A year after the first COVID-19 case hit California, Cal/OSHA - the state agency in charge of policing warehouses, offices, factories and other workplaces - is woefully understaffed and significantly undercounting the number of employees who have fallen seriously ill or died as a result of the coronavirus.

California employers reported only 1,600 serious worker illnesses or deaths to the Division of Occupational Safety and Health, known as Cal/ OSHA, from the start of the pandemic through mid-December, according to data obtained by The Sacramento Bee through a Public Records Act request.

The agency's inspectors determined that only 779 of those serious or deadly infections were actually contracted in the workplace. That represents a tiny fraction of the 3.2 million people who have tested positive for the disease in California, and less than 2 percent of the more than 41,000 who have died from it.

"It's troubling; it absolutely is troubling," said state Sen. Jerry Hill, D- San Mateo, who co-authored legislation last year strengthening workers' compensation protections for employees who contract COVID-19 on the job.

Cal/ OSHA officials "have a responsibility to make sure ... those employee environments are safe," Hill said. "We want to guarantee the employer is doing everything possible. ... That's where Cal/ OSHA has to have accurate data."

While state inspectors have responded to thousands of complaints and levied fines against some workplaces that failed to report serious cases, a long-existing staffing shortage has hindered that process. There were 107 job openings posted for the department as of Friday.

Asked about overlooked infections, Cal/ OSHA spokesman Luke Brown said: "We cannot speculate about the number of cases that have not been reported to Cal/ OSHA."

The agency's database includes employer names, inspection numbers and dates that the businesses reported to the state serious illnesses - defined by Cal/ OSHA as cases that resulted in deaths or hospitalization. It is the most detailed official glimpse into how the coronavirus has seriously harmed employees in California.

But it's far from a complete portrait. The database identifies only businesses that have volunteered information to the state. Workplace researchers, health experts and lawmakers all agree the data is likely missing swaths of essential workers who were seriously sickened at work.

"Obviously, that is way under the experience that has been reported daily about the huge numbers of serious illnesses and deaths among vulnerable communities who are people who have not been able to shelter at home," said Laura Stock, director of UC Berkeley's Labor Occupational Health Program.

Taken as a whole, the Cal/ OSHA database creates an improbable portrait of significant COVID-19 cases in the workplace. Only four serious, confirmed illnesses have been recorded at poultry processing plants - an industry that, in reality, has been a well-known hot spot for COVID-19. Just 77 serious cases have been tallied across all of California's agriculture, meat and poultry sectors.

According to Cal/ OSHA's data, Sacramento County had 51 confirmed workplace infections. That's second only to the 220 cases reported in Los Angeles County - one of the nationwide epicenters for COVID-19. More than 16,000 Angelenos have died and more than 1 million have contracted the diseases, according to Los Angeles County health officials.

"If you're not paying attention, and documenting where and why people are getting sick and dying, (the virus) doesn't just stay in the workplace," said Marcy Goldstein-Gelb, co-executive director of the National Council for Occupational Safety and Health. "It goes back to families. It goes back to whole communities."

The lopsided reporting of the most serious suspected cases, deaths and major illnesses, and a de facto honor system for companies to report problems, are the latest in a line of failures at the state's long-struggling worker safety department, critics said ...

The Division of Workers’ Compensation has canceled the scheduled February 18, 2021 virtual public hearing on the proposed adoption of a COVID-19 evidence-based guideline to the Medical Treatment Utilization Schedule (MTUS).

The publisher of the American College of Occupational and Environmental Medicine’s (ACOEM) guidelines made an edit to the version of the Coronavirus (COVID-19) Guideline that DWC posted for the 30-day public comment period.

As a result, DWC will not have sufficient time to repost the edited version and complete the formal guideline adoption process before another ACOEM update to this guideline is expected in mid-March.

DWC plans to adopt and incorporate ACOEM's COVID-19 Guideline into the MTUS when the next update is published if there is enough time to complete the formal adoption process before another update.

In the meantime, the DWC continues its support of this guidance and encourages providers to follow the MTUS Medical Evidence Search Sequence found in California Code of Regulations, title 8, section 9792.21.1, for treatment recommendations pertaining to COVID-19.

