Menu Close
Los Angeles budget officials warned, in a January 6 memo, that the City needs to immediately borrow tens of millions of dollars to avoid dipping into its emergency reserve fund after several high-profile lawsuit payouts.

The City Administrative Office recommended that the city borrow $50 million to $70 million to address cases that are part of a "new trend of increased liability payouts."

The City typically budgets $60 million a year for its legal liability fund, but has already paid out $135 million since July 1, when the current fiscal year began.

Recent significant payouts include a $200-million settlement by the Los Angeles City Council over a housing-related lawsuit brought by disabled groups and an $8-million settlement to end lawsuits related to the fatal Los Angeles Police Department shootings of three unarmed men in separate incidents. The $200 million will be paid out over 10 years.

The report recommends issuing Judgment Obligation Bonds to fund these settlements, and warns against dipping into the city’s reserve fund, which is for financial emergencies.

As of November, the reserve fund stood at about $295 million, which the report said is "only precariously above" the minimum amount required under city policy - 5% of the General Fund budget. The recommendation comes after the city paid out $100 million in legal cases last fiscal year, said Assistant City Administrative Officer Ben Ceja. He said the rising expenditures "could be the new normal in terms of paying out cases."

After calling the financial crisis to the attention of City officials, a Second Financial Status Report reported "a potential $52 million expenditure deficit and highlighted risks to revenues totaling $138 million. Since that report, additional information has increased the reported expenditure deficit to up to $80 million, while a new identified shortfall increases the combined revenue risk to $165 million. Therefore, the combined potential deficit currently stands at $245 million."

The Report goes on to state that the "options to resolve this deficit are extremely limited." The deficit is "mostly driven by the liability claims account, human resource benefits account, and recent labor agreements reached with firefighters."

"One significant source of expenditures includes pending resolutions to additional cases being handled by the City Attorney and Conflict Counsel. These payouts are above the $135.5 million identified in the FSR, which already exceeded the Adopted Budget by $67 million. As this Office stated at the time of the adoption of the 2016-17 Budget, potential liabilities above budgeted amounts posed a major risk in 2016-17 that had the potential to exceed the available reserves set aside in the Unappropriated Balance. The City must strive to increase the funding available for liabilities in the upcoming budget process."

In order to borrow the money, the report requests that "the City Attorney to present an amendment to the Los Angeles Administrative Code (Section 11.27) to clarify and expand on the types of settlements that are eligible to be paid with Judgment Obligation Bonds in a manner more consistent with current legal practice, and to provide more procedural flexibility with respect to the timing of certain portions of the issuance process." ...
/ 2017 News, Daily News
The California Department of Insurance released the examination findings and regulatory settlement agreement concerning the cyber security breach of health insurance giant Anthem Inc., which compromised 78.8 million consumers' records. CDI says this "was one of the largest cyber hacks of an insurance company's customer data,"

Anthem agreed to make a number of enhancements to its information security systems, and also agreed to provide credit protection to all consumers whose information was compromised. Anthem is paying more than $260 million dollars for security improvements and remedial actions in response to this breach.

The CDI also said "In this case, our examination team concluded with a significant degree of confidence that the cyber attacker was acting on behalf of a foreign government."

The cyber breach was first discovered by Anthem on January 27, 2015. In early February 2015, Anthem and its affiliates announced the company had suffered a major breach, which compromised 78.8 million consumer records, including records of at least 12 million minors.

An investigation by the insurance commissioners' examination team and a separate internal investigation by Mandiant, an information security firm hired by Anthem, revealed the data breach began on February 18, 2014, when a user within one of Anthem's subsidiaries opened a phishing email containing malicious content. Opening the email permitted the download of malicious files to the user's computer and allowed hackers to gain remote access to that computer and at least 90 other systems within the Anthem enterprise, including Anthem's data warehouse.

