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75 year old Egisto Salerno, M.D., an internal medicine physician practicing in San Diego, was sentenced to 18 months in custody for causing the illegal distribution of an opioid pain medication commonly known as Norco or Vicodin.

He is a 1976 graduate of the National University of La Plata Faculty of Medicine in Argentina, and licensed in California on January 4, 1982. He surrendered his California medical license on May 25, 2018 and is no longer licensed to practice medicine in California. He stipulated to surrender his license to resolve disciplinary actions then pending against him for gross negligence.

Salerno, whose medical practice was located at 5532 El Cajon Boulevard, pleaded guilty in January, admitting that he signed prescriptions for 78,544 pills that lacked a legitimate medical purpose and were outside the usual course of professional medical practice.

Salerno also admitted that an undercover federal agent who visited Salerno’s office on six occasions received six hydrocodone prescriptions.

In a separate instance, on a date when the undercover agent did not visit Salerno’s office and the doctor did not see him, Salerno acknowleged that a prescription was improperly issued by him in the name used by the undercover agent. After the prescription was issued, Salerno ginned up and signed a progress note in the "patient" chart for the purported visit that did not occur.

The prescription was then picked up by another as part of a larger scheme to divert these pills. That scheme involved two medical assistants in Salerno’s practice who falsified medical records and sold prescriptions that Salerno had pre-signed to a co-defendant though the "patients" identified on those prescriptions did not even see Salerno.

In fact, as Salerno acknowledged, many of those in whose names these prescriptions were written were deceased or jailed at the time the prescriptions were written.

The pills were, in turn, diverted to the "capper" or patient recruiter, who also arranged to bring homeless and other individuals to Salerno’s office and paid them to secure these prescriptions from Salerno. Others assisted the patient recruiter by transporting the purported patients to Salerno’s office and then to pharmacies to pick up the pills. In turn, pills were sold in San Diego and delivered to a pharmacy in Mexico for cash.

As the plea documents show, the criminal activity occurred between November 2014 and February 2018. Seven other defendants have been convicted in this case including Salerno’s two medical assistants - April J. Cervantes and David D. Apple; the lead patient "recruiter" - Stephen Toney; and Toney’s associates - Shalina D. Latson, Lonnell Ligon, LaJuan D. Smith and Amber N. Grabau.

Defendant David D. Apple, one of Salerno’s medical assistants, will be sentenced on December 2, 2020 ...
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/ 2020 News, Daily News
CartiHeal, developer of Agili-C, a proprietary implant for the treatment of cartilage lesions in arthritic and non-arthritic joints, announced that FDA has granted Breakthrough Device Designation for the Agili-C implant.

FDA's Breakthrough Device Program is reserved for certain medical devices that provide for more effective treatment or diagnosis of life-threatening or irreversibly debilitating diseases or conditions. This program is intended to help patients receive more timely access to these medical devices by expediting their development, assessment and review by FDA.

Cartilage, the flexible soft tissue that cushions joints - especially in the knee - cannot self-heal once damaged, because it lacks blood vessels.

The Agili-C surgical implant is a biological scaffold onto which the body’s own stem cells grow and regenerate the damaged bone and cartilage naturally. Gradually, over six to 12 months, the scaffold is replaced with a top layer of hyaline cartilage and a bottom layer of bone identical to the body’s own tissues in a normal joint.

The CartiHeal Agili-C implant is placed where the natural cartilage has degenerated and is immediately infiltrated with blood, starting a biological chain reaction. The result is regenerated bone and cartilage though migration and adhesion of stem cells. The tissue created by this little implant becomes genetically identical to the body’s own tissue. The clinical evidence of the Agili-C slowly becoming a part of the human anatomy is astounding!

"We are extremely pleased that FDA granted the Agili-C implant Breakthrough Device Designation," said Nir Altschuler, CartiHeal's Founder & CEO. "We look forward to working closely with FDA to expedite Agili-C's review process, once the final IDE study results will be available, in order to provide a promising treatment for millions of patients who suffer from cartilage defects and currently lack good treatment options."

CartiHeal, a privately-held medical device company headquartered in Israel and New Jersey, develops proprietary implants for the treatment of cartilage and osteochondral defects in traumatic and osteoarthritic joints ...
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/ 2020 News, Daily News
Public health experts are hoping one or several vaccines for COVID-19 will be ready by 2021. Close to 200 vaccines for the disease are under study, and several candidates have moved to phase III human studies.

To help speed up development and fund the trials, the U.S. has set up Operation Warp Speed, a partnership with the Department of Health and Human Services, the FDA and other federal agencies. Its goal is to deliver 300 million doses of a safe, effective vaccine by January 2021. These companies are included in the program: AstraZeneca, Janssen (Johnson & Johnson), Moderna, Novavax, Pfizer and Sanofi/GSK.

British pharmaceutical giant AstraZeneca on Monday said its potential Covid-19 vaccine has produced a similar immune response in older and younger adults. AstraZeneca, which is developing its potential Covid-19 vaccine in collaboration with the University of Oxford, said adverse responses to the vaccine among the elderly were also found to be lower.

The announcement is likely to boost hopes of a Covid vaccine being developed before the end of the year.

