Chronic pain affects up to 20% of people in developed countries, and represents not only a profound impact on individuals and their families but also a sizeable burden on employers, health care systems, and society in general.

Management of chronic pain varies greatly between nations and even within nations. Literature supports a multidisciplinary approach as the standard of care, although various health care systems may not always support this concept consistently.

A new study published in the Journal of Pain Research evaluates another safe and effective drug-free treatment option for chronic pain sufferers -- spinal cord stimulation (SCS).

Spinal cord stimulation, also known as dorsal column stimulation, uses low-voltage electrical stimulation to the spine to block the feeling of pain, via a small device implanted in the body. The field of neuromodulation for the treatment of pain has developed rapidly since the seminal paper on the electrical inhibition of pain by the stimulation of the dorsal column almost 50 years ago. (Shealy CN, Mortimer JT, Reswick JB. Electrical inhibition of pain by stimulation of the dorsal columns: preliminary clinical report. Anesth Analg. 1967;46(4):489-491)

Patients typically undergo a trial of neuromodulation with an externalized power source and if this trial proves to be positive and compelling, they subsequently have a subcutaneously implantable pulse generator for the long-term therapy.

Spinal cord stimulation technologies are fast advancing, and an update of the literature was much needed. The newest study, authored by an Australian team, looks at recent evidence for safety, efficacy and cost-effectiveness of spinal cord stimulation in back and limb pain.

In recent years, the next phase in the evolution of neuromodulation has become available with the development of dorsal root ganglion (DRG) SCS and the emerging use of two novel advances in stimulation frequencies, being high-frequency SCS (at 10,000 Hz) and burst SCS.14-19 These recent advances have improved the efficacy and expanded the applicability of SCS.

The authors reviewed the scientific evidence from three studies looking at the different routes of spinal cord stimulation: dorsal root ganglion SCS, burst wave form SCS and high frequency 10 (HF10) SCS. They found that the literature supports the use of traditional SCS for chronic pain, and provides high-quality evidence that dorsal root ganglion SCS and HF10 SCS are safe and effective for back and leg chronic pain.

Lead author Paul Verrills from the Metro Pain Group in Melbourne, Australia, thinks the study findings represent "unheralded evidence that we can safely treat back and leg pain using spinal cord stimulation techniques." Most importantly, spinal cord stimulation has relatively few side effects compared to other chronic pain therapies, and reduces the risks of complications.

Verrills goes on to say, "Spinal cord stimulation should now be considered earlier in the treatment continuum and not simply as an end-stage salvage therapy." ...

Cognitive behavioral therapy (CBT) is a treatment alternative for the millions taking opioids for noncancer pain, according to an article in the Journal of Psychiatric Practice.

"Cognitive behavioral therapy is a useful and empirically based method of treatment for pain disorders that can decrease reliance on the excessive use of opiates," write Drs. Muhammad Hassan Majeed of Natchaug Hospital, Mansfield Center, Conn., and Donna M. Sudak of Drexel University College of Medicine, Philadelphia. They discuss evidence supporting the use of CBT to avoid or reduce the use of opioids for chronic pain.

Rising use of opioid medications to treat chronic noncancer pain is a major contributor to the US opioid crisis. But despite the aggressive marketing and prescribing of these powerful painkillers, there has been little change in the amount and severity of pain reported by Americans over the past decade. "There is no evidence that supports the use of opioids for the treatment of chronic pain for more than one year, and chronic use increases the serious risks of misuse, abuse, addiction, overdose, and death," Drs. Majeed and Sudak write.

They believe that CBT is an important alternative to opioids for treatment of chronic pain. The goal of CBT is to help patients change the way they think about and manage their pain. The idea is not that pain (in the absence of tissue damage) "is all in your head" -- but rather that all pain is "in the head." Cognitive behavioral therapy helps patients understand that pain is a stressor and, like other stressors, is something they can adapt to and cope with.

Interventions may include relaxation training, scheduling pleasant activities, cognitive restructuring, and guided exercise -- all in the context of an "empathic and validating" relationship with the therapist. These interventions "have the potential to relieve pain intensity, improve the quality of life, and improve physical and emotional function," according to the authors.

"Therapy helps the patient see that emotional and psychological factors influence perception of pain and behaviors that are associated with having pain," Drs. Majeed and Sudak write. "Therapy...puts in place cognitive and behavioral strategies to help patients cope more successfully."

The authors cite several recent original studies and review articles supporting the effectiveness of CBT and other alternative approaches for chronic pain. Studies suggest that CBT has a "top-down" effect on pain control and perception of painful stimuli. It can also normalize reductions in the brain's gray matter volume, which are thought to result from the effects of chronic stress.

Cognitive behavioral therapy is moderately effective in reducing pain scores, while avoiding or reducing the opioid risks of overuse, addiction, overdose, and death. It can be used as a standalone treatment; in combination with other treatments, including effective non-opioid medications; or as part of efforts to reduce the opioid doses required to control chronic pain.

Unfortunately, CBT and other nondrug treatments are underused due to unfamiliarity, time pressure, patient demands, ease of prescribing medications, and low reimbursement rates. Drs. Majeed and Sudak note that significant investment of resources will be needed to train practitioners and to widely integrate the use of CBT into chronic pain treatment. The authors suggest that the President's Commission on the opioid crisis might fund such training programs as a preventive strategy to curb opioid abuse.

"There is a need for a paradigm shift from a biomedical to a biopsychosocial model for effective pain treatment and prevention of opioid use disorder," Dr. Majeed comments. "Increased use of CBT as an alternative to opioids may help to ease the clinical, financial, and social burden of pain disorders on society." ...

In May 2011, Sim Carlisle Hoffman M.D. was indicted on 884 felony counts alleging healthcare insurance fraud in violation of section 550. Hoffman was the owner of Advanced Professional Imaging (API), Advanced Management Services (AMS), and Better Sleeping Medical Center (BSMC) in Buena Park, and prosecutors accused him of running a "medical mill" for the sole purpose of insurance over-billing without providing any legitimate treatment to patients.

Orange County District Attorney Tony Rackauckas and California Insurance Commissioner Dave Jones originally announced the hundreds and hundreds of charges against Hoffman, BSMC neurologist Dr. Michael Heric of Malibu, Hoffman's administrator Beverly Mitchell of Westlake Village and API billing collector Louis Santillan of Chino Hills.

The 2011 indictment was ultimately dismissed in 2013 on the ground that the prosecution had failed to provide exculpatory evidence to the grand jury.

Rather than proceed by indictment, in January 2014, the prosecutors filed a felony complaint against Hoffman. The complaint alleged 159 counts of insurance fraud. One year and one-half later - after four amendments and two demurrers - the people filed a fifth amended complaint, alleging violations of section 550, subdivision (a)(5) (33 counts), subdivision (a)(6) (135 counts), and subdivision (a)(7) (one count).