The lead insurance commissioners employed an examination team composed of the cybersecurity firm CrowdStrike and Alvarez & Marsal Insurance and Risk Advisory Services, LLC. The team focused its investigation on Anthem's pre-breach response preparedness, the company's response adequacy at the time of the breach, and their post-breach response and corrective actions.

The team found Anthem had taken reasonable measures prior to the data breach to protect its data and employed a remediation plan resulting in a rapid and effective response to the breach once it was discovered. The team noted Anthem's exploitable vulnerabilities, worked with Anthem to develop a plan to address those vulnerabilities, and conducted a penetration test exercise to validate the strength of Anthem's corrective measures. As a result, the team found Anthem's improvements to its cybersecurity protocols and planned improvements were reasonable.

The team determined with a high degree of confidence the identity of the attacker and concluded with a medium degree of confidence that the attacker was acting on behalf of a foreign government. Notably, the exam team also advised that previous attacks associated with this foreign government have not resulted in personal information being transferred to non-state actors.

Within two weeks of discovering the breach and following discussions with the lead states, Anthem hired AllClear ID, a consumer credit protection company, to offer credit protection services to all breach-affected consumers for a two-year period. Additionally, as a result of this multi-state settlement, Anthem has agreed to offer a credit protection solution to all minors who were under age 18 when the security breach occurred. Consumers affected by the breach, including parents of affected minors, are encouraged to visit to learn more about the credit monitoring and identity theft services that Anthem agreed to offer to individuals ...
/ 2017 News, Daily News
Last March, a federal judge in California granted the United States’ motion to dismiss portions of CIGA's complaint regarding Medicare payments, holding that California’s insurance codes are preempted by federal law in the case of California Insurance Guarantee Association v. Sylvia Mathews Burwell, et al., No. 15-cv-1113, C.D. Calif..

CIGA is currently paying several claims in the Burwill case under various workers’ compensation policies issued by now-insolvent insurers. Some of these claimants also received payments from Medicare for items and services that were otherwise covered by these policies. Where Medicare pays benefits for a loss that is also covered by another insurer, the Medicare Secondary Payer statute, 42 U.S.C. § 1395y, designates Medicare as the "secondary payer" and generally requires those other insurance plans (called "primary plans") to reimburse Medicare for all benefits it paid. Concluding that the workers’ compensation policies were "primary plans" within the meaning of the statute, the United States demanded that CIGA reimburse it for the Medicare benefits paid to these claimants. CIGA refused, prompting the United States to commence collection proceedings.

CIGA filed a declaratory and injunctive relief action against Defendants Sylvia Mathews Burwell, United States Department of Health and Human Services, and the Centers for Medicare and Medicaid Services contending that it was not required to reimburse the United States for Medicare benefits paid to individuals whose losses may also be covered by CIGA.

Ultimately, the California District Court for the Central District of California held last March that the McCarran-Ferguson Act did not subject the United States to California’s claims filing deadline because the Act was never intended to waive the federal government’s sovereign immunity. CIGA’s claims against the United States were dismissed to the extent that they were based on the United States’ failure to file timely proofs of claim under California’s Guarantee Act.

But the CIGA litigation in the case continued, and things change.

In the same case, CIGA alleged that CMS calculated its reimbursement liability in a manner that is contrary to the MSP and the implementing regulations, resulting in over-inclusive reimbursement demands. It sought a judicial declaration to that effect, as well as a permanent injunction barring CMS from reapplying the offending practice to future demands against CIGA.

Curiously, CIGA and CMS were ordered into mediation to resolve the dollar value of the CMS obligation and were unsuccessful. At the conclusion, CMS gave up and withdrew its demands in court altogether, hoping to just walk away from CIGA. Ultimately CMS claimed that this rendered CIGA's litigation "moot" and asked that the case be dismissed. CIGA responded that Defendants’ conduct does not make it "absolutely clear" that CMS will never again reopen these claims or reapply the offending practice, which means the case is not moot.

