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The Division of Workers’ Compensation (DWC) has issued a notice of conference call public hearing for a proposed evidence-based update to the Medical Treatment Utilization Schedule (MTUS), which can be found at California Code of Regulations, title 8, section 9792.24.7.

The conference call public hearing is scheduled for Thursday, February 18, at 10 a.m. and members of the public may attend by calling 866-390-1828 and using access code 5497535#. Members of the public may review and comment on the proposed updates. Written comments must be submitted no later than February 18. Please see the proposed regulation page for direction for submitting written comments.

The proposed evidence-based update to the MTUS incorporate by reference the latest published guideline from American College of Occupational and Environmental Medicine (ACOEM) for the following:

-- Coronavirus (COVID-19) Guideline (ACOEM December 14, 2020)

The 99 page guideline contains an analysis of the effectiveness of COVID-19 treatment using the following:

-- Hydroxychloroquine and Chloroquine.
-- Azithromycin.
-- Favipiravir.
-- lopinavir-ritonavir.
-- Remdesivir.
-- low-Molecular-Weight Heparin.
-- IL-6 Receptor Antagonists (Tocilizumab, Sarilumab, and Siltuximab).
-- Baricitinib.
-- Casirivimab plus lmdevimab.
-- Bamlanivimab.
-- Convalescent COVID-19 Antibodies.
-- Glucocorticosteroids.
-- Interferon Beta-lb.
-- Ribavirin.
-- Zinc.
-- Vitamin D.

The proposed evidence-based update to the MTUS regulations are exempt from Labor Code sections 5307.3 and 5307.4 and the rulemaking provisions of the Administrative Procedure Act. However, DWC is required under Labor Code section 5307.27 to have a 30-day public comment period, hold a public hearing, respond to all the comments received during the public comment period and publish the order adopting the update online ...
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/ 2020 News, Daily News
Federal prosecutors for the Northern District of California filed an indictment charging defendant Rodney L. Stevenson II with wire fraud, mail fraud, and money laundering for his operation of an e-commerce site that claimed to have N95 masks for sale during the current COVID-19 epidemic.

Stevenson operated EM General, a company created in September 2019, which purported to sell N95 masks with N99 filters. At the onset of the COVID-19 pandemic in February 2020, EM General and its website, controlled by Stevenson, advertised that it had N95 masks "in stock" and available for shipping.

EM General sold many of these masks for as much as $24.95 each. Also according to the indictment, to bolster the legitimacy of EM General, Stevenson created a professional-looking website that included the names, backstories, and stock photographs of a group of fake EM General executives.

It also falsely described how long the company had been in business, its sales volume, and its reputation. Stevenson also used fictitious names in emails to customers.

The indictment alleges that, as the pandemic worsened and demand for N95 masks increased dramatically, EM General’s sales skyrocketed. EM General’s total sales from approximately on or about February 11, 2020, to approximately on or about March 8, 2020, were approximately $3,500,000 involving over 25,000 customers, the vast majority of which were sales of N95 masks that were never delivered to customers. This amount included over $900,000 in sales on February 28, 2020, alone.

Bay Area residents thought they were buying much needed N95 masks from EM General, but according to the criminal complaint Stevenson had no intention of delivering masks. "What's described in the complaint is a consumer nightmare of fake web pages and false promises," said US Attorney for the Northern District of California, David Anderson.

Stevenson and EM General delivered almost none of the masks. Instead, when customers complained and asked for refunds, Stevenson, at times communicating with Gmail accounts he created under the names of fake identities, generally refused to refund customers and instead offered a series of lies to fraudulently prolong his scheme while he continued selling masks.

These lies included that EM General could not offer refunds because it had already paid for the customer’s order from a manufacturer, that products would ship soon, and that customers would receive tracking orders soon. For a small number of customers, Stevenson eventually fraudulently substituted masks that did not meet the standards set by the National Institutes of Occupational Safety and Health for N95 or N99 masks, meaning that they did not filter out 95 or 99 percent of particulate matter from the air.

Stevenson is charged with nine counts of wire fraud, in violation of 21 U.S.C. § 1343; one count of mail fraud, in violation of 18 U.S.C. § 1341; five count of laundering of monetary instruments, in violation of 18 U.S.C. § 1956(a)(1)(A)(i); and one count of money laundering, in violation of 18 U.S.C. § 1957.
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/ 2020 News, Daily News
A California Workers’ Compensation Institute analysis of claims reported to the state Division of Workers’ Compensation as of January 11 shows that the number of COVID-19 claims in the California workers’ compensation system more than tripled between October and November, then jumped another 64.2% to a record 23,483 claims in December. A new projection shows that the December total could climb to 37,573 cases once claims that are yet to be filed or still under investigation are added to the tally.

The latest figures show that after falling to a 6-month low in September, monthly COVID-19 claim counts began trending up in October as the fall wave of coronavirus cases hit the state.

Although not all November and December claims have been reported, the initial data from those months shows that as of the January 11, the DWC had recorded 14,298 COVID-19 claims with November injury dates, and a record 23,483 COVID-19 claims from December.

