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The Riverside County District Attorney's Office has asked for an arrest warrant against Carlos Valencia, the employer of two men who were fatally electrocuted in March 2016 while pollinating palm trees in Thermal.

A report in the Desert Sun says that an investigation into the deaths of Osvaldo Ceron and Ernesto Hurtado found that Carlos Valencia, owner of Valencia Trimming in La Quinta, misclassified employees to make their jobs appear to be lower risk to his insurance provider and lied about employee pay.

Valencia deprived California's insurance fund for workers' compensation of $100,000 and cost the state more than $35,000 in unreported payroll taxes between 2012 and 2017, the arrest declaration says.

The district attorney filed the felony charges against Valencia, 49, on Dec. 7 with a recommended cash bond of $135,000.

Valencia Trimming employees Ceron and Hurtado were electrocuted while pollinating palm trees at 68600 Harrison Ave. in Thermal on March 12, 2016.

The two men were using a truck with a boom. Hurtado was maneuvering the boom when the bucket carrying both men made contact with a power line, according to the DA, shocking them.

Ceron fell from the bucket to the ground, where he was found dead by a third employee. Hurtado remained in the bucket, which caught fire while the group waited for the power company to shut off the power line. He was electrocuted and burned.

According to the DA, Valencia misreported both pay rate and worker classification to the State Compensation Insurance Fund.

SCIF issued Valencia Trimming an insurance policy effective in 2012. But Valencia "reported his payroll under landscaping and not tree trimming," a classification that lowered Valencia's insurance rate prior to the deaths of Ceron and Hurtado. Valencia later admitted to SCIF that "no landscaping operations are performed" by his business, according to the DA.

Valencia also underreported employee payroll wages to SCIF and to state tax authorities, the declaration says. For example, Valencia told SCIF investigators after the incident that Hurtado had earned $15,000 annually and that Ceron had earned $11,000 annually, but previously reported to SCIF that his business had no payroll wages during periods when one or both men were employees.

SCIF found that Valencia "never reported any payroll wages" to the Employment Development Department, California's largest tax collection agency ...
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/ 2017 News, Daily News
A Lake Elsinore woman, who worked as a teacher in the Los Angeles Unified School District, has been ordered to pay more than $92,000 restitution after pleading guilty to insurance fraud.

Sheila Marie Green, DOB: 8-8-69, was sentenced by Riverside County Superior Court Judge Helios Hernandez on Dec. 7, 2017, to eight years in custody - two years in county jail and six years of mandatory supervision. She was also ordered to pay $92,310 in restitution to three insurance companies.

Pursuant to a plea agreement with the DA’s Office, Green pled guilty on Nov. 29, 2017, to two counts of insurance fraud, Penal Code section 550 (a) (5).

During the years 2013 through 2016, while working as a teacher in the Los Angeles Unified School District (LAUSD), Green submitted claims on several disability insurance policies she had obtained that would pay benefits should she be injured and unable to work.

For each claim, Green forged the signature of a payroll employee with the LAUSD on documents stating, fraudulently, that she was not working.

However, an investigation conducted by investigators with the LAUSD and the Riverside County DA’s Office, showed that Green was working while also receiving disability benefits.

During a search of Green’s vehicle, investigators found copies of the documents with the forged payroll employee’s signature as well as paperwork with numerous "practice" signatures of the LAUSD payroll employee.

The case, RIF1605893, was prosecuted by Deputy District Attorney Matthew Roberts of DA’s Insurance Fraud Team ...
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/ 2017 News, Daily News
The trade group representing U.S. drugmakers said it has a filed a lawsuit to stop California from implementing a law aimed at reining in prescription drug prices.The Pharmaceutical Research and Manufacturers of America (PhRMA) initiated litigation in the United States District Court for the Eastern District of California challenging SB 17, which it alleges is an unprecedented and unconstitutional California law.

SB 17, Hernandez which was signed into law this year, requires pharmaceutical companies to notify health insurers and government health plans at least 60 days before scheduled prescription drug price hikes that would exceed 16 percent over a two-year period and to explain the reasons behind those increases.

In its federal complaint, filed last week, PhRMA argues that SB 17 attempts to dictate national health care policy related to drug prices in violation of the United States Constitution, singles out drug manufacturers as the sole determinant of drug costs despite the significant role many other entities play in the costs patients pay, and will cause market distortions such as drug stockpiling and reduced competition.

PhRMA seeks a declaration from the Court that certain provisions of SB 17 violate the United States Constitution and requests that the Court permanently enjoin the State from implementing or enforcing those provisions of the law. Specifically, the complaint alleges that SB 17 violates:

- the Commerce Clause, which prohibits California from regulating drug pricing beyond the State’s borders;
- the First Amendment, by compelling speech by manufacturers justifying their price changes; and
- the Fourteenth Amendment’s due process clause because the law is unconstitutionally vague.

SB 17 provides that if a manufacturer has increased certain products’ federally defined nationwide list price (wholesale acquisition cost, or WAC) by 16 percent or more cumulatively over the prior two to three calendar years, then that company may not increase the WAC in the current calendar year unless the company first provides registered purchasers and State purchasers with 60 days’ advance notice of the price increase. The WAC is a publicly available national price, not a price specific to California.

PhRMA claims that this law, therefore, expressly saddles the entire country with California’s "misguided drug pricing policy" by imposing restrictions on the national list price of manufacturers’ medicines.

It also alleges that the law also does not address the large rebates and discounts insurance companies and pharmacy benefit managers (PBMs) are receiving and that are not always passed on to patients. Further, the advance notice requirement could incentivize prescription-drug arbitrage by effectively creating a "buying window" for selected entities to stockpile products before price increases go into effect, which in turn could create substantial market distortions.

PhRMA says it recognizes that people have important questions about their medicine costs. That is why PhRMA says it has been convening a conversation called Let’s Talk About Cost that takes a broad look at this complex issue, exploring the slowdown in medicine cost growth, the rising cost of chronic disease, insurance coverage of medicine, the role of middlemen, and what our industry can do to make medicine more affordable for patients.