Pfizer, one of the front-runners in the quest for a COVID-19 vaccine, has more than one vaccine candidate, being developed together with the German company BioNTech. It said its candidate vaccine looks safe, and the company expects to have data soon on how well it protects people against the coronavirus.

The US Department of Health and Human Services and Department of Defense announced a $1.95 billion agreement with Pfizer to produce 100 million doses of the vaccine. The deal also allows the US government to acquire an additional 500 million doses.

The start of Moderna's Phase 3 trial of its mRNA-1273 vaccine was announced just last August. It will involve 30,000 adults at 89 clinical research sites around the country. It is the first Phase 3 trial begun under Operation Warp Speed, according to the National Institutes of Health.

Novavax, a biotechnology company based in Gaithersburg, Maryland, announced the launch of its phase three trial in the United Kingdom on September 24, which will evaluate the vaccine in up to 10,000 people, both with and without underlying conditions. Up to 400 participants will also be vaccinated against the seasonal flu as part of a sub-study that will help determine whether it is safe to give patients both vaccines at the same time.

On September 23, Johnson & Johnson, based in New Jersey, announced the launch of a phase three ENSEMBLE trial to evaluate the safety of the vaccine - and how well it works - among up to 60,000 adults from a variety of countries. The trial will include "significant representation" from older populations and those with underlying conditions that make them more susceptible to COVID-19.

On October 12, Johnson & Johnson announced that it has paused these trials for an independent safety review due to an unexplained illness in a participant ...
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/ 2020 News, Daily News
Angelica Reynoso was employed as a service officer by the Gardena Police Department and worked at the city jail. On February 20, 2016, an inmate who had scabies was transferred to another jail. Service Officer BrianLee packaged the inmate’s property but Reynoso may have touched the inmate’s shoes.

That same day, Reynoso or her former husband purchased 1,049 square feet of flooring from Lumber Liquidators.Over the next few months, Reynoso purchased additional flooring from Lumber Liquidators.

On February 23, 2016, Reynoso reported to her employer that she had a rash and believed it to be scabies due to the inmate exposure. Reynoso received treatment that day from a medical clinic.

On March 9, 2016, Reynoso informed her employer that she believed that scabies had infected her children and her residence. The employer sent a professional cleaning crew to Reynoso’s residence. The cleaners found an infestation of bedbugs, but not scabies. The crew steam-cleaned the carpet, but did not advise Reynoso to replace the carpet with new flooring.

Later Reynoso stated that her physician advised her to replace her flooring, and sent flooring invoices to her employer dated from February to May 2016, amounting to $8,640.22. When asked to provide the physician’s note, Reynoso replied that the replacement recommendation came from the cleaning crew who cleaned her residence.

A jury convicted Reynoso of workers’ compensation insurance fraud and insurance fraud. The court of appeal sustained the conviction in the unpublished case of People v Reynoso.

The issue on appeal was the admissibility of her recorded interview taken by Investigator Michael Downs at the police department. Downs died before the criminal trial, and the recording was admitted into evidence without his authentication.

Recordings are writings as defined by the Evidence Code. To be admissible, a writing must be relevant and authenticated. The Code defines authentication as "the introduction of evidence sufficient to sustain a finding that it is the writing that the proponent of the evidence claims it is."

The fact conflicting inferences can be drawn regarding authenticity goes to the document’s weight as evidence, not its admissibility.

The trial court acted within its discretion by deciding that the prosecutor established a prima facie showing of authenticity for the Downs recording.

The parties stipulated that the voices on the regarding were Downs and Reynoso. The parties also agreed that their respective transcripts of the recording had no material differences. At the beginning and end of the recording, Downs announced the time.From this information, the court could measure the duration of the interview and decide that it was complete ...
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/ 2020 News, Daily News
Marsh has published an Insight Report on the effects of COVID-19 on the Workers' Compensation industry so far. Here are some of the highlights of its report.

Some six months after the World Health Organization declared a pandemic, many of the most dire predictions about COVID-19’s impact on workers’ compensation systems have not been realized. Claims of COVID-19 exposure in the workplace have been outpaced by a decline in other types of reported occupational injuries, and the workers’ compensation insurance market remains competitive.

Industry observers have forecast that workers’ compensation premium volume will drop by as much as 10% to 20% in 2020 and will likely not continue to grow in 2021 as the labor market remains challenging. Despite this negative premium growth and a number of changes to state regulations or directives regarding the compensability of COVID-19 claims, Marsh anticipates the impact to insurer profitability to be less drastic and for the line to normalize fairly quickly.

The National Council on Compensation Insurance (NCCI), Workers’ Compensation Insurance Rating Bureau of California (WCIRB), and other industry observers have published sizable initial ranges of estimated claims losses from COVID-19. But a large influx of COVID-19 claims have not yet materialized, with limited exceptions in health care. And initial analysis shows that the average severity of COVID-19 claims is lower than expected.

Telemedicine will play an increasingly important role in workers’ compensation, potentially even after the pandemic subsides and workplaces largely transition to a new normal. Amid the pandemic, employers are reporting a variety of benefits and practical applications for telemedicine, including to facilitate triage and claim intake, initial injury assessments follow-up visits, and injury rehabilitation.