The preliminary hearing began on September 1, 2015, and ended on November 23 of that year. The resulting transcript spanned over 2,300 pages. Over 53,000 pages of documentary evidence was submitted. During the preliminary hearing, the complaint was amended again. This final amendment contained 102 counts alleging a violation of section 550, subdivision (a)(6), and one count alleging a violation of subdivision (a)(5). Defendant was held to answer on all 103 counts.

Following the preliminary hearing, prosecutors filed an amended information containing 121 counts: 120 counts of violating section 550, subdivision (a)(6), and one count of violating subdivision (a)(5). the amended information, for each count, included both patient names and references to the preliminary hearing exhibit numbers containing the evidence relevant to the particular offense.

The court overruled a demurrer to several counts, finding notice to be adequate, and concluded the People were permitted to allege multiple acts that form the basis of each count. It cautioned, however, that there was still work to be done before setting a trial date to ensure the defendant had clarity on what he would need to defend against at trial.

In response, Hoffman filed the present petition for a writ of mandate directing the court to sustain the demurrer. The Court of Appeal initially summarily denied the petition. But the California Supreme Court granted review and instructed the Court of Appeal to issue an order to show cause.

The issue is whether an information may allege a single offense in a single count, but describe within that count multiple discrete acts, each of which constitute the charged offense.

The Court of Appeal just concluded this month that the information was proper and denied the writ petition in the published case of Sim Carlisle Hoffman v The Superior Court of Orange County.

Each count alleges a single offense. Any complications, or undue prejudice to defendant, arising from the fact that multiple discrete acts may constitute the charged offense in each count are adequately dealt with by a unanimity instruction at trial, or by other tools at the court’s disposal, such as a severance of counts, or trial continuances where appropriate. A demurrer on these grounds is not the proper vehicle to address defendant’s concerns.

The court correctly overruled the demurrer ...

The County of Santa Clara and the County of Orange brought a California civil lawsuit against various pharmaceutical manufacturers and distributors, including Actavis, Inc., Actavis LLC, Actavis Pharma, Inc., Watson Pharmaceuticals, Inc., Watson Laboratories, Inc., and Watson Pharma, Inc. to seek redress for the costs of the opioid epidemic.

The California Action alleges the companies engaged in a "common, sophisticated, and highly deceptive marketing campaign" designed to expand the market and increase sales of opioid products by promoting them for treating long term chronic, nonacute, and noncancer pain - a purpose for which the companies allegedly knew its opioid products were not suited. The City of Chicago brought a lawsuit in Illinois making essentially the same allegations.

The Chicago Complaint alleges: "The City’s health plans have also paid costs imposed by long term opioid use, abuse, and addiction, such as hospitalizations for opioid overdoses, drug treatment for individuals addicted to opioids, intensive care for infants born addicted to opioids, long-term disability, and more. The City’s workers’ compensation program and health benefit plans have expended approximately $2.4 million on addiction treatment services from May 2013 to May 2015."

Some of the companies purchased general liability policies from The Travelers insurance company, and St.. Paul, The carriers declined to defend the companies. In September 2014, Travelers filed a California lawsuit to obtain a declaration it had no obligation under the St. Paul Polices or the Travelers Policies to defend or indemnify the companies it insured in connection with the California Action or the Chicago Action.

The trial court found that Travelers had no duty under the Policies to defend the insured companies. The court concluded (1) the California Complaint and the Chicago Complaint do not alleged an "accident" as required by the definition of "occurrence" (Travelers Policies) or "event" (St. Paul Policies) to create a duty to defend and (2) the Products Exclusions precluded coverage for Watson’s claims. The court deemed moot the issue whether the California Action or the Chicago Action "seek damages for" or "because of" potentially covered "bodily injury."

The Court of Appeal affirmed in the published case of The Travelers Property Casualty Company of America v Activis Inc., et. al.

The policies cover damages for bodily injury caused by an "accident," a term which has been interpreted to exclude the insured’s deliberate acts unless the injury was caused by some additional, unexpected, independent, and unforeseen happening. The California Action and the Chicago Action do not create a potential for liability for an accident because they are based, and can only be read as being based, on the deliberate and intentional conduct of the companies that produced injuries - including a resurgence in heroin use - that were neither unexpected nor unforeseen.

In addition, all of the injuries allegedly arose out of products or the alleged statements and misrepresentations made about those products, and therefore fall within the products exclusions in the policies ...

A total of 14.4 million beneficiaries of Medicare Part D, which offers Medicare recipients the opportunity to get federally subsidized prescription drug coverage, received at least one prescription for an opioid in 2016 while the Medicare Part D program paid about $4.1 billion to provide them with those drugs, according to a study by the inspector general for the Department of Health and Human Services.

Nationwide, 33 percent of all Medicare Part D beneficiaries got federally funded opioids in 2016. In Alabama, it went as high as 46 percent; in Mississippi, it was 45 percent; and, in Arkansas, it was 44 percent.

The IG’s discovery that 14.4 million Medicare Part D beneficiaries got an opioid prescription in 2016 was cited in a Government Accountability Office report.

'The Centers for Disease Control and Prevention (CDC), reported that from 1999 to 2014 the rate of drug poisoning deaths from prescription opioids nearly quadrupled from 1.4 to 5.1 per 100,000 people,' said the GAO report. 'In addition, the Department of Health and Human Services (HHS) Office of Inspector General (HHS-OIG) reported that 14.4 million people (about one-third) who participate in Medicare Part D received at least one prescription for opioids in 2016, and that Part D spending for opioids in 2016 was almost $4.1 billion."

The inspector general’s report - "Opioids in Medicare Part D: Concerns about Extreme Use and Questionable Prescribing" - was completed in July. "In 2016," said the IG report, "one out of every three beneficiaries received at least one prescription opioid through Medicare Part D."

Some of the Medicare Part D beneficiaries received an opioid prescription only for a short period of time. But others received an opioid on what the IG called "a regular basis" - and some received "high" or "extreme" amounts.Some beneficiaries also appeared to be "doctor shopping" in pursuit of opioids. The IG report stated:

-- "Specifically, 5 million beneficiaries received opioids for 3 months or more in 2016."
-- "A total of 501,008 beneficiaries received high amounts of opioids through Medicare Part D in 2016. This does not include beneficiaries who had cancer or were in hospice care."
-- "A total of 69,563 beneficiaries received extreme amounts of opioids for the entire year, putting them at serious risk of opioid misuse or overdose. Each of these beneficiaries had an average daily MED [morphine equivalent dose] that exceeded 240 mg for the entire year, This extreme amount is more than two and a half times the dose the CDC recommends avoiding for chronic pain patients."
-- "A total of 22,308 beneficiaries appear to be doctor shopping. Each of these beneficiaries received a high amount of opioids - an average daily MED that exceeded 120 mg for at least 3 months - and have four or more prescribers and four or more pharmacies in 2016. Typically, beneficiaries who receive opioids have just one prescriber and one pharmacy."

The IG also report noted that a number of prescribers - including doctors, nurses and physician assistants - also exhibited extraordinary patterns in the opioid prescription they issued to Medicare Part D beneficiaries:

The report recommended that the Centers for Medicare and Medicaid Services: "(1) gather information on the full number of at-risk beneficiaries receiving high doses of opioids, (2) identify providers who prescribe high amounts of opioids, and (3) require plan sponsors to report to CMS on actions related to providers who inappropriately prescribe opioids." ...

