for the Diversion Duty Agent.
Under Title 21, United States Code, Section 841, and Title 21, United States Code of Federal Regulations, Section 1306.04(a), a medical doctor may not prescribe a controlled substance unless there is a legitimate medical purpose ...
The doctor was taken into custody by San Diego Drug Enforcement Administration agents at his place of work.
The criminal complaint said at least two young women received prescriptions for opioids without a legitimate medical purpose on numerous occasions in exchange for sex acts. The complaint also shows a pattern in which sexually-explicit texts are exchanged by the doctor and the women, followed by prescriptions written for them by Thota.
According to the complaint, one victim said she met Thota when she was hospitalized for withdrawal symptoms for Hydrocodone and Alprazolam. Thota agreed to treat her but documented that his treatment was for pain even though this victim did not suffer from any medical condition that caused chronic or ongoing pain. This victim also stated that Thota kept increasing the dosage.
This victim, who was twenty years old when she met Thota, said she felt that if she did not submit to sexual acts with Thota he would not have provided her with additional opioid prescriptions. After being exposed to greater dosage levels of opioids by Thota, the young woman started using an even stronger opioid - heroin.
About a dozen potential new victims have come forward following the arrest according to Amy Roderick of the U.S. Drug Enforcement Administration. Roderick said she could provide no details on those individuals or their allegations
Thota's arrest came at the conclusion of a several-year investigation Officials said he is accused of prescribing the alleged victims, ranging in age from early 20s to early 30s, various narcotics, including hydrocodone, methadone and oxycodone, and using his access to the narcotics a way to pressure them into sex acts.
During his arraignment, Assistant U.S. Attorney Orlando Gutierrez said a 20-year-old patient of Thota's reported that the doctor upped the dosage of a prescription she was taking without telling her and that she felt she couldn't get more of it unless she had sex with the defendant.
Another woman threatened to take allegations of abuse to the DEA, and Thota paid her money not to do so, the prosecutor alleged.
And this is not his first run-in with authorities. In 2014 the California Medical Board accusation claimed that he committed gross negligence in his care and treatment of patients. The specific allegations say he prescribed increasing doses of opiates to patients without any clear positive response. In November 2015 Thota entered into a stipulated settlement and disciplinary order which provided for the revocation of his license, however the revocation was stayed and he was placed on seven years probation with restrictions. He was therefore on probation when this current arrest was made.
"Prescription drug abuse and overdoses have reached alarming levels," said U.S. Attorney Laura Duffy. "We are going after doctors who abuse their power to prescribe and exploit the desperation of addicts for their own gratification."
"Doctors who exploit patients are the worst kind of predators." said DEA San Diego Special Agent in Charge William Sherman. "DEA recognizes the trust the citizens of San Diego place in their doctors. We will continue to ensure that physicians who are abusing that trust by bartering sex for prescriptions will be arrested and prosecuted."
If anyone has information regarding other victims or if you believe you were victimized by Dr. Thota, we urge you to contact DEA at (858) 616-4100 and ask for the Diversion Duty Agent.
Under Title 21, United States Code, Section 841, and Title 21, United States Code of Federal Regulations, Section 1306.04(a), a medical doctor may not prescribe a controlled substance unless there is a legitimate medical purpose ...
An employee for a building remodeling company was sentenced to six months in county jail for cashing in disability checks under the false pretence of being unable to work.
Angel Monzon, 53, Santa Ana, pleaded guilty on Feb. 18, 2015, to one felony count of insurance fraud and two felony counts of making fraudulent statements. He was sentenced to 180 days in Orange County jail and three years of probation. Monzon paid over $25,000 in restitution.
On April 19, 2010, Monzon worked as a granite installer for Fermol Inc. in Huntington Beach. While working, Monzon lost his balance and fell while carrying a large piece of granite, which broke and landed on the defendant’s right thigh and knee. Monzon was placed on temporary total disability (TTD).
Monzon received over $24,000 from TTD benefits. The defendant reported to doctors that he was unable to work as a result of the injuries he suffered and had limited physical abilities.
Despite claiming his injury prevented him from working, Monzon resumed work as a granite installer and collected an income from a new job while illegally continuing to accept disability benefits.
On Aug. 1, 2012, Monzon’s original employer reported to the insurance company that the defendant had resumed working for himself or another company in a similar line of work. The defendant never returned to work for Fermol Inc.
On Jan. 30, 2013, Monzon lied under oath by falsely stating the following in a deposition: claiming to not have worked since the date of the injury; his sole income came from TTD benefits; the last date he worked was on April 11, 2012; not performing any activities involving granite since the date of the injury; not loading or unloading any granite since the date of the injury; not lifting anything over five pounds since the date of the injury; and not using a grinder, sander, or buffer since the date of the injury.
The California Department of Insurance (CDI) began investigating this case after receiving video surveillance footage of the defendant working on manual labor projects similar to those performed prior to his injury. Monzon was paid over $54,000 working for a new business while illegally receiving and cashing disability checks. He was arrested by the Orange County Sheriff’s Department on Aug. 20, 2014.
Deputy District Attorney Pamela Leitao of the Insurance Fraud Unit prosecuted this case ...
Angel Monzon, 53, Santa Ana, pleaded guilty on Feb. 18, 2015, to one felony count of insurance fraud and two felony counts of making fraudulent statements. He was sentenced to 180 days in Orange County jail and three years of probation. Monzon paid over $25,000 in restitution.
On April 19, 2010, Monzon worked as a granite installer for Fermol Inc. in Huntington Beach. While working, Monzon lost his balance and fell while carrying a large piece of granite, which broke and landed on the defendant’s right thigh and knee. Monzon was placed on temporary total disability (TTD).
