Reuters reports that Berkshire Hathaway Inc. is in advanced discussions to sell its Applied Underwriters workers compensation unit to a consortium of insurance firms, people familiar with the matter said Friday.
The deal would be a rare divestment by Warren Buffett, who has built a corporate empire of more than 90 businesses in sectors spanning insurance, chemicals, energy, railroads, food and retail. Unlike private equity firms, the 88-year-old billionaire investor does not seek to cash out once he takes over a company.
However, San Francisco-based Applied Underwriters now sits outside Berkshire Hathaway’s insurance focus, making it a noncore asset Mr. Buffett wishes to shed, the sources said.
Berkshire Hathaway’s insurance businesses include the auto insurer Geico, reinsurer General Re, and a unit that protects against major catastrophes or unusual risks.
Applied Underwriters, on the other hand, provides bundled workers compensation and other employment-related insurance products targeted to small and medium-sized businesses.
A grouping of insurance firms and a hedge fund-backed reinsurance firm are in talks to buy Applied Underwriters at around the value of its book of business, the sources said, declining to disclose the price and the identity of the buyers.
The sources cautioned there is always a possibility that deal negotiations end unsuccessfully and asked not to be identified because the matter is confidential.
Berkshire Hathaway did not immediately respond to a request for comment.
Applied Underwriters has also been in the crosshairs of California’s insurance regulator, reaching a settlement agreement in June 2017 over “bait and switch marketing tactics,” according to a statement from the state’s insurance commissioner at the time. Berkshire Hathaway acquired Applied Underwriters in May 2006.
Mr. Buffett is scheduled to publish his annual letter to Berkshire Hathaway shareholders this weekend, alongside the company’s annual report. Berkshire Hathaway’s cash pile reached $103.6 billion as of the end of September, as Mr. Buffett has struggled to find attractive acquisition opportunities to put money to work.
Mr. Buffett’s efforts to divest Applied Underwriters come as one of his biggest investments, Kraft Heinz Co., has soured. On Thursday, the food giant announced a multibillion-dollar write-down on its marquee brands, raising concerns that years of rigorous cost cuts had eroded the value of its Kraft and Oscar Mayer products ...
The deal would be a rare divestment by Warren Buffett, who has built a corporate empire of more than 90 businesses in sectors spanning insurance, chemicals, energy, railroads, food and retail. Unlike private equity firms, the 88-year-old billionaire investor does not seek to cash out once he takes over a company.
However, San Francisco-based Applied Underwriters now sits outside Berkshire Hathaway’s insurance focus, making it a noncore asset Mr. Buffett wishes to shed, the sources said.
Berkshire Hathaway’s insurance businesses include the auto insurer Geico, reinsurer General Re, and a unit that protects against major catastrophes or unusual risks.
Applied Underwriters, on the other hand, provides bundled workers compensation and other employment-related insurance products targeted to small and medium-sized businesses.
A grouping of insurance firms and a hedge fund-backed reinsurance firm are in talks to buy Applied Underwriters at around the value of its book of business, the sources said, declining to disclose the price and the identity of the buyers.
The sources cautioned there is always a possibility that deal negotiations end unsuccessfully and asked not to be identified because the matter is confidential.
Berkshire Hathaway did not immediately respond to a request for comment.
Applied Underwriters has also been in the crosshairs of California’s insurance regulator, reaching a settlement agreement in June 2017 over “bait and switch marketing tactics,” according to a statement from the state’s insurance commissioner at the time. Berkshire Hathaway acquired Applied Underwriters in May 2006.
Mr. Buffett is scheduled to publish his annual letter to Berkshire Hathaway shareholders this weekend, alongside the company’s annual report. Berkshire Hathaway’s cash pile reached $103.6 billion as of the end of September, as Mr. Buffett has struggled to find attractive acquisition opportunities to put money to work.
Mr. Buffett’s efforts to divest Applied Underwriters come as one of his biggest investments, Kraft Heinz Co., has soured. On Thursday, the food giant announced a multibillion-dollar write-down on its marquee brands, raising concerns that years of rigorous cost cuts had eroded the value of its Kraft and Oscar Mayer products ...
Former licensed insurance agent, Alan Amir Yousefi, 31, was charged with 10 felony counts including grand theft, insurance fraud and forgery, for allegedly stealing more than $105,000 in insurance premiums from several business owners.
Yousefi used a variety of schemes targeting contractors and small businesses to steal workers’ compensation premiums leaving his victims without insurance and at great financial risk.
The investigation revealed Yousefi, doing business as Vanak Insurance Services, failed to place insurance for clients and instead pocketed workers’ compensation premiums and used the cash for gambling, sports equipment and designer clothes.
Contractors and small businesses, including a minority-owned business, were issued bogus certificates to cover up the fraud. Not having valid policies in place exposed these businesses to claims and the potential for huge financial losses.
A construction company that purchased a workers’ compensation policy from Yousefi discovered it did not have coverage after an injured employee filed a claim. This business suffered an uncovered loss and is now negotiating a costly settlement with the injured employee’s attorney.
Other victims faced premium hikes as a result of having gaps in coverage through no fault of their own, while another victim had their contractor’s license suspended by the Contractors State License Board because Yousefi failed to secure the company a workers’ compensation policy.
He surrendered at the courthouse and was released after posting $100,000 bail, and is scheduled to be arraigned February 25th.
The Orange County District Attorney’s Office is prosecuting the case.
...
Yousefi used a variety of schemes targeting contractors and small businesses to steal workers’ compensation premiums leaving his victims without insurance and at great financial risk.
The investigation revealed Yousefi, doing business as Vanak Insurance Services, failed to place insurance for clients and instead pocketed workers’ compensation premiums and used the cash for gambling, sports equipment and designer clothes.
Contractors and small businesses, including a minority-owned business, were issued bogus certificates to cover up the fraud. Not having valid policies in place exposed these businesses to claims and the potential for huge financial losses.
A construction company that purchased a workers’ compensation policy from Yousefi discovered it did not have coverage after an injured employee filed a claim. This business suffered an uncovered loss and is now negotiating a costly settlement with the injured employee’s attorney.
Other victims faced premium hikes as a result of having gaps in coverage through no fault of their own, while another victim had their contractor’s license suspended by the Contractors State License Board because Yousefi failed to secure the company a workers’ compensation policy.
He surrendered at the courthouse and was released after posting $100,000 bail, and is scheduled to be arraigned February 25th.
The Orange County District Attorney’s Office is prosecuting the case.
...
Over the past week, DEA agents arrested six doctors, physician assistants and suspected drug traffickers on federal narcotics charges. Operation Hypocritical Oath also resulted in criminal cases against three other defendants - two of them doctors - and a series of administrative actions by the DEA that led to four medical practitioners losing their licenses.
Dr. Michael Anthony Simental, 47, of Corona, who practices at the Kaiser Permanente facility in Riverside, was arrested on charges of illegally distributing hydrocodone, an opioid found in drugs such as Vicodin.
The investigation into Simental began after one of his patients died of a drug overdose last June. Records from the California Medical Board and Kaiser showed a string of disciplinary actions, complaints about his prescribing practices, and questions about his sobriety while working. A criminal complaint outlines numerous communications between Simental and the overdose victim, some of which indicate that Simental "was aware he was prescribing excessive volumes of opiate drugs" to the woman and her husband.
Gabriel Hernandez, 58, of Anaheim, a physician assistant who works at a Long Beach pain management clinic known as Vortex Wellness & Aesthetics, was arrested on Wednesday pursuant to a criminal complaint that charges him with distributing oxycodone without a legitimate medical purpose. Over a two-year period that ended in November, Hernandez prescribed nearly 6,000 controlled substances - more than half of which were for maximum-strength oxycodone, which means he was responsible for approximately 446,000 oxycodone pills being dispensed, according to court documents.
Hernandez often wrote prescriptions for drug cocktails known as the "holy trinity" - a narcotic, a tranquilizer and/or a muscle relaxant - which are sought out by drug addicts and are particularly dangerous because of the threat of fatal overdose, according to the affidavit in support of the complaint. .
Dr. Reza Ray Ehsan, 60, of Bel-Air, was arrested on charges that allege he unlawfully sold controlled drugs to an agent posing as a patient during undercover meetings in December 2018 and January 2019. As documented in an affidavit in support of a search warrant for Ehsan’s medical files, he sold more than 700,000 pills - mostly opioid painkillers.
An 18-count indictment also alleges that Ehsan structured cash deposits to prevent banks from submitting mandatory reports for currency transactions exceeding $10,000.
Saloumeh Rahbarvafaei, 40, of Northridge, a nurse practitioner employed at several locations, including the Good Neighbor Clinic in Leimert Park, was arrested on charges of unlawfully distributing hydrocodone.
According to the criminal complaint filed in this case, undercover agents purchased prescriptions from Rahbarvafaei during five separate transactions last year. Rahbarvafaei allegedly did not examine either of the two undercover federal agents, and her meetings with them lasted a few minutes each. In each of the five meetings, the agents paid Rahbarvafaei in cash and in return she provided them prescriptions for several narcotics, including hydrocodone, court documents state.
Monica Ann Berlin, 41, of Del Mar, a former employee at a doctor’s office in Beverly Hills and who is presently with a Del Mar-based company that offers perioperative care services, was arrested last Thursday pursuant to a criminal complaint charging her with distribution and possession of a controlled substance. Berlin allegedly stole a signature stamp and prescription pads belonging to the doctor who employed her, and she used them to write fraudulent prescriptions and distribute controlled substances to others.
Berlin allegedly forged at least 44 prescriptions for controlled substances that another person filled at pharmacies in Beverly Hills and Rancho Santa Fe. In exchange for the drugs, Berlin’s buyer treated her to lavish dinners and bought her gifts. According to the complaint, Berlin sent text messages to her buyer using coded language by describing the drugs as "candies" and "Tic Tacs."
Ana Leblanc, 33, of Chino Hills, who worked at a Santa Ana clinic for two weeks last year, was arrested this morning on charges of fraudulently obtaining prescription drugs.
Leblanc, who has no authority to handle or prescribe controlled substances, used a prescription pad from her employer to write prescriptions for controlled substances, including oxycodone, to herself and others without the knowledge or approval of the doctor listed on the prescription script. In addition, she created a patient chart for herself at her place of employment, “diagnosed” herself with anxiety, and ordered Xanax from the clinic’s medication supply ...
Dr. Michael Anthony Simental, 47, of Corona, who practices at the Kaiser Permanente facility in Riverside, was arrested on charges of illegally distributing hydrocodone, an opioid found in drugs such as Vicodin.