Prior to the pandemic, employers had expressed interest in telemedicine but had not widely adopted its use in workers’ compensation, in part because laws in some states limited its use. Since COVID-19 emerged as a threat, however, many states have eased restrictions and encouraged employers and claims administrators to use telemedicine, which can offer many benefits to employers and workers, including the ability to avoid crowded waiting rooms and lengthy commutes.

The explosion of telemedicine in workers’ compensation during the pandemic also mirrors its greater use by primary care physicians and others in group health settings. As employees become more familiar with telemedicine’s benefits during the pandemic, they may expect it to remain a readily available option post-COVID-19 — including as a means for receiving care following workplace injuries ...
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/ 2020 News, Daily News
A woman was sentenced to 60 months in prison for her leading role in an opioid buy-back scheme in which a doctor at a Los Angeles clinic prescribed opioids to "patients" who sold the narcotics back to the clinic, which later sold drugs on the black market in California and Texas.

Angela Gillespie-Shelton, a.k.a. "Boss Lady," and "Angotti," 54, of Houston, was sentenced and also ordered to pay a $10,000 fine. She pleaded guilty on May 21 to one count of conspiracy to distribute controlled substances and one count of conspiracy to engage in money laundering.

From October 2012 to January 2015, Gillespie-Shelton and her co-conspirators ran Southfork Medical Clinic, located in the Harvard Heights neighborhood of Los Angeles. At the time, Gillespie-Shelton primarily was based in Texas, but she frequently traveled to California.

The conspiracy’s purpose was to sell prescriptions for narcotics in exchange for cash, and to later acquire those same drugs from the clinic’s "patients," ship the narcotics to Texas and then sell them on the black market. The prescriptions were for drugs including oxycodone and hydrocodone (commonly sold under the brand names Vicodin, Norco and Lortab), alprazolam (best known by the brand name Xanax), carisoprodol (a muscle relaxant sold under the brand name Soma) and promethazine with codeine (a cough syrup sold on the street as “purple drank” and “sizzurp”).

At the clinic, Gillespie-Shelton’s co-conspirator - Dr. Madhu Garg, 69, of Glendora - saw "patients" and regularly prescribed them the narcotics, when both Gillespie-Shelton and Garg knew that the customers did not have any actual or legitimate medical need for them.

After the "patients" filled the prescriptions, Gillespie-Shelton and her co-conspirators bought the drugs from them and shipped the drugs to Texas.

In Texas, Gillespie-Shelton used two pharmacies that she controlled as a front to sell on the black market the drugs shipped from the Los Angeles clinic. Under Gillespie-Shelton’s control, the pharmacies in Texas also filled false or fraudulent prescriptions and received kickbacks from the fake prescriptions. Gillespie-Shelton’s co-conspirators also stole a physician’s identity to issue falsified prescriptions to obtain additional narcotics.

In addition, Gillespie-Shelton laundered more than $1 million from the diversion schemes through numerous accounts. She used some of the money to further the narcotics trafficking conspiracy, which included paying rent for the Southfork Clinic and a stash house in Los Angeles, as well as paying Garg more than $200,000 for writing the illegal prescriptions.

In February 2016, Garg pleaded guilty to illegally distributing oxycodone and money laundering, and she later served an 18-month prison sentence.

"[Gillespie-Shelton and her co-conspirators] made hundreds of thousands of dollars profiting off the Opioid Crisis," prosecutors wrote in their sentencing memorandum. "The sheer amount of money [they] made over the course of this conspiracy shows that this was a crime borne of greed where the criminals trafficked lethal drugs despite the undeniable havoc they wreaked on their community."
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/ 2020 News, Daily News
The Department of Justice announced a global resolution of its criminal and civil investigations into the opioid manufacturer Purdue Pharma LP, and a civil resolution of its civil investigation into individual shareholders from the Sackler family. The resolutions with Purdue are subject to the approval of the bankruptcy court.

Purdue Pharma has agreed to plead guilty in federal court in New Jersey to a three-count felony information charging it with one count of dual-object conspiracy to defraud the United States and to violate the Food, Drug, and Cosmetic Act, and two counts of conspiracy to violate the Federal Anti-Kickback Statute.

The criminal resolution includes the largest penalties ever levied against a pharmaceutical manufacturer, including a criminal fine of $3.544 billion and an additional $2 billion in criminal forfeiture.

For the $2 billion forfeiture, the company will pay $225 million on the effective date of the bankruptcy, and, as further explained below, the department is willing to credit the value conferred by the company to State and local governments under the department’s anti-piling on and coordination policy.

Purdue has also agreed to a civil settlement in the amount of $2.8 billion to resolve its civil liability under the False Claims Act. Separately, the Sackler family has agreed to pay $225 million in damages to resolve its civil False Claims Act liability.

The resolutions do not include the criminal release of any individuals, including members of the Sackler family, nor are any of the company’s executives or employees receiving civil releases.

While the global resolution with the company is subject to approval by the bankruptcy court in the Southern District of New York, one important condition in the resolution is that the company would cease to operate in its current form and would instead emerge from bankruptcy as a public benefit company (PBC) owned by a trust or similar entity designed for the benefit of the American public, to function entirely in the public interest.