The federal judge agreed that the issue was not moot, and held CMS in the lawsuit to consider CIGA's allegations. It said "Here, the government clearly has not met that burden. Defendants have not changed their practice with respect to reimbursement calculations; rather, they have simply withdrawn their reimbursement demands for the three particular claims at issue in this lawsuit."

CIGA did not dispute that each charge for which CMS sought reimbursement contained at least one diagnosis code that is covered by CIGA’s policies, and CMS did not dispute that each charge also contained codes that were not covered by those policies. Thus, the parties’ arguments center on two main issues: (1) whether CIGA made a prima facie case to CMS that the reimbursement requests were erroneous; and (2) whether the MSP and the implementing regulations support Defendants’ position that CIGA must always fully reimburse CMS for a charge containing one covered code regardless of whatever uncovered codes are also present.

The Court concluded in a January 5 ruling "that if a single charge contains multiple diagnosis codes - some of which relate to a medical condition covered by CIGA’s policy and some of which do not - the presence of one covered code does not ipso facto make CIGA responsible for reimbursing the full amount of the charge. Instead, CMS must consider whether the charge can reasonably be apportioned between covered and uncovered codes or treatments. Upon such consideration, CMS might still conclude that apportioning the charge is unreasonable. In addition, even if the charge should be apportioned, the Court takes no position on how CMS should do so (e.g., pro-rata by covered codes versus uncovered codes, or some other method)"

This is a ruling at the federal district court trial level, and it may very well and likely will be appealed even to the U.S. Supreme Court. However at this point in time, there is a well reasoned opinion in CIGA's favor, and also inures to the benefit of all other California workers' compensation carriers and self insureds ...
/ 2017 News, Daily News
A south Jersey man injured on the job at a lumber company will have his medical marijuana tab paid by his employer's workers compensation insurance, according to a state administrative law judge ruling in what appears to be the first decision of its kind in the state.

Andrew Watson qualified for the state's medicinal marijuana program in 2014 because of a hand injury he suffered while working. Watson bought 2-1/4 ounces of state-sanctioned marijuana in the spring of 2014 but when his employer refused to pay, he stopped using it.

The price of one ounce of cannabis ranges from $425 to $520 for an average of $489 in the Garden State, not counting the 7 percent state sales tax, according to a state Health Department analysis. At those prices, New Jersey's medical pot is the most expensive in the nation. The law does not require insurance to cover the expense.

Administrative Law Judge Ingrid L. French said based on Watson's testimony, "the effects of the marijuana, in many ways, is not as debilitating as the effects of the Percocet. The pharmacy records show that, ultimately (Watson) was able to reduce his use of oral narcotic medication."

"As a result of his improved pain management, he has achieved a greater level of functionality," according to the judge, calling "his approach to his pain management needs (is) cautious, mature and overall he is exceptionally conscientious in managing his pain."

"The evidence presented in these proceedings show that the petitioner's 'trial' use of medicinal marijuana has been successful," French wrote. "While the court is sensitive to the controversy surrounding the medicinal use of marijuana, whether or not it should be prescribed for a patient in a state where it is legal to prescribe it is a medical decision that is within the boundaries of the laws in the state."

Attorney John Carvelli of Mount Laurel who represents the insurance carrier, Gallagher Bassett Services, said his client "respects the court decision." He declined to comment further.

Watson's lawyer, Philip Faccenda said he was "very pleased" with the ruling. He said he didn't know if Watson had resumed participating in the medicinal marijuana program. Watson could not be reached for comment.

Faccenda said was aware of only one other case in New Mexico in which a medical marijuana patient had prevailed in workers compensation dispute.

He stressed the ruling "has not broadened" New Jersey's medical marijuana law, which benefits patients with "a very limited number of conditions and injuries."

John Sarno, who as president and general counsel for the Employers Association of New Jersey often holds seminars on marijuana and the workplace, called the ruling "a straight-forward reading of the law."