Monzon received over $24,000 from TTD benefits. The defendant reported to doctors that he was unable to work as a result of the injuries he suffered and had limited physical abilities.
Despite claiming his injury prevented him from working, Monzon resumed work as a granite installer and collected an income from a new job while illegally continuing to accept disability benefits.
On Aug. 1, 2012, Monzon’s original employer reported to the insurance company that the defendant had resumed working for himself or another company in a similar line of work. The defendant never returned to work for Fermol Inc.
On Jan. 30, 2013, Monzon lied under oath by falsely stating the following in a deposition: claiming to not have worked since the date of the injury; his sole income came from TTD benefits; the last date he worked was on April 11, 2012; not performing any activities involving granite since the date of the injury; not loading or unloading any granite since the date of the injury; not lifting anything over five pounds since the date of the injury; and not using a grinder, sander, or buffer since the date of the injury.
The California Department of Insurance (CDI) began investigating this case after receiving video surveillance footage of the defendant working on manual labor projects similar to those performed prior to his injury. Monzon was paid over $54,000 working for a new business while illegally receiving and cashing disability checks. He was arrested by the Orange County Sheriff’s Department on Aug. 20, 2014.
Deputy District Attorney Pamela Leitao of the Insurance Fraud Unit prosecuted this case ...
It seems as though some doctors may be milking their better-insured patients. In fact, a recent study published in JAMA Internal Medicine suggests that more than $750 billion of U.S. health care spending annually represents waste, including approximately $200 billion in overtreatment. Keep in mind, that a person treating under the California workers' compensation system is a "better-insured" patient since they do not have any policy limit and no deductible.
This study examines low-value health care spending among US adults ages 18 to 64 years using data from Optum Clinformatics Datamart of UnitedHealthcare commercial claims for 2011 to 2013.
Data from 2013 insurance claims, which included nearly 1.5 million adults with commercial insurance, showed that just under eight percent of people had received "low-value services," meaning they provided little value to patients given all the costs and alternatives.
The most commonly received low value services included: triiodothyronine measurement in hypothyroidism (1.5%), imaging for nonspecific low back pain (1.3%), and imaging for uncomplicated headache (1.0%). The greatest proportion of spending was for spinal injection for lower-back pain at $12.l million (37.0%), head imaging for uncomplicated headache at $3.6 million (11.0%), and imaging for nonspecific low back pain at $3.1 million (9.4%)
"The important caveat to highlight is, we’re only looking at 28 services. We’re looking at a very small slice, but it can give you a lens on the larger problem," said Rachel Reid, lead author and a policy researcher at RAND Corporation to CNN.
In a previous report published in The National Academies of Sciences - Engineering - Medicine, a study found that the U.S. spends more on healthcare than any other nation. In 2009, health care costs reached $2.5 trillion, nearly 17 percent of the GDP. Yet, despite this spending, health outcomes in the U.S. are considerably below those in other countries.
It was also discovered that low-value spending was less among patients who were older, male, black or Asian, lower income, or enrolled in a Consumer-Directed Health Plan. Regionally, the Southern, Middle Atlantic, and Mountain regions had greater proportionate low-value spending
What happens when a patient asks for a specific test? Should a doctor refuse? "What are you supposed to say - no?" says Dr. Jane Orient, executive director of the Association of American Physicians and Surgeons, to CNN. "Failure to diagnose is one of the most common reasons for filing a lawsuit, so there is a lot of pressure [on doctors], if you think of something, to do it," according to Dr. Orient.
Ideally, the California workers' compensation Utilization Review and Independent Medical Review process will screen for and refuse authorization for low value care. And current and future amendments to the Medical Treatment Utilization Schedule will continue to identify what is considered by evidence based medicine to be low value care ...
This study examines low-value health care spending among US adults ages 18 to 64 years using data from Optum Clinformatics Datamart of UnitedHealthcare commercial claims for 2011 to 2013.
Data from 2013 insurance claims, which included nearly 1.5 million adults with commercial insurance, showed that just under eight percent of people had received "low-value services," meaning they provided little value to patients given all the costs and alternatives.
The most commonly received low value services included: triiodothyronine measurement in hypothyroidism (1.5%), imaging for nonspecific low back pain (1.3%), and imaging for uncomplicated headache (1.0%). The greatest proportion of spending was for spinal injection for lower-back pain at $12.l million (37.0%), head imaging for uncomplicated headache at $3.6 million (11.0%), and imaging for nonspecific low back pain at $3.1 million (9.4%)
"The important caveat to highlight is, we’re only looking at 28 services. We’re looking at a very small slice, but it can give you a lens on the larger problem," said Rachel Reid, lead author and a policy researcher at RAND Corporation to CNN.
In a previous report published in The National Academies of Sciences - Engineering - Medicine, a study found that the U.S. spends more on healthcare than any other nation. In 2009, health care costs reached $2.5 trillion, nearly 17 percent of the GDP. Yet, despite this spending, health outcomes in the U.S. are considerably below those in other countries.
It was also discovered that low-value spending was less among patients who were older, male, black or Asian, lower income, or enrolled in a Consumer-Directed Health Plan. Regionally, the Southern, Middle Atlantic, and Mountain regions had greater proportionate low-value spending
What happens when a patient asks for a specific test? Should a doctor refuse? "What are you supposed to say - no?" says Dr. Jane Orient, executive director of the Association of American Physicians and Surgeons, to CNN. "Failure to diagnose is one of the most common reasons for filing a lawsuit, so there is a lot of pressure [on doctors], if you think of something, to do it," according to Dr. Orient.
Ideally, the California workers' compensation Utilization Review and Independent Medical Review process will screen for and refuse authorization for low value care. And current and future amendments to the Medical Treatment Utilization Schedule will continue to identify what is considered by evidence based medicine to be low value care ...
