A new study, Factors Associated With Persistent Opioid Use Among Injured Workers’ Compensation Claimants, published online in the journal JAMA Network Open. says that many injured workers turn to opioid painkillers for relief, and nearly 30 percent may still be taking them three months after their injury -- increasing the odds of addiction.

The number of opioid prescriptions per workers’ compensation claim in the United States has climbed considerably since 2003, according to the NCCI Workers' Compensation Prescription Drug Study - 2013 Update. However, the researchers also noted that there "is a paucity of data on persistent opioid use and factors associated with persistent opioid use among workers’ compensation claimants." Thus they decided to conduct this new study.

For the study, the researchers collected data on nearly 9,600 injured workers who filed workers' compensation claims in Maryland from 2008 to 2016. All patients were initially treated with opioids. The objective of this study was to determine the proportion of injured workers who filled an opioid prescription beyond 90 days from their time of injury and the factors associated with persistent opioid use among injured workers’ compensation claimants in Maryland.

The findings suggest workers’ compensation claimants have a high proportion of persistent opioid use.

2741 claimants (28.6%) with an initial opioid prescription filled at least 1 opioid prescription more than 90 days from the time of injury. Nearly 10% of the injured workers filled an opioid prescription beyond 365 days from their date of injury. Persistent opioid use was significantly associated with increased age, preinjury incomes of $60 000 or more, claims adjudicated as permanent total disability, and a concomitant diagnosis of chronic joint pain or another pain diagnosis such as migraines or fibromyalgia. Claimants with crush injuries and strain or sprain injuries were 50% more likely than those with soft-tissue or contusion injuries to have persistent opioid use.

Researchers concluded that "the proportion of injured workers with persistent opioid use substantially exceeds recent reports on surgical patients at 90 days (28.6% vs 6.0%) and the national rate at 1-year from initial therapy reported by the Centers for Disease Control and Prevention."

"Many of our findings were consistent with previous research. Patients with a chronic joint pain diagnosis were more likely to be persistent opioid users." The researchers also conceded that " It is possible that some participants sought a chronic pain diagnosis to justify a continued disability claim."

"The strong association between persistent opioid use and chronic pain diagnoses are concerning and may highlight a critical gap between national evidence-based guidelines and actual prescribing practices."

US News adds to the study by reporting that the main concern shared by doctors is the use of opioids for non-acute pain, said senior researcher Dr. Gerard Slobogean, an assistant professor of orthopedics at the University of Maryland School of Medicine. "Physical therapy, other complementary and alternative therapies, as well as non-opioid medical therapies, should be considered for many injured workers," he said ...

Employers who implement an MPN, must provide access to care consistent with statutory and regulatory guidelines, including in a rural community. Hospitals are often thought of as the hubs of our health care system. But, according a report in the New York Times, hospital closings are rising, particularly in some communities.

Since 2010, nearly 90 rural hospitals have shut their doors. By one estimate, hundreds of other rural hospitals are at risk of doing so. In its June report to Congress, the Medicare Payment Advisory Commission found that of the 67 rural hospitals that closed since 2013, about one-third were more than 20 miles from the next closest hospital.

A study published last year in Health Affairs by researchers from the University of Minnesota found that over half of rural counties now lack obstetric services. Another study, published in Health Services Research, showed that such closures increase the distance pregnant women must travel for delivery.

And another published earlier this year in JAMA found that higher-risk, preterm births are more likely in counties without obstetric units. (Some hospitals close obstetric units without closing the entire hospital.)

"Options are dwindling for many rural families, and remote communities are hardest hit," said Katy Kozhimannil, an associate professor and health researcher at the University of Minnesota. Ms. Kozhimannil, a co-author of all three studies, said, "What’s left are maternity care deserts in some of the most vulnerable communities, putting pregnant women and their babies at risk."

In July, after The New York Times wrote about the struggles of rural hospitals, some doctors responded by noting that rising malpractice premiums had made it, as one put it, "economically infeasible nowadays to practice obstetrics in rural areas."

Many other types of specialists tend to cluster around hospitals. When a hospital leaves a community, so can many of those specialists. Care for mental health and substance use are among those most likely to be in short supply after rural hospital closures.

The closure of trauma centers has also accelerated since 2001, and disproportionately in rural areas, according to a study in Health Affairs. The resulting increased travel time for trauma cases heightens the risk of adverse outcomes, including death.

Another study found that greater travel time to hospitals is associated with higher mortality rates for coronary artery bypass graft patients.

In many communities, hospitals are among the largest employers. They also draw other businesses to an area, including those within health care and others that support it (like laundry and food services, or construction).

A study in Health Services Research found that when a community loses its only hospital, per capita income falls by about 4 percent, and the unemployment increases by 1.6 percentage points.

Not all closures are problematic. Some are in areas with sufficient hospital capacity. Moreover, in many cases hospitals that close offer relatively poorer quality care than nearby ones that remain open. This forces patients into higher-quality facilities and may offset negative effects associated with the additional distance they must travel.

Perhaps for these reasons, one study published in Health Affairs found no effect of hospital closures on mortality for Medicare patients. Because it focused on older patients, the study may have missed adverse effects on those younger than 65. Nevertheless, the study found that hospital closings were associated with reduced readmission rates, which is regarded as a sign of increased quality. So it seems consolidating services at larger hospitals can sometimes help, not harm, patients ...

United States Attorney William M. McSwain announced today that pharmaceutical companies Abbott Laboratories and AbbVie Inc. will pay $25 million to resolve allegations that it employed kickbacks and unlawful methods of marketing and promotion to induce physicians to prescribe the drug TriCor®.

The settlement resolves allegations that, between 2006 and 2008, Abbott knowingly paid kickbacks to physicians in order to induce TriCor® prescriptions. Abbott, through its sales representatives, allegedly provided physicians with improper gift baskets, gift cards, and other items to induce prescriptions of TriCor®. Abbott also engaged health care providers for consulting services and speaking engagements, where one purpose of the remuneration for the programs was to induce or reward physicians for TriCor® prescriptions.