Sarno predicted the ruling would have "minimal impact" on employers, given how few employees would be debilitated enough to qualify for both workers' compensation and the state's restrictive medical marijuana program.

"An appeal would raise complex, conflict of law issues between state and federal government, which would be extraordinarily expensive to litigate," he said ...
/ 2017 News, Daily News
The U.S. Department of Justice reports $4.7 billion in settlements and judgments from civil cases involving fraud and false claims during the budget year that ended Sept. 30, an amount much higher than the $3.5 billion reported the prior year. And more than half came from the health care industry, including drug companies, medical device companies, hospitals, nursing homes, laboratories and physicians.

The False Claims Act gives authorities the power to fight alleged fraud in a wide variety of industries receiving federal funds. It also includes financial incentives for whistleblowers to file fraud lawsuits on behalf of the government.

The largest recoveries this past year - $1.2 billion - came from the drug and medical device industry.

Drug manufacturers Wyeth and Pfizer Inc. paid $784.6 million to resolve federal and state claims that Wyeth knowingly reported false and fraudulent prices on two drugs used to treat acid reflux, Protonix Oral and Protonix IV. The government alleged that Wyeth (before it was acquired by Pfizer) failed to report deep discounts available to hospitals, as required by the government to ensure that the Medicaid program enjoyed the same pricing benefits available to the company’s commercial customers. Wyeth paid $413.2 million to the federal government and $371.4 million to state Medicaid programs.

In another settlement against a drug company, Novartis Pharmaceuticals Corp. paid $390 million based on claims that the company gave kickbacks to specialty pharmacies in return for recommending Exjade, an iron chelation drug, and Myfortic, an anti-rejection drug for kidney transplant recipients. The settlement includes $306.9 million for the federal government and $83.1 million for state Medicaid programs.

Hospitals and outpatient clinics accounted for $360 million in recoveries.

Tenet Healthcare Corp., a major hospital chain in the United States, paid $244.2 million to resolve civil allegations that four of its hospitals engaged in a scheme to defraud the United States by paying kickbacks in return for patient referrals. Tenet paid an additional $123.7 million to state Medicaid programs, and two of its subsidiaries pleaded guilty to related charges and forfeited $145 million, bringing the total resolution to $513 million.

In the medical lab arena, Millennium Health (formerly Millennium Laboratories) paid $260 million to settle allegations that it billed Medicare, Medicaid, and other federal health care programs for excessive and unnecessary urine drug and genetic testing and also that it gave free items to induce physicians to refer expensive and profitable lab tests to Millennium, in violation of the Anti-Kickback Statute and Stark Law. The settlement included $214.8 million in alleged false claims against federal programs, $26 million in alleged false claims against state Medicaid programs, and $19.2 million in related administrative claims.

The nation’s largest contract therapy provider paid $125 million to resolve claims that it had induced skilled nursing homes to submit false claims to Medicare for rehabilitation services that were not reasonable, necessary, and skilled, or that weren’t provided at all. The settlement was with RehabCare Group Inc., RehabCare Group East Inc., and their parent, Kindred Healthcare Inc. Cases involving nursing homes and skilled nursing facilities accounted for more than $160 million in settlements and judgments this past fiscal year.

The number of lawsuits filed under the qui tam provisions of the Act has grown significantly since 1986, with 702 qui tam suits filed this past year - an average of 13.5 new cases every week. The growing number of qui tam lawsuits, particularly since 2009, has led to increased recoveries. From January 2009 to the end of fiscal year 2016, the government recovered nearly $24 billion in settlements and judgments related to qui tam suits and paid more than $4 billion in whistleblower awards during the same period ...
/ 2017 News, Daily News
The WCIRB has completed an analysis of allocated loss adjustment expense (ALAE) cost trends in California workers’ compensation. Allocated loss adjustment expense (ALAE) costs are the costs of handling claims that can be attributed to an individual claim.