The investigation into Simental began after one of his patients died of a drug overdose last June. Records from the California Medical Board and Kaiser showed a string of disciplinary actions, complaints about his prescribing practices, and questions about his sobriety while working. A criminal complaint outlines numerous communications between Simental and the overdose victim, some of which indicate that Simental "was aware he was prescribing excessive volumes of opiate drugs" to the woman and her husband.
Gabriel Hernandez, 58, of Anaheim, a physician assistant who works at a Long Beach pain management clinic known as Vortex Wellness & Aesthetics, was arrested on Wednesday pursuant to a criminal complaint that charges him with distributing oxycodone without a legitimate medical purpose. Over a two-year period that ended in November, Hernandez prescribed nearly 6,000 controlled substances - more than half of which were for maximum-strength oxycodone, which means he was responsible for approximately 446,000 oxycodone pills being dispensed, according to court documents.
Hernandez often wrote prescriptions for drug cocktails known as the "holy trinity" - a narcotic, a tranquilizer and/or a muscle relaxant - which are sought out by drug addicts and are particularly dangerous because of the threat of fatal overdose, according to the affidavit in support of the complaint. .
Dr. Reza Ray Ehsan, 60, of Bel-Air, was arrested on charges that allege he unlawfully sold controlled drugs to an agent posing as a patient during undercover meetings in December 2018 and January 2019. As documented in an affidavit in support of a search warrant for Ehsan’s medical files, he sold more than 700,000 pills - mostly opioid painkillers.
An 18-count indictment also alleges that Ehsan structured cash deposits to prevent banks from submitting mandatory reports for currency transactions exceeding $10,000.
Saloumeh Rahbarvafaei, 40, of Northridge, a nurse practitioner employed at several locations, including the Good Neighbor Clinic in Leimert Park, was arrested on charges of unlawfully distributing hydrocodone.
According to the criminal complaint filed in this case, undercover agents purchased prescriptions from Rahbarvafaei during five separate transactions last year. Rahbarvafaei allegedly did not examine either of the two undercover federal agents, and her meetings with them lasted a few minutes each. In each of the five meetings, the agents paid Rahbarvafaei in cash and in return she provided them prescriptions for several narcotics, including hydrocodone, court documents state.
Monica Ann Berlin, 41, of Del Mar, a former employee at a doctor’s office in Beverly Hills and who is presently with a Del Mar-based company that offers perioperative care services, was arrested last Thursday pursuant to a criminal complaint charging her with distribution and possession of a controlled substance. Berlin allegedly stole a signature stamp and prescription pads belonging to the doctor who employed her, and she used them to write fraudulent prescriptions and distribute controlled substances to others.
Berlin allegedly forged at least 44 prescriptions for controlled substances that another person filled at pharmacies in Beverly Hills and Rancho Santa Fe. In exchange for the drugs, Berlin’s buyer treated her to lavish dinners and bought her gifts. According to the complaint, Berlin sent text messages to her buyer using coded language by describing the drugs as "candies" and "Tic Tacs."
Ana Leblanc, 33, of Chino Hills, who worked at a Santa Ana clinic for two weeks last year, was arrested this morning on charges of fraudulently obtaining prescription drugs.
Leblanc, who has no authority to handle or prescribe controlled substances, used a prescription pad from her employer to write prescriptions for controlled substances, including oxycodone, to herself and others without the knowledge or approval of the doctor listed on the prescription script. In addition, she created a patient chart for herself at her place of employment, “diagnosed” herself with anxiety, and ordered Xanax from the clinic’s medication supply ...
British drugmaker Indivior Plc launched a copycat version of its blockbuster opioid addiction drug Suboxone in the United States, just one day after the U.S. Supreme Court cleared the way for its rivals to market generic versions.
Rejecting arguments from Indivior, Chief Justice John Roberts left in force a ruling, set to take effect Tuesday, that lets Dr. Reddy’s put the generic drug on market.
Indivior argued that Dr. Reddy’s should wait until the high court considers whether to hear an appeal in the case.
Indivior has spent over two years fighting multiple legal battles and patent disputes in the United States with companies including Dr. Reddy’s, Teva and Mylan to block them from launching generics.
The drugmaker has said it faces potentially severe losses in market share to copycats in the immediate future.
Suboxone accounted for almost all of the company’s $1 billion in sales last year, and the company said on Feb. 14 that it’s unable to provide financial guidance for 2019 "given uncertainties surrounding how the U.S. market for both Suboxone Film and generic alternatives will ultimately develop."
The United States accounts for 80 percent of Indivior’s revenue. Indivior ended 2018 with a 53 percent share of the Suboxone film market in the United States, compared to 56 percent in 2017 and 61 percent in 2016.
The appeals court case is Indivior Inc. v. Dr. Reddy’s Laboratories SA 18-2167, U.S. Court of Appeals for the Federal Circuit (Washington).
The company’s authorized generic is being marketed and distributed by Sandoz Inc ...
Rejecting arguments from Indivior, Chief Justice John Roberts left in force a ruling, set to take effect Tuesday, that lets Dr. Reddy’s put the generic drug on market.
Indivior argued that Dr. Reddy’s should wait until the high court considers whether to hear an appeal in the case.
Indivior has spent over two years fighting multiple legal battles and patent disputes in the United States with companies including Dr. Reddy’s, Teva and Mylan to block them from launching generics.
The drugmaker has said it faces potentially severe losses in market share to copycats in the immediate future.
Suboxone accounted for almost all of the company’s $1 billion in sales last year, and the company said on Feb. 14 that it’s unable to provide financial guidance for 2019 "given uncertainties surrounding how the U.S. market for both Suboxone Film and generic alternatives will ultimately develop."
The United States accounts for 80 percent of Indivior’s revenue. Indivior ended 2018 with a 53 percent share of the Suboxone film market in the United States, compared to 56 percent in 2017 and 61 percent in 2016.
The appeals court case is Indivior Inc. v. Dr. Reddy’s Laboratories SA 18-2167, U.S. Court of Appeals for the Federal Circuit (Washington).
The company’s authorized generic is being marketed and distributed by Sandoz Inc ...
A new California Workers’ Compensation Institute (CWCI) study finds that non-steroidal anti-inflammatories (NSAIDs) have supplanted opioids as the most common therapeutic drug group prescribed to injured workers in California, while payment data show that both dermatological medications and anticonvulsants now rank ahead of opioids in terms of total reimbursements.
Using data from 5.75 million prescriptions dispensed to California injured workers from 2009 to June 2018, CWCI analysts examined changes in the prescription and payment distributions among therapeutic drug groups, identified trends in the use of generics, and determined average amounts paid for drugs within each drug group over the past decade.
The results show that efforts to curb inappropriate use of opioids - tighter scrutiny via utilization review and independent medical review; restrictions by payers, medical provider networks, pharmacy benefit managers and in the Medical Treatment Utilization Schedule (MTUS) formulary; and growing awareness of opioid risks - are continuing to have an effect, as opioids fell to 18.0% of the prescriptions filled in the first half of 2018, down from 20.2% in 2017, and down from 30.5% a decade ago.
Conversely, NSAIDs, often prescribed as non-opioid alternatives to treat pain, surpassed opioids as the top drug group in California workers’ compensation in 2016, and since then, their share of the prescriptions has continued to grow, climbing to a record 31.7% of the drugs dispensed to injured workers in the first half of 2018. Anticonvulsants’ share of the prescriptions also has increased, more than doubling from 4.1% in 2009 to 9.7% in the first half of 2018, likely due to their growing use as a non-opioid alternative to treat neuropathic pain.
The 2018 data show anticonvulsants were the third most prescribed drug group, moving ahead of muscle relaxants, which under the MTUS formulary that took effect on January 1, 2018, are not exempt from utilization review, with the exception of limited special fill or perioperative allowances that restrict the quantity of the drug that can be dispensed.
Until a few years ago, growth in dermatological payments was largely driven by high-cost "custom" pharmacy compounded drugs, but with legislative changes that took effect in 2012 (AB 378), high-profile indictments involving compounded drug kickbacks, and more public awareness, custom compounds have become less prevalent, though the study notes two other factors now underlie the continued growth in dermatologlical payments:
- - the increased prevalence of high-cost, mass-produced private label topicals containing one or more active ingredients (e.g., capsaicin, lidocaine, menthol, or methyl salicylate) commonly found in over-the-counter topical analgesics, which are marketed to physicians for in-office or mail order dispensing; and
- - increased payments for topicals containing a prescription NSAID (e.g., diclofenac) which are available in a number of formulations and strengths, some of which are exempt from utilization review under the formulary.
In addition to the increasing share of the workers’ compensation prescription dollars going toward dermatologicals, the study also found that anticonvulsants’ share of the drug spend tripled from 4.8% in 2009 to 15.2% in the first half of 2018, so anticonvulsants now rank ahead of opioids as the second most costly drug group.
The data show that most of the growth in anticonvulsant’s share of the payments occurred over the past four years, coinciding with the decline in opioid use, suggesting the use of certain anticonvulsants in place of opioids. Notably, anticonvulsant prescriptions used in California workers’ comp are heavily concentrated in just two drugs, one of which is only available as a brand drug, and that drug accounted for nearly three quarters of the anticonvulsant dollars paid in the first half of 2018 ...
Using data from 5.75 million prescriptions dispensed to California injured workers from 2009 to June 2018, CWCI analysts examined changes in the prescription and payment distributions among therapeutic drug groups, identified trends in the use of generics, and determined average amounts paid for drugs within each drug group over the past decade.
The results show that efforts to curb inappropriate use of opioids - tighter scrutiny via utilization review and independent medical review; restrictions by payers, medical provider networks, pharmacy benefit managers and in the Medical Treatment Utilization Schedule (MTUS) formulary; and growing awareness of opioid risks - are continuing to have an effect, as opioids fell to 18.0% of the prescriptions filled in the first half of 2018, down from 20.2% in 2017, and down from 30.5% a decade ago.
Conversely, NSAIDs, often prescribed as non-opioid alternatives to treat pain, surpassed opioids as the top drug group in California workers’ compensation in 2016, and since then, their share of the prescriptions has continued to grow, climbing to a record 31.7% of the drugs dispensed to injured workers in the first half of 2018. Anticonvulsants’ share of the prescriptions also has increased, more than doubling from 4.1% in 2009 to 9.7% in the first half of 2018, likely due to their growing use as a non-opioid alternative to treat neuropathic pain.
The 2018 data show anticonvulsants were the third most prescribed drug group, moving ahead of muscle relaxants, which under the MTUS formulary that took effect on January 1, 2018, are not exempt from utilization review, with the exception of limited special fill or perioperative allowances that restrict the quantity of the drug that can be dispensed.