Acting U.S. Attorney Duane A. Evans announced that Geoffrey Ricketts, age 48, and Samuel Kim, age 42, both of Porter Ranch, California, were sentenced this month after previously pleading guilty to conspiracy to commit health care fraud.

U.S. District Judge Eldon E. Fallon sentenced Geoffrey Ricketts to to 46 months imprisonment. Samuel Kim was sentenced to 25 months imprisonment. In addition, Geoffrey Ricketts and Samuel Kim owe restitution in the amount of $1,338,210 and $988,593 respectively.

Geoffrey Ricketts, Samuel Kim, along with co-defendants Marla Ricketts and Sunyup Kim were indicted on June 11, 2015, for their direction of a $38 million fraud scheme centering around the distribution of "talking glucose meters" that were not medically needed and were often not even requested.

The defendants operated Care Concepts, LLC, which was based in Metairie and Choice Home Medical Equipment and Supplies (Choice), which was based in Chatsworth, California.

According to court documents, the defendants paid kickbacks to workers at call centers in California and South Carolina, from which operators would cold-call Medicare recipients to convince them to accept talking glucose meters and related supplies. From 2007 through 2015, the defendants caused thousands of claims to be submitted to Medicare through Care Concepts and Choice, virtually all of which were fraudulent.

Marla Ricketts pleaded guilty on January 5, 2017, to conspiracy to commit health care fraud and was sentenced to five years of probation and ordered to pay $39,880.46 in restitution.

Sunyup Kim pleaded guilty on September 7, 2017, to conspiracy to commit health care fraud and was sentenced to twelve months and one day imprisonment, followed by two years of supervised release. Additionally, KIM was ordered to pay $93,927 in restitution.

Acting U.S. Attorney Evans praised the work of the Federal Bureau of Investigation and the Office of Inspector General for the United States Department of Health and Human Services for investigating this matter. Assistant U.S. Attorneys Patrice Harris Sullivan and Jordan Ginsberg were in charge of the prosecution ...

The Division of Workers’ Compensation (DWC) has suspended 21 more medical providers from participating in California’s workers’ compensation system, bringing the total number of providers suspended this year to 73.

DWC Administrative Director George Parisotto issued Orders of Suspension against the following providers:

1) Christopher King of Beverly Hills, owner of medical-billing and medical-management companies, and his wife were the masterminds in a $40 million conspiracy to commit medical insurance fraud along with over two dozen doctors, pharmacists and business owners. More than 13,000 patients and at least 27 insurance carriers were victims in the scheme. King pled guilty in Orange County Superior Court on April 26 to two felony counts of conspiracy to commit medical insurance fraud and felony insurance fraud. King, co-owner of Monarch Medical Group, King Medical Management and One Source Laboratories, recruited doctors and pharmacists to prescribe unnecessary treatment for patients with workers’ compensation insurance.
2) Marisa Schermbeck Nelson of Torrance pled guilty on July 26 in Los Angeles County Superior Court for her involvement in a fraudulent $150 million workers’ compensation insurance billing and capping conspiracy with orthopedic surgeon Munir Uwaydah. Nearly two dozen patients were deceived by Dr. Uwaydah and his staff into undergoing surgeries they were told would be performed by Dr. Uwaydah, but were instead performed by a physician’s assistant who has never attended medical school. These patients were operated on under general anesthesia and without Dr. Uwaydah present in the operating room. The scheme included payments of up to $10,000 a month for illegal referrals.
3) Marlon Songco of Burbank, president of Rehab Dynamics, Inc., pled guilty in federal court on January 8, 2015 for paying illegal kickbacks as part of a Medicare fraud scheme along with co-conspirators Joseff Sales and Danniel Goyena. Department of Industrial Relations Newsline No. 2017-102 Page 2
4) Dolphus Dwayne Pierce II, chiropractor in Lemoore, was found guilty in Kern County Superior Court on January 8, 2016 of conspiracy to commit insurance fraud for billing insurance companies for services that were unnecessary, not rendered or double billed.
5) Julio Diaz, physician in Santa Barbara and Orange Counties, was found guilty in August 2015 on 79 counts of writing prescriptions for narcotics without a legitimate medical purpose.
6) Edward Balbas, physician in Rancho Cucamonga, pled guilty on May 5 in Riverside County Superior Court to two felony counts of insurance fraud for submitting more than 165 fraudulent bills over a three-year period. As part of his plea agreement, Balbas was required to pay multiple insurance companies restitution of over $650,000.
7) Randall William Tonelli, pharmacist in San Mateo, pled guilty in federal court on July 11, 2016 to knowingly offering to sell and trade a prescription drug sample and misbranding drugs for sale with the intent to defraud and mislead. Tonelli surrendered his pharmacist license on October 13, 2016.
8) Candelaria Valdez, medical services provider in Hemet, pled guilty in September 2016 in Riverside Superior Court to misdemeanor battery relating to abuse of a patient.
9) Bennie Johnson, osteopathic physician in Encinitas, had his license revoked by the osteopathic board on March 6. The board determined he had committed repeated acts of gross negligence in his treatment of multiple cancer patients.
10) Helen Chang, physician in San Diego, was disciplined by the Medical Board of California for incompetence and gross negligence in her treatment of a patient. She surrendered her medical certificate on November 1, 2015.
11) Raffiel Arvon Norwood of Rosamond, former vocational nurse, pled guilty in federal court on October 22, 2009 to felony possession of child pornography. Norwood surrendered his medical license on July 7, 2016. He was suspended from the Medi-Cal program last April.
12) Mark Anderson, dentist in Woodland, was found guilty in March 2009 on felony counts of sexual battery.
13) Jerry Tabuyo, operator of a community care facility for the elderly in San Jacinto, pled guilty in January to operating without a license.
14) William Richard Bailey, osteopathic physician in San Diego, had his medical license revoked following conviction for tax evasion in 2016. He was sentenced to more than three years in federal prison and required to pay over $500,000 in restitution and fines.
15) James Francis Murphy of Encinitas, osteopathic physician, was convicted on federal charges of income tax fraud and evasion. He was sentenced to four years in prison commencing on February 24, 2015 and ordered to pay $447,528 in restitution. His medical license was revoked on October 24, 2016.
16) David Anderson, chiropractor in San Diego, pled guilty to mail and income tax fraud in 1997. He was suspended from participation in the Medicare and Medi-Cal programs on September 20, 2001.
17) Robert Craig Taylor, former chiropractor in Los Angeles, was convicted in March 2007 of misdemeanor burglary and identity theft, in September 2007 of felony possession of a controlled substance for sale and grand theft and in December 2007 of receiving stolen property, identity theft and commercial burglary. His chiropractic license was revoked effective October 25, 2009.
18) Matthew Cole, Newport Beach physician, pled guilty December 15, 2015 to federal charges of conspiracy to obtain controlled substances by misrepresentation, fraud, forgery deception and subterfuge. He was barred from participating in the Medi-Cal program following his conviction.
19) Joanne Benzor, Riverside physician, pled guilty in 2009 to two counts of driving under the influence of alcohol. Her medical license was revoked between May 18, 2012 and June 16, 2017, at which time it was reinstated subject to limitations.
20) Virginia Garrett of Sarasota, Florida, former registered nurse, was convicted on August 20, 2008 in Los Angeles Superior Court for reckless driving while under the influence of alcohol and drugs, with a prior conviction for driving with a blood alcohol content exceeding the legal limit. Her medical license was revoked by the Board of Registered Nursing on January 27, 2012.
21) Kenneth R. Geiger, physician in Sonoma, surrendered his medical license on April 2, 2008 following an evaluation that he suffers from an illness that ...