In addition to the kickback allegations, the settlement also resolves allegations that Abbott engaged in unlawful methods of off-label marketing and promotion relating to the sale of TriCor® for unapproved indications. The FDA-approved indications for TriCor® during this time period were for use, in conjunction with diet, to treat patients with hypertriglyceridemia, mixed dyslipidemia, or hypertriglyceridemia. However, Abbott marketed the drug off-label for: (1) use in treating, preventing, or reducing cardiovascular events and other cardiac health risk; (2) use in combination with statin drugs, and (3) use as a first-line treatment of diabetic patients, including treatment to prevent or reduce cardiac health risks in diabetic patients. These uses were not FDA-approved and were not covered by federal healthcare programs.

As a result of today’s $25 million settlement, the federal government will receive $23.2 million, and state Medicaid programs will receive $1.8 million.

This settlement resolves allegations in a lawsuit filed in the Eastern District of Pennsylvania by Amy Bergman, a former Abbott sales representative, under the qui tam, or whistleblower, provisions of the False Claims Act. The qui tam provisions permit private parties to sue for false claims on behalf of the government and to receive a share of any recovery. Ms. Bergman will receive $6.5 million as her share of the recovery in the case.

This case was a cooperative effort among the U.S. Attorney’s Office for the Eastern District of Pennsylvania, the Civil Division of the Department of Justice, the Office of the Inspector General of the Department of Health and Human Services, and the National Association of Medicaid Fraud Control Units. For the United States Attorney’s Office, Assistant United States Attorney Charlene Keller Fullmer and Auditor Dawn Wiggins handled the investigation and settlement.

The lawsuit is captioned United States ex rel. Amy Bergman, et al. v. Abbott Laboratories, Civil Action No. 2:09-cv-04264999 (E.D. Pa.). The claims resolved by the settlement are allegations only; there has been no determination of liability ...

Medical costs per claim and the components in 18 state workers' compensation systems are analyzed in depth in a new series of studies, CompScope Medical Benchmarks, 19th Edition, released by the Workers Compensation Research Institute (WCRI).

"The studies are designed to help policymakers and others benchmark state system performance. The benchmarks also provide an excellent baseline for identifying important trends and for tracking changes over time in response to workers’ compensation reforms," said Ramona Tanabe, WCRI's executive vice president and counsel.

The 18 study states are Arkansas, California, Florida, Georgia, Illinois, Indiana, Iowa, Louisiana, Massachusetts, Michigan, Minnesota, New Jersey, North Carolina, Pennsylvania, Tennessee, Texas, Virginia, and Wisconsin. There are individual reports for every state except Arkansas and Iowa.

The following are sample findings for some of the study states:

California: The study shows a decrease in medical payments per claim, evaluated as of March 2017, as a result of the continuing impact of Senate Bill 863.

Massachusetts: Medical payments per claim were the lowest of the 18 study states; many costs have been decreasing going back several years.

North Carolina: Decreases in medical payments per claim were the steepest of all study states (6 percent per year since 2013), likely reflecting the impact of recent fee schedule changes.

Pennsylvania: Faster-than-typical growth in medical payments per claim was driven by faster growth in hospital outpatient payments per claim.

Texas: Medical payments per claim decreased from 2014 to 2016, following several years of increasing medical costs.

Wisconsin: In contrast to moderate to rapid growth in prior years, Wisconsin experienced little growth in medical payments per claim since 2014.

The Workers Compensation Research Institute (WCRI) is an independent, not-for-profit research organization based in Cambridge, MA. Organized in late 1983, the Institute does not take positions on the issues it researches. It provides information obtained through studies and data collection efforts, which conform to recognized scientific methods. Objectivity is further ensured through rigorous, unbiased peer review procedures.

WCRI's diverse membership includes employers; insurers; governmental entities; managed care companies; health care providers; insurance regulators; state labor organizations; and state administrative agencies in the U.S., Canada, Australia, and New Zealand ...

President Trump proposed changes to a segment of Medicare drug pricing that the White House believes would save Americans $17.2 billion over five years and cut down on "global freeloading."

The president plans to change the pricing model for Medicare Part B drugs administered in doctors’ offices to keep costs aligned with the lower prices similar countries pay for the same medicines. Total payment for such drugs could drop by 30 percent over time, the White House says.

"We will no longer accept the inflated prices charged to our seniors," Trump said.

The new "international pricing index" for Medicare Part B would set a target price for physician-administered drugs at 126 percent of the average price other countries pay. It would include a larger add-on fee for doctors and hospitals that would be independent of the drug’s price.

That’s a change from the current system that sets pricing based on the average sales price only in the US, plus a price-based add-on fee. The new model would end the incentive for doctors to prescribe the most expensive drugs to obtain the higher fees.

The Medicare Part B model would be phased in over a five-year period and initially apply to 50 percent of the country, with the opportunity to scale up afterward.

Trump on Thursday railed against a "rigged" drug system that allows other countries to benefit at America’s expense, calling it "wrong and unfair."

"We’re taking aim at the global freeloading that forces American consumers to subsidize lower prices in foreign countries through higher prices in our country," Trump said.

Earlier Thursday, Health and Human Services Secretary Alex Azar tweeted out an HHS report that highlights the disparities that the Trump administration seeks to end.

The report compared prices for 27 different Medicare Part B drugs that are administered by physicians - not those dispensed by the pharmacies. The report found that prices charged to the US are 1.8 times higher on average than 16 other countries with similar economic conditions. The US was paying the highest price for 19 of the 27 drugs.

The pricing disparities meant that Medicare Part B and its beneficiaries spent an additional $8.1 billion (or 47 percent more) on the 27 common drugs than it would if the payments were determined by an international pricing index, Azar said.

The new pricing aims to tackle the smaller market of non-retail drugs. Pharmacy-dispensed drugs account for about 72 percent of total prescription drug spending in the United States ...

A group of researchers claim that hospital accreditation is not necessarily tied to better outcomes for U.S. patients.

Based on records for more than 4.2 million patients over age 65 covered by Medicare, the study team found no difference between accredited and unaccredited hospitals in patient death rates, and only a slightly lower rate of patient readmissions at accredited hospitals, according to the report published in The British Medical Journal.

To be reimbursed for care provided to Medicare patients, hospitals either need to be accredited by an independent organization approved by the Centers for Medicare and Medicaid Services, or they must have passed a review by a state survey agency.

To see if accredited hospitals offer better quality care, researchers analyzed data from 4,400 U.S. hospitals, including 3,337 accredited facilities and 1,063 that passed state-based review in 2014-2017. They linked this data with Medicare files and with results of government-sponsored patient satisfaction surveys for all the hospitals.