Loss adjustment expenses (LAE), which represent the cost of administering and settling workers’ compensation claims, are a significant component of advisory pure premium rates developed by the WCIRB. Allocated loss adjustment expenses (ALAE) are the portion of LAE that can be attributed to a particular claim and include the costs related to defending claims when there are disputes over workers’ compensation benefits as well as medical cost containment program costs (MCCP) and other costs such as investigating the compensability of workers’ compensation claims.ALAE levels have historically been much higher in California than in other states.

ALAE costs have increased sharply over the last several years despite implementation of many of the components of Senate Bill No. 863 (SB 863) intended to reduce total loss adjustment expense (or "frictional cost") levels which include ALAE costs. The WCIRB regularly studies the costs underlying the high ALAE in California as well as the factors driving the recent increases in ALAE levels.

The major findings of the report are:

1) Average ALAE cost per claim have increased by more than five-fold in the last 25 years. In addition, despite the implementation of SB 863 in 2013, average ALAE costs have increased by 20% since 2012.

2) California ALAE costs as a percentage of losses are by far the highest of any state and more than twice the countrywide median. Other interstate comparisons suggest that the differences in California ALAE costs are largely related to activities that occur later in the life of a claim.

3) Recent increases in ALAE levels are related to both increases in the frequency of claims involving significant ALAE costs in addition to the average ALAE cost on those claims. Although the majority of claims with significant ALAE costs occur in the Los Angeles Basin area, recent increases in ALAE costs have occurred broadly throughout California.

4) Cumulative injury claims are much more likely to involve significant ALAE costs than non-cumulative injury claims and these types of claims have been growing faster than other types of claims, indicating that the recent growth in cumulative injury claims is likely a key driver of recent increases in ALAE levels.

5) The proportion of claims with significant ALAE costs that have been settled by compromise and release has more than doubled since 2010. Claims settled by compromise and release incur significantly higher ALAE costs than claims closed by other means, suggesting that the recent increases in these types of claims is a factor driving recent increases in ALAE levels.

6) Based on a recent WCIRB claim survey on ALAE costs, a majority of permanent disability claims involve an applicant’s attorney and Workers’ Compensation Appeals Board appearances. In addition, significant portions of permanent disability claims involved depositions, liens, disputes for which no lien had yet been filed (i.e., "pre-liens"), surveillance or investigation costs, or costs of preparing subpoenaed records.

The full report is available in the Research and Analysis section of the WCIRB website ...
/ 2017 News, Daily News
The Division of Workers Compensation (DWC) and the Workers’ Compensation Appeals Board (WCAB) have made changes to lien and attorney fee disclosure statement requirements which went into effect on January 1, 2017. The changes were made to implement provisions of Senate Bill 1160 and Assembly Bill 1244. The changes are as follows:

1) In compliance with SB 1160, DWC has made available an amended lien form which includes the required declaration affirming eligibility under penalty of perjury per newly enacted Labor Code Section 4903.05(c) effective January 1, 2017.

All liens filed after January 1, 2017 must use this new form. The new lien form and the required declaration are now available for all e-filers and JET Filers. All filers that must pay the filing fee are required to fill out the declaration. Liens filed without the declaration will be dismissed.

2) Also available for e-filers and JET Filers is a declaration for all liens filed prior to January 1, 2017 that require a filing fee under Labor Code Section 4903.05, as mandated by SB 1160. The declaration, which must include information on the type of services provided by the lien claimant, must be filed by July 1, 2017.

The Workers’ Compensation Appeals Board (WCAB) has posted new rules on this requirement, and has scheduled a public hearing January 4 on the proposed regulations.

3) SB 1160 also requires that all lien claimants file an original bill with their lien. This is a new requirement that is mandatory for all lien filings as of January 1, 2017.