"In this time of great innovation and advancement in therapies, we understand how important it is for patients to have affordable access to the medicines they need, but SB 17 is not only poorly conceived, it also misses the mark with its myopic focus on manufacturers and provisions that are in clear violation of the Constitution," said James C. Stansel, PhRMA Executive Vice President and General Counsel. "The law creates bureaucracy, thwarts private market competition, and ignores the role of insurers, pharmacy benefit managers and hospitals in what patients pay for their medicines." ...
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/ 2017 News, Daily News
The right to a jury trial is a pillar of America’s justice system, enshrined in the Constitution from a tradition dating back more than 1,000 years. But according to a report in the Wall Street Journal, the problem these days is making sure jurors stay awake.

Last week, federal judges in two New York trials - one involving charges of sanctions evasion, the other concerning allegations of corruption in international soccer - dismissed jurors who were dozing off.

In a typical criminal trial, 12 jurors in a boxed area listen for hours at a time to testimony, with a few breaks and a lunch hour. Some trials last several months.

During jury selection, the judge and lawyers interview prospective jurors to find biases, including questions about hobbies, news sources and other topics. Lawyers say they watch for prospects already napping during jury selection. When lawyers see a slumbering juror, "it is a total blow to the ego," says Sarah Coyne, a former federal prosecutor and now a partner at Weil Gotshal & Manges LLP.

There are no concrete rules for when a judge should dismiss a juror for sleeping. Lawyers say it depends how long they were napping and whether they snoozed through crucial testimony.

In one current trial, Manhattan federal prosecutors are seeking to convince a jury that a Turkish banker is guilty of helping Iran evade U.S. sanctions. The testimony has focused on emails, spreadsheets and wiretapped calls - mostly in Turkish and translated by a live interpreter. The alleged scheme is so complex prosecutors asked one witness to draw the banks and front companies involved on a large sheet of paper. By the end, the witness had drawn a maze of boxes connected by multicolored lines and arrows to indicate the money flow.

One juror was visibly asleep throughout the first week, his head propped in his hand or rolled into his chest. Occasionally, he awoke to sip water or jot notes before resuming his nap. His eyes were closed during much of the government’s most important witness testimony. Late last week, U.S. District Judge Richard Berman dismissed the juror, telling the court he was "really sound asleep - not just dozing." Judge Berman said when the juror was asked during jury selection what he did in his spare time, the juror said sleep. "He seemed like a very nice fellow," Judge Berman added.

In Brooklyn federal court last week, U.S. District Judge Pamela Chen addressed a somnolent juror in the trial of three former South American soccer officials accused of corruption. "And as I am speaking to you, you are yawning," Judge Chen said, telling the juror that he seemed to be asleep and struggling to stay alert. The juror collected his backpack, beanie and glasses and was excused.

Veteran attorneys have strategies to combat lethargy: Ask the judge to take a break before an important witness; place less-exciting testimony in the morning, not during the post-lunch food coma; walk close to the jury box and speak loudly. Judges may make eye contact with a juror next to a sleeper and motion to elbow that person awake. The government and defense are generally careful not to call out a sleeper in open court, to avoid embarrassment and turning the juror against one side.

Former prosecutors say jurors may suffer shock when sitting through a trial for the first time and realizing it is much slower paced than trials on shows such as "Law & Order." "If you’re a criminal-defense lawyer," says Joshua Dubin, a New York jury consultant and defense lawyer, "you pray the jurors fall asleep during the government’s case and wake up during the cross-examination." ...
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/ 2017 News, Daily News
The Division of Workers’ Compensation will implement the new evidence based drug formulary for medical providers treating injured workers beginning January 1, 2018, following final approval by the Office of Administrative Law.

The division will also host two informational webinars for interested parties on the formulary implementation on December 13 and 14.

The drug formulary establishes a list of medications to guide appropriate care for injured workers, emphasizing their health outcomes and helping them return to work while reducing administrative burdens and costs. Its guidelines include measures to prevent the overuse of opioids, powerful painkillers that must be carefully monitored when used to treat work-related injuries and illnesses.

The formulary will be part of the Medical Treatment Utilization Schedule (MTUS), which contains guidelines on treatments for injured workers, and is based on medical treatment guidelines created by the American College of Occupational and Environmental Medicine (ACOEM), published by ReedGroup. The formulary adopts a drug list compiled by DWC, with assistance from ReedGroup/ACOEM, and takes into consideration medications frequently prescribed for occupational injuries and the evidence-based drug recommendations in ACOEM’s guidelines.

The final regulations approved by the Office of Administrative Law implement the adoption of an evidence-based drug formulary as mandated by Assembly Bill 1124 and include:

- Provisions for phased-implementation of the formulary in conjunction with the recently updated evidence-based MTUS treatment guidelines.
- A list of drugs classified as either "exempt" or "non-exempt" with respect to the requirement to obtain prospective utilization review before dispensing.
- Ancillary formulary rules, including rules regarding physician dispensing, generic versus brand name drugs, off-label use, special-fill, peri-operative fill, compounded drugs and access to unlisted drugs.
- Provisions relating to the Pharmacy & Therapeutics Committee.

To inform and educate the public about the adoption and implementation of the MTUS drug formulary, DIR will host an informative online webinar next week. The webinar will focus on the formulary’s regulatory framework and explain the rules that apply to the drug list designations, and how the formulary relates to recent updates of the MTUS guidelines. A demonstration by ReedGroup of the online access to the ACOEM materials and information on how workers’ compensation system participants can obtain a license will also be provided during the webinar.

Please register to attend one of the available sessions of the live webinar: Wednesday, December 13, 10 a.m. PST or Thursday, December 14, 2 p.m. PST. Questions and comments can be emailed to for consideration during the webinar. For those unable to attend one of the listed sessions, the recorded webinar will be posted online for later viewing.

DWC’s website will contain resources related to the implementation of the MTUS Drug Formulary, including sign-ups for upcoming webinars, recorded sessions of prior webinars, guidance updates and information on how to apply to become a member of the Pharmacy & Therapeutics Committee. Please check the website on a regular basis for updates ...
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/ 2017 News, Daily News
Big Pharma is having a Big Tobacco moment. The article in the Claims Journal reports that much like the tobacco litigation over the past 50 years, there is no precedent for the current opioid lawsuits.