Overall, they found that patients treated at accredited hospitals had slightly lower 30-day mortality than those at hospitals reviewed by a state agency (10.2 percent versus 10.6 percent), although the difference was too small to rule out the possibility it was due to chance.

The research team also found identical mortality rates (2.4 percent) and nearly identical readmission rates (15.9 percent versus 15.6 percent) for six types of major surgery at accredited and state-reviewed hospitals.

For the medical conditions, readmissions were lower at accredited hospitals, at 22.4 percent versus 23.2 percent, a statistically meaningful difference.

Patient experience scores were slightly higher at state-survey hospitals than at accredited hospitals.

In addition, the research team found no differences in mortality, readmission rates or patient experience scores between the hospitals accredited by The Joint Commission, considered the "gold standard" for accreditation, or other independent organizations, the study team notes.

Future studies should look at what type of accreditation and by which organization seem most helpful for better patient outcomes. For instance, hospitals designated as stroke centers or rehabilitation centers may have better outcomes for particular medical conditions, said Laura Wagner of the University of California, San Francisco, who wasn’t involved in the study.

"The bottom line is that accreditation does matter, and it provides a framework for both patients and healthcare providers around quality," One of the authors said. "It can improve quality in some cases, and we need to improve that framework to provide care." ...

Sandab Duon filed three claims for injury while employed as a machine operator by California Dairies. Robert Weber, M.D., acted as the internal medicine panel QME and evaluated applicant on August 3, 2015. Robindra Paul, M.D., was the psychiatric panel QME.

On April 19, 2016, the Hartford representative sent a letter to the internal QME Dr. Weber enclosing a copy of Dr. Paul’s March 16, 2016 report in response to Dr. Weber's request to see the psychiatric report during his deposition. The letter lists applicant’s attorney, Mr. Bryan Leiser, as one of the copied parties, but only states his name, not his address. No proof of service of the letter is in evidence.

Dr. Weber issued a report dated August 31, 2016 reflecting his receipt and review of Dr. Paul’s report. However, Dr. Weber’s opinion remained "as expressed" in his previous report.

The matter ultimately proceeded to trial. One of the issues was whether Dr. Weber as the internal medicine QME has been tainted based upon the provision of Dr. Paul’s reporting to him during the period of time that this issue was being disputed, and if so, is it sufficient to entitle the applicant to a new internal medicine panel.

The WCJ found that The Hartford, provided medical information to the internal medicine panel qualified medical evaluator (QME) without first serving applicant and engaged in ex parte communication with the QME in violation of Labor Code sections 4062.3(b) and 4062.3(e). (Lab. Code, § 4062.3(b) & (e).) and ordered the parties to obtain a new QME panel in internal medicine or agree to an internal medicine agreed medical evaluator (AME).

A co-defendant, Insurance Company of the West petitioned for reconsideration.The WCAB issued an en banc decision in the case of Sandab Suon v California Dairies; Insurance Company of The West; The Hartford; Starr Indemnity and Liability Insurance Company, interpreting Labor Code section 4062.3.

Section 4062.3(b) requires that "information" proposed to be provided to the QME "shall be served on the opposing party 20 days before the information is provided to the evaluator." Section 4062.3(e) separately requires that "communications with a [QME] before a medical evaluation" must be served on the opposing party "20 days in advance of the evaluation."

However, section 4062.3(e) further provides that "[a]ny subsequent communication with the medical evaluator "shall be served on the opposing party when sent to the medical evaluator." The preliminary question is whether the documents or materials sent to the QME are "information" or "communication" as those terms are used in the Labor Code.

Whether a party properly served a written communication with the QME to the opposing party is a question of fact the determination of which must be supported by substantial evidence. In this matter, the evidence in the record is unclear whether Mr. Paul’s letter to the QME Dr. Weber was properly served and received by Mr. Leiser, and the matter will be returned to the WCJ to further address that issue pursuant to the discussion herein. If a communication was not ex parte, the trier of fact must decide if the documents or materials sent to the QME nonetheless constitute "information" subject to section 4062.3(b).

As a general rule, the WCAB determined that the following rules apply to a QME evaluation.

(1) Disputes over what information to provide to the QME are to be presented to the WCAB if the parties cannot informally resolve the dispute. The "meet and confer" provisions in the Civil Discovery Act are useful
(2) Although section 4062.3(b) does not give a specific timeline for the opposing party to object to the QME’s consideration of medical records, the opposing party must object to the provision of medical records to the QME within a reasonable time in order to preserve the objection.
(3) If the aggrieved party elects to terminate the evaluation and seek a new evaluation due to an ex parte communication, the aggrieved party must do so within a reasonable time following discovery of the prohibited communication.
(4) The trier of fact has wide discretion to determine the appropriate remedy for a violation of section 4062.3(b).
(5) Removal is the appropriate procedural avenue to challenge a decision regarding disputes over what information to provide to the QME and ex parte communication with the QME

...

Pursuant to Labor Code section 129(e), the Administrative Director of the Division of Workers’ Compensation submitted its twenty-seventh annual workers’ compensation report summarizing the results of 2017 audits conducted by the DWC Audit and Enforcement Unit.

The Audit Unit annual report provides information on how claims administrators audited by the DWC performed and includes the Administrative Director’s ranking report for audits conducted in calendar year 2016.

The DWC Audit & Enforcement Unit completed 47 profile audit reviews (PARs), which were all routinely selected; there were 0 target audits, which would have been conducted based upon the failure of a prior audit. The PAR subjects consisted of 7 insurance companies, 14 self-administered/self-insured employers, 22 third-party administrators (TPA), and 4 insurance companies/third-party administrators’ combined claims-adjusting locations.

The performance of any insurer, self-insurer, or third-party administrator is rated for action in specific areas of benefit provision. Of foremost importance is the payment of all indemnities owed to an injured worker for an industrial injury. The timeliness of all initial and subsequent indemnity payments and compliance with the regulations of the Administrative Director for the provision of notice for a qualified or agreed medical evaluation are also measurable performance factors.