4) To comply with the new requirements for the attorney fee disclosure statement introduced by AB 1244, DWC has made available a revised attorney fee disclosure statement form in compliance with recently amended Labor Code Section 4906. An amended form with the required information is now posted on DWC’s website ...
/ 2017 News, Daily News
A future in which human workers are replaced by machines is about to become a reality at an insurance company in Japan, where more than 30 employees are being laid off and replaced with an artificial intelligence system that can calculate payouts to policyholders.

Fukoku Mutual Life Insurance believes it will increase productivity by 30% and see a return on its investment in less than two years. The firm said it would save about 140m yen (£1m) a year after the 200m yen (£1.4m) AI system is installed this month. Maintaining it will cost about 15m yen (£100k) a year.

The move is unlikely to be welcomed, however, by 34 employees who will be made redundant by the end of March.

The system is based on IBM’s Watson Explorer, which, according to the tech firm, possesses "cognitive technology that can think like a human", enabling it to "analyse and interpret all of your data, including unstructured text, images, audio and video".

The technology will be able to read tens of thousands of medical certificates and factor in the length of hospital stays, medical histories and any surgical procedures before calculating payouts, according to Mainichi Shimbun news.

While the use of AI will drastically reduce the time needed to calculate Fukoku Mutual’s payouts - which reportedly totalled 132,000 during the current financial year - the sums will not be paid until they have been approved by a member of staff, the newspaper said.

Japan’s shrinking, ageing population, coupled with its prowess in robot technology, makes it a prime testing ground for AI.

According to a 2015 report by the Nomura Research Institute, nearly half of all jobs in Japan could be performed by robots by 2035.

Dai-Ichi Life Insurance has already introduced a Watson-based system to assess payments - although it has not cut staff numbers - and Japan Post Insurance is interested in introducing a similar setup, the Mainichi said.

Watson is a question answering computer system capable of answering questions posed in natural language, The computer system was specifically developed to answer questions on the quiz show Jeopardy!. In 2011, Watson competed on Jeopardy! against former winners Brad Rutter and Ken Jennings. Watson received the first place prize of $1 million.

In February 2013, IBM announced that Watson software system's first commercial application would be for utilization management decisions in lung cancer treatment at Memorial Sloan Kettering Cancer Center, New York City, in conjunction with health insurance company WellPoint. IBM Watson's former business chief says that 90% of nurses in the field who use Watson now follow its guidance.

On January 9, 2014 IBM announced it was creating a business unit around Watson. IBM Watson Group has headquarters in New York's Silicon Alley and will employ 2,000 people. IBM has invested $1 billion to fund the division. Watson Group will develop three new cloud-delivered services: Watson Discovery Advisor, Watson Engagement Advisor, and Watson Explorer.

Watson analyzes high volumes of data and processes information more like a human than a computer - by understanding natural language, generating hypotheses based on evidence, and learning as it goes ...
/ 2017 News, Daily News
The City of Santa Monica’s costs for workers’ compensation rose sharply last fiscal year, prompting a warning by the City's finance director that a 53 percent increase in funding likely will be needed soon.

According to the report in the Santa Monica Lookout, the City spent approximately $9.3 million on medical treatment and indemnity payments for injured employees in the 2015-2016 fiscal year. That was a 22 percent increase from the previous fiscal year, when the City spent $7.6 million on disabilities, mostly due to the aging of its workforce, especially in its police and fire departments and its bus system.

The City has 564 cases still on its books, a number that Finance Director Gigi Decallaves said has been steady in recent years.

Although the City made some "modest" gains, such as slowing the frequency of claims in some departments, the improvements were "eclipsed" by higher program expenses, such as cash flow, and total liabilities, or the value of all open claims from 1979 forward.The City spent another $10.5 million on those costs in fiscal year 2015-2016, a 19 percent jump from the previous year, Decavalles said.

Worse still, the City’s few spots of good news were "completely over-shadowed" by "substantial growth" in the average cost per claim because of higher permanent and temporary disability expenses, she said.