This regulatory search sequence requires a search of the most current version of ACOEM guidance. The ACOEM COVID-19 Guideline meets that criteria. Additional information is available at DWC’s MTUS webpage.
...

Reuters reports that a U.S. congressional panel is investigating three large meatpacking companies for possible worker-safety violations following reports that hundreds of industry workers have died of COVID-19. The House of Representatives’ coronavirus subcommittee asked JBS USA, Tyson Foods Inc and Smithfield Foods Inc to provide records of inspections, complaints and other internal documents.

The panel also asked the Occupational Safety and Health Administration (OSHA), the nation’s workplace safety watchdog, to provide records of its efforts to enforce worker safety rules.

Meatpacking plants emerged as early hubs of coronavirus infection last spring, forcing many of them to close temporarily and pushing up meat prices. Companies erected physical barriers and took other steps to protect workers, but they were not able to eliminate the risk of infection.

Surrounding communities also were affected. Meatpacking plants were associated with at least 236,000 coronavirus cases and up to 5,200 deaths as of July, according to the National Academy of Sciences.

Labor unions and workers have accused the companies of taking inadequate steps to protect workers.

Smithfield, Tyson and JBS said they have spent hundreds of millions of dollars on worker safety, bonuses and other measures. All three companies said they would cooperate with the investigation.

The Meat Institute trade group said case rates for industry workers were five times lower in December than they were in May, while infections rose for the U.S. population as a whole.

The coronavirus subcommittee’s chairman, U.S. Representative James Clyburn, said his panel would also examine OSHA’s enforcement efforts, which he described as ineffective. "It is imperative that the previous Administration’s shortcomings are swiftly identified and rectified to save lives in the months before coronavirus vaccinations are available for all Americans," he said in a statement.

In response, OSHA said more stringent safety guidelines issued to employers on Friday were a "first step" in its efforts to work with Congress on worker protections.

A Reuters investigation found that workplace inspections by OSHA dropped 44% between March, when the virus began to spread widely in the United States, and December.

OSHA last year fined Smithfield, owned by Hong Kong-listed WH Group Ltd, $13,494 for a violation at its Sioux Falls, South Dakota, plant, where four workers died and nearly 1,300 were infected.

The agency fined JBS $15,615 for a violation at its Greeley, Colorado, plant, where six died and about 300 tested positive. Both companies are appealing the fines ...

A national electronic health records (EHR) technology vendor, athenahealth Inc., has agreed to pay $18.25 million to resolve allegations that it violated the False Claims Act by paying unlawful kickbacks to generate sales of its EHR product, athenaClinicals.

In a complaint filed in conjunction with this settlement, the United States alleged that Athena violated the False Claims Act and the Anti-Kickback Statute through three marketing programs.

First, Athena invited prospective and existing customers to "Concierge Events," providing free tickets to and amenities at sporting, entertainment, and recreational events, including trips to the Masters Tournament and the Kentucky Derby with complimentary travel and luxury accommodations, meals, and alcohol.

Second, Athena paid kickbacks to its existing customers under a "Lead Generation" program designed to identify and refer new prospective clients to Athena. Under this program, Athena paid up to $3,000 to existing customers for each new client that signed up for Athena services, regardless of how much time, if any, the existing customer spent speaking to or meeting with the new client.

Finally, Athena entered into deals with competing vendors that were discontinuing their EHR technology offerings to refer their clients to Athena. Under such deals, Athena paid remuneration to the competitor based on the value and volume of practices that were successfully converted into Athena clients.

"It is illegal for companies to extend invitations to all-expense-paid sporting, entertainment, and recreational events, and other perk-filled offers to its prospective customers to win business and boost their bottom line through illegal kickback schemes," said Joseph R. Bonavolonta, Special Agent in Charge of the FBI Boston Division. "Today’s agreement by Athena to pay $18.25 million should send a strong message to anyone thinking about engaging in this type of illegal activity. The FBI will continue to work with our law enforcement partners to do everything in our power to safeguard our government health care programs and the taxpayers picking up the bill."

The settlement resolves allegations in a lawsuit filed by Geordie Sanborn and a separate lawsuit filed by Cheryl Lovell and William McKusick; both matters are pending in federal court in Boston, Massachusetts. The lawsuits were filed under the qui tam, or whistleblower, provisions of the False Claims Act, which permit private individuals to sue on behalf of the government for false claims and to share in any recovery. The Act allows the government to intervene and take over the action, as it did in these two cases. The whistleblower share to be awarded in connection with the settlement has not been determined.