- Forty-three audit subjects (91%) met or exceeded the PAR 2016 performance standard and therefore had no penalty citations assessed in accordance with LC section 129.5(c) and CCR, Title 8, section 10107.1(c)(4). However, these audit subjects were ordered to pay all unpaid compensation.
- Four audit subjects (9%) failed to meet or exceed the PAR standard, and their audits were expanded to a full compliance audit of indemnity claims (FCA stage
1) Two of these audit subjects (50% of those that failed to meet or exceed the PAR standard) met or exceeded the FCA 2016 performance standard and therefore had penalty citations assessed for unpaid and late payment of indemnities in accordance with LC section 129.5(c)(2) and CCR, Title 8, sections 10107.1(d).
2) The remaining two of the four audit subjects (50% of those that failed to meet or exceed the PAR standard) failed to meet or exceed the FCA 2016 performance standard and their audits expanded into full compliance audit of indemnity claims (FCA stage 2) and added a sample of denied claims to be audited. These audit subjects were assessed administrative penalties for all penalty citations in accordance with LC section 129.5(c) and CCR, Title 8, Section 10107.1(d) and 10107.1(e).

The audit regulations are currently being amended to address the statutory changes brought about by the adoption of Senate Bill (SB) 863. As of January 1, 2013, the amended Labor Code section 4650(b)(2) came into effect and now provides that, under specific circumstances set by statute, permanent disability (PD) indemnity will not be payable to an injured employee until it is awarded by the Workers’ Compensation Appeals Board ...

Siemens Healthineers, the medical arm of the German engineering and technology conglomerate, has teamed up with Israeli start-up Healthy.io to allow patients to test their urine at home by using a smartphone camera that scans a dipstick and sends the results to their doctor.

Healthy.io’s founder and CEO Yonatan Adiri was selected as one of the 50 most influential people in healthcare by TIME magazine.

The alliance is the latest partnership between medtech firms and technology companies aimed at helping patients monitor their own health, as well as lowering the costs of managing chronic diseases.

Urine testing is the world's second-most frequently conducted diagnostic test. Regular testing is needed to monitor kidney function in patients with chronic kidney disease, as well as to detect potential signs of diabetes.

Last summer. the Food and Drug Administration granted Class 2 approval to Healthy.io’s Dip.io, a urinalysis kit that includes an mHealth app and dipstick. Through a smartphone camera, the app’s AI software can detect 10 different healthcare conditions, including certain infections, pregnancy issues and chronic conditions, and instantly stores that data in the cloud for care providers.

Class II approval is granted to devices that have direct health implications and require a medium level of supervision. This is one of the first devices reportedly approved by the FDA that is designed for use with optical equipment designed by a third party.

Under the new global partnership Healthy.io will use urinalysis tests from Siemens Healthineers in dipkits that are sent to patients at home. Patients urinate on the dipstick and scan it using their smartphone camera, which uses computer vision and machine learning to ensure the results can be read. The results are then sent via an app to the patient's medical record for a doctor to assess.

"This alliance expands our capabilities to improve patient experience by conducting testing in their home," said Christoph Pedain from Siemens Healthineers' Point of Care Diagnostics business.

Yonatan Adiri, founder and chief executive officer of Healthy.io said the technology was like a "medical selfie" that would improve patient outcomes through more frequent testing.

The mobile health platform is currently being tested at Pennsylvania’s Geisinger health system in a partnership with the National Kidney Foundation.

A number of technology companies including Apple, Samsung Electronics and Google are working on health-related applications for wearable devices and smartphones. Last month, Apple said its new watch can take an electrocardiogram and detect heart problems.

Orthopaedics company Zimmer Biomet is also testing a new app with Apple which would allow patients due to have hip or knee replacements to funnel basic health data from their Apple watches to their surgeons ...

Fiona Bulanadi filed a lawsuit against Permanente Medical Group, and several entities involved in the administration of her workers’ compensation claim, a claims adjuster, Sedgwick Claims Management Services, Inc., and Sedgwick’s employee, Fia Kyono.

She alleged that the Permanente Medical Group induced her to accept employment with the company and to remain employed there by repeatedly assuring her it would pay her workers’ compensation benefits, if and when it became necessary. Allegedly representatives of Permanente Medical Group assured Fiona, orally and "in paperwork that was provided to her," that "if she was injured on the job that she could count on the prompt provision of worker[s’] compensation benefits."

On February 7, 2014 a car hit Fiona while she was walking on a footpath at a Kaiser facility. Fiona was on the footpath because Permanente Medical Group required its employees to "take walks and engage in invigorating activities during lunches and breaks."

Fiona filed a workers’ compensation claim. Permanente Medical Group gave the claim to Kaiser Foundation Health Plan, which in turn assigned it to Sedgwick. Sedgwick sent Fiona a letter allegedly falsely identifying Kaiser Foundation Health Plan as her employer, purporting to deny her workers’ compensation claim, but suggesting the claim was "still open." According to Fiona, the defendants investigated her workers’ compensation claim in bad faith, looked for ways to avoid paying her benefits, and denied the claim for patently false reasons.

Fiona sued Permanente Medical Group for "damages for being willfully uninsured or not permissibly self-insured," breach of her employment contract, and unfair business practices. She sued all of the defendants for fraud, negligent misrepresentation, and intentional infliction of emotional distress. She sued Sedgwick, Kyono, and Kaiser for interference with contract, and she sued Kaiser for premises liability negligence.

The court sustained defendants demurrer to all of the Bulanadis’ causes of action on the ground they were barred by the exclusive remedy provision of the Workers’ Compensation Act. The court of appeal reversed in the unpublished case of Bulandi v. Southern California Permanente Medical Group.

Fiona alleged Permanente Medical Group was willfully uninsured or not permissibly self-insured. If that allegation is true, her employer is not protected by workers’ compensation exclusivity, and Fiona may bring a civil action for damages for her work-related injuries. If that allegation is not true, at least some of Fiona’s causes of action may be barred by the Workers’ Compensation Act.

The trial court ruled on demurrer that Permanente Medical Group was self-insured by taking judicial notice of two documents: (1) a DIR certificate of consent to self-insure issued to Permanente Medical Group in 1965 and (2) a document in portable document format posted on the DIR website listing Permanente Medical Group, among others, as a self-insured employer. Because these documents did not indisputably establish Permanente Medical Group was self-insured, however, the trial court erred ...

Respondents Low Desert Empire Pizza, Inc., Hi Desert Empire Pizza, Inc., Ten Cap, Inc., and Capten, Inc. sued several related insurance entities - Applied Underwriters, Inc. (Applied), Applied Underwriters Captive Risk Assurance Company, Inc. (AUCRA, and together with Applied, appellants) and California Insurance Company (CIC) (together with appellants, defendants).