That year-end surge pushed the number of COVID-19 claims reported to the DWC for accident year (AY) 2020 to 93,470, which is 15.7% of all 2020 claims reported to the state, though with the recent spike, that proportion rose to 28.7% of all work injury claims reported for November and 47.4% of all claims reported for December.

The AY 2020 COVID-19 claim count includes 464 death claims -- up 21.7% from the 381 death claims reported as of December 28 -- which means COVID-19 death claims accounted for nearly half (48.0%) of the 966 work-related death claims recorded by the state for AY 2020.

Additional year-end claims continue to be filed, and CWCI’s projected COVID-19 claim count based on historical claim development that accounts for delays in COVID-19 claim reporting estimates that ultimately there will be 16,872 claims from November, and 37,573 claims from December, far surpassing the previous monthly record of 15,537 COVID-19 claims projected for July.

With hundreds of thousands of California jobs lost during the pandemic, and many workers in the state continuing to work remotely, DWC has recorded only 594,840 work injury claims for AY 2020, down 13.5% from 667,942 claims for AY 2019, despite the addition of the 93,470 COVID-19 claims.

However, the year-over-year decline in claim volume is only 6.5% if CWCI’s updated projection of the ultimate claim count for AY 2020 is used.

Other recent results show that health care workers’ share of the COVID-19 claims has declined from 44.7% in the first quarter of 2020 to 28.8% in the fourth quarter; males and younger workers continue to account for a growing share of the COVID-19 claims; and COVID-19 claim denial rates hit a 6-month high of 36.9% in October, though the denial data on claims from the last two months of 2020 is too green to be reliable.

Denial rates vary significantly by industry, with October claim denial rates ranging from 12.8% for utility workers to 66.8% for transportation workers. Many COVID-19 claims are denied because the claimants do not test positive for the virus.

The latest results on California workers’ comp COVID-19 claims are from the January 11 update to CWCI’s COVID-19/Non-COVID-19 Interactive Claim App, which integrates data from CWCI, DWC, and the Bureau of Labor and Statistics to provide information on California work injury claims from comparable periods of 2019 and 2020. The app is updated biweekly and is available to the public here ...
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/ 2020 News, Daily News
Licensed insurance agents Robert Farmer, 65, of Camarillo, and Marion Urcan, 67, of Agoura Hills, were arraigned in Los Angeles County Superior Court on multiple counts of grand theft after allegedly accepting over $687,000 in insurance premium payments from business owners and misappropriating the money for their personal use.

Farmer and Urcan, doing business as Centerpointe Insurance Services Limited in Camarillo, accepted insurance premium payments from two towing companies in the Los Angeles area.

On June 20, 2019, the California Department of Insurance received a complaint from the owner of one of the towing companies that alleged Centerpointe Insurance Services Limited accepted two checks totaling $391,000 for the company’s commercial auto insurance policy, but Farmer and Urcan did not forward these premium payments to the insurance company.

On December 20, 2019, the Department received a complaint from the other towing company that alleged Centerpointe embezzled a $50,000 down payment made toward the renewal of the towing company’s commercial auto insurance policy.

An investigation by the Department of Insurance revealed Farmer and Urcan accepted over $687,000 in total from the two towing companies but never sent the payments to an insurance company to secure liability insurance for either business owner, leaving them vulnerable to catastrophic loss.

The Department of Insurance is taking the appropriate administrative action against the licensees. Anyone who has been victimized or knows someone who has been victimized by either Farmer or Urcan, please call 661-253-7500.

They are scheduled to return to court on March 5, 2021. This case is being prosecuted by the Los Angeles County District Attorney’s Office ...
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/ 2020 News, Daily News
A major labor union and several ride-hailing drivers are suing to overturn a newly passed ballot measure classifying gig workers as independent contractors in California.

The Washington Post reports that the groups filed suit Tuesday in California’s Supreme Court, alleging Proposition 22 violates the state constitution and limits the power of state legislators to implement certain worker protections they are authorized to grant.

The suit, filed by Service Employees International Union and a group of ride-hailing drivers, asks the state Supreme Court to invalidate Prop 22, which cemented gig driver’s status as independent contractors after more than 58 percent of voters supported it in November.

They argue the measure limits state legislators’ ability to implement a system of workers' compensation in defiance of their constitutional authority to do so. It also argues that the proposition unconstitutionally defines what comprises an amendment to the measure, as well as violating a rule limiting ballot measures to a single subject to prevent voter confusion.

The Protect App-Based Drivers and Services coalition, which represents gig companies such as Uber, Lyft and Doordash, criticized the lawsuit in a statement attributed to Uber driver Jim Pyatt, an activist who has worked in favor of Prop 22.

The groups that filed the suit, which also include SEIU California State Council, took particular issue with the measure’s inclusion of a provision requiring a seven-eighths legislative supermajority to amend and even define what constitutes an amendment. That authority, they say, is vested with the courts.

The lawsuit blasts the measure’s drafters as having "impermissibly" usurped this Court’s authority to ‘say what the law is’ by determining what constitutes an ‘amendment.’"

Further, they argued, they violated the single-subject rule by "burying these cryptic amendment provisions on subjects not substantively addressed in the measure, and in language that most voters would not understand."