Until a few years ago, growth in dermatological payments was largely driven by high-cost "custom" pharmacy compounded drugs, but with legislative changes that took effect in 2012 (AB 378), high-profile indictments involving compounded drug kickbacks, and more public awareness, custom compounds have become less prevalent, though the study notes two other factors now underlie the continued growth in dermatologlical payments:
- - the increased prevalence of high-cost, mass-produced private label topicals containing one or more active ingredients (e.g., capsaicin, lidocaine, menthol, or methyl salicylate) commonly found in over-the-counter topical analgesics, which are marketed to physicians for in-office or mail order dispensing; and
- - increased payments for topicals containing a prescription NSAID (e.g., diclofenac) which are available in a number of formulations and strengths, some of which are exempt from utilization review under the formulary.
In addition to the increasing share of the workers’ compensation prescription dollars going toward dermatologicals, the study also found that anticonvulsants’ share of the drug spend tripled from 4.8% in 2009 to 15.2% in the first half of 2018, so anticonvulsants now rank ahead of opioids as the second most costly drug group.
The data show that most of the growth in anticonvulsant’s share of the payments occurred over the past four years, coinciding with the decline in opioid use, suggesting the use of certain anticonvulsants in place of opioids. Notably, anticonvulsant prescriptions used in California workers’ comp are heavily concentrated in just two drugs, one of which is only available as a brand drug, and that drug accounted for nearly three quarters of the anticonvulsant dollars paid in the first half of 2018 ...
National health expenditure growth is expected to average 5.5 percent annually from 2018-2027, reaching nearly $6.0 trillion by 2027, according to a report published by the independent Office of the Actuary at the Centers for Medicare & Medicaid Services (CMS).
Growth in national health spending is projected to be faster than projected growth in Gross Domestic Product (GDP) by 0.8 percentage points over the same period. As a result, the report projects the health share of GDP to rise from 17.9 percent in 2017 to 19.4 percent by 2027.
Similar to the findings in last year’s report, the report found that by 2027, federal, state and local governments are projected to finance 47 percent of national health spending, an increase of 2 percentage points from 45 percent in 2017.
Medicare: Medicare spending growth is projected to average 7.4 percent over 2018-2027, the fastest rate among the major payers. Underlying the strong average annual Medicare spending growth are projected sustained strong enrollment growth as the baby-boomers continue to age into the program and growth in the use and intensity of covered services that is consistent with the rates observed during Medicare’s long-term history.
Medicaid: Average annual growth of 5.5 percent is projected for Medicaid spending for 2018-2027. Medicaid expansions during 2019 in Idaho, Maine, Nebraska, Utah, and Virginia are expected to result in the first acceleration in growth in spending for the program since 2014 (from 2.2 percent in 2018 to 4.8 percent in 2019). Medicaid spending growth is then projected to average 6.0 percent for 2020 through 2027 as the program’s spending patterns reflect an enrollment mix more heavily influenced by comparatively more expensive aged and disabled enrollees.
Private Health Insurance and Out-of-Pocket:: For 2018-2027, private health insurance spending growth is projected to average 4.8 percent, slowest among the major payers, which is partly due to slow enrollment growth related to the baby-boomers transitioning from private coverage into Medicare. Out-of-pocket expenditures are also projected to grow at an average rate of 4.8 percent over 2018-2027 and to represent 9.8 percent of total spending by 2027 (down from 10.5 percent in 2017).
Prescription Drugs: Spending growth for prescription drugs is projected to generally accelerate over 2018-2027 (and average 5.6 percent) mostly as a result of faster utilization growth. Underlying faster growth in the utilization of prescription drugs, particularly over 2020-2027, are a number of factors including efforts on the part of employers and insurers to encourage better medication adherence among those with chronic conditions, changing pharmacotherapy guidelines, faster projected private health insurance spending growth in lagged response to higher income growth, and an expected influx of new and expensive innovative drugs into the market towards the latter stage of the period.
Hospital: Hospital spending growth is projected to average 5.6 percent for 2018-2027. This includes a projected acceleration in 2019, to 5.1 percent from 4.4 percent in 2018, reflecting the net result of faster expected growth in both Medicare (higher payment updates) and Medicaid (as a result of expansion in five states), but slower projected growth in private health insurance as enrollment declines slightly due to the repeal of the individual mandate.
Physician and Clinical Services: Physician and clinical services spending is projected to grow an average of 5.4 percent per year over 2018-2027. This includes faster growth in prices over 2020-2027 for physician and clinical services due to anticipated rising wage growth related to increased demand from the aging population ...
Growth in national health spending is projected to be faster than projected growth in Gross Domestic Product (GDP) by 0.8 percentage points over the same period. As a result, the report projects the health share of GDP to rise from 17.9 percent in 2017 to 19.4 percent by 2027.
Similar to the findings in last year’s report, the report found that by 2027, federal, state and local governments are projected to finance 47 percent of national health spending, an increase of 2 percentage points from 45 percent in 2017.
Medicare: Medicare spending growth is projected to average 7.4 percent over 2018-2027, the fastest rate among the major payers. Underlying the strong average annual Medicare spending growth are projected sustained strong enrollment growth as the baby-boomers continue to age into the program and growth in the use and intensity of covered services that is consistent with the rates observed during Medicare’s long-term history.
Medicaid: Average annual growth of 5.5 percent is projected for Medicaid spending for 2018-2027. Medicaid expansions during 2019 in Idaho, Maine, Nebraska, Utah, and Virginia are expected to result in the first acceleration in growth in spending for the program since 2014 (from 2.2 percent in 2018 to 4.8 percent in 2019). Medicaid spending growth is then projected to average 6.0 percent for 2020 through 2027 as the program’s spending patterns reflect an enrollment mix more heavily influenced by comparatively more expensive aged and disabled enrollees.
Private Health Insurance and Out-of-Pocket:: For 2018-2027, private health insurance spending growth is projected to average 4.8 percent, slowest among the major payers, which is partly due to slow enrollment growth related to the baby-boomers transitioning from private coverage into Medicare. Out-of-pocket expenditures are also projected to grow at an average rate of 4.8 percent over 2018-2027 and to represent 9.8 percent of total spending by 2027 (down from 10.5 percent in 2017).
Prescription Drugs: Spending growth for prescription drugs is projected to generally accelerate over 2018-2027 (and average 5.6 percent) mostly as a result of faster utilization growth. Underlying faster growth in the utilization of prescription drugs, particularly over 2020-2027, are a number of factors including efforts on the part of employers and insurers to encourage better medication adherence among those with chronic conditions, changing pharmacotherapy guidelines, faster projected private health insurance spending growth in lagged response to higher income growth, and an expected influx of new and expensive innovative drugs into the market towards the latter stage of the period.
Hospital: Hospital spending growth is projected to average 5.6 percent for 2018-2027. This includes a projected acceleration in 2019, to 5.1 percent from 4.4 percent in 2018, reflecting the net result of faster expected growth in both Medicare (higher payment updates) and Medicaid (as a result of expansion in five states), but slower projected growth in private health insurance as enrollment declines slightly due to the repeal of the individual mandate.
Physician and Clinical Services: Physician and clinical services spending is projected to grow an average of 5.4 percent per year over 2018-2027. This includes faster growth in prices over 2020-2027 for physician and clinical services due to anticipated rising wage growth related to increased demand from the aging population ...
As Medicaid officials investigate whether pharmacy middlemen are ripping off taxpayers by manipulating drug prices in the insurance program covering 3 million poor Ohioans, the Ohio Dispatch reports that another state agency recently found it overpaid millions under a similar arrangement.
"We thought we had a solid contract that kept us from being taken advantage of (but) discovered we were being hosed," said John Hanna, former pharmacy program manager for the Ohio Bureau of Workers’ Compensation.
"I’ve been a pharmacist since 1977 and I was stunned when I saw the level of manipulation that went on that I didn’t know about," said Hanna, who retired last September after eight years.
After nearly a year of investigating, Ohio is taking its first steps to recover money from pharmacy middlemen who do billions of dollars worth of business with state agencies. The bureau spent about $86 million last year on pharmacy claims for about 41,000 injured workers.
Attorney General Dave Yost announced Tuesday that he is seeking repayment of nearly $16 million paid to pharmacy-benefit manager OptumRx by the Bureau of Workers’ Compensation. Yost intends to take OptumRx to nonbinding mediation, saying the company has overcharged the bureau since 2015. Such mediation is required under the contract between the bureau and OptumRx. If it fails, the dispute presumably will be taken to court.
"The state of Ohio and the BWC consider these matters of public significance and have calculated the following overcharges attributable to OptumRx’s failure to adhere to agreed discounts on generic drugs. ..." says a copy of Yost’s Feb. 11 letter to OptumRx that was obtained by The Dispatch.
The firm that conducted the analysis, Healthplan Data Solutions, determined that OptumRx overcharged BWC by $5.7 million in 2017. That’s 6.5 percent of the $86 million in total agency spending on prescription drugs that year. The bureau fired OptumRx as a consequence of the analysis.
The bureau’s analysis, conducted by the Columbus-based Healthplan Data Solutions, found the private company hired by the bureau to run its pharmacy program overcharged the agency $5.6 million in 2017.
As described by Hanna, workers’ comp was paying pharmacists less to fill prescriptions than they were charging the state, allowing them to pocket millions.
In industry jargon, the practice is known as "spread pricing." Serious questions about are being raised about it in Iowa, Kentucky, Arkansas and nationally
Hanna said "PBMs started in ’80s to process prescriptions and they slowly grew in the marketplace and realized they had the ability to control pricing and reimbursements. That’s where the concept of the spread came in - you’re my client and I tell you I will process prescriptions for you for your prescription drug plan for X dollars, and then I go to the pharmacies and tell them I will pay you X minus $9 and that’s my spread."
"The client has no idea what the pharmacy is being paid unless they have a transparent contract." ...
"We thought we had a solid contract that kept us from being taken advantage of (but) discovered we were being hosed," said John Hanna, former pharmacy program manager for the Ohio Bureau of Workers’ Compensation.
"I’ve been a pharmacist since 1977 and I was stunned when I saw the level of manipulation that went on that I didn’t know about," said Hanna, who retired last September after eight years.
After nearly a year of investigating, Ohio is taking its first steps to recover money from pharmacy middlemen who do billions of dollars worth of business with state agencies. The bureau spent about $86 million last year on pharmacy claims for about 41,000 injured workers.
Attorney General Dave Yost announced Tuesday that he is seeking repayment of nearly $16 million paid to pharmacy-benefit manager OptumRx by the Bureau of Workers’ Compensation. Yost intends to take OptumRx to nonbinding mediation, saying the company has overcharged the bureau since 2015. Such mediation is required under the contract between the bureau and OptumRx. If it fails, the dispute presumably will be taken to court.