Desert Pizza challenged the legality of defendants’ EquityComp workers’ compensation insurance program, which consists of an insurance policy and two related side agreements.

Applied and AUCRA moved to compel arbitration based on arbitration provisions in the side agreements, and Desert Pizza countered that the provisions were unenforceable because defendants failed to file them with California’s Insurance Commissioner for approval, as required in Insurance Code section 11658 (Section 11658).

The trial court agreed and denied the motions to compel arbitration. The Court of Appeal affirmed the denial in the unpublished case of Low Desert Empire Pizza, Inc. v. Applied Underwriters, Inc.

This case involves the intersection of California’s workers’ compensation insurance laws and the Federal Arbitration Act (FAA).

This is one of several actions in this state and across the country challenging the legality of defendants’ EquityComp program based on their failure to seek and obtain regulatory approval of side agreements to the insurance policy. (E.g., Citizens of Humanity, LLC v. Applied Underwriters, Inc. (2017) 17 Cal.App.5th 806 (Citizens of Humanity); Minnieland Private Day Sch., Inc. v. Applied Underwriters Captive Risk Assur. Co. (4th Cir. 2017) 867 F.3d 449; Citizens of Humanity, LLC v. Applied Underwriters Captive Risk Assur. Co. (2018) 299 Neb. 545.)

California’s Insurance Commissioner recently issued an administrative decision concluding appellants’ failure to file a virtually identical EquityComp side agreement under Section 11658 rendered the arbitration provisions in that agreement void and unenforceable. (Matter of Shasta Linen Supply, Inc., Decision & Order, dated June 20, 2016, file No. AHB-WCA-14-31, at p. 43 (Shasta Linen).)

Even more recently, the Fourth Appellate District, Division One, reached the same conclusion. (Nielsen Contracting, Inc. v. Applied Underwriters, Inc. (2018) 22 Cal.App.5th 1096, 1118 (Nielsen), review den. Aug. 15, 2018.)

Thus, in this case, the Court of Appeal concluded that defendants’ violation of Section 11658 renders their arbitration provisions unenforceable, and affirmed the order denying the motions to compel arbitration ...

Mark R. Leeds sued Reino & Iida, a Professional Corporation, and individual lawyers Donald Reino and Myles Iida, claiming that defendants breached an agreement to pay him 25 percent of attorney fees earned for workers’ compensation cases plaintiff referred to them. According to the complaint, plaintiff and his law firm separated from defendants in October 2010, and a controversy arose regarding plaintiff’s entitlement to fees for cases plaintiff had referred to defendants.

This is the second time this case has been before the Court of Appeal. In the first review, the trial court sustained defendants’ demurrer to the complaint. In 2013, the Court of Appeal reversed and remanded for further proceedings, concluding that plaintiff and his law firm should be given leave to amend their complaint to state a cause of action for breach of contract.

After remand, the trial court granted defendants’ motions for summary judgment, reasoning that the fee splitting agreement was illegal under Rules of Professional Conduct, rule 2-200 because the parties had not obtained written client consent. Leeds again appealed. Following a second review, the Court of Appeal affirmed the trial court in the unpublished case of Leeds v. Reino and Iida.

State Bar Rule 2-200, captioned "Financial Arrangements Among Lawyers," provides that "[a] member shall not divide a fee for legal services with a lawyer who is not a partner of, associate of, or shareholder with the member unless: [¶] (1) The client has consented in writing thereto after a full disclosure has been made in writing that a division of fees will be made and the terms of such division; and [¶] (2) The total fee charged by all lawyers is not increased solely by reason of the provision for division of fees and is not unconscionable as that term is defined in rule 4-200." (Rule 2-200(A).)

The Supreme Court has held that rule 2-200 unambiguously directs that a member of the State Bar ‘shall not divide a fee for legal services’ unless the rule’s written disclosure and consent requirements and its restrictions on the total fee are met. Rule 2-200 "encompass[es] any division of fees where the attorneys working for the client are not partners or associates of each other, or are not shareholders in the same law firm,’ and a lawyer’s failure to comply with rule 2-200 precludes him from sharing fees pursuant to a fee splitting agreement."

It is undisputed that the parties have not obtained written client consent for the division of fees among them. Leeds contended that client consent was not required, because he performed all of the work on the cases under defendants’ control, and he did not merely refer the cases to defendants. Plaintiff argues that rule 2-200 was not intended to apply to this type of situation.

The Court of Appeal concluded that "no authority supports plaintiff’s contentions." ...

Michael E. Barri, Tristar Medical Group, and Coalition for Sensible Workers’ Compensation Reform petitioned the court of appeals pursuant to Labor Code section 5955, seek orders directing the Workers’ Compensation Appeals Board to perform its duties and adjudicate Tristar’s lien claims and not enforce provisions contained in newly enacted anti-fraud legislation. (§§ 4615 & 139.21.) claiming certain provisions were unconstitutional.

The new anti-fraud scheme cast a very broad net to halt all proceedings relating to any workers’ compensation liens filed by criminally charged medical providers, as well as any entities "controlled" by the charged provider. The Legislature created this new scheme because existing laws permitted charged providers to collect on liens while defending their criminal cases, allowing continued funding of fraudulent practices.

Pursuant to these two new statutes, the Government gained authority to automatically stay liens filed by charged providers and noncharged entities, without considering if the liens were actually tainted by the alleged illegal misconduct. (§ 4615.) As a result, untainted liens may be stayed (and go unpaid) for a lengthy stretch of time because, in addition to the period required for completion of the criminal case, the statute provides for two post-conviction evidentiary hearings. In the first hearing, the administrative director decides whether to suspend the convicted provider from further participation in the workers’ compensation system. (§ 139.21, subd. (b).)

Following this hearing, the "special lien proceeding" attorney identifies and gathers liens to be adjudicated together by a workers compensation judge (WCJ) in a consolidated "special lien proceeding." (§ 139.21, subd. (e)(2).) In this second hearing, the lienholder has the evidentiary burden to rebut the statutorily mandated presumption the consolidated liens are all tainted by the misconduct and should not be paid. (§ 139.21, subd. (g).)