They said they were suing in the state Supreme Court rather than a lower court because the issues were of broad public importance and required a speedy resolution to minimize harm to gig workers ...
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/ 2020 News, Daily News
Simplified Labor Staffing Solutions, Inc. and Simplified Staffing Labor Solutions, LLC are sister entities that provide staffing services, that is, secure payroll services, insurance coverage, licenses, and corporate benefits.

Ashish Wahi owns Simplified. Michael Dougan is its chief financial officer. A major expense in their business operation is paying for workers' compensation insurance.

Simplified initiated litigation against Trinity Risk Management, LLC, affiliated entities Knight Management Group, Inc. and H.J. Knight International Insurance Agency, Inc., and other named defendants. Simplified alleged fraud-based claims related to workers’ compensation insurance it had purchased from defendants who sell workers’ compensation insurance to staffing companies.

Simplified filed a first amended complaint against defendants, and added Captive Resources, Inc. as another named defendant.

Simplified alleged defendants conspired to induce Simplified to purchase their worker’s compensation insurance through them by claiming that after one year of paying surcharges on the actual premiums for the coverage they required, Simplified would then earn "steep discounts on worker’s compensation coverage." Defendants "purported to offer underwriting of insurance risk without being a licensed insurance company, and/or offered for sale insurance coverage as a broker without being a licensed broker . . . or by means of misrepresenting the actual party they represented.

The defendants filed a cross-complaint against Simplified, alleging eight causes of action, including defamation. The cross-complainants alleged Simplified and/or Wahi were approximately $2 million dollars in arrears on Simplified’s workers’ compensation payments.

Simplified filed a special motion to strike the defamation cause of action from the cross-complaint as a strategic lawsuit against public participation under the anti-SLAPP statute. The trial court granted Simplified’s special motion to strike and the court of appeal affirmed in the unpublished case of Trinity Risk etc. v. Simplified Labor.

The purpose of the anti-SLAPP law is not to insulate defendants from any liability for claims arising from the protected rights of petition or speech. It only provides a procedure for weeding out, at an early stage, meritless claims arising from protected activity.

The wording of the statute protects the right of litigants to the utmost freedom of access to the courts without fear of being harassed subsequently by derivative tort actions. The law provides that it "shall be construed broadly." ...
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/ 2020 News, Daily News
Limin Gao filed an Application for Adjudication, alleging a psyche injury while employed by Chevron from May 2, 2014 to July 2, 2015.

The matter proceeded to trial on March 10, 2020. Gao provided in-person testimony, both direct and on cross-examination, flying in from her current residence in Ontario, Canada in order to do so.

Because the trial could not be completed in one session, the trial was continued to June 9, 2020, with in-person testimony contemplated from several defense witnesses.

In light of the Covid-19 pandemic, WCAB District Offices stopped conducting in-person trials as of March 16, 2020. Beginning May 4, 2020, WCAB District Offices began to hear trials on the case-in-chief remotely, via phone link.

On May 7, 2020, the State of California’s Governor, Gavin Newsom, issued Executive Order N-63-20 which essentially suspended the requirement that a witness testify in person under certain conditions and circumstances.

As the June 9, 20201 trial date approached, the parties made clear they had very different ideas about how the case should proceed. Applicant favored proceeding via remote testimony, while defendant objected, requesting a continuance until in-person testimony could be elicited from its three rebuttal witnesses.

The WCJ issued the Order Continuing September 1, 2020 Trial, stating that due process required continuing the trial to allow for in-person testimony from defendant’s witnesses, because applicant had previously given in-person testimony. Limin Gao Petitioned for Removal to have the WCAB rule on the legality of the WCJ order continuing the hearing. The panel reversed and remanded in the significant panel decision of Limin Gao v Chevron Corporation.

The WCAB ruled that "each case must be resolved according to its own particular circumstances, and it would therefore be inappropriate to institute a blanket rule that it is per se unreasonable to continue a case to allow for in-person testimony."

"However, in consideration of Executive Order N-63-20, the purposes of the workers’ compensation system, and current conditions, the default position should be that trials proceed remotely, in the absence of some clear reason why the facts of a specific case require a continuance. Moreover, as the party seeking the continuance, the burden should be on defendant in this case to demonstrate why a continuance is required." ...
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/ 2020 News, Daily News
The Division of Workers’ Compensation (DWC) is now accepting applications for the Qualified Medical Evaluator (QME) examination for April 17, 2021.

DWC will offer in-home computer-based testing (CBT) for the April 2021 QME examination using Proctor U.

Candidates who are interested in taking the CBT exam and have the minimum system requirements should indicate so on the application. CPS HR Consulting, the vendor managing the QME Exam, will notify interested candidates of the registration and scheduling process.

DWC will continue to offer an in-person examination in Northern and Southern California on April 17, 2021 following the guidelines and recommendations by the CDC and California Department of Public Health. The test sites will be announced on the Registration Notices.

Application and Registration packet for the QME exam may be downloaded from the DWC website.

Applicants may also contact the Medical Unit at 510-286-3700 to request an application via U.S. mail, email or fax. The deadline for filing the exam applications is March 4, 2021. No applications will be accepted after this postmarked date.