"The state of Ohio and the BWC consider these matters of public significance and have calculated the following overcharges attributable to OptumRx’s failure to adhere to agreed discounts on generic drugs. ..." says a copy of Yost’s Feb. 11 letter to OptumRx that was obtained by The Dispatch.
The firm that conducted the analysis, Healthplan Data Solutions, determined that OptumRx overcharged BWC by $5.7 million in 2017. That’s 6.5 percent of the $86 million in total agency spending on prescription drugs that year. The bureau fired OptumRx as a consequence of the analysis.
The bureau’s analysis, conducted by the Columbus-based Healthplan Data Solutions, found the private company hired by the bureau to run its pharmacy program overcharged the agency $5.6 million in 2017.
As described by Hanna, workers’ comp was paying pharmacists less to fill prescriptions than they were charging the state, allowing them to pocket millions.
In industry jargon, the practice is known as "spread pricing." Serious questions about are being raised about it in Iowa, Kentucky, Arkansas and nationally
Hanna said "PBMs started in ’80s to process prescriptions and they slowly grew in the marketplace and realized they had the ability to control pricing and reimbursements. That’s where the concept of the spread came in - you’re my client and I tell you I will process prescriptions for you for your prescription drug plan for X dollars, and then I go to the pharmacies and tell them I will pay you X minus $9 and that’s my spread."
"The client has no idea what the pharmacy is being paid unless they have a transparent contract." ...
Workers who are injured on the job may or may not file for workers’ compensation, but among the factors that influence that decision - and tip it toward filing a comp claim - is the level of the deductible in their employer-provided health plan.
That finding comes from a new report from the Workers Compensation Research Institute, which finds that as deductibles rise, employees are more likely to turn to comp claims rather than their own coverage.
"In years past, workers may have chosen to have a work injury covered within their group health plan," says John Ruser, WCRI’s president and CEO. "But the increasing cost of deductibles may cause them to consider having the injury covered - where it potentially belongs - in the workers’ compensation system, where there are no deductibles or copayments for the medical care they receive."
According to the report, workers who have a higher deductible from their group health plan when they’re injured are not only more likely to file under workers’ compensation than under group health insurance, workers who have sustained soft-tissue injuries are even more likely to turn to workers’ comp rather than their own health coverage when deductibles are higher for the latter.
When injured workers have an average remaining deductible of $550 on their own health coverage, the report adds, they’re approximately 1.4 percentage points more likely to tip the scales in favor of filing a workers’ compensation claim than if their own coverage deductible is zero. And that results in an increase of 5.3 percent in workers’ compensation claim volume.
States in which workers can choose their initial provider are the ones seeing the most concentration in the rise in filing workers’ compensation claims. That could possibly be due to the ability within workers’ compensation of workers to stay with their group health doctor in these states.
The study also estimated the increase in workers’ compensation volume from the growth in high-deductible group health policies, and found that "the increase partially offsets the overall decline in workers’ compensation claims seen over the past decade." ...
That finding comes from a new report from the Workers Compensation Research Institute, which finds that as deductibles rise, employees are more likely to turn to comp claims rather than their own coverage.
"In years past, workers may have chosen to have a work injury covered within their group health plan," says John Ruser, WCRI’s president and CEO. "But the increasing cost of deductibles may cause them to consider having the injury covered - where it potentially belongs - in the workers’ compensation system, where there are no deductibles or copayments for the medical care they receive."
According to the report, workers who have a higher deductible from their group health plan when they’re injured are not only more likely to file under workers’ compensation than under group health insurance, workers who have sustained soft-tissue injuries are even more likely to turn to workers’ comp rather than their own health coverage when deductibles are higher for the latter.
When injured workers have an average remaining deductible of $550 on their own health coverage, the report adds, they’re approximately 1.4 percentage points more likely to tip the scales in favor of filing a workers’ compensation claim than if their own coverage deductible is zero. And that results in an increase of 5.3 percent in workers’ compensation claim volume.
States in which workers can choose their initial provider are the ones seeing the most concentration in the rise in filing workers’ compensation claims. That could possibly be due to the ability within workers’ compensation of workers to stay with their group health doctor in these states.
The study also estimated the increase in workers’ compensation volume from the growth in high-deductible group health policies, and found that "the increase partially offsets the overall decline in workers’ compensation claims seen over the past decade." ...
The U.S. Supreme Court rejected Maryland’s bid to revive a law aimed at preventing price gouging by pharmaceutical companies, dealing a setback to the power of states to rein in prescription drug costs.
Last year, Maryland became the first state in the country to give its attorney general the power to take legal action against drug companies that dramatically increase the price of off-patent or generic drugs.
The complicated law applied to generic or off-patent drug makers that manufacture a medicine at least three other firms also make. If those conditions applied, companies could not impose a significant price increase without justifying it to the attorney general, who could ask a judge to order that the price increase not take effect. Violating the law carried a $10,000 fine.
The Association for Accessible Medicines, a trade group representing generic drug manufacturers such as Teva Pharmaceutical Industries Ltd and Mylan NV, sued its Attorney General Brian E. Frosh and Dennis R. Schrader, who was the state’s acting health secretary, to block the measure.
The case worked it way to the U.S. Court of Appeals for the Fourth Circuit, which said in a 2-to-1 ruling that the 2017 law is unconstitutional because it violates the commerce clause of the U.S. Constitution.
"Although we sympathize with the consumers affected by the prescription drug manufacturers’ conduct and with Maryland’s efforts to curtail prescription drug price gouging, we are constrained to apply the dormant commerce clause to the Act," Judge Stephanie D. Thacker wrote for the majority opinion. "We hold that the Act is unconstitutional under the dormant commerce clause because it directly regulates transactions that take place outside Maryland."
Maryland argued that the 4th Circuit’s decision not only prevents Maryland and other states from reining in abusive prescription-drug prices that harm consumers and public health but that the ruling could call into question other state regulatory efforts. At issue was whether the measure violated Supreme Court precedents that constrain states from enacting laws that burden out-of-state competitors.
The U.S. Supreme Court just declined to take up Maryland’s appeal of the 2018 federal appeals court ruling, without comment, letting a lower court ruling against the law stand.
So far, California as had better results with S.B. 17. The California law requires all drug price hikes over 16% over a two-year span to be subject to transparency requirements, which would discourage double-digit price increases and better negotiations between drug companies and purchasers.
Last August, the U.S. District Court, Eastern District of California dismissed a lawsuit brought by the Pharmaceutical Research and Manufacturers of America (PhRMA) to halt S.B. 17.
PhRMA filed this lawsuit alleging the law as unconstitutional and seeking a permanent injunction preventing its implementation. The U.S. District Court dismissed the suit as PhRMA did not produce enough facts to substantiate their claims or standing ...
Last year, Maryland became the first state in the country to give its attorney general the power to take legal action against drug companies that dramatically increase the price of off-patent or generic drugs.
The complicated law applied to generic or off-patent drug makers that manufacture a medicine at least three other firms also make. If those conditions applied, companies could not impose a significant price increase without justifying it to the attorney general, who could ask a judge to order that the price increase not take effect. Violating the law carried a $10,000 fine.
The Association for Accessible Medicines, a trade group representing generic drug manufacturers such as Teva Pharmaceutical Industries Ltd and Mylan NV, sued its Attorney General Brian E. Frosh and Dennis R. Schrader, who was the state’s acting health secretary, to block the measure.
The case worked it way to the U.S. Court of Appeals for the Fourth Circuit, which said in a 2-to-1 ruling that the 2017 law is unconstitutional because it violates the commerce clause of the U.S. Constitution.
"Although we sympathize with the consumers affected by the prescription drug manufacturers’ conduct and with Maryland’s efforts to curtail prescription drug price gouging, we are constrained to apply the dormant commerce clause to the Act," Judge Stephanie D. Thacker wrote for the majority opinion. "We hold that the Act is unconstitutional under the dormant commerce clause because it directly regulates transactions that take place outside Maryland."
Maryland argued that the 4th Circuit’s decision not only prevents Maryland and other states from reining in abusive prescription-drug prices that harm consumers and public health but that the ruling could call into question other state regulatory efforts. At issue was whether the measure violated Supreme Court precedents that constrain states from enacting laws that burden out-of-state competitors.
The U.S. Supreme Court just declined to take up Maryland’s appeal of the 2018 federal appeals court ruling, without comment, letting a lower court ruling against the law stand.
So far, California as had better results with S.B. 17. The California law requires all drug price hikes over 16% over a two-year span to be subject to transparency requirements, which would discourage double-digit price increases and better negotiations between drug companies and purchasers.
Last August, the U.S. District Court, Eastern District of California dismissed a lawsuit brought by the Pharmaceutical Research and Manufacturers of America (PhRMA) to halt S.B. 17.
PhRMA filed this lawsuit alleging the law as unconstitutional and seeking a permanent injunction preventing its implementation. The U.S. District Court dismissed the suit as PhRMA did not produce enough facts to substantiate their claims or standing ...
Two San Diego physical therapy clinics and their owners have paid $450,000 to resolve allegations that they fraudulently billed TRICARE for medical services that were supposedly performed by qualified medical doctors, but were actually provided by unqualified and unauthorized employees.
South Bay Physical Medicine, Inc. and Direct Health Medical Center, Inc. d/b/a San Diego Spine and Rehabilitation were physical therapy clinics. Brett Allan, Sr., Brett Allan, Jr. and Jeff Allan owned the clinics.
"The United States Attorney’s Office works hard to safeguard the integrity of the TRICARE program and the safety of our soldiers and their family members," said U.S. Attorney Robert Brewer. "Health care fraud hurts the entire health care system, from taxpayers down to honest providers and innocent patients. We are committed to using all available remedies, both civil and criminal, to combat health care fraud."
The Government’s resolution of this matter illustrates its emphasis on combating health care fraud. One of the most powerful tools in this effort is the False Claims Act. Tips and complaints from all sources about potential fraud, waste, and abuse can be reported at https://www.tricare.mil/ContactUs/ReportFraudAbuse.
This matter was handled by Assistant U.S. Attorney Dylan M. Aste of the U.S. Attorney’s Office for the Southern District of California, the Federal Bureau of Investigation, the Defense Criminal Investigative Service, and the Defense Health Agency Program Integrity Office.
...
South Bay Physical Medicine, Inc. and Direct Health Medical Center, Inc. d/b/a San Diego Spine and Rehabilitation were physical therapy clinics. Brett Allan, Sr., Brett Allan, Jr. and Jeff Allan owned the clinics.