But the growing opioid litigation seems to be following in the footsteps of the infamous tobacco litigation. In the 1950s, individual plaintiffs sued tobacco companies alleging negligence in the manufacture of and advertising for cigarettes. Tobacco fought back and prevailed in all of those early lawsuits. A second wave of lawsuits emerged in the 1980s, and plaintiffs found their first victory in the landmark case of Cipollone v. Liggett, although the $400,000 verdict was reversed on appeal. Tobacco successfully argued that smokers knew and knowingly assumed the risks and that federal law governing advertising preempted state laws.

Like the tobacco litigation, suits are now being filed by municipalities, counties, and states, claiming that the dangerous products have cost the government substantial sums of public funds to deal with the consequences of an opioid epidemic that was fueled by the defendants’ acts of placing these highly addictive prescription medications into the stream of commerce and "fraudulent" marketing regarding the safety of these analgesics.

Even insurance companies are waking up to the fact that they have had to pay billions in claim dollars as a direct result of this preventable epidemic. They too are lining up to seek compensation and reimbursement for increased workers’ compensation and health insurance claims costs that could amount to more than $25 billion. Lawyers working the opioid litigation against those responsible for the prescription opioid crisis recognize that billions have been spent unnecessarily by the insurance industry and are looking for insurance companies to join the litigation.

Last months’ issue of Medical Care magazine estimated that the societal cost of the U.S. prescription opioid epidemic tops $80 billion and is growing. Health insurers and workers’ compensation carriers shoulder about one-third of this cost, while only one-fourth of it is borne by the public sector. For employers and workers’ compensation carriers, this means that even employees who don’t fit the stereotype of drug users will struggle with this potentially deadly addiction.

The crisis has led directly to increased workers’ compensation costs. A 2012 report by Lockton Companies concluded that "prescription opioids are presently the number one workers’ compensation problem in terms of controlling the ultimate cost of indemnity losses." The report says that there has never been a more damaging impact on the cost of workers’ compensation claims from a single issue than the abuse of opioid prescriptions for the management of chronic pain. It says that an estimated 55 to 86 percent of all claimants are receiving opioids for chronic pain relief.

A 2012 Hopkins-Accident Research Fund Study determined that employees prescribed even one opioid had average total claims costs four to eight times greater than employees with similar claims who didn’t take opioids. The reasons include increased emergency room visits from overdose, death, addiction treatment, related illness, and abuse and misuse of prescribed drugs. It is estimated that 35 percent of employees receiving long-term opioid pain treatment are addicted.

The increased claims costs of prescription opioids are astronomical. An annual workers’ compensation report from pharmacy benefit managing giant Express Scripts recently noted: "The issue of opioid prescribing becomes even more important in workers’ compensation settings as prolonged opioid use has been shown to be associated with poorer outcomes, longer disability, and higher medical costs for injured workers." In 2002, less than 1 percent of injured California employees were prescribed opioids. By 2011, it was 5 percent and payments for these prescriptions rose from 4 to 18 percent - an astonishing 321 percent increase in payments ...
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/ 2017 News, Daily News
A doctor who operated a medical clinic in Lynwood has been found guilty of drug-trafficking charges after a federal jury found that he issued prescriptions for powerful narcotics and sedatives without a medical purpose for mostly young "patients" who sometimes traveled more than 100 miles to get prescriptions.

Dr. Edward Ridgill, 65, who has residences in Whittier and Newbury Park, was found guilty of 26 felony counts of illegally distributing controlled substances.

The evidence presented during a one-week trial showed that Ridgill illegally prescribed the opioid painkiller hydrocodone, which is often sold under the brand name Norco; alprazolam, best known by the brand name Xanax; and carisoprodol, a muscle relaxer often sold under the brand name Soma.

Prosecutors presented evidence at trial from a California database that tracks prescriptions and "confirms [Ridgill]’s predatory prescribing," according to court documents that describe young "patients" traveling from Victorville, Palmdale and Desert Hot Springs to obtain prescriptions.

The jury heard that, in 2014 alone, Ridgill wrote nearly 9,000 prescriptions, and 95 percent of those prescriptions were for hydrocodone, alprazolam and carisoprodol, typically for the maximum strength. "The combination of these three drugs is the most sought-after drug cocktail on the black market, and one for which there is no legitimate medical purpose," prosecutors said in a court filing.

Jurors in the case heard testimony about undercover DEA operatives who received prescriptions from Ridgill in exchange for cash. According to court documents, the testimony showed that Ridgill’s "initial physical exams were cursory, and far from the type of exam required to justify prescribing high doses of controlled substances."

Law enforcement authorities executed federal search warrants on Ridgill’s residences and medical office in March 2015. At that time, authorities recovered multiple pre-written prescriptions for controlled substances, as well as cash found lining patient files and stuffed in the drawers containing those files, which prosecutors argued demonstrated that Ridgill operated a cash-for-drugs business.

The jury deliberated for about 30 minutes before finding Ridgill guilty of 26 counts of distributing controlled substances outside the course of professional practice and without a legitimate medical purpose. Specifically, Ridgill was convicted of 13 counts of distributing hydrocodone, nine counts of distributing alprazolam, and four counts of distributing carisoprodol.

Ridgill is scheduled to be sentenced on March 19 by United States District Judge S. James Otero. Ridgill faces decades in federal prison, including up to 20 years in prison for six of the counts related to distributing hydrocodone.

This was not his first run-in with the law. He was convicted by a jury in 1998 of the federal crime of mail fraud. State records reflect that "respondent devised a scheme to defraud the Employment Development Department ("EDD") in which he would falsely certify that various individuals were disabled, and hat he had medically examined them prior to reaching such determination,when in fact respondent knew full well those individuals were not disabled."

As a result of the 1998 conviction, his license was revoked, but the revocation was stayed and he was placed on probation for five years. In 2004 the Medical Board granted early relief from his probation. He is currently still licensed to practice.

The current investigation into Ridgill was conducted by the Drug Enforcement Administration’s Tactical Diversion Squad, HIDTA (the Los Angeles High Intensity Drug Trafficking Area), the Los Angeles Police Department, the Torrance Police Department and IRS-Criminal Investigation.
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/ 2017 News, Daily News
The Division of Workers’ Compensation announced the approval of a labor-management "carve-out" agreement between the City of Los Angeles and the Los Angeles Police Protective League.

The agreement covers an estimated 10,000 union members.