For more information, contact the Medical Unit at 510-286-3700 or by email at QMETest@dir.ca.gov ...
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/ 2020 News, Daily News
Distribution of the COVID vaccines, which in California is done in several phases and prioritizes first doses for health care workers and people at risk of becoming severely ill from the virus, has lagged other jurisdictions by a considerable margin.

Nationwide, about 6.7 million Americans have received a vaccine dose according to the Centers for Disease Control and Prevention. The CDC has projected that close to 90 million people will be vaccinated by March, still under one third of Americans and far less than the 70% officials say is needed to reach herd immunity.

In California, vaccine rollout has been beset by a number of issues that bring into focus challenges that come with such a gargantuan effort.California has received just over 2 million vaccine doses but only administered about 652,000 of them as of Jan. 8.

Vaccine doses are also lower than anticipated, with officials estimating they won’t have enough doses to immunize "most" residents of its 58 counties until the summer.

Lags are also tied to ultra-low temperature storage requirements for the Pfizer vaccine, a shortage of vaccination sites and staff to administer doses and a delay in setting up systems to track who is immunized and where they live.

The Golden State has the nation’s highest total of people infected with Covid-19, with more than 2.5 million cases. As of Jan. 7, health departments statewide have reported 73,862 positive cases among health care workers and 276 deaths.

California recently told local health departments and providers to expand vaccine eligibility by offering doses to community health and testing site workers, public health field staff and dental clinic and pharmacy personnel.

More than 586,000 health care workers in California have received the first dose of a Covid-19 vaccine, according to state data.

The new guidance also says once demand has subsided from the first priority group, doses should be allocated to people age 75 and older, childcare workers, staff in emergency response and food service and educators.

Los Angeles County, where about 1 in 5 people being tested for Covid-19 are currently testing positive, is the largest from a cluster of Southern California counties that has received about 256,000 doses from the state, the largest quantity of any region. The area includes Orange, San Luis Obispo, Santa Barbara and Ventura counties.

Still, there aren’t enough vaccine doses currently available to immunize even half of the county population by spring, Dr. Paul Simon, chief science officer at LA County’s Department of Public Health, said Friday.

The county said in a statement Friday it opened 19 vaccination sites this week and will open 75 more by next week ...
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/ 2020 News, Daily News
The California Commission on Health and Safety and Workers' Compensation (CHSWC) announce the unanimous election of Commissioner Martin Brady as the Chair of the Commission for 2021.

The election was held at the December 3, 2020 public CHSWC meeting held online due to the current Covid-19 pandemic.

Martin Brady is Executive Director at Schools Insurance Authority, where he has worked since 1988.

He is a member of the California Joint Powers Authority, California Coalition on Workers’ Compensation, Public Agency Risk Managers Association, Public School Risk Institute, Association of Governmental Risk Pools and the Public Risk Management Association.

Mr. Brady has been a member of the Commission since 2012.

CHSWC, created by the workers' compensation reform legislation of 1993, is charged with examining the health and safety and workers' compensation systems in California and recommending administrative or legislative modifications to improve their operation.

CHSWC was established to conduct a continuing examination of the workers' compensation system and of the state's activities to prevent industrial injuries and occupational diseases and to examine those programs in other states.

Information about CHSWC and its meetings is available online. Information may also be obtained by writing to the Commission on Health and Safety and Workers' Compensation, 1515 Clay Street, 17th Floor, Oakland, CA 94612; by calling (510) 622-3959; by faxing a request to (510) 286-0499; or by emailing chswc@dir.ca.gov.

Due to the current Covid-19 pandemic, CHSWC public meetings will be held online until further notice ...
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/ 2020 News, Daily News
Since the onset of the COVID-19 crisis in March, the Division of Workers’ Compensation (DWC) has worked hard to ensure the continuity of its services to the workers’ compensation community. District offices continue to hear all cases either via teleconference or by video.

In an additional measure to keep DWC and the workers’ compensation community safe, DWC has not accepted any walk-in documents or walk-through documents since March. Documents have only been accepted via e-filing, JET filing or by mail during this time. Recently, DWC issued a Newsline further encouraging the workers’ compensation community to file documents by e-filing or JET filing due to the limited availability of staff in our district offices.

The Workers’ Compensation Appeals Board (WCAB) recently issued an en banc decision suspending Regulation Section 10789(c) on walk-throughs. This change allows DWC, effective January 11, to now offer a "walk-through alternative" in the Lifesize video conferencing platform. Instructions on using that platform may be found on the DWC website.

District offices will be available for walk-throughs Monday through Friday, from 2 to 4 p.m. only. Walk-throughs will be available only for a Compromise and Release, or Stipulation with Request for Award at this time. To be heard, the documents must be filed at least 24 hours ahead of the walk-through appearance, by either JET filing or e-filing. Documents filed by U.S. mail must be available to the judge in EAMS prior to the walk-through.

DWC has previously posted instructions on how to e-file settlement documents. The walk-through procedure will be handled via the Lifesize virtual courtroom which will be available for each office. A list of links for each office may be found here. The link for each virtual walk-through courtroom will not change. It should be noted that a judge will handle as many walk-throughs as are feasible for the day. The order in which a judge will hear the walk-throughs will be up to the judge handling that day’s matters. We encourage parties to file proposed orders to assist the judge with handling the matter more expeditiously.