"The United States Attorney’s Office works hard to safeguard the integrity of the TRICARE program and the safety of our soldiers and their family members," said U.S. Attorney Robert Brewer. "Health care fraud hurts the entire health care system, from taxpayers down to honest providers and innocent patients. We are committed to using all available remedies, both civil and criminal, to combat health care fraud."
The Government’s resolution of this matter illustrates its emphasis on combating health care fraud. One of the most powerful tools in this effort is the False Claims Act. Tips and complaints from all sources about potential fraud, waste, and abuse can be reported at https://www.tricare.mil/ContactUs/ReportFraudAbuse.
This matter was handled by Assistant U.S. Attorney Dylan M. Aste of the U.S. Attorney’s Office for the Southern District of California, the Federal Bureau of Investigation, the Defense Criminal Investigative Service, and the Defense Health Agency Program Integrity Office.
...
Evangelina Ruiz began work as a legal assistant with Carter and Carter, APLC in 2007 at their office in Corona. Christopher Carter specialized in mold and mold remediation cases.
In September 2011, Christopher Carter accepted a tort case involving black water and mold in a house. Ruiz was assigned to inspect documents in the case, which she alleged contained mold and mold spores.
Ruiz became ill. Ruiz filed a worker’s compensation claim but Carter advised Ruiz it did not carry worker’s compensation insurance during the time that she alleged to have been sickened by the documents.
Ruiz filed a lawsuit in the trial court and with the Worker’s Compensation Appeals Board (WCAB).
The second amended complaint filed in the trial court, which alleged one cause of action for premises liability. Carter brought a motion for summary judgment, which was granted by the trial court.
Ruiz appealed the grant of Carter’s Motion claiming that (1) because Carter was an illegal uninsured employer, she only had to prove worker’s compensation causation, which is a lower standard than the civil causation standard used by the trial court in granting the Motion; (2) pursuant to Labor Code section 3708, Carter had the burden to prove it was not negligent; and (3) the trial court erred by rejecting Ruiz’s argument when she filed the first amended complaint, that she could allege different theories of negligence
The court of appeal conclude the Motion was properly granted and affirm the judgment in the unpublished case of Ruiz v. Carter & Carter, APL.
LC 3706 states, "If any employer fails to secure the payment of compensation, any injured employee or his dependents may bring an action at law against such employer for damages, as if this division did not apply." LC 3708 mandates a presumption not present in other tort actions that the injury to the employee "was a direct result and grew out of the negligence of the employer, and the burden of proof is upon the employer, to rebut the presumption of negligence."
Here, Ruiz had the burden of proving by a preponderance of the evidence that she was injured in the Carter offices. Ruiz failed to provide any competent evidence with the SAC to support she was injured at Carter’s office.
The burden of proof did not shift to Carter under Labor Code section 3708 to prove that it was not negligent because Ruiz failed to present competent evidence that she had suffered an injury at work ...
In September 2011, Christopher Carter accepted a tort case involving black water and mold in a house. Ruiz was assigned to inspect documents in the case, which she alleged contained mold and mold spores.
Ruiz became ill. Ruiz filed a worker’s compensation claim but Carter advised Ruiz it did not carry worker’s compensation insurance during the time that she alleged to have been sickened by the documents.
Ruiz filed a lawsuit in the trial court and with the Worker’s Compensation Appeals Board (WCAB).
The second amended complaint filed in the trial court, which alleged one cause of action for premises liability. Carter brought a motion for summary judgment, which was granted by the trial court.
Ruiz appealed the grant of Carter’s Motion claiming that (1) because Carter was an illegal uninsured employer, she only had to prove worker’s compensation causation, which is a lower standard than the civil causation standard used by the trial court in granting the Motion; (2) pursuant to Labor Code section 3708, Carter had the burden to prove it was not negligent; and (3) the trial court erred by rejecting Ruiz’s argument when she filed the first amended complaint, that she could allege different theories of negligence
The court of appeal conclude the Motion was properly granted and affirm the judgment in the unpublished case of Ruiz v. Carter & Carter, APL.
LC 3706 states, "If any employer fails to secure the payment of compensation, any injured employee or his dependents may bring an action at law against such employer for damages, as if this division did not apply." LC 3708 mandates a presumption not present in other tort actions that the injury to the employee "was a direct result and grew out of the negligence of the employer, and the burden of proof is upon the employer, to rebut the presumption of negligence."
Here, Ruiz had the burden of proving by a preponderance of the evidence that she was injured in the Carter offices. Ruiz failed to provide any competent evidence with the SAC to support she was injured at Carter’s office.
The burden of proof did not shift to Carter under Labor Code section 3708 to prove that it was not negligent because Ruiz failed to present competent evidence that she had suffered an injury at work ...
A project to develop breakthrough artificial intelligence technology for the anti-fraud sector is one of a number of new projects set to receive funding to enable the UK accountancy, insurance and legal services industries to transform how they operate.
The artificial intelligence software, being developed by Intelligent Voice Ltd, Strenuus Ltd. and the University of East London will combine AI and voice recognition technology to detect and interpret emotion and linguistics to assess the credibility of insurance claims.
The project is one of 40 backed by £13 million in Government investment to support collaborative industry and research projects to develop the next-generation of professional services.
Business Secretary Greg Clark said: "Artificial intelligence and data are transforming industries across the world. We are combining our unique heritage in AI with our world beating professional services to put the UK at the forefront of these cutting-edge technologies and their application."
"We want to ensure businesses and consumers benefit from the application of AI - from providing quicker access to legal advice for customers, to tackling fraudulent insurance claims, these projects illustrate our modern Industrial Strategy in action. We’re investing record levels in research and development so that every part of the UK can benefit from the industries and high-skilled jobs of the future."
The projects announced on February 15 back innovation in the accountancy, insurance and legal services and are part of the Next Generation Services Industrial Strategy Challenge Fund. This is a £20 million fund, administered by UK Research and Innovation (UKRI), to support the development and adoption of AI and Data technologies that will transform the UK’s services industries.
This announcement builds on reviews that BEIS has undertaken with the InsurTech (insurance technology) and LawTech (legal technology) emerging sectors, in partnership with Treasury and the Ministry of Justice.
The Industrial Strategy sets out Grand Challenges to put the UK at the forefront of the industries of the future, ensuring that the UK takes advantage of major global changes, improving people’s lives and the country’s productivity. Artificial intelligence and data is one of the four Grand Challenges which will see AI used across a variety of industries and put the UK at the forefront of the AI and data revolution.
...
The artificial intelligence software, being developed by Intelligent Voice Ltd, Strenuus Ltd. and the University of East London will combine AI and voice recognition technology to detect and interpret emotion and linguistics to assess the credibility of insurance claims.
The project is one of 40 backed by £13 million in Government investment to support collaborative industry and research projects to develop the next-generation of professional services.
Business Secretary Greg Clark said: "Artificial intelligence and data are transforming industries across the world. We are combining our unique heritage in AI with our world beating professional services to put the UK at the forefront of these cutting-edge technologies and their application."
"We want to ensure businesses and consumers benefit from the application of AI - from providing quicker access to legal advice for customers, to tackling fraudulent insurance claims, these projects illustrate our modern Industrial Strategy in action. We’re investing record levels in research and development so that every part of the UK can benefit from the industries and high-skilled jobs of the future."
The projects announced on February 15 back innovation in the accountancy, insurance and legal services and are part of the Next Generation Services Industrial Strategy Challenge Fund. This is a £20 million fund, administered by UK Research and Innovation (UKRI), to support the development and adoption of AI and Data technologies that will transform the UK’s services industries.
This announcement builds on reviews that BEIS has undertaken with the InsurTech (insurance technology) and LawTech (legal technology) emerging sectors, in partnership with Treasury and the Ministry of Justice.
The Industrial Strategy sets out Grand Challenges to put the UK at the forefront of the industries of the future, ensuring that the UK takes advantage of major global changes, improving people’s lives and the country’s productivity. Artificial intelligence and data is one of the four Grand Challenges which will see AI used across a variety of industries and put the UK at the forefront of the AI and data revolution.
...
A Beverly Hills workers’ compensation orthopedic surgeon has pleaded guilty to two felony counts of billing fraud for selling marked-up goods to his practice from his own medical supply company over several years.
Gil Tepper M.D. is permanently disqualified from being a provider in the workers’ compensation system and is prohibited from operating any physician-owned medical supply distribution company.
Tepper was ordered to pay more than $1.7 million in restitution to nine insurance companies. The defendant was also sentenced to six months of electronic monitoring and must complete 300 hours of community service.
About $1.1 million in restitution will be paid from Tepper’s frozen funds and he must pay the remaining amount by sentencing on Jan. 28, 2020. If Tepper doesn’t comply with the terms of the plea agreement, he faces a possible maximum sentence of six years in state prison.
According to his arrest warrant, Tepper created and founded Metalink Distributors, which held itself out to be a manufacturer and supplier of medical hardware products. Prosecutors claimed Tepper employed an alleged co-conspirator Dr. Jorge Vital as the Director of Patient Financial Services for MMMC.
During a 2016 raid, officials seized records showing that Tepper used Metalink as a fraudulent shell company to receive healthcare reimbursement payments from insurance companies and government programs through workers’ compensation claims.
MMMC allegedly purchased surgical hardware implants and medical devices from FDA registered surgical hardware suppliers, distributers and manufacturers. Then Vital and Tepper allegedly made it appear that MMMC purchased its surgical hardware from Metalink by creating Metalink invoices with grossly inflated costs, with an average markup 300% over the actual costs.
But MMMC never ordered nor received surgical hardware from Metalink. Vital supposedly instructed MMMC employees to submit the misleading Metalink invoices to numerous insurance companies, including Liberty Mutual, Sedgwick, Farmers, ICW Group Insurance Companies, and Berkshire Hathaway Homestate Companies.
Tepper testified in his deposition in 2012 that he was not aware where Metalink ordered their surgical hardware from and denied ever owning Metalink.
His co-defendant, Jorge Antonio Vital ,is charged with eight counts of workers’ compensation insurance fraud and one count each of conspiracy to commit a crime and attempted perjury under oath, all felonies. The charges include an allegation of taking property valued at more than $3.2 million.
A pre-preliminary hearing for Vital is scheduled for Feb. 19 in Department 50 of the Foltz Criminal Justice Center.
The case was investigated by the District Attorney’s Bureau of Investigation. Case BA456262 was prosecuted by Head Deputy District Attorney Jennifer Lentz Snyder of the Healthcare Fraud Division ...
Gil Tepper M.D. is permanently disqualified from being a provider in the workers’ compensation system and is prohibited from operating any physician-owned medical supply distribution company.
Tepper was ordered to pay more than $1.7 million in restitution to nine insurance companies. The defendant was also sentenced to six months of electronic monitoring and must complete 300 hours of community service.