The relatives of a private contractor killed in last year’s massive Soberanes Fire near Big Sur have given up pursuing their wrongful death lawsuit against the state of California.

Robert Reagan, 35, died after the bulldozer he was operating tipped over down an embankment several days after the epic Monterey County wildfire began in July 2016.

His widow, Morgan Kemple, and two young daughters filed a lawsuit in March, blaming Cal Fire for his death. Their suit sought compensatory damages and claimed that the firefighting agency was negligent in supervising operation of the dozer.

But a Monterey County Superior Court judge dismissed the lawsuit last month after the family decided to end its legal bid.

In court papers, the family’s lawyer, Cyrus Shahriari of Beverly Hills, wrote the suit was being dropped because his clients faced a California law that makes it difficult to win negligence claims against state government on incidents involving firefighting injuries.

The development left one Bay Area expert on employment law shaking her head. "The perverse outcome is that his family has nothing," said Veena Dubal, an associate professor at UC Hastings College of the Law. "It’s a tragic situation."

The company that employed Reagan was not providing its employees with workers’ compensation coverage at the time of the crash, which has made it difficult for his family to receive benefits from his death.

Kemple has not responded to requests for comment about the decision to drop the lawsuit. Last April, she said the lack of workers’ compensation made it tough for her young family to get by.

Separately, Monterey County prosecutors have filed criminal charges against the small firm that employed Reagan, Czirban Concrete Construction. Among the charges is insurance fraud and failure to provide workers’ comp. A preliminary hearing in the case is scheduled for Dec. 14.

California’s Division of Occupational Safety and Health (Cal/OSHA) has fined Czirban tens of thousands of dollars, and the Contractors State License Board has suspended the company’s license.

Word of the Reagan family’s dropped lawsuit comes as state workplace regulators investigate the private contractor that employed a water truck driver killed last month in Napa County while helping battle the Nuns Fire, because it also failed to provide workers’ compensation insurance.

Garrett Paiz, a 38-year-old volunteer firefighter from Noel, Missouri, died Oct. 16 after his truck overturned as he was descending Oakville Grade. The California Highway Patrol is looking into the causes of the crash ...

It what may be characterized as a federal lawsuit pieced together from evidence that exists across existing criminal and civil litigation, 14 AIG related companies seek restitution from nearly 30 named defendants who it claims fraudulently or illegally made claims for payment for providing worker's compensation treatment on cases where AIG entities provided coverage. The 22 page federal lawsuit filed on October 31, 2017 lists the following entities as defendants:

- Healthsmart Pacific, Inc.
- Healthsmart Pacific, Inc. doing business as Pacific Hospital of Long Beach
- Long Beach Pain Center Medical Clinic, Inc. a California Corporation
- International Implants, LLC a California Corporation
- International Implants, LLC formerly known as SI Venture Partners LLC
- Michael D. Drobot, Sr. an individual
- Michael R. Drobot Jr. an individual
- Industrial Pharmacy Management LLC a California Corporation
- Venture Partners, LLC
- Long Beach Prescription Pharmacy a California Corporation
- Coastal Express Pharmacy, Inc. a California Corporation
- Meds Management Group LLC a California Corporation
- Pacific Specialty Physician Management, Inc. a California Corporation
- First Medical Management, Inc. a California Corporation
- Paul Richard Randall an individual
- Platinum Medical Group, Inc. a California Corporation
- Linda Martin an individual
- Daniel Capen an individual
- Daniel Capen, M.D., A Professional Corporation a California Corporation
- Southwestern Orthopedic Medical Corporation a California Corporation, Beneficiary and Heir to the Estate Of Downey Orthopedic Medical Group
- Southwestern Orthopedic Medical Corporation a California Corporation doing business as Channel Islands Orthopedic
- Westlake Surgical Medical Associates, Inc. a California Corporation
- Ismael Silva an individual
- Healthpointe Medical Group, Inc. a California Corporation
- National Intraoperative Monitoring a California Corporation formerly known as West Ocean Union Medical
- Southwest Hospital Development Group, Inc. a former California Corporation
- Starbase, Inc. a California Corporation
- Lokesh S. Tantuwaya an individual
- Dr. Lokesh S. Tantuwaya, M.D., Inc. a California Corporation

What stands out in the AIG lawsuit is its reliance on either admissions filed in plea agreements in other cases made by federally indicted and convicted parties, or the deposition testimony already taken in related cases. In other words much of the evidence relied upon by AIG in their suit was available "in plain sight," in plea agreements or discovery in other litigation. For example the AIG complaint quotes from data in other cases such as the following examples.

Paragraph 47 reads: On February 20, 2014, Drobot, Sr. pleaded guilty and admitted in his plea agreement that a) "Beginning in or around 1998 and continuing through in or around November 2013, he conspired with dozen of doctors, chiropractors, marketers, and others to pay kickbacks in return for those persons to refer thousands of patients to Pacific Hospital for spinal surgeries and other medical services;" b) "To help generate the monies for the kickback payments, defendant used a co-schemer’s company or his own company . . . to fraudulently inflate the price of medical hardware purchased by Pacific Hospital to be used in the spinal surgeries . . . "; and c) "In paying the kickbacks, inflating the medical hardware costs, and submitting the resulting claims for spinal surgeries and medical services, defendant and his co-conspirators acted with the intent to defraud workers’ compensation insurance carriers . . . "

Paragraph 48 reads: Defendant Randall, who pleaded guilty in United States v. Randall, Case No. 12-cr-00023. Randall admitted in his plea agreement that his company, Platinum Medical "paid kickbacks to physicians for referring workers’ compensation patients for toxicology tests."

Paragraph 49 reads: Randall also admitted in a March 9, 2016 deposition that he negotiated contractual agreements between Drobot Sr. and physicians to provide compensation for those doctors performing spinal surgeries at Pacific Hospital. He testified that there were "many" such agreements entered into between Drobot Sr. and doctors for compensation for spine surgeries at Pacific Hospital.

Paragraph 49 reads: In United States v. Linda Martin, Case No. 16-cr-00014. Martin admitted in her plea agreement that she "conspired with Drobot, other hospital employees, dozens of doctors, chiropractors, marketers, and others to pay kickbacks in return for referral of hundreds of patients to Pacific Hospital for spinal surgeries and other medical services paid for primarily through the California Workers’ Compensation System ("SWCS") and the Federal Employees’ Compensation Act ("FECA")."