As part of the plea, Purdue will admit that it conspired to defraud the United States by impeding the lawful function of the DEA by representing to the DEA that Purdue maintained an effective anti-diversion program when, in fact, Purdue continued to market its opioid products to more than 100 health care providers whom the company had good reason to believe were diverting opioids and by reporting misleading information to the DEA to boost Purdue’s manufacturing quotas.

In addition, Purdue will admit to conspiring to violate the Federal Anti-Kickback Statute. Purdue made payments to two doctors through Purdue’s doctor speaker program to induce those doctors to write more prescriptions of Purdue’s opioid products. Similarly, from approximately April 2016 through December 2016, Purdue made payments to Practice Fusion Inc., an electronic health records company, in exchange for referring, recommending, and arranging for the ordering of Purdue’s extended release opioid products - OxyContin, Butrans, and Hysingla.

The DOJ resolution does not resolve claims that states may have against Purdue or members of the Sackler family, nor does it impede the debtors’ ability to recover any fraudulent transfers ...
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/ 2020 News, Daily News
The Centers for Medicare and Medicaid Services (CMS) has just released its latest version of the WCMSA Reference Guide (Version 3.2, October 5, 2020). This new guide replaces the WCMSA Reference guide version 3.1 (May 11, 2020).

The new Reference Guide provides a list of major medical centers used by the Workers’ Compensation Review Contractor (WCRC). This list of centers is used to establish pricing associated with medical services such as a surgery, hospital stay, long-term in-patient care, etc. The list of the zip codes is found in Appendix 7 of the Guide and should follow the same process as outlined for selecting the proper jurisdiction for determining pricing.

CMS also added a new screen to the WCMSA Portal (WCMSAP) on October 5, which requires the submitter to answer the question, "Does the proposed WCMSA for this settlement include any costs associated with a major medical center, Yes or No?" If the answer is yes, then the appropriate zip code for the major medical center that was used in the calculation of the WCMSA needs to be entered into the space provided.

This enhancement should improve the WCMSA process. In the past, it has not been clear which major medical center the WCRC used to price WCMSAs.

The new process should reduce the number of counter higher determinations received on WCMSAs. The industry has been asking CMS/WCRC to clarify this issue for some time and Optum is pleased to see that this has been addressed in the WCMSA Reference Guide ...
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/ 2020 News, Daily News
Applied Underwriters, Inc. and Applied Risk Services, Inc. filed a lawsuit against the Insurance Commissioner of the State of California and others in U.S. District Court for the Eastern District of California, asserting five claims under the U.S. Constitution.

Applied and its affiliates primarily write workers’ compensation insurance through multiple insurance companies in all fifty states in the United States,and have done so since 2002. California Insurance Company ("CIC") is the largest of those companies and was formed in 2004. Since that time, CIC has grown into a company with over a billion dollars in assets and over $600 million in capital and surplus.

Applied Underwriters and Applied Risk Services allege that the California Department of Insurance acted in bad faith and abused its authority under state law in ways that have caused substantial harm to the companies.

Disputes between the CDI and Applied Underwriters has a longstanding history. The current dispute arose in January 2019, after a $920 million sale to company founder Steve Menzies, who was an indirect owner of 11.5% of CIC’s shares was announced.

The California Department of Insurance says it must sign off on the deal because one of Applied’s subsidiaries, California Insurance Co., is domiciled in the state. It subsequently denied approval of the sale.

The California Department of Insurance placed California Insurance Company into a conservatorship, allegedly under false pretenses and has abused its authority by trying to force Applied Underwriters to relinquish its rights in connection with the Department’s unlawful actions.

In the year long period that CIC has been in conservation, Applied Underwriters claims the CDI has "refused to resolve matters in good faith," and has instead demanded that Applied "subject itself to jurisdiction, give up its right to bring this and other lawsuits, and bind itself to other onerous terms."

The complaint says that up until this week, Insurance Commissioner Lara and his representatives continued to "propose unfair and preposterous terms under the constant threat that if Applied and others did not agree, they would seek court approval for a rehabilitation plan that would be ‘even worse.'"

That rehabilitation plan, originally due in August, was filed October 19.

According to Applied Underwriters, the rehabilitation plan "effectively eliminates CIC’s business in California, and other states, requires CIC to transfer its business to a new insurer of the Commissioner’s choosing, and leaves just a shell CIC with all of its obligations to other reinsurers and affiliates under its contracts and no source of revenue to meet its obligations." ...
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/ 2020 News, Daily News
Michael Ray Williams, 37, of Daly City, was sentenced to 60 days in county jail and three years formal probation after pleading no contest to two felony counts of insurance fraud, after illegally working for multiple employers while simultaneously collecting over $85,000 in workers' compensation benefits from two different insurers.

Williams repaid the State Compensation Insurance Fund $40,000 in restitution and was ordered to pay additional restitution to Travelers Insurance and his former employer.

In November 2014, Williams was working as an electrician when he sustained a work-related injury. He filed a workers' compensation claim with SCIF and began collecting temporary workers' compensation benefits.

In March 2015, Williams began working for a different employer, yet allegedly continued to collect payments from SCIF.

In May 2015, Williams sustained another work-related injury and filed another workers' compensation claim, this time with Travelers Insurance.

Between March 2015 and November 2016, Williams allegedly worked for and was paid by three different employers. At one point, Williams was collecting payments from SCIF and Travelers for two different work-related injuries, while continuing to work.