DWC understands that parties may want to walk-through other documents. However, at this time walk-throughs are limited to only a Compromise and Release or Stipulation with Request for Award. Limits will be based on both availability and pursuant to the DWC/WCAB Policy and Procedural Manual section 1.25.

DWC will be monitoring the impact of this program and will look to expand hours and documents allowed in the future based on staffing availability ...
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/ 2020 News, Daily News
The number of U.S. workplace deaths rose 2% in 2019 to 5,333 from 5,250 fatal workplace injuries in 2018, according to the most recent Census of Fatal Occupational Injuries released by the Labor Department’s Bureau of Labor Statistics (BLS). The fatal work injury rate was 3.5 fatalities per 100,000 full-time equivalent (FTE) workers, the same rate reported in 2018.

It was the highest number of fatalities reported since 2007. Transportation incidents continued to account for the largest share of fatalities; transportation incidents increased 2% in 2019 to 2,122 cases. Falls, slips, and trips increased 11% in 2019 to 880 cases.

Other key findings in the BLS report included:

-- The 5,333 fatal occupational injuries in 2019 represents the largest annual number since 2007.
-- A worker died every 99 minutes from a work-related injury in 2019.
-- Fatalities among workers age 55 and over increased 8 percent from 1,863 in 2018 to 2,005 in 2019, which is the largest number ever recorded for this age group.
-- Hispanic or Latino worker fatalities were up 13 percent to 1,088 in 2019–a series high since 1992.
-- Workplace deaths due to suicides (307) and unintentional overdoses (313) increased slightly in 2019.
-- Fatalities in the private construction industry increased 5 percent to 1,06- the largest total since 2007.
-- Driver/sales workers and truck drivers incurred 1,005 fatal occupational injuries, the highest since this series began in 2003.

Both the NSC and American Society of Safety Professionals (ASSP) responded to the CFOI report, calling for employers to take consistent, systemic action to curtail the number of workplace deaths.

"Fatalities should never be the cost of doing business," NSC said in a statement. ASSP urged employers to adopt voluntary national consensus standards and implement safety and health management systems in response to numbers of workplace fatalities reported in 2019.

"With many safety advancements being readily available to employers nationwide, it’s troubling that we’re continuing to see higher numbers of worker fatalities," said ASSP President Deborah Roy said in a statement.

ASSP said that employer efforts to improve workplace safety should involve safety and health management systems like the one specified in the group’s Z10.0-2019 standard.
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/ 2020 News, Daily News
Exceltox, a California diagnostic laboratory located in Irvine California, has agreed to pay $357,584 to resolve allegations that it violated the False Claims Act by submitting or causing to be submitted claims for genetic tests to Medicare without valid physician oversight..

Between September 2015 to November 2015, Exceltox used the services of contractor Seth Rehfuss, of Somerset, New Jersey, who persuaded groups of senior citizens in senior housing complexes to submit to genetic testing, despite applicable Medicare rules requiring proper orders from a treating physician for such tests.

Exceltox, in turn, submitted claims for payment to Medicare for Rehfuss’ genetic tests performed without valid physician oversight.

Rehfuss previously pleaded guilty in Trenton federal court to a superseding information charging him with conspiracy to commit health care fraud and was sentenced in May 2019 to 50 months in prison.

Exceltox was also connected with the prosecution of a Bakersfield physician in 2019, Jason Helliwell, who was at the time on probation by the state medical board for negligent patient care and sex with patients, faced criminal allegations of billing fraud.

Helliwell and two others were charged Sept. 4 2019, in a 31-count criminal complaint alleging a fraudulent medical billing scheme, according to the complaint filed by the Kern County District Attorney’s Office.

The complaint alleges that Helliwell, 47, conspired with Brandon Williams, 40, a sales representative for Irvine-based Exceltox toxicology lab, and Tamara Head, 53, owner of Rosedale Medical Billing Solution, to charge insurance companies for medically unnecessary treatment. The alleged fraud in the complaint dates back to 2010 and occurred as recently as 2016.

The schemes alleged in the DA’s complaint and investigative reports involve Helliwell ordering unnecessary blood and urine tests for patients for which Head is accused of fraudulently charging insurance companies. Helliwell received kickbacks from Williams, whose lab performed some of the testing, for the samples.

Reports state that Helliwell would collect urine samples from patients for lead and mercury testing and would "surreptitiously" order additional testing for illicit drugs without the patient’s knowledge.

Helliwell was given $20 to $25 per patient sample by the toxicology lab, former employees told an investigator, and the lab also paid for a personal medical assistant for Helliwell, according to reports.

Helliwell also ordered testing on an in-house blood allergy machine for patients who didn’t complain of allergy symptoms, the reports said.

Emails obtained between Helliwell and Head indicated the two worked together to bill insurance companies for services not provided to patients, to bill under other doctor’s names and to manipulate billing to receive higher reimbursements, the reports said.

The discovery was made as part of a joint investigation with the California Department of Insurance, according to Kern County Deputy District Attorney Joseph Kinzel.
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/ 2020 News, Daily News
Los Angeles County on Tuesday approved a proposal to require national grocery and drug retailers operating in unincorporated areas of Los Angeles County to pay frontline workers an additional $5 per hour in "hero pay."