In their petition, Barri, Tristar, and CSWCR maintain these statutory provisions go too far and are forcing many legitimate lien providers to stop treating injured workers because the process has become too onerous, expensive, and financially risky. They maintain the creation of a "significantly delayed post deprivation hearing," the over-inclusive application to untainted liens, and the Government’s failure to provide adequate notice to noncharged entities, has effectively dismantled the safety net in place for injured workers. They suggest the true legislative purpose of the statutes goes beyond fraud prevention and serves the district attorney’s desire to financially cripple criminally charged lien claimants, hampering their ability to adequately defend themselves at trial.

The court of appeal took judicial notice of a number of related documents including the proceedings in federal court by other lien claimants -Vanguard Medical Management Billing, Inc. v. Baker, No. EDCV 17 CV 965 GW(DTBx). It found no merit to any of their claims and denied them the requested relief in the published case of Barri v WCAB ...

The California WCIRB recently released a new study in which its researchers examine the impact that increased efforts to identify and prosecute provider fraud may be having on the California workers’ compensation system.

As of April 7, 2018 (the time of this analysis), more than 450 medical providers have been indicted and/or suspended by the DIR from practicing in the California’s workers’ compensation system. Many of these providers previously billed and were paid significant amounts for workers’ compensation-related services. While many of the procedures billed by these providers may have been for legitimate services, the suspension of their practices in California’s workers’ compensation is likely a significant driver of reduced medical costs.

The Impact of Medical Fraud Enforcement on California Workers’ Compensation study uses data from the WCIRB’s medical transaction database to analyze the volume and type of medical services that were performed by providers who were subsequently indicted or suspended for fraud ("Indicted Providers").

The Indicted Providers identified in the WCIRB’s medical transaction data included medical doctors, pharmacists/ pharmacies and other providers and entities such as chiropractors, suppliers of durable medical equipment and hospitals. As shown in Chart 1, approximately half of the Indicted Providers were medical doctors and about one third were pharmacists or pharmacies. Medical doctors accounted for 55% of total medical payments to Indicted Providers, while pharmacists or pharmacies totaled approximately 30% of the payments.

Almost half of the providers received less than $100,000 in payments for medical services in the California workers’ compensation system, and about 10% received more than $10 million in medical payments.

Notable findings of the study include:

- Within the California workers’ compensation system, the share of medical payments to Indicted Providers declined from 7.2% in the second half of 2012 to 1.9% in the second half of 2017. The share of paid transactions by Indicted Providers also fell from 4.4% to 1.4% over the same time period.
- The payments to Indicted Providers for different medical services varied over time. For example, for the second half of 2012, Indicted Providers accounted for 5% of payments for Physician Fee Schedule Services, while by the second half of 2017, Indicted Providers accounted for 1.2% for Physician Fee Schedule Services.
- The proportion of payments to Indicted Providers for Medical Liens showed a steady increase, from 18% for the second half of 2012 to 45% for the second half of 2017.
- The time between when the service was provided and when the payment was made was noticeably longer for Indicted Providers than for Other Providers, with the exception of medical lien payments.

The complete study is accessible in the Research section of the WCIRB website ...

The WCIRB has released The World of Cumulative Trauma Claims report which focuses on workers’ compensation claims for workplace injuries that result from repetitive mentally or physically traumatic activities extending over a period of time.

CT claims have always been a part of the California workers’ compensation system. Recently, although overall claim frequency and average indemnity and medical costs have been flat to declining, the proportion of claims involving CT has increased sharply. This report explores the world of CT claims including how they differ from specific injury claims and the key drivers of the recent CT claim increases.

CT claims have continued to grow at a significant rate through the economic recovery. CT claims are also much more likely to be reported late, so early estimates of CT claim proportions typically understate the true proportions for an accident year.

Like many cost components, CT claim rates differ significantly across the regions of California. While the proportion of CT claims has typically been higher in the Los Angeles Basin, these rates have diverged significantly over the last several years and are also showing a similar pattern in San Diego.

All of the recent growth in CT claims has been in the Los Angeles and San Diego regions. CT claim rates in other regions of California have declined and are lower than the 1998 levels.

Although the WCIRB does not use the phrase "epidemic" some might say this adjective accurately describes the phenomena in Southern California. According to Merriam-Webster, an epidemic is something that is "excessively prevalent", or "affecting or tending to affect a disproportionately large number of individuals within a population, community, or region at the same time."

Beginning in 2008, Construction CT claims increased in the Los Angeles Basin and has accelerated in recent years to be 4 times the 2007 lows.

Los Angeles Basin CT rates in Manufacturing diverted from the rest of the state starting in 1999 and accelerated rapidly starting in 2012. The Los Angeles Basin’s share of all Manufacturing claims has been consistent over time, suggesting that some shifting from specific claims to CT claims may be occurring. The recent CT rates of over 20% in the Los Angeles Basin are among the highest of any industry and the growth in this industry is one of the most significant drivers of recent CT claim growth.

The proportion of CT claims has increased in the Los Angeles Basin Trade industry in recent years though at a somewhat less significant rate than in other industries. The percentage of all Trade industry indemnity claims from the Los Angeles Basin has also increased which is partially attributable to the increases in CT claims.

The vast majority of indemnity claims in the Information industry are from the Los Angeles Basin. Unlike other industries, CT rates in the Information sector across California regions have cut in half from the high in 2004.

The Finance & Insurance industry typically has higher CT claim proportions than any other industry. CT claims decreased to historical lows in the Los Angeles Basin during the 2007 - 2008 financial crisis and rebounded since 2010 to more typical levels for this industry.

CT claims have increased significantly in the Los Angeles Basin Real Estate industry and in 2016 are 4 times the 2008 level. CT claims in Real Estate in other regions of California have also increased, but by a less significant magnitude.

The proportion of CT claims in the Administrative industry is increasing across all regions of California though at a faster pace in the Los Angeles Basin.

The ratio of Arts & Entertainment CT claims in the Los Angeles Basin reached a historical high of 15% in 2015, but shows some indications of decline in 2016 . The proportion of all Arts & Entertainment industry claims from the Los Angeles Basin has increased almost 10% in the last 3 years, driven in part by the CT claim growth.

Beginning in 2008 , the ratio of CT claims in the Los Angeles Basin Hospitality industry increased significantly, more than doubling through 2016. Growth in Los Angeles Basin CT claims from this large industry is one of the most significant drivers of the overall recent growth.

The full report available on the WCIRB website continues to report similar data supporting the conclusion that there is indeed a CT epidemic in the Los Angeles Basin ...