To fraudulently collect benefits, William allegedly misrepresented his level of injury, abilities, earnings and employment status to SCIF and medical providers, including providing false statements to his Qualified Medical Examiner to collect permanent disability benefits after the temporary benefits were exhausted.

Williams was also charged with grand theft for allegedly using his former employer's credit card for personal expenses, including the purchase of an engagement ring.

This case was being prosecuted by the San Mateo County District Attorney's Office ...
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/ 2020 News, Daily News
A new California Workers’ Compensation Institute (CWCI) study examined the initial impact of replacing the statewide average GAF in the workers’ comp Official Medical Fee Schedule (OMFS) with a system that uses smaller Metropolitan Statistical Area (MSA) localities when applying regional cost adjustments as part of the fee schedule formula.

The state adopted the GAF change for services rendered to injured workers on or after 1/1/19 to improve payment accuracy and align OMFS allowable fees with those allowed by Medicare and other systems.

Under the new structure developed by Medicare in 2017, there are 32 payment localities in California.

The CWCI study found that switching from statewide to locality-specific geographic adjustment factors (GAFs) in the calculation of California workers’ comp physician and non-physician service fees has not resulted in a major shift in where the dollars go, and despite concerns, the switch does not appear to have generated inappropriate shifting of billing to higher reimbursed areas, or caused rural providers to leave the system.

The study found that both before and after the switch, medical providers in Los Angeles County accounted for a much larger share of the office visit services and payments than providers in any other locality, though their proportion of services and payments did decrease by about 5 percentage points in the first year after the locality specific GAFs were adopted.

Those decreases, however, were offset by 5 percentage point increases in the proportion of E&M visits and payments to providers in nearby San Bernardino/Riverside Counties, a shift that occurred after a large occupational medicine group expanded into the Inland Empire.

Other than that, the study found no significant changes in the proportion of E&M services or payments among the geographic localities, and no indication of a shift in services or payments to providers in either urban or rural areas of the state

The study also showed that the switch to the new GAF had little effect on the types of E&M services used, as follow-up visits by established patients remained the most prevalent type of office visits, accounting for 86.5% of the E&M services in 2018 and 80.5% in 2019.

A key factor influencing the average payments in each locality was the use of discount contracts, such as those paid to providers within an employer’s medical provider network, which allow payments below the fee schedule amounts.

The percentage of E&M services in the study sample that were paid at a discounted rate fell from 78.3% to 76.6%, but the average discount increased from 15.5% to 17.1%, so thus far the use of these contracts has helped mitigate the impact that the change to the fee schedule’s geographic adjustment factor has had on the average amounts paid for E&M services ...
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/ 2020 News, Daily News
Trucking company owners Hardip Singh, 44, and Amandeep Kaur, 36, were charged with multiple counts of insurance fraud after allegedly misclassifying employees as independent contractors in a scheme to underreport payroll by more than $1.4 million.

The scheme resulted in a $234,000 loss to their insurer and a $220,000 loss to the Employment Development Department (EDD).

Singh and Kaur were doing business as Trust Transport, Inc., a long-haul trucking company based out of their residence in Sacramento and a separate trucking yard in West Sacramento.

From February 25, 2014 through October 20, 2016, Trust Transport maintained workers’ compensation insurance coverage with State Compensation Insurance Fund (SCIF) and reported $105,811 in payroll.

SCIF conducted audits to confirm the payroll and found that several workers were issued 1099s and had been misclassified as independent contractors. Department of Insurance detectives served a search warrant at Trust Transport’s bank for financial records and discovered approximately $1,436,387 in unreported payroll from the misclassified "independent contractors."

The investigation revealed Singh and Kaur fraudulently misclassified these employees in order to avoid paying higher workers’ compensation insurance premiums. SCIF reported a $234,541 loss in underpaid insurance premiums and EDD reported a $220,000 loss due to this scheme.

Both Singh (October 13) and Kaur (October 16) self-surrendered to the Sacramento County Superior Court. The Sacramento County District Attorney’s Office is prosecuting the case.

The California Insurance Commissioner said that by "under reporting payroll and employees, not only are business owners breaking the law they are putting honest businesses at risk."
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/ 2020 News, Daily News
A rapper who boasted in a YouTube music video about getting rich from committing unemployment benefits fraud was just arrested on federal charges of carrying out that very scheme by fraudulently applying for more than $1.2 million in jobless benefits, including by using stolen identities.

Fontrell Antonio Baines, 31, who uses the stage name "Nuke Bizzle," of Memphis, Tennessee and who currently resides in the Hollywood Hills, was arrested pursuant to a criminal complaint alleging a scheme to fraudulently obtain unemployment insurance benefits under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act).

Baines allegedly exploited the Pandemic Unemployment Assistance (PUA) provision of the CARES Act, which is designed to expand access to unemployment benefits to self-employed workers, independent contractors, and others who would not otherwise be eligible.

According to an affidavit filed with the complaint, Baines possessed and used debit cards pre-loaded with unemployment benefits administered by the California Employment Development Department (EDD). The debit cards were issued in the names of third-parties, including identity theft victims. The applications for these debit cards listed addresses to which Baines had access in Beverly Hills and Koreatown.