Supervisors Hilda Solis and Holly Mitchell co-authored the motion calling for a temporary "urgency" ordinance that would apply to store chains that are publicly traded or have at least 300 employees nationwide and more than 10 employees per store. Supervisor Kathryn Barger abstained from the vote, which was 4-0.

"There's no question that these people deserve hero pay," Barger said, but told her colleagues that she wanted to make sure there would not be unintended consequences before offering her support.

The motion pointed to a rising number of outbreaks of the virus in grocery stores and the additional stress that workers suffer when they cannot consistently maintain distance from crowds of customers at work. Workers also bear increased child care costs incurred while kids are at home distance learning.

Solis and Mitchell noted that several grocery corporations offered $2 to $4 hourly raises at the outset of the pandemic, but that additional support lapsed in May.

The California Grocers Association pushed back hard, agreeing that their employees are heroes, but that the ordinance would result in higher food costs, hurting low-income families and seniors already struggling to cover those costs.

"Grocery store workers are frontline heroes, and that's why grocers have undertaken a massive effort to institute store policies to make both workers and customers safer," California Grocers Association President and CEO Ron Fong said. "Many grocers have already provided workers with extra pay, bonuses and generous health benefits during the pandemic as a supplement to the fair, competitive wages and benefits collectively bargained by grocery workers' unions."

San Francisco supervisors have also passed a resolution Tuesday to give them hazard pay, after urging large chain grocery stores to raise hourly wages for employees by $5.

The $5 in hazard pay would last while the city remains in the purple, red or orange tier on the state’s tiered system.

The extra compensation would not be required of small mom-and-pop groceries ...
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/ 2020 News, Daily News
Courthouse News reports that the pharmaceutical industry’s effort to block California’s requirement that drug companies publicly notify and explain major price increases has stalled, with a federal judge ruling the landmark transparency law does not violate the First Amendment.

Siding with the state, a U.S. District Judge rejected an industry group’s arguments that the 2017 bill infringes drugmakers’ free speech and regulates interstate commerce. Noting the Pharmaceutical Research and Manufacturers of America (PhRMA) willingly bypassed discovery and pushed for summary judgment, the court found the group’s case plainly underdeveloped and unfit for market.

"There are genuine disputes of material fact as to whether providing advance notice of certain increases in a prescription drug’s wholesale acquisition cost results in either direct or extraterritorial regulation," the judge explained while denying the group’s facial challenge. "Ultimately, PhRMA has not met its burden in showing that Senate Bill 17 violates the dormant Commerce Clause on its face."

Hoping to force the industry to explain sudden increases to Californians, a bipartisan group of lawmakers approved the transparency bill in 2017. Then-Governor Jerry Brown quickly signed the bill, saying the public deserved more information on medication costs with "pharmaceutical profits soaring."

Supported by an influential coalition of California unions and health care groups, SB 17 requires drug companies to give the state and insurers at least 60 days’ notice before planned price increases of more than 16% over a two-year period. It also forces insurance companies to file yearly reports with state regulators outlining the impact of medicine costs on health care premiums.

Additional reporting requirements include annual reports to regulators by health plans and insurers with specified information related to the proportion of the premium dollar spent on prescription drugs, the year-over-year increase in net costs and member costs, the 25 most frequently prescribed medications, most costly drugs by total plan spending, and drugs with the highest year over year increase in net cost.

The law also tasks regulators with compiling the information into a consumer-friendly report showing the overall impact of drug costs on health care premiums.

Shortly after its passage, the industry responded with its lawsuit in the Eastern District of California, arguing the state was picking on drug manufacturers and ignoring the underlying reasons for spiking costs.

In court, the group contended the advance-notice requirement effectively triggers a "60-day nationwide price freeze" by preventing manufacturers from increase a drug’s wholesale acquisition cost or list price. It also claimed SB 17 interferes with Medicaid reimbursement schemes enacted in other states.

"That is unconstitutional," the group claimed in court papers. "The Commerce Clause does not permit a single state to ‘project its legislation into other states by regulating the price to be paid for drugs in those states.’"

Following the defeat, the group’s public affairs director hinted an appeal was likely.

"Our position remains that SB 17 is unconstitutional. We will continue to make that case," said Nick McGee in an email ...
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/ 2020 News, Daily News
John S. Romero, 74, of Loma Linda, the former president of a Colton-based labor union was sentenced to 144 months in prison for stealing nearly $800,000 from the union’s health plan trust fund, which he used to pay for personal expenses including legal bills and a car loan for his son’s sports car.

At the conclusion of a five-day trial, a jury found Romero guilty of one count of conspiracy, 12 counts of theft in connection with health care, and one count of making a false statement to a government agency.

Romero appointed himself president of United Industrial Services Workers of America (UISWA) and trustee of the UISWA health plan trust fund. Money paid into the fund was supposed to be used exclusively for health care benefits of its participants. Instead, Romero stole the union’s health funds for the benefit of himself and his immediate family.

In furtherance of his scheme, Romero appointed a sham trustee who had no prior experience with unions. He also actively misled the third-party administrators of the health plan into making improper payments from the trust fund.