California’s Labor Enforcement Task Force (LETF) is a coalition of California state agencies formed in 2012 to combat the underground economy. The task force operates under the direction of the Department of Industrial Relations (DIR) and conducts monthly inspections in high-risk industries. LETF member partners include DIR divisions Cal/OSHA and the Labor Commissioner’s Office, officially known as the Division of Labor Standards Enforcement, the Contractors State License Board, the Employment Development Department, the California Department of Insurance, the Bureau of Automotive Repair, Alcoholic Beverage Control and the California Department of Tax and Fee Administration.

This week, California’s Labor Enforcement Task Force has discovered safety violations during targeted inspections that put workers in immediate danger of fatal and serious injuries, including amputation and lacerations. The task force issued orders shutting down dangerous machinery at seven high-risk work sites in Southern California, including four car wash and three manufacturing businesses.

At four car washes, task force inspectors discovered that industrial water extractors for towels did not have functioning interlock devices to stop the machines when the door is unlocked or open. Inspectors issued stop orders known as Orders Prohibiting Use to Pasadena Auto Wash, Baldwin Park Hand Car Wash and Star Auto Spa in El Monte, and Fair Oaks Car Wash in Altadena.

Cal/OSHA removed the stop orders at Pasadena Auto Wash and Fair Oaks Car Wash after the machinery was adequately repaired. The other two businesses have not corrected the hazards.

Inspectors also cited Baldwin Park Hand Car Wash $6,000 for violation of child labor laws after finding minors working in dangerous occupations. "LETF monitors not only for safety violations, but also for violations of wage, tax and licensing laws," added LETF Chief Dominic Forrest. "We issue stop orders when we find hazards that require immediate action to prevent serious injury and we also offer information that helps employers understand and follow their responsibilities."

Imminent safety hazards were also discovered when LETF inspected three manufacturing companies located in Santa Ana: Maximum Security Safes, Trinity Window Fashions and Pierre’s Fine Carpentry. Inspectors issued orders to shut down woodworking table saws that were not properly guarded. The orders were subsequently lifted after the hazards were corrected.

LETF inspectors also issued stop-work orders and cited Trinity Window Fashions $3,000 and Pierre’s Fine Carpentry $1,500 for failure to maintain workers’ compensation insurance. The orders were lifted after the companies provided proof of insurance ...

A federal grand jury has indicted South Bay doctor and PQME Venkat Aachi, charging him with distributing hydrocodone outside the scope of his professional practice and without a legitimate medical need, and with health care fraud related to the submission of false and fraudulent claims regarding the health care benefits.

Aachi is listed on the DIR database as a PQME in Physical Medicine and Rehabilitation with offices in San Jose and Campbell California.

According to the indictment filed October 9, 2018, and unsealed Friday, October 12, 2018, on six occasions from November 27, 2017, through March 5, 2018, Aachi knowingly distributed hydrocodone to two individuals knowing that the distribution was outside the scope of his professional practice and not for a legitimate medical purpose.

Further, on July 2, 2018, Aachi allegedly submitted to an insurance company a false and fraudulent claim for payment for healthcare benefits, items, and services.

Aachi made an initial appearance on October 12, 2018, before U.S. Magistrate Judge Virginia K DeMarchi. At that time, he was arraigned on the indictment, entered a plea of not guilty, and was released on bond. Aachi is scheduled to appear next before Magistrate Judge DeMarchi on October 22, 2018, for a further bond hearing.

If convicted, Aachi faces a maximum 20 years in prison and a one-million dollar fine for each of the six distribution counts and an additional 10 years in prison for the insurance fraud count.

Assistant U.S. Attorney Shailika Kotiya is prosecuting the case with the assistance of Rawaty Yim.

This prosecution is the result of investigations by the DEA, FBI, HHS-OIG, and the California Department of Justice Bureau of Medi Cal Fraud and Elder Abuse (BMFEA).

Through the BMFEA, the California Department of Justice regularly works with other law enforcement agencies to investigate and prosecute fraud perpetrated on the Medi Cal program against a wide variety of healthcare providers, including doctors and pharmaceutical companies.

This case was investigated and prosecuted by member agencies of the Organized Crime Drug Enforcement Task Force, a focused multi-agency, multi-jurisdictional task force investigating and prosecuting the most significant drug trafficking organizations throughout the United States by leveraging the combined expertise of federal, state, and local law enforcement agencies ...

In 2013 D.L. Falk Construction, Inc. entered into a contract with the Central Contra Costa Sanitary District under which Falk was to be general contractor on district project No. 8226, "Seismic Improvements for HOB."

The project involved seismic upgrades for the District in Martinez, which required removing various existing finishes to expose the building’s structural steel columns; strengthening the columns by welding on specially manufactured pieces; testing the columns; and restoring the building’s finishes to make it ready for occupancy.

B.A. Retro, Inc. was a subcontractor on a project on which D.L. Falk Construction, Inc.was the general contractor. Retro began sending workers to the project, who were from the union hall. Retro’s work on the project was, as its President acknowledged, dangerous: it included working "with heavy metal objects"; lifting "big plates from trucks into the work site"; some "welding" that required a "fire watch" mandated by law; and similar dangerous activities.

At the conclusion of the project, Retro sued Falk for $260,000, the amount it claimed Falk owed on the balance of the subcontract. This was in addition to the $440,447 Falk had had paid Retro on the contract by that time.

During litigation, Falk learned that Retro had begun work on the job at a time when it did not have workers’ compensation insurance, the effect of which was to cause an automatic suspension of its license. Retro’s certified license certificate showed that at the time of the subcontract with Falk Retro had an "exemption from workers’ compensation" insurance, which exemption is available only if the contractor had no employees.

The case proceeded to a court trial on the licensure issue,as a defense to the contract balance, and a cross complaint by Falk for restitution of the $440,447 it had previously paid on the contract. The court ruled against Retro, rejecting its claim of substantial compliance with the licensing law, and entered judgment against Retro on both its claim and Falk’s restitution claim. Retro appealed, and the court of appeal affirmed the trial court in the unpublished case of B.A. Retro, Inc. v. D.L. Falk Construction, Inc.

The Contractors Licensing Law, Business and Professions Code 7031, provides that no person "engaged in the business or acting in the capacity of a contractor" can bring an action for compensation for work requiring a contractor’s license if the person was not properly licensed at all times during the performance of the work. Subdivision (b) permits a person "who utilizes the services of an unlicensed contractor" to bring an action for disgorgement of "all compensation paid to the unlicensed contractor."