Evidence gathered during the investigation established that at least 92 debit cards that had been pre-loaded with more than $1.2 million in fraudulently obtained benefits were mailed to these addresses, according to the affidavit. Baines and his co-schemers allegedly accessed more than $704,000 of these benefits through cash withdrawals, including in Las Vegas, as well as purchases of merchandise and services.

The affidavit further alleges that Baines bragged about his ability to defraud the EDD in a music video posted on YouTube and in postings to his Instagram account, under the handles "nukebizzle1" and "nukebizzle23." For example, Baines appears in a music video called "EDD" in which he boasts about doing "my swagger for EDD" and, holding up a stack of envelopes from EDD, getting rich by "go[ing] to the bank with a stack of these" - presumably a reference to the debit cards that come in the mail. A second rapper in the video intones, "You gotta sell cocaine, I just file a claim".

On September 23, Las Vegas police arrested Baines, who had in his possession eight debit cards, seven of which were in the names of other persons, the affidavit states.

The criminal complaint alleges three felony offenses - access device fraud, aggravated identity theft, and interstate transportation of stolen property. If convicted of all of these charges, Baines would face a statutory maximum sentence of 22 years in federal prison ...
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/ 2020 News, Daily News
The factors behind trends in medical payments per claim in state workers’ compensation systems and the impact of legislative and regulatory changes on those costs are examined in a new set of studies released by the Workers Compensation Research Institute (WCRI).

The studies, CompScope Medical Benchmarks, 20th Edition, examine trends in payments, prices, and utilization of medical care for workers injured on the job. They provide analyses of recent costs and trends for policymakers and other system stakeholders, reporting how medical payments per claim and cost components vary over time and from state to state.

"The reports are useful to identify where medical cost and care patterns may be changing," said Ramona Tanabe, executive vice president and counsel for WCRI. "They also help identify where medical payments per claim or utilization may differ from other states."

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

-- California: California saw moderate growth in medical payments per claim with more than seven days of lost time in 2017, after a decrease following the implementation of Senate Bill (SB) 863. Other policy changes that may influence the recent trends in California include two major fraud-fighting measures ─ Assembly Bill (AB) 1244 and Senate Bill 1160, the drug formulary required by AB 1124, and multiple medical fee schedule updates.
-- Florida: Medical payments per claim in Florida have been typical of 18 states, a result masking the lowest prices paid for non-hospital professional services and higher-than-typical payments per claim for ambulatory surgery centers (ASCs) and for hospital outpatient and inpatient services. These results were mainly related to fee regulations in the state.
-- Illinois: The average medical payment per claim with more than seven days of lost time in Illinois was more than 15 percent higher than the median of 18 states studied for claims at 12 months of experience. This result reflects a combination of higher prices paid for many professional services and higher utilization of medical services than in other study states.
-- Minnesota: Medical payments per claim in Minnesota remained stable from 2012 to 2017. Several trends offset one another to produce the stable results. For example, hospital inpatient payments per episode decreased following the 2016 inpatient fee schedule change, while ASC and hospital outpatient facility payments per claim increased.
-- North Carolina: Medical payments per claim in North Carolina decreased 5 to 7 percent per year since 2014. These decreases likely reflect 2015 Medicare-based fee schedule changes for hospitals, ASCs, and nonhospital (professional) services.
-- Wisconsin: Medical payments per claim in 2017 increased following two years of little change. The growth stemmed from several underlying factors: a larger recent increase in workers’ compensation medical prices paid for nonhospital care, an increase in hospital outpatient payments per service, and an increase in medical payments for inpatient episodes, especially surgical.

The studies cover the period from 2012 through 2017, with claims experience through March 2018. The 18 states in the study ― Arkansas, California, Florida, Georgia, Illinois, Indiana, Iowa, Louisiana, Massachusetts, Michigan, Minnesota, New Jersey, North Carolina, Pennsylvania, Tennessee, Texas, Virginia, and Wisconsin ― represent more than 60 percent of the nation’s workers’ compensation benefit payments. Individual reports are available for every state except Arkansas and Iowa.

For more information on these studies, visit the WCRI website ...
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/ 2020 News, Daily News
If COVID-19 behaves like other workers’ compensation lung and disease claims, about two out of 100 cases may result in some degree of permanent partial disability and one out of 5,000 may result in permanent total disability, according to a new report by the National Council on Compensation Insurance.

In a follow up to the report by the Claims Journal, Jeff Eddinger, NCCI’s senior division executive for regulatory business management, said Thursday that’s not enough to be a major cost driver, but does represent a real risk that insurers should keep in mind when assessing the potential impact of the pandemic on losses.

"The vast majority of COVID claims are small-dollar claims," Eddinger said in a telephone interview. "There is a small percentage that will result in permanent disability claims."

NCCI has included the potential for permanent disability into its Hypothetical Scenarios Tool, a calculator released in May that models COVID-19 costs under various scenarios. The calculator allows users to adjust assumptions, such as the percentage of workers who are infected, the percentage hospitalized and now the percentage who are permanently disabled.

Adjusting the calculator to assume no permanent disability claims results in projected COVID-19 costs of $25.1 billion for the 38 states that use NCCI services. But the total cost increases by $4 billion when using the new default settings for permanent disability provided by NCCI.