About $1.1 million in restitution will be paid from Tepper’s frozen funds and he must pay the remaining amount by sentencing on Jan. 28, 2020. If Tepper doesn’t comply with the terms of the plea agreement, he faces a possible maximum sentence of six years in state prison.
According to his arrest warrant, Tepper created and founded Metalink Distributors, which held itself out to be a manufacturer and supplier of medical hardware products. Prosecutors claimed Tepper employed an alleged co-conspirator Dr. Jorge Vital as the Director of Patient Financial Services for MMMC.
During a 2016 raid, officials seized records showing that Tepper used Metalink as a fraudulent shell company to receive healthcare reimbursement payments from insurance companies and government programs through workers’ compensation claims.
MMMC allegedly purchased surgical hardware implants and medical devices from FDA registered surgical hardware suppliers, distributers and manufacturers. Then Vital and Tepper allegedly made it appear that MMMC purchased its surgical hardware from Metalink by creating Metalink invoices with grossly inflated costs, with an average markup 300% over the actual costs.
But MMMC never ordered nor received surgical hardware from Metalink. Vital supposedly instructed MMMC employees to submit the misleading Metalink invoices to numerous insurance companies, including Liberty Mutual, Sedgwick, Farmers, ICW Group Insurance Companies, and Berkshire Hathaway Homestate Companies.
Tepper testified in his deposition in 2012 that he was not aware where Metalink ordered their surgical hardware from and denied ever owning Metalink.
His co-defendant, Jorge Antonio Vital ,is charged with eight counts of workers’ compensation insurance fraud and one count each of conspiracy to commit a crime and attempted perjury under oath, all felonies. The charges include an allegation of taking property valued at more than $3.2 million.
A pre-preliminary hearing for Vital is scheduled for Feb. 19 in Department 50 of the Foltz Criminal Justice Center.
The case was investigated by the District Attorney’s Bureau of Investigation. Case BA456262 was prosecuted by Head Deputy District Attorney Jennifer Lentz Snyder of the Healthcare Fraud Division ...
Licensed podiatrist, Schlomo Schmuel,DPM, 53, of Sherman Oaks, self-surrendered to California Department of Insurance detectives on two felony counts of fraud after allegedly inflating bills and billing for services not rendered or not medically necessary.
The resulting loss to an insurer totaled more than $360,000.
Schmuel operated two businesses, Innovative Orthopedic Solutions and Diamond Orthopedic Services.
While running these two businesses, Schmuel allegedly billed for a hot/cold water unit, also known as a Vital Wrap System, using two combined Healthcare Common Procedure Coding Systems (HCPCS) codes.
The hot/cold unit, used to reduce pain and swelling after undergoing surgery, is a single component and requires only one HCPCS code. By using the two different codes, Schmuel allegedly inflated the invoices and billed for services not rendered.
Department investigators allege Schmuel was also involved in an unlawful kickback scheme where he paid to have the hot/cold water unit prescribed to injured workers, despite it not being medically necessary.
Schmuel allegedly paid a "marketer" $100 for each unit that was prescribed by another medical provider who treated the injured workers with the unit provided by Schmuel.
Schmuel was booked into the Clara Shortridge Foltz Criminal Justice Center.
"This medical professional allegedly used his position of trust to have unneeded medical treatment prescribed to patients in order to scam hundreds of thousands from insurers," said Insurance Commissioner Ricardo Lara. "My department will continue to investigate fraud and work with our law enforcement partners to ensure California consumers and insurers are protected."
The Los Angeles County District Attorney’s Office is prosecuting this case ...
The resulting loss to an insurer totaled more than $360,000.
Schmuel operated two businesses, Innovative Orthopedic Solutions and Diamond Orthopedic Services.
While running these two businesses, Schmuel allegedly billed for a hot/cold water unit, also known as a Vital Wrap System, using two combined Healthcare Common Procedure Coding Systems (HCPCS) codes.
The hot/cold unit, used to reduce pain and swelling after undergoing surgery, is a single component and requires only one HCPCS code. By using the two different codes, Schmuel allegedly inflated the invoices and billed for services not rendered.
Department investigators allege Schmuel was also involved in an unlawful kickback scheme where he paid to have the hot/cold water unit prescribed to injured workers, despite it not being medically necessary.
Schmuel allegedly paid a "marketer" $100 for each unit that was prescribed by another medical provider who treated the injured workers with the unit provided by Schmuel.
Schmuel was booked into the Clara Shortridge Foltz Criminal Justice Center.
"This medical professional allegedly used his position of trust to have unneeded medical treatment prescribed to patients in order to scam hundreds of thousands from insurers," said Insurance Commissioner Ricardo Lara. "My department will continue to investigate fraud and work with our law enforcement partners to ensure California consumers and insurers are protected."
The Los Angeles County District Attorney’s Office is prosecuting this case ...
The CDC reports that millions of workers drive or ride in a vehicle as part of their jobs, and motor vehicle crashes are the leading cause of work-related deaths in the United States. All workers are at risk of crashes, whether they drive light or heavy vehicles, or whether driving is a main or incidental job duty. And, the risk of industrial transportation related injury will likely increase according to a new UCLA study of an emerging urban transportation phenomena.
West Los Angeles is the epicenter of the electric scooter phenomenon -- Santa Monica was one of the first U.S. cities in which the scooters were widely used -- but the vehicles are now available in more than 60 cities nationwide and about a half dozen locations outside of the U.S.
UCLA researchers reporting in the JAMA Network, have found that people involved in electric scooter accidents are sometimes injured badly enough -- from fractures, dislocated joints and head injuries -- to require treatment in an emergency department.
The researchers examined data from 249 people who were treated at the emergency departments of UCLA Medical Center, Santa Monica, and Ronald Reagan UCLA Medical Center between Sept. 1, 2017, and Aug. 31, 2018. The study found that about one-third of them arrived by ambulance, an indication of the severity of their injuries.
"There are thousands of riders now using these scooters, so it's more important than ever to understand their impact on public health," said Dr. Tarak Trivedi, the study's lead author, an emergency physician and scholar in the National Clinician Scholars Program at the David Geffen School of Medicine at UCLA.
The research, published Jan. 25 in JAMA Network Open, is the first published study on injuries caused by electric scooters. It reports that the most common mechanisms of injury among scooter riders were falls (80 percent), collisions with objects (11 percent), or being struck by a moving vehicle such as a car, bicycle or other scooter (9 percent).
E-scooters can reach speeds of about 15 miles per hour, and it has become common to see them zipping along streets and sidewalks -- even though they are intended to be used on streets only -- often dodging pedestrians and motorists. Unused scooters are frequently left at the edge of curbs, but they sometimes are abandoned in places where they obstruct sidewalks or block building entrances.
Cities have adopted a hodgepodge of responses to the safety issues posed by the new phenomenon. For example, in August 2018, Santa Monica began a public safety campaign with Bird and Lime, two of the leading e-scooter suppliers. A month later, the city launched a pilot program intended to develop administrative regulations on shared scooters and bikes. (Santa Monica already has a longstanding rule prohibiting bikes and electric devices from sidewalks.)
The authors wrote that the Segway, a two-wheeled personal transporter that was introduced in the early 2000s, and a precursor of the scooters, also carried a serious risk for orthopedic and neurologic injuries.
...
West Los Angeles is the epicenter of the electric scooter phenomenon -- Santa Monica was one of the first U.S. cities in which the scooters were widely used -- but the vehicles are now available in more than 60 cities nationwide and about a half dozen locations outside of the U.S.
UCLA researchers reporting in the JAMA Network, have found that people involved in electric scooter accidents are sometimes injured badly enough -- from fractures, dislocated joints and head injuries -- to require treatment in an emergency department.
The researchers examined data from 249 people who were treated at the emergency departments of UCLA Medical Center, Santa Monica, and Ronald Reagan UCLA Medical Center between Sept. 1, 2017, and Aug. 31, 2018. The study found that about one-third of them arrived by ambulance, an indication of the severity of their injuries.
"There are thousands of riders now using these scooters, so it's more important than ever to understand their impact on public health," said Dr. Tarak Trivedi, the study's lead author, an emergency physician and scholar in the National Clinician Scholars Program at the David Geffen School of Medicine at UCLA.
The research, published Jan. 25 in JAMA Network Open, is the first published study on injuries caused by electric scooters. It reports that the most common mechanisms of injury among scooter riders were falls (80 percent), collisions with objects (11 percent), or being struck by a moving vehicle such as a car, bicycle or other scooter (9 percent).
E-scooters can reach speeds of about 15 miles per hour, and it has become common to see them zipping along streets and sidewalks -- even though they are intended to be used on streets only -- often dodging pedestrians and motorists. Unused scooters are frequently left at the edge of curbs, but they sometimes are abandoned in places where they obstruct sidewalks or block building entrances.
Cities have adopted a hodgepodge of responses to the safety issues posed by the new phenomenon. For example, in August 2018, Santa Monica began a public safety campaign with Bird and Lime, two of the leading e-scooter suppliers. A month later, the city launched a pilot program intended to develop administrative regulations on shared scooters and bikes. (Santa Monica already has a longstanding rule prohibiting bikes and electric devices from sidewalks.)
The authors wrote that the Segway, a two-wheeled personal transporter that was introduced in the early 2000s, and a precursor of the scooters, also carried a serious risk for orthopedic and neurologic injuries.
...
GenomeDx Biosciences Corp. has agreed to pay $1.99 million to resolve allegations that it violated the False Claims Act, 31 U.S.C. §§ 3729 et seq., by submitting false claims to Medicare for its "Decipher®" post-operative genetic test for prostate cancer patients. GenomeDx is a genomic testing company with operations based in San Diego and headquarters in Vancouver, British Columbia.
The United States alleged that GenomeDx submitted claims to Medicare between September 2015 and June 2017 for the Decipher test that were not medically reasonable and necessary because the prostate cancer patients did not have risk factors necessitating the test, namely pathological stage T2 disease with a positive surgical margin, pathological stage T3 disease, or rising Prostate-Specific Antigen (“PSA”) levels after an initial PSA nadir.
"The Department of Justice is committed to ensuring that Medicare patients only receive laboratory testing that is reasonable and necessary for the individual patient,” said Assistant Attorney General Joseph A. Hunt. “Medically unnecessary and unproven testing increases costs for federal health care programs and is not in the interest of patients."
"As this settlement demonstrates, we are committed to protecting the integrity of the Medicare program and will hold health care providers accountable under the False Claims Act when they engage in improper billing," said Robert S. Brewer, Jr., United States Attorney for the Southern District of California. "This settlement is also another example of our commitment to vigorously investigate cases brought to our attention by whistleblowers. We commend the two employees of GenomeDx who had the courage to come forward and work with investigators."