The California Supreme Court has acknowledged that the statute, while punitive, is necessary to protect an important public policy. (Hydrotech Systems, Ltd. v. Oasis Waterpark, supra, 52 Cal.3d at pp. 995, 997.) ...

Two Illinois-based nonprofit risk pools, who provide more than 203 local municipalities and other public entities with workers’ compensation and employee healthcare insurance, filed a joint lawsuit in the Circuit Court of Cook County against leading opioid manufacturers, distributors, professional associations, and prescribers. It is the first opioid lawsuit brought by insurance risk pools in Illinois.

The Intergovernmental Risk Management Agency (IRMA) and Intergovernmental Personnel Benefit Cooperative (IPBC), seek injunctive relief and financial compensation from defendants to recoup substantial costs resulting from the far-reaching impact of the over-prescription and abuse of opioid medication. IPBC’s costs include vast expenditures on hospitalizations due to overdose, addiction treatment services, and overdose reversal medications, while IRMA has paid millions of dollars in cases involving injured workers who were unnecessarily given long-term opioid prescriptions to treat chronic pain.

The suit alleges opioid manufacturers, including Purdue Pharma, Allergan, and Teva, engaged in aggressive and deceptive marketing campaigns; distributors including AmerisourceBergen, Cardinal Health, and McKesson failed to act as gatekeepers against overprescribing the addictive narcotics; professional organizations including Chicago-based American Academy of Pain Medicine and American Pain Society deceptively promoted the use of opioids for chronic pain management; and suburban Chicago doctors Paul Madison and Joseph Giacchino served as "pill mills," doling out opioids to anyone who came through the door of their clinic.

The 217 page civil complaint alleges that the defendants’ plan to flood the Illinois market with opioid medication worked: in 2015, eight million opioid prescriptions were filled in Illinois, the equivalent of 60 prescriptions per 100 people.

The lawsuit is the latest step in a proactive multi-pronged strategy IPBC and IRMA have enacted to address and reduce opioid abuse in their members’ employee communities.

"This lawsuit is about real costs incurred directly as a result of the opioid epidemic. We have seen fully employed, respectable public employees with work injuries who were prescribed opioids unnecessarily and became addicted, ultimately rendering them unable to return to work and costing our members millions," said IRMA Executive Director Margo Ely. "Opioid abuse and addiction has cost our members through not only lost productivity, but very sad stories of lost careers and lives."

"As a taxpayer-supported health insurance provider to public entities across Illinois, we have a fiduciary obligation to aggressively seek to recoup the millions of dollars in claim costs that have been wasted due to over-prescription of opioid medications and addiction treatment," said IPBC Executive Director Dave Cook. "The impact of long-term opioid use and abuse has been significant to our organization financially, and to many of our members who have suffered as a result of defendants’ egregious behavior."

Founded in 1979, the Intergovernmental Risk Management Agency (IRMA) was the first municipal risk pool in Illinois, and today, provides comprehensive risk management services, including workers’ compensation coverage, for 72 municipal groups in northeastern Illinois.

The Intergovernmental Personnel Benefit Cooperative (IPBC) is a public risk entity pool established in 1979 by Chicago area municipalities to administer some or all of the personnel benefit programs offered by participating members to employees and retirees ...

Workers’ compensation premium rates fell considerably nationwide, while California continued to see among the worst rates in the nation, according to a new study out from the Oregon Department of Consumer and Business Services. The department puts out its Oregon Workers’ Compensation Premium Rate Ranking Summary report every two years. The full report is due out in about two months, and is expected to include details such as classification code rankings for each state.

"We’ve noticed that generally everyone’s still moving down," said Jay Dotter, who authored the report along with Chris Day. 'It’s the most we’ve seen for a while."

Day noted that majority of states saw rates move down on the index. He couldn’t say exactly why that was, but offered some possible explanations. 'For (National council on Compensation Insurance) states, loss costs have been dropping,' Dotter said. 'We’ve been seeing that the losses due to medical and indemnity have been going down.'

California was behind only New York as the state with highest index rate. New York was in third place in the prior study, and moved up to worst in the nation, which resulted in California moving to second worst.

According to the report in the Insurance Journal, the California Department of Workers’ Compensation, which has touted the success of system-wide changes that have been ongoing over the past six years, took issue with the state’s ranking.

"Oregon’s study is based on the industrial mix in their state and does not reflect actual costs in California’s workers compensation system," a statement provided by a DWC spokesperson reads.

The Oregon report compares 50 classification codes with the largest losses for Oregon only and is based on payroll figures over a three-year period in that state from 2012 to 2014. This gives an overall index rate for the state based on state rates by class code weighted by premium. The authors of the report use a common set of class codes so they are comparing the rates without a class codes difference added in, since class codes vary broadly from state to state. However, the index rates are based on each state’s rates as of Jan. 1, 2018.

Since the 2012 workers’ comp reforms were enacted, California has seen a reduction in costs to employers while increasing injured workers’ benefits and improving access and quality of evidence-based care, according to the DWC statement.

"This is the result of our work to identify and reduce high litigation and administrative costs," the statement continues.

The statement also notes that as a result of these changes, the Workers’ Compensation Insurance Rating Bureau has for the past three years consistently recommended that pure premium costs be lowered.

The WCIRB in August submitted to the insurance commissioner proposed advisory pure premium rates to be effective Jan. 1, 2019 that average $1.70 per $100 of payroll. That indicated average pure premium is 4.5 percent less than the average approved July 1, 2018 advisory pure premium rate of $1.78 and 20 percent less than the corresponding industry average filed pure premium rate of $2.13 as of July 1, 2018.

New York was the worst ranked state $3.08, or 181 percent of the study median. New Jersey ($2.84), Alaska ($2.51) and Delaware ($2.50) followed.

Oregon’s $1.15 index rate ranked 46th. North Dakota (.82 cents), Indiana (.87 cents), Arkansas (.90 cents), West Virginia ($1.01) were the top ranked states with the lowest index rates.

Oregon ranked 43rd on the previous list, the best performance since the list first started to be complied in the late 1980s, according to Dotter. The state ranked 6th on the first report. Oregon later initiated reforms that included reducing litigation and sending contested workers’ comp cases through newly created administrative review processes, according to Dotter ...