NCCI said in a previous study that it assumes 8.5% of workers who file claims will require hospitalization for moderate symptoms and 1.5% will develop severe cases that require critical care.

The bottom line: There is a 2.3% chance that a reported COVID-19 claim will result in permanent partial injury and there’s a 0.05% chance that a COVID claim will result in a permanent total injury.

The Claims Journal analysis continues to note that data reported by state officials in California and Florida suggests that COVID-19 claims have become a sizable fraction of the total number of workers compensation claims filed. According to the California Division of Workers’ Compensation, COVID-19 was the cause of 44,354 first reports of injury from Jan. 1 to Sept. 30, or 11% of the total number.

The Florida Division of Workers’ Compensation reports that 21,221 COVID-19 indemnity claims have been filed as of Sept. 30, or 31.8% of the total number of injury and illness claims in the state.

Marsh issued a report this week that concludes, "many of the most dire predictions about COVID-19’s impact on workers’ compensation systems have not been realized."

"Claims of COVID-19 exposure in the workplace have been outpaced by a decline in other types of reported occupational injuries, and the workers’ compensation insurance market remains competitive," the report says.

Marsh said data from its clients shows that the number of new claims reported from January through August showed illness and injury rates ranged from a 29% decrease in April to a 5% increase in June.

The claims filed so far have proven to be inexpensive: 96% cost less than $3,500, according to one respondent to the Health Strategy Associates survey ...
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/ 2020 News, Daily News
The Division of Workers’ Compensation (DWC) has posted an order adjusting the Hospital Outpatient Departments and Ambulatory Surgical Centers section of the Official Medical Fee Schedule (OMFS) to conform to changes in the Medicare payment system as required by Labor Code section 5307.1.

The Hospital Outpatient Departments and Ambulatory Surgical Centers fee schedule update order adopts the following Centers for Medicare & Medicaid Services (CMS) Medicare changes:

October 2020 Quarterly Update

-- The CMS Medicare Hospital Outpatient Prospective Payment System (OPPS) October 2020 Addendum A quarterly update
-- The CMS Medicare OPPS October 2020 Addendum B quarterly update
-- The CMS Ambulatory Surgical Center Payment System, October 2020 ASC Approved HCPCS Code and Payment Rates – Column A entitled “HCPCS Code” of “CY 2020 Oct ASC AA” and Column A entitled “HCPCS Code” of “CY 2020 Oct ASC EE”
-- Certain sections of the CMS Medicare OPPS October 2020 Integrated Outpatient Code Editor (I/OCE), IOCE Quarterly Data Files V213.R1 Re-Release (posted 10/5/2020) quarterly update.

The order adopting the OMFS adjustments is effective for services rendered on or after October 1, 2020 and is posted on the DWC website ...
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/ 2020 News, Daily News
The US healthcare industry is undergoing significant disruptions as the coronavirus pandemic catalyzed the need for improved healthcare delivery and digital health startups are at the helm of this transformation.

Globally, healthcare funding to private firms reached $18.09 billion in Q2 2020, establishing a new quarterly record, with equity investments growing 6.3% quarter-over-quarter from 1,197 deals in Q1 2020 to 1,272 deals in Q2 2020.

In a new report, Insider Intelligence examined the top five US digital health startups in AI, telehealth, and medical devices - the areas of digital health with the most number of deals in the first half of 2020.

The companies mentioned in this report are: 98point6, Abbott, Aetion, Anthem, Bigfoot Biomedical, Biofourmis,, Chugai, Cigna, Element Science, Firefly Health, Gaido Health, Genesis Health, Happify Health, K Health, Komodo Health, Mindstrong, Modern Fertility, Oak Street Health, Onera Health, Premera Blue Cross, Vicarious Surgical, and Virta Health.

Here are some key takeaways from this report:

-- Digital health startups are transforming the US healthcare system amid the growing demand for improved healthcare delivery catalyzed by the coronavirus pandemic.
-- The AI, telehealth, and medical device spaces are the three areas of healthcare where technology is causing the biggest disruptions. These spaces represent the digital health market areas that scored the most number of deals in the first half of 2020.
-- AI's ability to rapidly sift through vast sums of data, facilitate remote patient monitoring, and power digital therapeutics highlights the transformative power of the tech in healthcare - and it's attracting substantial investor attention.
-- Telehealth usage - and investments - have surged amid the coronavirus pandemic, underscoring how virtual care solutions are already making a sizable impact on the US healthcare delivery landscape.
-- The medical device market, with tech ranging from remote monitoring devices to robotics-based surgical tools, is experiencing record-breaking investment activity.

The full report:

-- Highlights how the coronavirus pandemic has accelerated growing demand for improved healthcare delivery, and the steps digital health startups are taking to transform the US healthcare system.
-- Provides an overview of the three areas of healthcare where technology is causing the biggest disruptions - AI, telehealth, and medical devices - and the factors making these markets particularly ripe for transformation.
-- Identifies the top 5 US startups to watch in the AI, telehealth, and medical device market areas.
-- Shares forward-looking insights on what's next for each of the featured startups ...
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/ 2020 News, Daily News
The California Attorney General joined a coalition of 20 state attorneys general in filing an amicus brief in the U.S. Court of Appeals for the Seventh Circuit to address significant issues of antitrust and anticompetitive pharmaceutical agreements involving AbbVie Inc.’s drug, Humira.