Provisions of workers' compensation reform legislation, implemented through Labor Code Sections 3201.5 and 3201.7, allow employers and unions to form a labor-management alternative workers' compensation program also known as a carve-out. A key feature of most carve-outs is an alternative dispute resolution process.

Senate Bill (SB) 983, first provided for carve-outs in the construction industry and closely related industries. Later legislation, Assembly Bill (AB) 749, provided for carve-outs in the aerospace and timber industries, and then SB 228 repealed AB 749 and provided for carve-outs in all other industries in addition to construction, which is still covered by the initial legislation. SB 899, provided that the employer and union may negotiate any aspect of benefit delivery under certain conditions.

There are 57 active labor-management carve-out agreements in California, including 27 that cover public safety unions, 21 in the construction industry, and nine in other industries.

The requirements to participate and the elements required to be in carve-out programs are contained in Labor Code section 3201.5 for the construction industry and Labor Code section 3201.7 for all other industries, as well as California Code of Regulations, title 8, sections 10200-10204.

A carve-out establishes an alternative dispute resolution process that is negotiated by labor and management. Employers and/or unions usually employ and compensate ombudsmen, mediators, and arbitrators in the dispute resolution process. In some cases, employers and/or union members act as ombudsmen and mediators.

Legislative statute requires that an appeals process be maintained in a carve-out. Therefore, the arbitrator’s decision may be appealed to the reconsideration unit of the Workers’ Compensation Appeals Board and, ultimately, to the state courts of appeal.

Reports covering prior years of the program, which has been in force for construction trades since 1993 and for non-construction workforces since 2004, are available on DWC’s website ...
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/ 2017 News, Daily News
A former NBA player known for an infamous on-court punch that nearly killed another player has pleaded guilty to fraudulently taking money meant for an African charity he ran. The Kansas City Star reports that Kermit Washington, who was scheduled to go to trial Monday in U.S. District Court in Kansas City, instead pleaded guilty to two counts of making a false statement in a tax return and one count of aggravated identity theft.

Washington, 66, of Las Vegas, referred professional athletes to San Diego attorney Ronald Jack Mix so that Mix could file workers’ compensation claims in California on behalf of the athletes, according to federal prosecutors. Washington used his position as a regional representative for the National Basketball Players Association to refer clients to Mix.

Mix then agreed to make donations to Washington’s charity, The Sixth Man Foundation, which did business as Project Contact Africa. Washington accepted about $155,000 in donations to his charity, which were actually illegal referral payments from Mix and his law firm, prosecutors said.

Washington then diverted money from the charity’s bank account to pay himself or for personal spending. Washington admitted that he failed to account for this income to the charity on Project Contact Africa’s IRS filings during those years.

Mix, 78, a member of the NFL Hall of Fame, pleaded guilty last year to filing a false tax return. The California State Bar suspended Mix from the practice of law in September 2016 pending the outcome of disciplinary proceeding it filed against him.

Mix made donations ranging ranging from $5,000 to $25,000 for referrals of athletes, some of whom lived in the Western District of Missouri. Mix then claimed those payments as charitable contributions on his individual tax returns from 2010 to 2013.

The case against Washington also involved a Maryland man, Reza Davachi, who was once prosecuted in a separate case in one of the largest software piracy crimes ever handled by U.S. authorities. Washington accepted about $82,000 in contributions to his charity from Davachi, and also diverted those funds from the charity’s bank account to pay himself or for personal spending.

In 1977, Washington was involved in one of the ugliest on-court incidents in NBA history. During a game between the Los Angeles Lakers and Houston Rockets, Washington punched Rudy Tomjanovich, shattering bones in a his face and nearly killing Tomjanovich.

A sentencing date for Washington has not been set ...
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/ 2017 News, Daily News
ESIS®, Inc., Chubb's risk management division, announced a new workers' compensation solution that it says is designed to help streamline the claims process, enabling employers to reduce associated legal costs and helping employees return to work quickly after a work-related incident.

The new advocacy model, ESIS Care(SM), is designed to keep the employee at the center of the claim process, fostering more confidence for employees going through the workers compensation claims process while helping to establish a transparent relationship with the employer.

As part of the ESIS Care solution, both employers and employees have access to a dedicated network of intake, clinical, and claims representatives, alongside specialists known as Care Champions, who are responsible for helping to support both parties throughout the duration of a claim. The company lists the expected outcomes as follows:

- Eliminate perceived barriers within the workers compensation claims process
- Improved return-to-work rate due to ESIS’ continual care and concern for employees, and constant communication and consultative care from day one
- Decrease in litigation rates as a result of fewer instances of employee dissatisfaction or confusion
- Reduced length of treatment and subsequent medical costs on claims
- Partnership and consultation for injured workers resulting in a simplified claims process
- Maximized claim outcomes
- ESIS’ integrated design keeps employees at the center of the claim process, from start to finish
- Promoting additional collaboration and trust helps increase productivity and employee satisfaction

Veronica Cressman, Senior Vice President, ESIS Medical Programs says that "On the employer side, ESIS Care encourages trust on behalf of the employers, ultimately reducing legal involvement and high medical costs often associated with workers compensation issues. For employees, our new advocacy model helps eliminate perceived barriers, increases communication, and provides a customized level of care, while providing more transparency about the process so employees can quickly return to work."

"Increased employee absence, higher loss costs, and gaps in communication can easily occur during the workers compensation claims process and lead to higher litigation rates and employee dissatisfaction, resulting in workforce turnover," said Cressman.

"ESIS Care enables Care Champions to operate as consultative partners for employers and trusted advisors for their employees.

ESIS Care is designed to help clients with their unique program needs, from helping employees understand their treatment and recovery plans, to ensuring employers are aware of the next steps for returning the employee back to work." ...
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/ 2017 News, Daily News
Patriot National Inc., provides technology, outsourcing and underwriting services to the workers' compensation insurance industry with several offices in California.

According to a report in the Insurance Journal, it has announced a plan of reorganization as part of a restructuring support agreement (RSA) with its lenders, Cerberus Business Finance, LLC and its affiliates, and TCW Asset Management Co. LLC., which have agreed to acquire the financially troubled firm.