Paragraph 59 reads: Documents produced by Pacific Hospital Fraud co-conspirators IPM, PSMP and/or International Implants (also referred to as "I2") demonstrate that Capen, either directly or through Capen, M.D., received monthly "reimbursement" in the amount of $10,137.90 from May through September 2008, totaling $50,689.50. By November 2009, International Implants records reflect that "per surgery," Capen was receiving $5,833 as a "monthly payment" and $8,333 as a "management fee." Between January and June 2010, the co-conspirator records demonstrate that Capen performed 32 "Qualifying Fusions" for the Pacific Hospital Fraud, resulting in a $440,000 payment due.

Paragraph 71 reads: According to records produced in another litigation, Tantuwaya had a $70,000 "option" contract dated March 1, 2010, pursuant to which PSPM was to make payments to Tantuwaya "due on the 15th day of each succeeding month until aggregate pmts equal $15,000,000." December 2010 PSPM records list his year-to-date payments as $510,000. January 2012 PSPM records list total payments to Tantuwaya from 2009-2012 as $943,900. December 2012 PSPM records list total payments to Tantuwaya as $1,453,900.

And the allegations continue to show that much evidence is contained in plea agreements signed by perpetrators in criminal cases, and depositions already taken in other civil actions against the same group of perpetrators. In other words the evidence is in "plain sight." It is not that hard any more to piece together the pieces of a puzzle found across a variety of criminal and civil actions that show the big picture needed to prevail in a recovery action by an insurance company ...

The head of the Food and Drug Administration recently warned that the agency will get much more aggressive with drug makers, potentially forcing companies to pull painkillers off the market.

FDA Commissioner Scott Gottlieb addressed the National Press Club in Washington arguing that the current opioid epidemic requires a much more "intrusive" response from federal regulators than previously expected. Gottlieb said that over the past decade the government failed to address the looming crisis, despite being aware of mounting problems concerning opioid addiction. .

The FDA will enact stricter standards for their own product review and approval process, including evaluating if the risks for abuse of the drug outweigh the legal benefits of the product. Popular painkillers previously approved by the FDA can be crushed up for snorting or injection.

"To try to get ahead of it now, I think we need to be willing to take much more dramatic action, be much more potentially intrusive than what we thought we might have to do and what would have been our comfort zone five years ago or 10 years ago," Gottlieb said Friday, according to The Washington Examiner.

For the first time in history, the FDA ordered a drug maker to pull a medication off the market June 8 due to widespread reports of abuse. Endo Pharmaceuticals announced the decision to comply with the FDA request July 6 following an internal review of the drug.

The unprecedented move came in the wake of reports patients were crushing up the pills to inject. Representatives for Endo said they stand by the safety profile of Opana ER and believe the benefits outweigh the risks. They say the pill is safe and effective when administered properly, but will comply and work with the FDA on the issue.

The move reflects the FDA’s new focus on not just the prescribed risks of painkillers, but the risks posed by illegal abuse of the pills.

President Donald Trump declared the opioid epidemic a "public health emergency" Oct. 26, giving states hit hard by opioid addiction flexibility on how they direct federal resources to combat rising drug deaths.

Data from the National Institute on Drug Abuse released Sept. 7 predicts that the addiction epidemic in America will continue to deteriorate, pushing drug deaths to an estimated 71,600 in 2017. If the estimates prove accurate, 2017 will be the second year in a row that drug deaths surpass U.S. casualties from the Vietnam War ...

The Division of Workers’ Compensation has posted an order adopting regulations to update the evidence-based treatment guidelines of the Medical Treatment Utilization Schedule (MTUS).

The updates, effective for medical treatment services rendered on or after December 1, 2017, incorporate by reference the American College of Occupational and Environmental Medicine’s (ACOEM’s) most recent treatment guidelines to the General Approaches, Clinical Topics, and Special Topics sections of the MTUS.

"We are publishing this Administrative Order one month before its effective date to give the public, especially treating physicians and utilization review physicians, thirty days to prepare before these evidence-based updates become effective," said George Parisotto, DWC Administrative Director.

The ACOEM guidelines that are incorporated by reference into the MTUS are:

- Initial Approaches to Treatment Guideline (ACOEM June 30, 2017)
- Opioids Guideline (ACOEM April 20, 2017)
- Chronic Pain Guideline (ACOEM May 15, 2017)
- Ankle and Foot Disorders Guideline (ACOEM September 2015)
- Occupational/Work-Related Asthma Medical Treatment Guideline (ACOEM January 4, 2016)
- Low Back Disorders Guideline (ACOEM February 24, 2016)
- Cervical and Thoracic Spine Disorders Guideline (ACOEM May 27, 2016)
- Elbow Disorders Guideline (ACOEM 2013)
- Eye Disorders Guideline (ACOEM April 1, 2017)
- Hand, Wrist, and Forearm Disorders Guideline (ACOEM June 30, 2016)
- Hip and Groin Guideline (ACOEM May 1, 2011)
- Knee Disorders Guideline (ACOEM October 28, 2015)
- Occupational Interstitial Lung Disease Guideline (ACOEM January 4, 2016)
- Shoulder Disorders Guideline (ACOEM August 1, 2016)

"DWC has incorporated the most recent ACOEM guidelines to ensure the guidelines in the MTUS contain the most recent, state-of-the-art current evidence-based recommendations," said DWC Executive Medical Director Dr. Raymond Meister.

The administrative order consists of the order and two addendum:

1) Addendum one shows the regulatory amendments directly related to the evidence-based updates to the MTUS.
2) Addendum two contains hyperlinks to the updated ACOEM guidelines adopted and incorporated into the MTUS by reference.

Since the ACOEM guidelines contain proprietary content, a commercial license from ReedGroup, the publisher of the ACOEM guidelines, is required when physicians and entities use the MTUS for commercial purposes ...

A new study published in Regional Anesthesia & Pain Medicine, concluded that a minimally invasive procedure called cooled radiofrequency ablation (CRFA) provides better pain reduction and functional improvement compared to steroid injection for patients with osteoarthritis of the knee.

"This study demonstrates that CRFA is an effective long-term therapeutic option for managing pain, and improving physical function and quality of life, for patients suffering from painful knee osteoarthritis when compared with intra-articular steroid injection," according to the clinical trial report by Leonardo Kapural, MD, PhD, of the Center for Clinical Research, Winston-Salem, N.C., and colleagues.

According to a report in Science Daily, knee osteoarthritis is a common and painful condition in older adults. Knee replacement surgery is an established option for patients with advanced osteoarthritis, but is not appropriate for all patients because of age or health status. Even patients who have knee replacement may have ongoing pain, despite a mechanically satisfactory prosthesis. Intra-articular (within the joint) steroid injection is commonly performed, but provides only short-term pain relief. In addition, steroids may have adverse effects on cartilage over time

Dr. Kapural and colleagues evaluated CRFA as an alternative to steroid injection in 151 patients with chronic pain from knee osteoarthritis. The patients had had knee pain for an average of about ten years, with many previous treatments. They were randomly assigned to undergo CRFA or steroid injection.