AbbVie allegedly employed numerous strategies to prevent any competition to Humira, including entering into multiple anticompetitive agreements with rival drug companies that allowed AbbVie to raise the price of Humira and limit options for patients.

Humira is used to treat inflammation that leads to autoimmune diseases such as Crohn’s disease, ulcerative colitis, rheumatoid arthritis, ankylosing spondylitis, psoriatic arthritis and plaque psoriasis. Humira is the world’s largest selling drug, generating sales of some $20 billion a year and costing approximately $39,000 per year for treatment.

AbbVie’s anticompetitive agreements, known as pay-for-delay agreements, allowed rival companies to compete against Humira outside the United States in 2018. But the agreements required the rival companies to delay the introduction in the U.S. of a competitive counterpart to Humira until 2023.

On June 8, 2020, in a Memorandum and Opinion Order, Judge Shah of the Northern District of Illinois Eastern Division, granted AbbVie’s motion to dismiss the Plaintiffs’ complaint, ruling that "even when considered broadly and together for their potential to restrain trade - [the Plaintiffs’ allegations] fall short of alleging the kind of competitive harm remedied by antitrust law."

The dismissal has now been appealed to the United States Court of Appeals for the Seventh Circuit. California has thus joined forces with the attorneys general of Washington, Colorado, Connecticut, Delaware, Idaho, Illinois, Maine, Maryland, Massachusetts, Michigan, Minnesota, Nebraska, New Mexico, New York, North Carolina, Oregon, Rhode Island, Virginia, and Wisconsin to overturn this dismissal.

The California Attorney General said that with these pay-for-delay agreements, "AbbVie could freely raise the price of Humira in the U.S. by 6.2 percent in 2019 followed by a 7.4 percent increase this year. While Humira prices are increasing in the U.S., they are decreasing in Europe where there is competition. Humira’s sky-high price tag and its scheme to protect the inflated Humira price hurts employers, patients, insurers and the government, who all shoulder the burden of those inflated prices."

In California, Assembly Bill 824, which went into effect on January 1, 2020, gives the Attorney General a stronger platform to investigate and prosecute these illegal and harmful drug pricing practices.
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/ 2020 News, Daily News
A Santa Monica day spa owner was just charged in federal court with accumulating N95 respirators in anticipation of the COVID-19 pandemic and then price gouging by selling the scarce masks at vastly inflated prices - sometimes nearly 1,100 percent over list price.

Niki Schwarz, 55, of Santa Monica, the owner of Tikkun Holistic Spa, was named in a criminal information charging her with one count of hoarding and price gouging. In a plea agreement also just filed, Schwarz agreed to plead guilty to the misdemeanor offense.

In the plea agreement, Schwarz admitted that in February she began accumulating N95 respirators in anticipation of a shortage that would be caused by a global pandemic resulting from the spread of the novel coronavirus. From the beginning of February until the end of June, Schwarz accumulated nearly 20,000 N95 masks that had been manufactured by 3M (list price ranging from $1.02 to $1.27) and Alpha Pro (list price of 86 cents).

In March, the United States government designated N95 respirators as "scarce materials" under the Defense Production Act of 1950 due to the overwhelming need of health care providers dealing with COVID-19 patients to use personal protective equipment.

Schwarz admitted that she obtained the N95 respirators for the purpose of reselling them at above-market rates, and that she sold the masks for up to $15 each.

Schwarz "accumulated and resold the masks at prices in excess of the prevailing market prices willfully, that is, with knowledge that masks had been designated as scarce materials and with knowledge that accumulation of the designated materials to resell in excess of prevailing market prices was unlawful," according to the plea agreement.

On March 1, an associate informed Schwarz that the associate was going to stop selling N95 masks because she believed it was crime - and that price gouging could result in one year in prison - but Schwarz continued to sell the masks at inflated prices.

The hoarding and price gouging offense that Schwarz admits in the plea agreement carries a statutory maximum sentence of one year in federal prison.

The case is being prosecuted by Assistant United States Attorney Jeff Mitchell of the Major Frauds Section, who is a regional coordinator of the Justice Department’s COVID-19 Hoarding and Price Gouging Task Force ...
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/ 2020 News, Daily News
The Division of Workers’ Compensation announces its emergency regulations 36.7 and 46.2 for medical-legal evaluations, which became effective on May 14, 2020, will now expire on March 12, 2021.

The expiration date is in accordance with Executive Orders N-40-20 and N-66-20.

There are two possible 210-day extensions if those Executive Orders remain in effect. The emergency regulations can be found on the DWC website.

The regulations concern how medical-legal evaluations and payment for those evaluations can occur during this emergency period. Also provided in the regulations are alternative forms of service for required forms related to medical-legal evaluations and reports.

-- QME Regulation 36.7 specifies how and under what circumstances the parties may serve documents electronically.

-- QME Regulation 46.2 specifies how and under what circumstances QME, AME and other evaluations may be conducted by telehealth.

These emergency regulations help injured workers and employers continue to move their workers’ compensation claims toward a resolution and avoid additional and undue delay ...
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/ 2020 News, Daily News