Under the transaction, announced Nov. 28, Patriot National will be acquired by certain funds and accounts managed by the investment management firms, and its direct and indirect U.S.-based subsidiaries will file voluntary petitions for relief under Chapter 11 of the U.S. Bankruptcy Code.

Cerberus and TCW will convert a portion of their claims under the financing agreement in consideration for 100 percent of the new equity to be issued in Patriot National and the subsidiaries under the plan. All existing equity interests in Patriot National and its subsidiaries will be extinguished, and Patriot National will no longer have any affiliation with its founder and former CEO Steven Mariano, who resigned earlier this year.

The company, headquartered in Fort Lauderdale, Fla., expects the reorganization, which is subject to regulatory approval, will be completed early in the second quarter of 2018.

Patriot National said in a statement that it will "continue to operate its business in the ordinary course and the Chapter 11 filing is not expected to have a meaningful impact on its day-to-day operations."

Patriot National provides general agency services, technology outsourcing, software, specialty underwriting and policyholder services, claims administration services and self-funded health plans to insurance carriers, employers and other clients. While it does not bear underwriting risk, it works with insurance carriers to design workers’ compensation and other multi-line programs that are marketed through more than 4,000 independent retail agencies.

In its announcement, Patriot National said it intends to continue to provide service to all of its carrier customers in accordance with the terms of current agreements. Furthermore, it anticipates all commissions due to brokers who commit to continue their business relationships with Patriot National will be paid "in the ordinary course of business or in full under the [reorganization] Plan," the statement says.

The move is not unexpected after a tumultuous year for the company that came to a head in mid-November with the announcement that its largest workers’ compensation customer, Guaranteed Insurance Co. (GIC), would be placed in receivership by Florida regulators. The companies were mutually owned by Mariano, who resigned from Patriot National last summer. GIC held an estimated 10 percent of Patriot National’s stock and accounted for 60 to 70 percent of its business.

GIC provided alternative market workers’ compensation insurance in 31 states, with 8,600 active polices in force as of Nov. 13, including 1,250 in Florida. Its liquidation was approved by Florida regulators on Monday. Under the liquidation order, all GIC policies are canceled effective Dec. 27, unless otherwise terminated prior to that date.

Another subsidiary, Patriot Underwriters Inc., is a national program administrator that underwrites and services workers’ compensation insurance for insurance companies. Shortly after Florida regulators took over GIC, Patriot National filed a forbearance agreement with the Securities and Exchange Commission that said it would be laying off 250 employees, representing approximately one-third of its workforce.

Another affiliate of Patriot National, Ashmere Insurance Co., announced last week it would be acquired by New York-based Bedrock Insurance Group Holdings. Ashmere is a workers’ compensation insurance carrier licensed in 15 states.
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/ 2017 News, Daily News
Montana has sued OxyContin maker Purdue Pharma LP, withdrawing from a multi-state investigation by attorneys general into opioid manufacturers’ marketing practices and joining a growing list of states that have broken off to pursue individual lawsuits.

Montana Attorney General Tim Fox announced a lawsuit on Monday accusing Purdue of misrepresenting the likelihood that long-term use of painkiller would lead to addiction and of falsely claiming it was safe for treating chronic pain.

The 64 page lawsuit alleges that the violations committed by Purdue for which Attorney General Fox’s office claims in the suit include:

- Misrepresenting the likelihood that long-term use of its drug would lead to addiction;
- Falsely claiming that use of OxyContin would improve overall health quality, and failing to disclose the harmful side effects caused by long-term opioid use;
- Falsely claiming long-term opioid use is safe and effective pain treatment, even though Purdue had no evidence to prove it;
- Telling prescribers that OxyContin works for 12 hours, even though Purdue knew that it did not for many patients, requiring frequent increases in dosage, thus increasing the likelihood of addiction;
- Claiming that its new generation of abuse-deterrence opioids were safer and would prevent abuse and diversion, when Purdue knew that the drugs were still readily abused;
- And falsely claiming that opioids are safer than alternative, non-narcotic treatment.

Purdue in a statement denied the allegations. It has argued its medications are U.S. Food and Drug Administration-approved for long-term use and carry warning labels about their addiction risks.

State attorneys general have been conducting a multistate investigation into whether companies that manufacture and distribute prescription opioids engaged in unlawful practices. Increasingly, some attorneys general have withdrawn from the probe to pursue lawsuits against drugmakers including Purdue, claiming they engaged in deceptive marketing that underplayed opioids’ risks.

Purdue faces lawsuits by at least 11 states besides Montana. It also faces lawsuits by cities and counties nationally and a federal probe by the U.S. Attorney’s Office in Connecticut.

Plaintiffs lawyers involved in the cases have compared them to the litigation by states against the tobacco industry that led to 1998’s $246 billion settlement.

Stamford, Connecticut-based Purdue and three executives pleaded guilty in 2007 to federal charges related to the misbranding of OxyContin and agreed to pay a total of $634.5 million to resolve a U.S. Justice Department probe.That year, Purdue also reached a $19.5 million settlement with 26 states and the District of Columbia. It agreed in 2015 to pay $24 million to resolve a lawsuit by Kentucky.

The current multi-state probe was announced publicly after Ohio Attorney General Mike DeWine withdrew from it and in May sued Purdue, Endo International Plc, Johnson & Johnson, Teva Pharmaceutical Industries Ltd and Allergan Plc.

Purdue in a letter last week urged DeWine to avoid litigation by rejoining the multi-state probe, where officials have said they are exploring if early settlement opportunities exist ...
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/ 2017 News, Daily News
Reserving a claim for lifetime workers' compensation benefits can be tricky business. How do you "guess" a good number for life expectancy? For most of the last several decades, life expectancy has been increasing as a result of new medical discoveries. But now, antibiotic resistance has caused a fall in life expectancy for the first time.

The U.K. Office for National Statistics said that life expectancy in future years has been revised down after the statistics authority said that "less optimistic views" about the future had to be taken into account.

Opinions on "improvements in medical science" had declined, it said, and fears of the "re-emergence of existing diseases and increases in anti-microbial resistance" meant people would not live as long as was previously expected.

The ONS uses predictions about how medicine and science will improve to model how life expectancy will change. Under the projection made in 2010, a baby girl born in 2016 could expect to live 83.7 years. This has now been revised down to 82.9.