"Lab tests and other medical services should only be conducted or provided when medically necessary," said Christian J. Schrank, Special Agent in Charge for the Office of Inspector General of the U.S. Department of Health and Human Services. "Whistleblowers play a critical role in keeping entities honest and accountable, and are encouraged to report suspected waste, fraud and abuse by those billing federal healthcare programs."
"The message is clear, if you take advantage of programs like Medicare, you will be held accountable," said John Brown, FBI Special Agent-in-Charge. “Companies who engage in filing false claims to generate more corporate revenue are not only stealing from the federal taxpayer, but also from people who rely on federally funded programs for their health care needs."
The False Claims Act allegations being resolved were originally brought in a lawsuit filed by two former employees of Genome DX, Stephanie LaFleur and Corrine Vause, under the qui tam, or whistleblower, provisions of the False Claims Act, which allow private citizens with knowledge of fraud against the government to bring suit on behalf of the government and to share in any recovery. The whistleblowers will receive approximately $350,000 of the settlement proceeds of $1,990,380.
The investigation was conducted by the Civil Division of the Department of Justice, the U.S. Attorney’s Office for the Southern District of California, the Department of Health and Human Services Office of Inspector General, and the Federal Bureau of Investigation ...
The United States alleged that GenomeDx submitted claims to Medicare between September 2015 and June 2017 for the Decipher test that were not medically reasonable and necessary because the prostate cancer patients did not have risk factors necessitating the test, namely pathological stage T2 disease with a positive surgical margin, pathological stage T3 disease, or rising Prostate-Specific Antigen (“PSA”) levels after an initial PSA nadir.
"The Department of Justice is committed to ensuring that Medicare patients only receive laboratory testing that is reasonable and necessary for the individual patient,” said Assistant Attorney General Joseph A. Hunt. “Medically unnecessary and unproven testing increases costs for federal health care programs and is not in the interest of patients."
"As this settlement demonstrates, we are committed to protecting the integrity of the Medicare program and will hold health care providers accountable under the False Claims Act when they engage in improper billing," said Robert S. Brewer, Jr., United States Attorney for the Southern District of California. "This settlement is also another example of our commitment to vigorously investigate cases brought to our attention by whistleblowers. We commend the two employees of GenomeDx who had the courage to come forward and work with investigators."
"Lab tests and other medical services should only be conducted or provided when medically necessary," said Christian J. Schrank, Special Agent in Charge for the Office of Inspector General of the U.S. Department of Health and Human Services. "Whistleblowers play a critical role in keeping entities honest and accountable, and are encouraged to report suspected waste, fraud and abuse by those billing federal healthcare programs."
"The message is clear, if you take advantage of programs like Medicare, you will be held accountable," said John Brown, FBI Special Agent-in-Charge. “Companies who engage in filing false claims to generate more corporate revenue are not only stealing from the federal taxpayer, but also from people who rely on federally funded programs for their health care needs."
The False Claims Act allegations being resolved were originally brought in a lawsuit filed by two former employees of Genome DX, Stephanie LaFleur and Corrine Vause, under the qui tam, or whistleblower, provisions of the False Claims Act, which allow private citizens with knowledge of fraud against the government to bring suit on behalf of the government and to share in any recovery. The whistleblowers will receive approximately $350,000 of the settlement proceeds of $1,990,380.
The investigation was conducted by the Civil Division of the Department of Justice, the U.S. Attorney’s Office for the Southern District of California, the Department of Health and Human Services Office of Inspector General, and the Federal Bureau of Investigation ...
Last fall, Governor Edmund G. Brown Jr. signed SB 1300 (Jackson; D-Santa Barbara), a comprehensive bill that makes several changes in the law for making sexual harassment claims.
The bill also amends FEHA to specify that an employer may be responsible for the acts of nonemployees for all forms of harassment, rather than the responsibility being limited to sexual harassment, as it was before SB 1300 took effect.
Further, the bill prohibits a prevailing defendant from being awarded fees and costs unless specific conditions are met.
SB 1300 prohibits employers from requiring employees to sign a release of claims under the Fair Employment and Housing Act (FEHA) in exchange for a raise or as a condition of employment.
These provisions took effect on January 1, but employers and defense counsel need to be aware of the bill’s "intent language."
The broad "intent" language is likely inconsistent with canons of statutory construction and prior court precedent. As such, SB 1300’s intent language will surely increase employer costs as lawyers attempt to erroneously utilize the "findings and declarations" in SB 1300 to expand FEHA litigation.
The general rule of statutory construction is to effectuate the intent of the Legislature, which basically requires the courts to give the statutory language its usual and ordinary meaning. A statute is changed by a material amendment to the statutory language itself, but not by "legislative intent" language.
One intent declaration concerns the Legislature’s view about whether a single harassment incident still could be considered a violation of FEHA. To quote SB 1300: "the Legislature hereby declares its rejection of the United States Court of Appeals for the 9th Circuit’s [decision] and states that the opinion shall not be used in determining what kind of conduct is sufficiently severe or pervasive to constitute a violation of [FEHA]."
Yet, the author removed from her bill the statutory provisions that would have lowered the severe or pervasive standard.
Another declaration concerns the Legislature’s view that "harassment cases are rarely appropriate for disposition on summary judgment." However, SB 1300 does not amend Code of Civil Procedure Section 437(c), which sets forth the requirements regarding motions for summary judgment. However, SB 1300 does not amend Code of Civil Procedure Section 437(c), which sets forth the requirements regarding motions for summary judgment.
Additionally, the intent language of SB 1300 seeks to lower the legal standard for hostile work environment claims by referring to a single quote by a single justice’s concurring opinion in a U.S. Supreme Court 9-0 decision: :the Legislature affirms its approval of the standard set forth by Justice Ruth Bader Ginsburg in her concurrence that, in a workplace harassment suit, ‘the plaintiff need not prove that his or her tangible productivity has declined as a result of the harassment.’"
Given that SB 1300 did not change the statutory standards for summary judgment and hostile work environment, the superfluous intent language in SB 1300 does not serve to provide guidance regarding either of these standards. As the U.S. Supreme Court has stated, "We are governed by laws, not by the intentions of legislators." ...
The bill also amends FEHA to specify that an employer may be responsible for the acts of nonemployees for all forms of harassment, rather than the responsibility being limited to sexual harassment, as it was before SB 1300 took effect.
Further, the bill prohibits a prevailing defendant from being awarded fees and costs unless specific conditions are met.
SB 1300 prohibits employers from requiring employees to sign a release of claims under the Fair Employment and Housing Act (FEHA) in exchange for a raise or as a condition of employment.
These provisions took effect on January 1, but employers and defense counsel need to be aware of the bill’s "intent language."
The broad "intent" language is likely inconsistent with canons of statutory construction and prior court precedent. As such, SB 1300’s intent language will surely increase employer costs as lawyers attempt to erroneously utilize the "findings and declarations" in SB 1300 to expand FEHA litigation.
The general rule of statutory construction is to effectuate the intent of the Legislature, which basically requires the courts to give the statutory language its usual and ordinary meaning. A statute is changed by a material amendment to the statutory language itself, but not by "legislative intent" language.
One intent declaration concerns the Legislature’s view about whether a single harassment incident still could be considered a violation of FEHA. To quote SB 1300: "the Legislature hereby declares its rejection of the United States Court of Appeals for the 9th Circuit’s [decision] and states that the opinion shall not be used in determining what kind of conduct is sufficiently severe or pervasive to constitute a violation of [FEHA]."
Yet, the author removed from her bill the statutory provisions that would have lowered the severe or pervasive standard.
Another declaration concerns the Legislature’s view that "harassment cases are rarely appropriate for disposition on summary judgment." However, SB 1300 does not amend Code of Civil Procedure Section 437(c), which sets forth the requirements regarding motions for summary judgment. However, SB 1300 does not amend Code of Civil Procedure Section 437(c), which sets forth the requirements regarding motions for summary judgment.
Additionally, the intent language of SB 1300 seeks to lower the legal standard for hostile work environment claims by referring to a single quote by a single justice’s concurring opinion in a U.S. Supreme Court 9-0 decision: :the Legislature affirms its approval of the standard set forth by Justice Ruth Bader Ginsburg in her concurrence that, in a workplace harassment suit, ‘the plaintiff need not prove that his or her tangible productivity has declined as a result of the harassment.’"
Given that SB 1300 did not change the statutory standards for summary judgment and hostile work environment, the superfluous intent language in SB 1300 does not serve to provide guidance regarding either of these standards. As the U.S. Supreme Court has stated, "We are governed by laws, not by the intentions of legislators." ...
A new study claims that surgery is a leading cause of death. The findings were published in a research letter to The Lancet medical journal.
About 4.2 million people worldwide die every year within 30 days of surgery -- more than from HIV, tuberculosis and malaria combined, a new study reports.
The findings show that 7.7 percent of all deaths worldwide occur within a month of surgery, a rate higher than that from any other cause except ischemic heart disease and stroke.
About 313 million surgical procedures a year are performed worldwide, according to The Lancet Commission on Global Surgery, but little is known about the quality of surgery around the world. That's what this study set out to explore, using available data on volume and type of procedures and death rates.
"Surgery has been the 'neglected stepchild' of global health and has received a fraction of the investment put in to treating infectious diseases such as malaria," said lead author Dr. Dmitri Nepogodiev. He's a research fellow at the University of Birmingham in England.
Along with finding that 4.2 million people a year die within a month of having surgery, his team discovered that half of those deaths occur in low- and middle-income countries.
Researchers from Birmingham's NIHR Global Health Research Unit on Global Surgery said 4.8 billion people worldwide lack timely access to safe and affordable surgery. They estimated that there is an unmet need for 143 million surgical procedures a year in low- and middle-income countries.
But answering unmet needs those countries would increase the worldwide number of postoperative deaths to 6.1 million a year, the investigators said.
"Although not all postoperative deaths are avoidable, many can be prevented by increasing investment in research, staff training, equipment and better hospital facilities," Nepogodiev said in a university news release. "To avoid millions more people dying after surgery, planned expansion of access to surgery must be complemented by investment in to improving the quality of surgery around the world," he noted ...
About 4.2 million people worldwide die every year within 30 days of surgery -- more than from HIV, tuberculosis and malaria combined, a new study reports.
The findings show that 7.7 percent of all deaths worldwide occur within a month of surgery, a rate higher than that from any other cause except ischemic heart disease and stroke.
About 313 million surgical procedures a year are performed worldwide, according to The Lancet Commission on Global Surgery, but little is known about the quality of surgery around the world. That's what this study set out to explore, using available data on volume and type of procedures and death rates.