From 2008 to 2014, Romero embezzled health plan funds to pay a $110,000 personal civil judgment against himself and his son, John J. Romero, 55, also of Loma Linda. He also embezzled $40,000 to pay criminal defense lawyers who represented Romero in a separate case. Romero funneled more than $310,000 to himself by disguising the funds as rent payments on two properties he owned and held under a shell company.

In addition, he stole more than $300,000 in union health plan money to make "salary" payments to his family, even though none of his family members ever worked for the plan. He also used plan funds to pay off a $25,000 loan on his son’s Ford Mustang Shelby GT500 sports car.

Romero also filed a false financial report with the U.S. Department of Labor in which he concealed the existence of more than $100,000 in union receipts and disbursements that Romero held in a secret bank account and from which he made regular payments to his mistress.

Romero advanced his scheme by appointing his son as the secretary and treasurer of the union. He later appointed his ex-wife, Evelyn Romero, 71, as the UISWA president and trustee in 2010, shortly before Romero began serving a two-year federal prison sentence for making false statements to federal officials while he was president of a different labor union. Romero’s son, ex-wife, and daughter, Danae Romero, 42, of Loma Linda, pleaded guilty to criminal charges in this case. Evelyn and Danae Romero each were sentenced to two years’ probation in this case. John J. Romero was sentenced to time served in prison, plus three years of supervised release.

At a September 9 hearing, Judge Phillips ordered this case’s other defendants to pay restitution in the following amounts: Evelyn Romero - $316,502; John J. Romero - $273,350; and Danae Romero - $200,552.
...
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/ 2020 News, Daily News
Adir International, LLC operates the Curacao chain of retail department stores. From 2004 to 2011, Travelers issued a workers’ compensation insurance policy to Adir. The policy was a "guaranteed cost" policy with standard language approved by the Commissioner.

Before issuing the policy to Adir, in accordance with Insurance Code section 11658, Travelers filed the policy with the Workers’ Compensation Insurance Rating Bureau for the Commissioner’s review. The Commissioner did not object to the policy. The policy did not contain an arbitration provision.

As an annual condition for issuing the policy, Adir executed a separate agreement with Travelers that contained the terms and conditions for the Retrospective Rating Plan Endorsement. The annual agreement introduced a requirement for binding arbitration of disputes.

On February 14, 2011, the Commissioner issued a letter to the Rating Bureau requesting it to "notify its member insurers" that the Commissioner "has prohibited the use of collateral agreements, which is synonymous with the term ‘side-agreement,’ concerning workers’ compensation insurance unless they are attached to the policy." The Commissioner further stated that an insurer’s attempted enforcement of unfiled side agreements could constitute a violation of California law.

When Adir’s coverage expired on July 1, 2012, it did not renew its workers’ compensation insurance with Travelers. Travelers then sought arbitration regarding "the amount of premium currently owing to Travelers by Adir.

On March 13, 2015, Adir filed a complaint in the Los Angeles County Superior Court against Travelers. The Superior Court refused to rule on the validity of the arbitration clause, asserting that the arbitrator was to resolve that issue.

Adir then filed a motion with the arbitration panel, arguing that since the arbitration agreement was not "filed or approved by the Insurance Commissioner," the agreement was "an illegal agreement and therefore unenforceable." The arbitration panel denied Adir’s motion to dismiss Travelers’ arbitration claims.

On June 22, 2016, the Commissioner, in a precedential administrative decision (Matter of Shasta Linen Supply, Inc.) ruled that unapproved policy side agreements were illegal.

On July 20, 2017, the arbitration panel issued an interim award of $2,709,280 in favor of Travelers and against Adir. Before the arbitration panel issued a final award, on May 3, 2018, the Fourth District Court of Appeal issued Nielsen Contracting, Inc. v. Applied Underwriters, Inc. (2018) 22 Cal.App.5th 1096, which held that the trial court, not the arbitrator, should determine the enforceability of the specific arbitration provisions.

On June 18, 2018, under the trial court’s "inherent authority to reconsider its prior rulings," Adir filed a renewed motion in the Superior Court, seeking to declare the arbitration provision in the agreement "void and unenforceable for illegality." The trial court granted Adir’s renewed motion on August 23, 2018, declaring the arbitration provisions unenforceable and void.

Travelers appealed, and the Court of Appeal affirmed the finding in the unpublished case of Adir International v. The Travelers Indemnity.

A number of arguments made by Travelers on appeal were rejected, including its argument that the issue was preempted by the Federal Arbitration Act ...
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/ 2020 News, Daily News
A new nonprofit, trade association, the California Staffing Agency Reform Association (Cal-SARA), has been established by staffing industry leaders to clean up the current marketplace, which it claims is inundated with fraudulent and black market workers' compensation insurance.

"The increasing demand for a contingent or variable workforce, combined with the decreasing supply of employees and workers' compensation insurers, has allowed a massive black market to grow virtually unchecked. These illegal practices put staffing agencies, injured workers and California taxpayers at risk. Regulators have thus far been unsuccessful in policing these activities causing the situation to get worse," says Mark Bertler, Executive Director of Cal-SARA.