Life expectancy for babies born in 2060, the latest year which appears in both models, is now two years shorter than it was in the 2010 data. Baby girls born in that year were previously expected to live to 90.1 - this has now fallen to 88.3.

Baby boys are also set to live less long, with children born in 2016 expected to live to 79.2, instead of 79.9, and those born in 2060 expected to live to 85.7 instead of 86.8.

The expectancies have been revised down before but this is the first time the ONS has said it believes antibiotic resistance plays a part. Experts have repeatedly warned of the dangers of antibiotic resistance, which could cause hundreds of diseases which are currently easily curable to become killers.

Anti-microbial resistance also includes the issue of viruses and funguses becoming resistance to antiviral and antifungal medication. An increasing number of people with HIV have a version of the condition which is resistant to antiretroviral medication.

The World Health Organisation has said that the phenomenon is "one of the biggest threats to global health". Earlier this month it told farmers and the food industry to stop giving the medicines to healthy animals. It is also asking farmers to avoid using the varieties which are seen as the "last line of defence" because they are among the few medicines which treat certain diseases in humans.

According to a paper published earlier this month by the European Consumer Organisation, antibiotic resistance is set to become a bigger killer than cancer by 2050, and routine infections could become deadly in as little as 20 years.
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The Los Angeles Times reported Sunday that CVS Health Corp. plans to buy Aetna Inc. for $69 billion in a blockbuster deal that would further consolidate the U.S. healthcare industry by merging one of the nation’s largest pharmacy chains with a major healthcare insurer.

CVS, which operates 9,700 drugstores and 1,100 walk-in healthcare clinics, agreed to pay $207 a share - $145 in cash and $62 in CVS stock - for Aetna, according to the Washington Post and other media reports that cited unidentified sources Sunday.

Spokespeople for CVS and Aetna, which has 22 million medical members, could not be immediately reached for comment. But rumors of the firms' potential marriage have been circulating for weeks, and both companies repeatedly have declined to comment on the speculation.

For consumers, the merger would be the latest example of how the sale of drugs and other healthcare supplies, patient treatment and medical insurance are being consolidated under one roof.

The deal would enable CVS to expand its range of health services to Aetna's vast membership, with observers suggesting that CVS' storefronts increasingly could offer more local care options by becoming community medical hubs offering primary care and pharmaceuticals.

A CVS-Aetna tie-up also could impact consumers by sparking further consolidation among other major players in the healthcare industry.

For the companies, the merger is seen helping them mine new areas of sales growth and, in the case of CVS, fend off a potential threat to its pharmacy business from e-commerce giant, which is eyeing a move into the pharmaceuticals business.

Adding Aetna's membership to CVS' business - which includes nearly 900 retail locations in California - also could give CVS added leverage in negotiating for lower drug prices with makers of pharmaceuticals, analysts have said.

Aetna, meanwhile, would use the CVS deal to move past its scuttled plans to acquire rival insurer Humana Inc., and to keep pace with UnitedHealth Group, the nation’s largest health insurer.

UnitedHealth has been aggressively expanding into filling prescriptions as a pharmacy benefit manager (PBM), and it owns more than 400 surgery centers and urgent-care clinics and runs medical practices for about 22,000 doctors nationwide.

PBMs negotiate with drug companies for volume discounts and run prescription drug plans for insurers, employers and government agencies. CVS' Caremark unit is among the nation's largest pharmacy benefit managers, but it faces stiff competition in that market from UnitedHealth and others.

But a CVS-Aetna merger would require clearance by federal antitrust regulators and approval is by no means certain. Indeed, Aetna dropped its $34-billion bid for Humana in February after a federal judge blocked it on antitrust grounds.

Still, a combination of CVS and Aetna "would finally meet Aetna's goal of selling itself without the adverse effects on competition that Aetna's failed deal with Humana would have had," analyst Jack Curran of the research firm IBISWorld said in a note last week.

The businesses of CVS and Aetna also have little overlap and thus the merger stands a better chance of being cleared, analyst David Larsen of the investment bank Lerrink Partners said in a recent note.

CVS' revenue last year totaled $178 billion while Aetna's revenue was $63 billion. If the takeover offer is $207 a share, that would be a 14% premium to Aetna's closing price of $181.31 on Friday ...
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A former employee of a Southern California ambulance company and a former employee of a Los Angeles dialysis treatment center both pleaded guilty today to fraud charges for their roles in a fraud scheme that resulted in more than $6.6 million in fraudulent claims to Medicare. Three other individuals charged in the case previously pleaded guilty.

Aharon Aron Krkasharyan, 53, of Los Angeles, California, pleaded guilty in federal court in Los Angeles to one count of conspiracy to commit health care fraud. Maria Espinoza, 47, also of Los Angeles, pleaded guilty to one count of conspiracy to pay and receive kickbacks for health care referrals. U.S. District Judge George H. Wu of the Central District of California accepted the guilty pleas. Krkasharyan is scheduled to be sentenced on March 29, 2018, and Espinoza is scheduled to be sentenced on April 2, 2018.

Krkasharyan was employed as the Quality Improvement Coordinator for Mauran Ambulance Inc., an ambulance transportation company operating in the greater Los Angeles area that provided non-emergency services to Medicare beneficiaries, many of whom were dialysis patients. According to admissions made in connection with his plea, between June 2011 and April 2012, Krkasharyan conspired with other Mauran employees to submit claims to Medicare for ambulance transportation services for individuals who did not need such services. Krkasharyan also admitted that he and his co-conspirators instructed Mauran emergency medical technicians to conceal the patients’ true medical conditions by altering paperwork and creating fraudulent reasons to justify the ambulance services.

Espinoza was an administrative assistant at DaVita Doctors Dialysis of East Los Angeles. As part of her guilty plea, Espinoza admitted that she conspired with an employee of Mauran to receive cash kickbacks in return for referrals of dialysis patients to Mauran for whom Mauran submitted claims to Medicare for non-emergency ambulance transportation services.

Earlier this month, Toros Onik Yeranosian, 55, the former owner of Mauran, and Oxana Loutseiko 57, the former general manager of Mauran, each pleaded guilty before Judge Wu to one count of conspiracy to commit health care fraud for their roles in the fraud scheme. The former Dispatch Supervisor at Mauran, Christian Hernandez, 36, pleaded guilty to one count of conspiracy to commit health care fraud in December 2015.