The noninvasive CRFA procedure uses radiofrequency energy to interrupt pain transmission by a specific nerve (genicular nerve) of the knee. Before the procedure, a local anesthetic nerve block is performed to confirm that numbing the genicular nerve reduces the patient's knee pain. Cooled radiofrequency ablation is performed on an outpatient basis, with local anesthesia and minimal sedation.

Patients undergoing CRFA had significant and lasting reduction in pain scores. From an initial pain score of about 7 on a 10-point scale, pain ratings at one month were about 3 in the CRFA group versus 4 in the steroid group.

With further follow-up, pain scores remained lower in the CRFA group while increasing toward the pre-treatment level in the steroid group. At six months, 74 percent of patients assigned to CRFA had at least a one-half reduction in pain scores, compared to 16 percent of those undergoing steroid injection.

Forty percent of patients in the CRFA group rated their knee function "satisfactory" at six months' follow-up, compared to just three percent of the steroid group. Ninety-one percent of the CRFA group felt their overall health had improved, compared to 24 percent in the steroid group.

Patients undergoing CRFA had greater reduction in the use of conventional, non-opioid pain medications. There was no significant difference in opioids, which were used by a minority of patients in both groups. There were no serious treatment-related adverse events in either group.

The results suggest that CRFA provides "clinically meaningful" pain reduction and functional improvement in patients with knee OA, with better and longer-lasting improvement than steroid injection. Dr. Kapural and colleagues plan longer follow-up to assess outcomes at one year and beyond. They note that pain may return as the treated nerve regenerates; if so, repeating the CRFA procedure is a "reasonable and sensible" option.

The authors note some limitations of their study, including the fact that the results weren't assessed in "blinded" fashion. They also suggest more focused studies to see if CRFA can reduce the need for opioid pain medications. Dr. Kapural and coauthors conclude, "Nonetheless, the findings of this study indicate that CRFA for genicular nerve ablation is superior to a single corticosteroid injection in osteoarthritic subjects for management of knee pain." ...

An attorney representing a majority of 66 counties and cities nationwide that have lawsuits filed against opioid distributors accused of fueling a national drug epidemic has requested the cases be consolidated into a multidistrict litigation and heard before one judge.

The Herald Dispatch reports that a motion filed Sept. 25 with the U.S. Judicial Panel on Multidistrict Litigation, Attorney James C. Peterson said all 66 cases filed in 11 districts nationwide make similar claims, and consolidation would create better cohesion and efficiency as the cases move forward against the "Big Three" distributors - McKesson Corp., Cardinal Health and AmerisourceBergen Drug Corp. Peterson's firm represents clients in 46 of those cases.

Various pill manufacturers are also named in various lawsuits, including Purdue, Teva/Cephalon, Janssen, Endo, Actavis and Mallinckrodt.

The original allegations made by Huntington at the beginning of 2017 started a rippling effect of cases being filed across the nation. Currently, lawsuits are pending in federal courts in West Virginia, Illinois, Alabama, California, Kentucky, Ohio, New Hampshire, Tennessee and Washington.

The cities and counties allege drug firms breached their duty to monitor, detect, investigate, refuse and report suspicious orders of prescription opiates coming into the states over the past several years - a duty the lawsuits claim companies have under the Controlled Substances Act of 1970. The 66 lawsuits claim the businesses were negligent in creating a public nuisance and participated in corrupt practices, Peterson said.

"The economic burden of prescription opioid misuse alone is $78.5 billion a year, including the costs of health care, lost productivity, addiction treatment and criminal justice expenditures." Paul T. Farrell Jr., who represents several counties throughout the country, said the companies had paid millions in fines and had licenses suspended for similar allegations.

Peterson wrote that the federal government has recently fined McKesson a record $150 million for failure to report suspicious orders and Cardinal Health was fined $44 million for similar allegations.

Peterson also pointed to Purdue's agreement to pay approximately $600 million in fines in 2007 for deceptive marketing regarding the addictive nature of OxyContin.

Peterson argued the best location for the cases to be heard would be Ohio because of its central and easily accessible location, underutilized court system and because it is one of the hardest hit areas represented in all the lawsuits. He also wrote the Big Three each maintains facilities or is headquartered in the state. Illinois would also be satisfactory, he wrote.

"As this national calamity continues to unfold, the federal judiciary should respond with a cohesive and efficient judicial methodology, rather than risking inconsistent decisions on pre-trial issues and duplication of efforts in different federal courts," he said.

...

A former resident of Aliso Viejo who submitted fraudulent bills to insurance companies that sought well over $8 million for tests and services that were never performed was just sentenced to 97 months in federal prison.

Michael Mirando, 40, who currently resides in Portland, Oregon, was sentenced by United States District Judge Percy Anderson, who also ordered Mirando to pay just over $3 million in restitution. At the conclusion of the hearing, Judge Anderson - who called the defendant "totally unrepentant" - remanded Mirando into custody.

Following a one-week trial, Mirando was found guilty in May of 15 counts of health care fraud. The federal jury deliberated for less than 30 minutes before issuing its verdicts.

The evidence presented during the trial showed that Mirando - who was an owner of Holter Labs, LLC, which provided cardiac monitoring services using an ambulatory electrocardiography device known as a Holter recorder - defrauded dozens of private insurance companies by submitting millions of dollars in claims for services that were never performed.

Mirando handled most of Holter Lab’s business activities, including purchasing the Holter recorders, advertising, managing the company’s finances, and submitting the medical claims to the patients’ insurance companies. Holter Labs was based in Laguna Niguel until Mirando moved the company to Portland in 2012.

Holter Labs provided the Holter recorder to physicians, who prescribed the devices to monitor patients’ heart rates for one to two days. Mirando then billed the patients’ insurance companies for the prescribed 24- or 48-hour tests, but he also submitted bills for services never ordered - such as 30-day tests - and for services the device could not perform - such as brain scans and oxygen studies.

From 2005 through 2016, Mirando submitted tens of thousands of claims to health insurance companies, some of which were for services legitimately performed. But Mirando also submitted bills "for services that doctors never ordered, patients never received, and that the Holter devices never performed and, in many cases, were incapable of performing," according to documents filed by prosecutors.

The bills submitted to 26 health insurance companies sought approximately $10.3 million, which included approximately $8.4 million for tests that his company’s heart rate monitors never performed and were unable to perform. The victim health insurance companies paid about $3 million on these fraudulent claims.

After Mirando admitted that he purchased his house in Portland with proceeds generated by the fraud scheme, Judge Anderson recently signed a preliminary order of forfeiture for that residence.

The case against Mirando was investigated by the Federal Bureau of Investigation. The case was prosecuted by Assistant United States Attorneys Michael G. Freedman and Katherine A. Rykken of the General Crimes Section ...

In response to Southern California police officers being denied injury benefits for wounds they sustained in the Las Vegas mass-shooting, an Anaheim state assemblyman is proposing legislation to require compensation for officers hurt off duty while responding to out-of-state crimes.