"Moreover, the City’s claim profile is cause for concern," she said. "A high frequency of continuous trauma-oriented injuries, coupled with an aging workforce, suggests that program costs will continue to rise well into the future." Both temporary and permanent disability cases were the City’s biggest problem.

The report blamed climbing costs for permanent disability expenses on 2012 state legislation (SB 863) that mandated an overall 30 percent hike in the award schedule. It rose 64 percent, from $1.4 million last fiscal year to $2.6 million this year for the City.

Temporary disability costs grew as well, driven by the lengthening amount of time employees of the Fire Department and Big Blue Bus system were granted to recover from injuries. Those cases totaled $3.1 million this fiscal year, a 19 percent hike from last year’s $2.6 million.

But a particularly difficult problem for Santa Monica is the dominance of "cumulative trauma oriented" injuries, which are common among an aging workforce like the City’s.

This fiscal year, the City settled 131 claims for a total of more than $3.2 million - an increase of almost 80 percent from the $1.8 million paid out for 98 settlements last year.

In all, workers’ compensation total liabilities increased to $27.8 million by June 30, 2016, up from $25.7 million a year earlier, an eight percent increase, Decavalles said. Most of increase occurred in the Fire Department, followed by the Police Department and the Big Blue Bus (BBB), she said.

Decavalles called the rising compensation coats during fiscal year 2015-2016 an "adverse experience" that is going to be felt "going forward."

The City’s Workers’ Compensation Self-Insurance Fund for the 2017-2018 year will need to be increased by $7.1 million, or from $13.4 million to $20.5 million -- or 53 percent -- to "maintain an adequate confidence level," the report said.

Santa Monica has approximately 2,200 full-time employees, City officials have said ...
/ 2017 News, Daily News
Retired workers compensation defense attorney, James Callopy died quietly in his home after lung cancer surgery and a subsequent massive infection. He was 75 years of age.

Raised as an only child on Long Island, he had a strong Catholic school education. Jim earned his undergraduate degree in Sociology at St. John's University in Jamaica, N.Y.

He served for 2 years in the Navy followed by time in the reserves.

He was a claim adjuster for Traveler's Insurance for 13 years.

After attending the San Fernando Valley School of Law, he passed the bar and worked in the legal department of Mission Insurance Co.

Next, he was at the law firm of Liebman and Reiner where he became a partner.

Later, with 3 other attorneys, he formed a small workman's compensation firm in Brea, CA. It subsequently became Callopy and Bather. He retired on March 15, 2007.

Jim lived a very full 75 years and was a beloved husband, father and grandfather. He is survived by his wife, Loretta of 53 years, his four children and six grandchildren.

A funeral Mass will be held at Holy Family Cathedral in Orange, CA on January 4, 2017 at 12:10 p.m. Military Honors by the Navy will be presented after the Mass. Private interment will follow with no reception.

In lieu of flowers, donations may be made to the , the Veteran's Association, and Mary's Kitchen in Orange that feeds the homeless ...
/ 2017 News, Daily News
The federal government saw a spike in utilization in the prescription compounding industry that led investigators to an estimated $2 billion in fraud in claims to Tricare nationally beginning in 2013 and running into last year.

Across the country compounding pharmacies were charging as much as $10,000 to $20,000 each for prescriptions and some hired marketers who used Facebook and other social media to target military families, enticing them with inclusion in research studies and telling them of creams and salves that were pain relievers, migraine headache medicines and scar reducers, said Jason Mehta, a Jacksonville-based assistant U.S. attorney for the Middle District of Florida.

The cost to actually compound these creams was often only about 5 percent of the submitted cost, according to the Department of Justice. Compounding pharmacies were making in the range of 90 percent profit on each prescription.