In connection with his guilty plea, Yeranosian admitted that during the course of the conspiracy, Mauran submitted to Medicare at least $6.6 million in false and fraudulent claims for medically unnecessary transportation services, of which Medicare paid at least $3.1 million. As part of their plea agreements, all five defendants agreed to pay restitution to Medicare.

The case was investigated by the FBI and HHS-OIG, and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Central District of California. Trial Attorneys Alexis D. Gregorian and Jeremy R. Sanders of the Fraud Section are prosecuting the case.

The Fraud Section leads the Medicare Fraud Strike Force. Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged nearly 3,500 defendants who have collectively billed the Medicare program for more than $12.5 billion. In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers ...
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California Attorney General Xavier Becerra alleges that an Anaheim janitorial company servicing more than 80 major retail stores across Southern California paid its 150 workers just $400 a month over the past four years, far below the minimum wage.

In a Los Angeles press conference, Becerra announced a lawsuit against the contractor, One Source Facility Solution, and its chief executive, Dilip Joshi, calling it an "unscrupulous company." One Source’s janitors, the lawsuit notes, clean stores for Ross Dress-for-Less, dd’s Discount, JoAnn’s Fabrics, Burlington Coat Factory and Toys R Us.

The retailers are not charged in the complaint because they contract out their janitorial work to USM, a national company based in Pennsylvania, whose business model is to hire subcontractors to service its clients. The contracting arrangement is common among retailers, protecting them against wage and hour lawsuits, whether from janitors or garment workers - two workforces where government agencies often find widespread violations.

However, Becerra put the major chains on notice. "I hope the retailers who employ the contractors who employ these workers are watching today," he said as television cameras whirred at the press conference. "At the end of the day, we want to go after the employer, but we want everyone to know when someone works at your establishment you have responsibility as well."

One Source and USM did not respond to telephone messages.

According to the lawsuit, One Source also under-reported payroll taxes and provided false payroll information to its workers’ compensation insurance carrier. The suit seeks at least $1 million in back wages for workers and unspecified civil penalties.
One Source paid workers fixed amounts for particular services, whether scrubbing or floor waxing, failed to keep accurate records of hours worked or pay the state minimum wage which has risen from $8 to $10.50 over the four years covered by the lawsuit.

For certain jobs, the complaint alleged, "One Source managers inform employees that the assigned work requires two people and that the employee is responsible for recruiting a partner. The partner is not placed on the payroll or paid separately, and the first employee is expected to split their wages with the recruited employee partner."

Although the state labor commissioner has filed numerous complaints against shady contractors in recent years, it has had trouble collecting back pay and fines as companies frequently go out of business and re-incorporate under different names.

A 2015 law, SB 588, The Fair Day’s Pay Act, tightened enforcement and allowed the labor commissioner to place a lien on the property of employers who refuse to pay a judgement. It also allows them to collect when a business closes and opens a similar company ...
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The case of Saul Zuniga v. Interactive Trucking, Inc.; SCIF involves another challenge to the constitutionality of certain provisions of the IMR process, asserting that the anonymity of the IMR reviewers violates due process and the IMR statute violates the guarantee of right to appellate review.

After successfully appealing an IMR determination and obtaining an order remanding the matter back to IMR for review by a different physician reviewer, Zuniga filed a discovery motion seeking the disclosure of the IMR reviewers’ identities. While the discovery motion was pending, the second IMR decision was issued authorizing additional, but not all, of the prescribed medications. Thereafter, over defendant’s objections, a trial was set on the issue of the disclosure of the IMR physicians’ identities. The Workers’ Compensation Judge issued a decision finding that he could not release the names of the IMR physicians pursuant to Labor Code section 4610.6(f).

Zuniga filed a petition for reconsideration, which was denied. He then filed a petition for writ of review in October 2014 arguing that the anonymity of the IMR reviewers violates due process and that the IMR statutes violate the guaranteed right to appellate review.

SCIF filed its answer arguing: (1) The petitioner lacks standing since he did not exhaust his administrative remedies by filing an appeal of the second determination and therefore the petition for review was premature; (2) the petition failed to name the DWC, which is an indispensable party; (3) the WCJ was correct in finding that he lacked the authority to order the disclosure of the reviewing doctors; and (4) not revealing the reviewers’ identities did not deprive the petitioner of his due process rights.

The briefing in this case was completed in December 2014 and the case remained idle for over a year.

In February 2016, the petition for writ of review was granted in case Saul Zuniga v. Interactive Trucking, Inc.; SCIF California Court of Appeal, First Appellate District, Div. 2, Case No. A143290.

The threshold issue is whether the Board correctly concluded that Labor Code 4610.6(f), which provides in part that "the independent medical review organization shall keep the names of the reviewers confidential in all communications with entities or individuals outside the independent medical review organization," does not deny due process to an injured employee who seeks to obtain medical treatment under Labor Code 4600.

The Court of Appeal has now set the case for oral argument on December 19, 2017 at 1:30 pm. The court made the following request of the parties:

"At oral argument, in addition to any other issues the parties wish to address, the parties should be prepared to address the following: 1. The extent to which the following two cases apply to the facts of this case: Stevens v. Workers' Compensation Appeals Board (2015) 241 Cal.App.4th 1074 and Ramirez v. Workers' Compensation Appeals Board (2017) 10 Cal.App.5th 205. 2. Whether the conflict-of-interest and reporting requirements in Labor Code section 139.5, especially subdivisions (c) through (e) affect the issues in this case."

In effect the Zuniga case challenges the confidentiality provisions of the IMR process so that the identity of the medical reviewer is not known by the litigants. Zuniga claims that this provision limits his ability to investigate the reviewer for bias or other ethical misconduct in support of an IMR appeal. The outcome of this case is not expected to markedly change the IMR system as a whole. Nonetheless, it will no doubt be some time next year before there is a result ...
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The U.S. Food and Drug Administration is aiming to approve drugs based on very early data if the drug shows a possible benefit in terms of survival, the head of the agency told lawmakers at a recent hearing.

Speaking before the House Committee on Energy and Commerce, FDA Commissioner Scott Gottlieb said the agency would approve such drugs quickly and figure out later whether the benefit seen was real or coincidental.