Cal-SARA says that legitimate staffing agencies are forced to compete with scam agencies that do not operate with legitimate workers' compensation insurance. Illegal operations drive prices down below the cost of doing business, creating an unfair marketplace. Customers of the California staffing industry have come to accept these illegitimate operations, largely due to the unfilled and accelerating demand for workers. Regulators appear to be playing "whack-a-mole" and cannot seem to shut them down as fast as they pop up.

Cal-SARA will provide education, training and legal support for its members, as well as providing assistance to regulators and insurers. Cal-SARA will also act to protect its members from illegal and unethical activity by aggressively pursuing all parties who enable these illegal arrangements, including brokers and PEOs.

A robust and inclusive committee structure will ensure that Cal-SARA's mission and goals are advanced. These committees include industry leaders on their education, governance, audit, membership and litigation committees.

"Self-reform is the fastest and most reliable way to clean up our industry," says Bertler. "Unethical and unscrupulous actors continue to destroy the market by blatantly utilizing illegal business practices without fear of sanction or punishment," he explains. "The temptation to cross the line and operate in this emerging and dangerous underground marketplace is often too great. Once they stop paying for workers' compensation insurance, they may also resort to payroll tax fraud as well. Cal-SARA is in the process of generating a war chest of resources and talent to put an end to these crimes," he adds.

Cal-SARA promotes legal and regulatory compliance in the sale of workers' compensation insurance and advocates for the common business interests of its members in recognizing and eliminating workers' compensation fraud in the temporary staffing/staffing/recruiting industries. To learn more and join the fight against staffing industry workers' compensation fraud, visit https://www.cal-sara.org/ ...
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/ 2020 News, Daily News
State Compensation Insurance Fund announced plans to distribute an approximate $39 million dividend to its qualifying policyholders with policies that took effect between Aug. 27 and Dec. 31, 2020.

This dividend equals approximately 10% of the estimated annual premium reported during that time period.

This announcement follows up State Fund’s August declaration of an approximate 10% mid-year dividend that applied to all policies incepted between Jan. 1 and Aug. 26, 2020. The dividend distribution for the entire year equals approximately $114 million.

Through 2020, State Fund is reporting approximately $1.13 billion in premium.

"This has been a very challenging year for our policyholders and we’re glad we can continue to support them with this dividend declaration," said State Fund President and CEO Vern Steiner. "We took a number of actions during 2020 to help our policyholders, including accelerating the delivery of our 2019 dividend payments and providing more than $40 million in COVID-19 safety support grants. This latest declaration continues that support - all qualifying State Fund policyholders now know they can expect another dividend payment next year."

Since its creation in 1914, State Fund has paid out more than $5 billion in dividends to policyholders.

State Fund policyholders will begin to receive dividend payments during the second half of next year ...
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/ 2020 News, Daily News
The Ohio Attorney General's office says it may have uncovered evidence in a court battle to show that a pharmacy benefit manager knowingly overcharged a state agency.

A report in the Columbus Dispatch says that among hundreds of thousands of emails obtained from PBM OptumRX as part of the litigation was one that appears to acknowledge that the multibillion-dollar corporation was not following the terms of its contract with the Ohio Bureau of Workers' Compensation.

The PBM administered prescription drugs for workers injured on the job. In all, OptumRX overcharged the bureau on more than 1.3 million claims for generic medications, the lawsuit says. The contract, in effect from mid-2009 until the fall of 2018, called for the PBM to charge the lowest of four potential prices for generic drugs, including a measure from the Centers for Medicare and Medicaid known as the Federal Upper Limit, or FUL for short.

But in a series of May 2015 emails marked as "confidential," John Spankroy, director of public sector account management for Catamaran, a company purchased by OptumRX, said the Federal Upper Limit was never applied, despite the contract.

He told Susan McCreight, senior director of public sector account management, "Per BWC contract we are supposed to be using pricing logic that includes lower of FUL for generics. None of the BWC price schedules has FUL as a cost source."

In a separate email, Spankroy told Bryce Owens, the Illinois-based PBM's manager for pricing and analytics, "We do not see FUL included as a cost source option."

Spankroy also acknowledged: "BWC is not aware of this (yet)."

"The admission is highly relevant" to the central issue in the legal dispute: "whether OptumRX was required to follow the pricing terms included in the BWC contract," said Yost's legal team in a Dec. 16 court filing.

But Andrew Krejci, who is with Optum's corporate communication office, says the federal FUL requirement was never part of the PBM's agreement with the state.

"The plain language of the contract demonstrates that the lesser-of reimbursement methodology, which was agreed upon and utilized by the parties over the course of their almost decade-long relationship, incorporated three reimbursement options and CMS FUL was never one of them," OptumRx said in a court filing.

The bureau dropped OptumRX more than two years ago after a consultant determined the PBM was vastly overcharging the state.

The same consultant later discovered that PBMs - including OptumRX - in Ohio's Medicaid program, which pays for health care of the poor and disabled, were charging three to six times the standard rate, enabling them to take home nearly $250 million in a single year.

According to the lawsuit, which seeks unspecified damages, OptumRx overcharged the bureau on 57% of 2.3 million prescription claims from injured Ohio workers between January 2014 and September 2018 ...
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/ 2020 News, Daily News
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