The Orange County Register reports that Assemblyman Tom Daly, D-Anaheim, plans to introduce legislation "to eliminate any ambiguity in the law" after Orange County rejected workers’ compensation claims last week from four of its deputies injured in the Las Vegas shooting.

Daly believes California law already requires cities and counties to pay those benefits. But Orange County counsel Leon Page believes the state’s labor code clearly forbids benefit payments for injuries off-duty officers sustain outside California, while officials in Los Angeles County say state law is vague on the issue.

If Daly’s idea becomes law, it could put taxpayers on the hook for additional bills for long-term medical care and disability payments.

More than 200 California police officers were attending a country music show on Oct. 1 when Stephen Paddock fired into the festival crowd, killing 58 people and wounding more than 500.

During the shooting, many of those officers shifted to police mode even though they were in Las Vegas, helping people to safety, performing CPR and assisting local authorities who were trying to secure the area. Some California officers were shot while responding, and others say they have developed PTSD from the incident.

Since then, jurisdictions that employ those injured officers, including Los Angeles, Riverside, San Bernardino and Orange counties, have faced questions about whether they are required or even allowed to pay for the long-term medical treatment, time off, and other benefits that might come to some officers if they’re issued worker’s compensation.

The state’s labor code is clear that police officers are owed workers’ compensation benefits if they intervene in a crime anywhere in California while off duty and become injured. Daly’s bill, which he could introduce before the end of the year, will ask the legislature to clarify that the existing law also covers out-of-state, off-duty incidents.

Orange County Supervisor Todd Spitzer believes Daly’s legislation could apply retroactively to help the officers injured in Las Vegas if the bill seeks only to clarify the intent of the current law rather than to change it or create a new law.

Los Angeles County is considering whether to grant or deny claims by two sheriff’s deputies shot at the festival, and a county official said he expects the issue to result in litigation. In San Bernardino County, which employs 11 deputies who attended the festival, including Sgt. Brad Powers, who was shot in the leg in Las Vegas, the deputies’ union has initiated talks with the sheriff’s department to advocate that Powers be treated as an on-duty injury.

The Orange County Board of Supervisors is scheduled to consider a resolution toward creating a policy to provide paid time off for off-duty employees who are wounded while trying to save lives in out-of-state "mass casualty" events. Dominguez said the sheriff’s union remains concerned that the plan wouldn’t cover the long-term medical care ...

A large group of U.S. states accused key players in the generic drug industry of a broad price-fixing conspiracy, moving on to widen an earlier lawsuit to add many more drugmakers and medicines.

According to the Reuters Health report, the lawsuit, brought by the attorneys general of 45 states and the District of Columbia, accused 18 companies and subsidiaries and named 15 medicines. It also targeted two individual executives: Rajiv Malik, president and executive director of Mylan NV, and Satish Mehta, CEO and managing director of India’s Emcure Pharmaceuticals.

The states said the drugmakers and executives divided customers for their drugs among themselves, agreeing that each company would have a certain percentage of the market. The companies sometimes agreed on price increases in advance, the states added.

The states said Malik and Mehta spoke directly to one another to agree on their companies’ shares of the market for a delayed-release version of a common antibiotic, doxycycline hyclate.

"It is our belief that price-fixing is systematic, it is pervasive, and that a culture of collusion exists in the industry," Connecticut Attorney General George Jepsen, who is leading the case, told a news conference in Hartford.

Mylan said in a statement it had found no evidence of price-fixing by the company or any of its employees, and vowed to defend itself vigorously. Malik, the company’s second-ranking official, has received more than $50 million in compensation over the past three years, last year making more than CEO Heather Bresch. "Mylan has deep faith in the integrity of its president, Rajiv Malik, and stands behind him fully," the company said.

Two former executives of Emcure’s subsidiary Heritage Pharmaceuticals pleaded guilty in January to federal charges of conspiring to fix prices and divide up the market for doxycycline and the diabetes drug glyburide. The two men, former Heritage president Jason Malek and former chairman and chief executive Jeffrey Glazer, reached a deal with 41 states and territories in which they each agreed to pay $25,000 and cooperate with the state probe.

The original complaint, filed in December, targeted Mylan, Heritage, Aurobindo Pharma USA Inc, Citron Pharma LLC, Mayne Pharma USA Inc and Teva Pharmaceuticals USA Inc.

The states are pressing a new complaint that would add Novartis AG’s unit Sandoz, India-based Sun Pharmaceutical Industries Ltd, Endo International PLC’s unit Par Pharmaceutical, Dr. Reddy’s Laboratories, Apotex Corp, Glenmark Generics Ltd, Lannett Company Inc, Alkem Laboratories Ltd’s unit Ascend Laboratories and Cadila Healthcare Ltd’s unit Zydus Pharmaceuticals Inc.

Teva spokeswoman Denise Bradley said the company denied the allegations. Endo spokeswoman Heather Lubeski said the company would vigorously defend itself against the claims. Other companies did not immediately respond to requests for comment.

The original lawsuit centered on just two medicines, delayed-release doxycycline and glyburide. The price of doxycycline rose from $20 for 500 tablets to $1,849 between October 2013 and May 2014, according to U.S. Senator Amy Klobuchar, a Minnesota Democrat who had been pressing for action on high drug prices.The amended complaint would expand the number of drugs to include glipizide-metformin and glyburide-metformin, which are among the most commonly used diabetes treatments.

Others include: acetazolamide, which is used to treat glaucoma and epilepsy; the antibiotic doxycycline monohydrate; the blood pressure medicine fosinopril; the anti-anxiety medicine meprobamate; and the calcium channel blocking agent nimodipine.
...

The billionaire founder of Insys Therapeutics Inc, John Kapoor, has resigned from the company’s board of directors, Insys said in a statement on Sunday after he was arrested on Thursday on charges he participated in a scheme to bribe doctors to prescribe a fentanyl-based cancer pain drug, marking a step by authorities to fight the opioid epidemic.

The founder and majority owner of Insys Therapeutics Inc., was arrested and charged with leading a nationwide conspiracy to profit by using bribes and fraud to cause the illegal distribution of a Fentanyl spray intended for cancer patients experiencing breakthrough pain.

John N. Kapoor, 74, of Phoenix, Ariz., a former member of the Board of Directors of Insys, was arrested in Arizona and charged with RICO conspiracy, as well as other felonies, including conspiracy to commit mail and wire fraud and conspiracy to violate the Anti-Kickback Law.

The superseding indictment also includes additional allegations against several former Insys executives and managers who were initially indicted in December 2016.

The superseding indictment charges that Kapoor and other company officials conspired to bribe practitioners in various states, many of whom operated pain clinics, in order to get them to prescribe a fentanyl-based pain medication.