"Surgery has been the 'neglected stepchild' of global health and has received a fraction of the investment put in to treating infectious diseases such as malaria," said lead author Dr. Dmitri Nepogodiev. He's a research fellow at the University of Birmingham in England.
Along with finding that 4.2 million people a year die within a month of having surgery, his team discovered that half of those deaths occur in low- and middle-income countries.
Researchers from Birmingham's NIHR Global Health Research Unit on Global Surgery said 4.8 billion people worldwide lack timely access to safe and affordable surgery. They estimated that there is an unmet need for 143 million surgical procedures a year in low- and middle-income countries.
But answering unmet needs those countries would increase the worldwide number of postoperative deaths to 6.1 million a year, the investigators said.
"Although not all postoperative deaths are avoidable, many can be prevented by increasing investment in research, staff training, equipment and better hospital facilities," Nepogodiev said in a university news release. "To avoid millions more people dying after surgery, planned expansion of access to surgery must be complemented by investment in to improving the quality of surgery around the world," he noted ...
A California Court of Appeal just made a sweeping change in California’s reporting time pay rules which now limits a common "on-call" scheduling practice used by employers throughout the state.
In 2012, Skylar Ward worked as a sales clerk in a Tilly’s, Inc., store in Torrance, California.
Under Tilly’s scheduling policy, Ward was required to call in approximately two hours before the start of her shift to determine whether she needed to come to work. If Tilly’s told her to report to work, she was required to do so and would be paid for that shift as normal. However, if Tilly’s informed her that there was no need to come in, Ms. Ward would receive no compensation.
Ward filed a putative class action complaint in 2015. The trial court sustained a demurrer without leave to amend, finding that by merely calling in to learn whether an employee will work a call-in shift, Ward and other employees do not report to work as contemplated by Wage Order 7. The court of appeal reversed in the published case of Ward v. Tilly’s, Inc.
The court held that merely calling in for one of these mandatory on-call shifts constitutes "report[ing] to work," which entitled Ms. Ward and her coworkers to a minimum of two hours of reporting time pay under the applicable wage order.
Prior to the case, various courts had disagreed about what it truly meant to "report to work" within the context of this provision, with many courts - not to mention employers - understandably believing that this required the employee to physically report to the workplace location in order to be eligible for reporting time pay.
In relevant part, the court examined the language from the reporting time rule contained within Wage Order No. 7-2001 codified at California Code of Regulations, title 8, section 11070.
The court ultimately reasoned that even having to place a telephone call as part of a mandatory on-call schedule fell within this "reporting" rule for two main reasons. First, requiring reporting time pay would "require employers to internalize some of the costs of overscheduling, thus encouraging employers to accurately project their labor needs and to schedule accordingly."
Second, it would also "compensate employees for the inconvenience and expense associated with making themselves available to work on-call shifts, including forgoing other employment, hiring caregivers for children or elders, and traveling to a worksite. In relying on these public policy considerations, the court aligned itself with prior California cases that tended to tie the compensability of worktime to the degree of employer control over an employee’s activities.
The court left several key questions unanswered. Most notably, the court failed to address the issue of whether its holding would apply retroactively - potentially exposing countless employers across the state that utilize similar on-call scheduling policies to staggering class action liability.
The court also neglected to address the inherent line-drawing problem contained within its decision; that is, how long before a shift could an employee call in and still have it constitute compensable reporting? If not two hours, then how long? ...
In 2012, Skylar Ward worked as a sales clerk in a Tilly’s, Inc., store in Torrance, California.
Under Tilly’s scheduling policy, Ward was required to call in approximately two hours before the start of her shift to determine whether she needed to come to work. If Tilly’s told her to report to work, she was required to do so and would be paid for that shift as normal. However, if Tilly’s informed her that there was no need to come in, Ms. Ward would receive no compensation.
Ward filed a putative class action complaint in 2015. The trial court sustained a demurrer without leave to amend, finding that by merely calling in to learn whether an employee will work a call-in shift, Ward and other employees do not report to work as contemplated by Wage Order 7. The court of appeal reversed in the published case of Ward v. Tilly’s, Inc.
The court held that merely calling in for one of these mandatory on-call shifts constitutes "report[ing] to work," which entitled Ms. Ward and her coworkers to a minimum of two hours of reporting time pay under the applicable wage order.
Prior to the case, various courts had disagreed about what it truly meant to "report to work" within the context of this provision, with many courts - not to mention employers - understandably believing that this required the employee to physically report to the workplace location in order to be eligible for reporting time pay.
In relevant part, the court examined the language from the reporting time rule contained within Wage Order No. 7-2001 codified at California Code of Regulations, title 8, section 11070.
The court ultimately reasoned that even having to place a telephone call as part of a mandatory on-call schedule fell within this "reporting" rule for two main reasons. First, requiring reporting time pay would "require employers to internalize some of the costs of overscheduling, thus encouraging employers to accurately project their labor needs and to schedule accordingly."
Second, it would also "compensate employees for the inconvenience and expense associated with making themselves available to work on-call shifts, including forgoing other employment, hiring caregivers for children or elders, and traveling to a worksite. In relying on these public policy considerations, the court aligned itself with prior California cases that tended to tie the compensability of worktime to the degree of employer control over an employee’s activities.
The court left several key questions unanswered. Most notably, the court failed to address the issue of whether its holding would apply retroactively - potentially exposing countless employers across the state that utilize similar on-call scheduling policies to staggering class action liability.
The court also neglected to address the inherent line-drawing problem contained within its decision; that is, how long before a shift could an employee call in and still have it constitute compensable reporting? If not two hours, then how long? ...
Independent pharmacists across Ventura County have filed a lawsuit against OptumRx, alleging the company manipulated drug pricing to enable lower reimbursement rates paid to small drugstores and plunging businesses underwater.
OptumRx, one of the biggest operations of its kind in the United States and part of the UnitedHealth network, sets payment rates as the pharmacy benefit manager for the Gold Coast Health Plan. The publicly funded Gold Coast organization provides Medi-Cal insurance to nearly 200,000 low-income Ventura County residents.
The pharmacists allege the company used contracts negotiated with agents of pharmacies to force the businesses into accepting payment that often fell below costs. OptumRx threatened people who pushed back with expulsion from the network, the complaint stated.
The lawsuit alleges unfair trade practices, breach of contract and violation of California law. It was filed by 18 companies and individuals in Ventura County Superior Court.
The litigation also targets three pharmacy services administration organizations - operated by Cardinal Health, Arete Pharmacy Network and AmerisourceBergen - that worked as middlemen between the pharmacies and OptumRx.
Leaders of OptumRx have repeatedly defended their pricing in a drama that dates back to last summer, shortly after the company assumed its role as Gold Coast’s pharmacy benefit manager.
"OptumRx’s role is to ensure consumers and health plan payers have convenient access to affordable prescription medications, and we will continue to work to help lower health care costs for Gold Coast Health Plan and California taxpayers," said OptumRx spokesman Drew Krejci in a statement Thursday. "We believe this lawsuit is without merit and will vigorously defend ourselves."
Pharmacists have crowded meetings of the Ventura County Medi-Cal Managed Care Commission for months, complaining about below-market rates they say shut down the Medical Plaza Pharmacy in Fillmore and put many others in jeopardy. The commission governs Gold Coast.
An independent consultant reviewed the rates and told the commission in April that the reimbursement paid by OptumRx is comparable to payment in similar Medicaid plans in California and elsewhere. After a closed-door discussion, commissioners announced they would not try to force the pharmacy benefit manager to raise the rates.
The lawsuit alleges OptumRx won the Gold Coast contract because it offered price guarantees and met the guarantees by obtaining secret rebates from drug makers and then manipulating pricing.
OptumRx also used something called the "maximum allowable cost" list to force reimbursement down, pharmacists claim. The so-called MAC list helps set the reimbursement rate and is supposed to be influenced by prices different distributors ask for the same generic medication. The pharmacists allege OptumRx ignored market prices and made up its own maximum allowable cost "based on thin air."
It is "a moving target moved at Optum’s whim," the lawsuit stated. It alleged OptumRx also kept its MAC price for generic drugs secret and violated state law by not making decisions on appeals by pharmacists within seven business days ...
OptumRx, one of the biggest operations of its kind in the United States and part of the UnitedHealth network, sets payment rates as the pharmacy benefit manager for the Gold Coast Health Plan. The publicly funded Gold Coast organization provides Medi-Cal insurance to nearly 200,000 low-income Ventura County residents.
The pharmacists allege the company used contracts negotiated with agents of pharmacies to force the businesses into accepting payment that often fell below costs. OptumRx threatened people who pushed back with expulsion from the network, the complaint stated.
The lawsuit alleges unfair trade practices, breach of contract and violation of California law. It was filed by 18 companies and individuals in Ventura County Superior Court.
The litigation also targets three pharmacy services administration organizations - operated by Cardinal Health, Arete Pharmacy Network and AmerisourceBergen - that worked as middlemen between the pharmacies and OptumRx.
Leaders of OptumRx have repeatedly defended their pricing in a drama that dates back to last summer, shortly after the company assumed its role as Gold Coast’s pharmacy benefit manager.
"OptumRx’s role is to ensure consumers and health plan payers have convenient access to affordable prescription medications, and we will continue to work to help lower health care costs for Gold Coast Health Plan and California taxpayers," said OptumRx spokesman Drew Krejci in a statement Thursday. "We believe this lawsuit is without merit and will vigorously defend ourselves."
Pharmacists have crowded meetings of the Ventura County Medi-Cal Managed Care Commission for months, complaining about below-market rates they say shut down the Medical Plaza Pharmacy in Fillmore and put many others in jeopardy. The commission governs Gold Coast.
An independent consultant reviewed the rates and told the commission in April that the reimbursement paid by OptumRx is comparable to payment in similar Medicaid plans in California and elsewhere. After a closed-door discussion, commissioners announced they would not try to force the pharmacy benefit manager to raise the rates.
The lawsuit alleges OptumRx won the Gold Coast contract because it offered price guarantees and met the guarantees by obtaining secret rebates from drug makers and then manipulating pricing.
OptumRx also used something called the "maximum allowable cost" list to force reimbursement down, pharmacists claim. The so-called MAC list helps set the reimbursement rate and is supposed to be influenced by prices different distributors ask for the same generic medication. The pharmacists allege OptumRx ignored market prices and made up its own maximum allowable cost "based on thin air."
It is "a moving target moved at Optum’s whim," the lawsuit stated. It alleged OptumRx also kept its MAC price for generic drugs secret and violated state law by not making decisions on appeals by pharmacists within seven business days ...