Gottlieb cited the FDA’s "accelerated approval" pathway as a potential blueprint.

Accelerated approval allows the agency to approve drugs based on substitute measures of clinical benefit. For example, cancer drugs that cause tumors to shrink are considered likely to confer a meaningful clinical benefit, such as survival.

The same principal could be applied to drugs which appear to increase survival in a small number of people, Gottlieb said. It could be determined later whether the benefit was statistically significant.

"Even though the observed benefit, in this case, is on a clinical endpoint - an early look at survival - and not a surrogate measure of benefit, we believe using an accelerated approval approach often could be valuable."

He said the agency was also working on a proposal to more quickly approve cancer drugs for additional types of cancer.

Currently, a company with a lung cancer drug would have to conduct randomized clinical trials comparing the drug to a placebo or comparator drug.

The new proposal would allow approval in a second cancer based on a single arm study in which all patients receive the experimental treatment. He said the agency plans to issue guidance clarifying the circumstances in which such an approach would be appropriate ...
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Christine Mendiola worked with mentally ill residents in a locked facility at defendant Crestwood Behavioral Health, Inc. When hired, she understood she would be working with clients who were chronically mentally ill but stable. She alleged however that Crestwood concealed that a large portion of the residents had pending felony charges or significant criminal histories.

On July 11, 2011, Mendiola was working the night shift and monitoring three clients on the patio during a smoke break. One of the clients required "line of sight" observation and Mendiola was the only staff member on the patio (a line of sight observation requires a staff member to be assigned to that particular client and only that client in order to keep an eye on him at all times). Another client (Resident G) became agitated, pacing and yelling in Spanish. When she tried to calm him, he turned his agitation towards her. She tried to call for help on a walkie-talkie, but Resident G knocked it out of her hand. He assaulted her, bashing her head against the cinder blocks and throwing her to the ground. For seven minutes she yelled for help. Finally, she directed another client to call for help on her walkie-talkie. That client pulled Resident G off Mendiola before help came.

Resident G had been admitted to Crestwood under a Murphy conservatorship with pending assault and battery charges. He had been found incompetent to stand trial. Crestwood also knew that Resident G had a history of attacking women. Crestwood allegedly kept this information from staff. Mendiola has been unable to work since the attack.

She brought suit against Crestwood for assault, battery, fraudulent inducement and misrepresentation, unlawful business practices (Bus. & Prof. Code, § 17200), and other claims.

Crestwood moved for summary adjudication as to all claims. It asserted workers’ compensation was the exclusive remedy as to the assault and battery, and there was no triable issue of material fact as to the remaining claims. Crestwood provided documentation that Mendiola had acknowledged in writing that the job required the management of assaultive, disruptive, or suicidal clients.

The trial court found workers’ compensation was the exclusive remedy for the claims of assault and battery. The court denied the motion as to the fraud claim. Focusing on the allegations of Mendiola’s declaration concerning her move to the Dream House, the court found triable issues of fact as to fraudulent inducement. For the same reasons, the court denied summary adjudication of the unfair business practices claim. But later during a motion in limine, the fraud claims were dismissed for lack of subject matter jurisdiction, and Mendiola appealed. The court of appeal affirmed the dismissal in the unpublished case of Mendiola v. Crestwood Behavioral Health.

Whether the exclusive remedy of the workers’ compensation system in California applies to intentional torts, including fraud, is a "complicated" question. Mendiola’s fraud claims are nearly identical to those in Spratley v. Winchell Donut House, Inc. (1987) 188 Cal.App.3d 1408 and are similar to the first claim that was barred in Johns-Manville Products Corp. v. Superior Court (1980) 27 Cal.3d 465, 475-476.

These claims, whether misrepresentation or concealment, all relate to workplace safety, "an issue contemplated by the workers’ compensation statutory scheme” and “a risk reasonably encompassed within the compensation bargain." ...
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Medicare and other insurers pay for urine tests with the expectation that clinics will use the results to detect and curb dangerous abuse. But some doctors have taken no action when patients are caught misusing pharmaceuticals, or taking street drugs such as cocaine or heroin. Federal pain guidelines say doctors should discuss test results with patients and taper medication if necessary.

Medicare and private insurers acknowledge that they lack the resources to routinely verify that doctors who order a high volume of drug-related tests do so to improve patient care, not fatten the bottom line.

"This is a big issue," said Louis Saccoccio, who heads the National Health Care Anti-Fraud Association, a group formed by private insurers and government officials. "There are abusive practices out there."

In nearly a dozen recent criminal cases, prosecutors have cited evidence that doctors supplied opiates to patients with repeated abnormal urine test results.

One such doctor was Alabama pain specialist Shelinder Aggarwal, who billed Medicare and private insurers over $9 million for urine tests solely "because he served to profit," according to prosecutors in Alabama. He pleaded guilty to illegal prescribing and health care fraud. Earlier this year, a judge sentenced him to 15 years in prison.

Theodore Parran, who has served as an expert witness for the federal government, predicted more doctors could face fraud charges, or discipline by state medical licensing boards, over lab testing that appears to be profit-motivated.

"This is certainly on their radar," Parran, a professor of medical education at Case Western Reserve University School of Medicine, said in an interview. Ignoring repeated abnormal urine tests "is bad medicine" that "endangers the safety of the patients and the community."

The Kaiser Hospital News investigation earlier this year found that dozens of pain doctors with their own labs took in $1 million or more in 2015 from Medicare for running urine and, in some cases, genetic drug tests. Some doctors derived at least 80 percent of their Medicare income this way.

Indeed, deciding how often to order these tests, and for which patients and drugs, can be a judgment call. Doctors also sometimes disagree over what action they should take against patients with "dirty" urine: Some doctors kick out drug abusers, while others argue that is unethical. Instead, doctors should counsel these patients and refer them for substance abuse treatment, they say.

Donald White, a spokesman for the U.S. Department of Health and Human Services’ Office of the Inspector General, said if test results are disregarded, "why is the test being ordered in the first place?"

"When abnormal urine drug test results are not acted upon by the physician who ordered the test, it raises concerns not only that the testing itself is not medically reasonable and necessary, but also that the doctor’s treatment of the patient may fall below the standard of care," White said.
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