The medication, called "Subsys," is a powerful narcotic intended to treat cancer patients suffering intense breakthrough pain. Prosecutors allege that the practitioners wrote large numbers of prescriptions for the patients, most of whom were not diagnosed with cancer, In exchange for bribes and kickbacks,

The indictment also alleges that Kapoor and the six former executives conspired to mislead and defraud health insurance providers who were reluctant to approve payment for the drug when it was prescribed for non-cancer patients. They achieved this goal by setting up the "reimbursement unit," which was dedicated to obtaining prior authorization directly from insurers and pharmacy benefit managers.

"As alleged, these executives created a corporate culture at Insys that utilized deception and bribery as an acceptable business practice, deceiving patients, and conspiring with doctors and insurers," said Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division.

The charges of conspiracy to commit RICO and conspiracy to commit mail and wire fraud each provide for a sentence of no greater than 20 years in prison, three years of supervised release and a fine of $250,000, or twice the amount of pecuniary gain or loss. The charges of conspiracy to violate the Anti-Kickback Law provide for a sentence of no greater than five years in prison, three years of supervised release and a $25,000 fine. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.

...

The proposed merger between U.S. pharmacy operator CVS Health Corp and No. 3 health insurer Aetna Inc represents a $66 billion bet that insurers can drive down high U.S. drug prices by cutting out the middleman.

The move is the most expensive effort to date that would enable a national health insurer to take back full control of prescription medicines for their customers by negotiating prices with pharmaceutical manufacturers and setting customer out-of-pocket costs for each drug.

Reuters Health reports that CVS, one of the largest U.S. pharmacy benefits managers, has offered to buy No. 3 health insurer Aetna for more than $200 per share. It could take at least several weeks for any deal to materialize.

If the deal happens, it would likely pressure rival insurers, drugmakers, pharmaceutical benefits managers, and retail pharmacies to also consider mergers or switching partners to try to keep up with the potential healthcare cost savings or increase in profit margins.

"It’s an alternate model at this point. It’s not clear that it’s definitely a better one," BMO Capital Markets analyst Matt Borsch said. "More consolidation could lead to pressure on some of the brand-name drug prices and a better counterweight to the big pharma companies."

For years, insurers paid drug benefits managers like CVS and Express Scripts Holdings Co to negotiate down drug prices, with both parties taking a share of any discount by the time a medicine was paid for by consumers.

But outrage over the high costs of drugs has grown as consumers have picked up a larger portion of the tab for drug costs and it is threatening profit margins all along the drug supply chain, from manufacturers to distributors, insurers and pharmacies.

UnitedHealth Group Inc and Humana Inc currently have in-house pharmacy benefits businesses, and say that it has helped them keep medical costs down.

Anthem Inc recently decided to go down that same path. It cut ties with Express Scripts during a $3 billion legal fight, and said it would use CVS to build its own pharmacy benefits business in the next few years. That tie-up could now be at risk if CVS reaches a deal to buy Aetna.

CVS also provides management services for Aetna rival Cigna Corp. If CVS buys Aetna, that could revive Cigna’s interest in buying Humana, analyst Christine Arnold of investment bank Cowen & Co said in a research note.

Aetna earlier this year closed the door on a deal with rival insurer Humana Inc after antitrust regulators said that combination and a rival deal between Anthem Inc and Cigna Corp were anti-competitive.

Over the past decade, health insurers have diverged on the value of the pharmacy benefits business.

Anthem sold its pharmacy benefit manager to Express Scripts and outsourced almost all of the business in 2010.

UnitedHealth took the opposite approach when it decided in 2011 to bring its pharmacy benefits management in house, then bought an even bigger standalone benefits manager, Catamaran, in 2015.

Humana operates its own pharmacy benefit manager and Cigna and Aetna have hybrid approaches where they manage some parts in house and outsource others.

Another potential lure of a deal for Aetna would be to capitalize on the growing number of simple health services offered in a CVS store, from flu shots to blood pressure checks. Reimbursing such patient care outside of a doctor’s office or hospital could cut healthcare costs, Gupta said ...

Insurance Commissioner Dave Jones adopted and issued a revised advisory pure premium rate, lowering the benchmark to $1.94 per $100 of payroll for workers' compensation insurance, effective January 1, 2018.

This is 17.1 percent less than the average pure premium rate of $2.34 California insurers filed as of July 1, 2017.

This decision results in an advisory pure premium rate that is slightly below the $1.96 average rate recommended by the Workers' Compensation Insurance Rating Bureau (WCIRB) in its filing. Jones issued the advisory pure premium rate three weeks after a public hearing and careful review of the testimony and evidence submitted.

His adoption is only advisory, as the commissioner has no rate authority over workers' compensation insurers.

"The continued decreases in costs to insurers should be passed along to employers through lower rates," said Insurance Commissioner Dave Jones. "Workers' compensation reform legislation should require that system cost savings be passed onto employers in the form of lower rates-- the law does not require this currently."

The WCIRB's pure premium advisory rate filing demonstrated continued decreases in costs in California's workers' compensation insurance market.

The pure premium advisory rate reduction is based on insurers' cost data through June 30 of this year. Insurers' net costs in the workers' compensation system continue to decline as a result of SB 863, SB 1160, and AB 1244 enacted by the Legislature and Governor Brown.

The WCIRB notes continued favorable medical loss development including acceleration in claim settlement.

The WCIRB will evaluate workers' compensation insurance costs again in the summer and fall of next year when it files its pure premium rate benchmark recommendation with the Department of Insurance. That filing will provide an opportunity to assess whether medical costs continue to be lower and what changes, if any, there are in other costs in the system.

The purpose of the pure premium benchmark rate process is to review costs in the workers' compensation insurance system and to confirm that rates filed by insurance companies are adequate to cover benefits for injured workers ...

The Division of Workers’ Compensation (DWC) has suspended three more medical providers from participating in California’s workers’ compensation system, bringing the total number of providers suspended this year to 52.

DWC Administrative Director George Parisotto issued Orders of Suspension against the following providers:

1) Byong Chun "David" Min of Irvine pled guilty on April 20, 2016 to health care fraud and illegal kickbacks. Min, co-owner and operator of Glory Rehab Team, Inc., which also operated as Dream Hospital and Daesung Clinic in Orange County, was involved in an illegal kickback scheme referring Medicare beneficiaries to co-schemers Marlon Songco, Joseff Sales and Danniel Goyena, knowing that they would bill Medicare for services that were never provided.

2) Sujan Thyagaraj of Roswell, New Mexico, a physician whose medical license was summarily suspended in New Mexico in March 2016 after criminal charges were filed against him for sexual assault on a patient. The Medical Board of California revoked his physician and surgeon’s license on September 23, 2016. Thyagaraj was suspended from the Medi-Cal program on August 29, 2017.

3) Rhonda Singleton of Los Angeles, owner of substance abuse treatment facility Singleton Housing Project, pled no contest in Los Angeles County Superior Court on January 25, 2017 to grand theft of the California Health Care Deposit Fund. Singleton was suspended from Medi-Cal on August 15, 2017.

AB 1244 (Gray and Daly), which went into effect January 1, introduced new changes to the workers’ compensation system and requires the division’s Administrative Director to suspend any medical provider, physician or practitioner from participating in the workers’ compensation system under certain circumstances ...