According to the Defense Health Agency that oversees Tricare, costs for compound drugs skyrocketed from $5 million in 2004 to $514 million in 2014. Costs topped $1 billion in the first six months of 2015. Tricare went to Congress for help so the agency could make the payments, and rules were changed to make approvals of compound prescriptions more stringent. The agency was on track to lose $2 billion in 2015 alone until the controls were put in place in May, said George Jones, chief of pharmacy operations at the agency.

And now the promise of criminal prosecutions has materialized. In Arizona, a dozen doctors, pharmacy owners and marketing pros accused of a kickback scheme that prosecutors allege involved a sham medical study used to bilk up to $102 million from the publicly-funded federal health program for military family members.

Federal prosecutors said the scheme involved prescribing "compounded" drugs such as pain, scar and migraine creams to military families covered by Tricare, the federal health insurance program for active-duty and retired military and family members.

There have been at least two other federal probes alleging pharmacies paid kickbacks to doctors who ordered expensive compounded drugs for patients. One involved a California pharmacy that billed the state's worker's compensation program for pricey markups. In another, a Florida doctor was indicted on a charge of taking kickbacks for sending prescriptions, which billed Tricare and Medicare for creams that cost as much as $21,000 for a one-month supply, according to a federal indictment.

The Texas case centered on a Dallas-based company called CMGRX LLC, or Compound Marketing Group. Federal prosecutors allege that the marketing group arranged kickbacks to doctors who prescribed and Tricare-insured patients who purchased drugs from four compounding pharmacies.

Tricare enrollees were paid study "grants" of $250 per month for each prescription they obtained from a partner pharmacy.

"The defendants and their co-conspirators falsely represented that the study was approved by Tricare and that it was designed to evaluate the safety and efficacy of compounded drugs," the indictment stated. "In reality, the PSI study was not approved by Tricare, was not overseen by a qualified physician, epidemiologist or other medical professional, had no control group, and was not designed to gather any useful scientific data relating to the safety or efficacy of any drug."

The indictment alleged that Simmons also recruited an El Paso doctor, William F. Elder-Quintana, who wrote thousands of prescriptions that cost Tricare $96 million through June 2016. Elder-Quintana and other doctors were paid $60 for each pain or scar creme prescription or $30 for each vitamin prescription, the indictment said.

The indictment also alleged that marketing group employees would contact Tricare's pharmacy-benefits consultant, Express Scripts, to find out whether certain drugs were covered. These employees then would adjust the prescriptions to maximize payments from Tricare "without any regard for the medical necessity for the prescriptions."

The indictment accused marketing group employees of sending prefilled prescription forms to Elder-Quintana, who it alleged would sign the prescriptions after a cursory telephone interview with the patient. Other times, marketing group employees would use a stamp with Elder-Quintana's signature to order prescriptions, the indictment stated.
/ 2017 News, Daily News
The Division of Workers’ Compensation (DWC) announced that the 2017 minimum and maximum temporary total disability (TTD) rates increase on January 1, 2017.

The minimum TTD rate will increase from $169.26 to $175.88 and the maximum TTD rate will increase from $1,128.43 to $1,172.57 per week.

Labor Code section 4453(a) (10) requires the rate for TTD be increased by an amount equal to percentage increase in the State Average Weekly Wage (SAWW) as compared to the prior year. The SAWW is defined as the average weekly wage paid to employees covered by unemployment insurance as reported by the U.S. Department of Labor for California for the 12 months ending March 31 in the year preceding the injury. In the 12 months ending March 31, 2016, the SAWW increased from $1,120.67 to $1,164.51—an increase of just under 3.912 percent.

Under Labor Code section 4659(c), workers with a date of injury on or after Jan. 1, 2003 who are receiving life pensions (LP) or permanent total disability (PTD) benefits are also entitled to have their weekly LP or PTD rate adjusted based on the SAWW.

The first quarter 2015 SAWW figures may be verified at the U.S. Department of Labor website, as can the first quarter 2016 SAWW figures ...
/ 2017 News, Daily News