This matter is being handled by the Civil Division’s Commercial Litigation Branch (Fraud Section) and the U.S. Attorney’s Office for the District of Massachusetts, with assistance from the U.S. Department of Health and Human Services, Office of Inspector General; the Federal Bureau of Investigation; the Department of Veterans Affairs, Office of Inspector General; and the U.S. Postal Service, Office of Inspector General.

The two lawsuits are captioned United States ex rel. Sanborn. v. athenahealth, Inc., No. 17-cv-12125 (D. Mass.) and United States ex rel. Lovell and McKusick v. athenahealth, Inc., No. 17-cv-12543 (D. Mass.). The claims resolved by the settlement are allegations only and there has been no determination of liability ...

Edward Vaca pursued both a tort claim, and a number of workers' compensation claims against his employer, Vons, including a 132a claim for discrimination.

A 132a was filed in each WC case, and was the subject of a Finding and Award in 2015, which stated that damages for the Section 132a claim would be informally adjusted by the parties with jurisdiction reserved. A Finding of violation of Labor Code section 132a was affirmed by Opinion on Decision After Reconsideration in 2019,

While the workers' compensation claim was pending, Vons and Varga entered into a Confidential Settlement Agreement and General Release of Claims in the civil action in 2016.

The Settlement Agreement contained language that Vons claims provided for the disposition of the 132a claim, although the Settlement Agreement did not specifically provide for that in a clear and unambiguous way.

For example, Paragraph 5 provided that "Plaintiff shall withdraw any and all pending charges and complaints of discrimination filed against any of the defendants in the Action with any governmental agency that are open at the time of Plaintiff’s execution of this Agreement."

Paragraph 9 provided that "The Claims released herein include . . . any Claims in any way arising out of or based upon Plaintiff’s employment with Defendant, or the termination thereof, . . . Plaintiff will not institute, . . . and/or continue any legal, administrative or grievance proceeding against the Releasees . . ."

Paragraph 13 provided that "It is expressly understood and agreed that Plaintiff is not eligible for reinstatement . . . Plaintiff will neither seek nor accept any such employment . . ."

However, In Paragraph A of Page 1, provided that the "Action’ that is the subject of the entire agreement is defined as Case BC589377." This civil case is not the same action as the workers' compensation claims bearing case numbers ADJ9770846 et al.

On February 11, 2020, the matter proceeded to trial in the workers' compensation case of the issue of whether "applicant’s 132a claim and accompanying remedies are barred, estopped or precluded or otherwise invalid as a matter of law." The WCJ concluded that it was not released. Reconsideration was denied in the panel decision of Varga v Vons. The Court of Appeal recently denied a Petition for Writ of Review, and the decision is now final.

Labor Code 5000(a) plainly prohibits contracts such as releases that purport to exempt employers from liability for workers’ compensation benefits without without WCAB approval. "We are therefore unable to discern statutory support for defendant’s position." ...

Dr. Mario Rosenberg, a 73-year-old physician who lives in Beverly Hills, is the last of 19 defendants in a $154 million medical insurance fraud scheme dating back more than two decades - was sentenced Friday to three years of formal probation, 1,000 hours of community service and ordered to pay $2.9 million in restitution.

He is one of the doctors accused of performing more than 1,000 unneeded surgeries on healthy patients. Prosecutors alleged that 2,841 people across the country were recruited to undergo unnecessary and dangerous surgeries in exchange for access to lower cost cosmetic surgery. Authorities once described this as the largest medical fraud prosecution in the United States, dubbed the "Unity Outpatient Surgery Center scheme," referring to the Unity Outpatient Surgery Center in Buena Park, California.

At the time, Rosenberg was on staff at Cedars-Sinai Medical Center and affiliated with Herbalife. He primarily performed colonoscopies and esophagogastroduodenoscopy (EGDs). Rosenberg was accused of performing 646 procedures on 554 patients, which resulted in the fraudulent billing to insurance companies of more than $9 million, for which Unity was paid more than $2.3 million. Of Rosenberg’s patients, 84 percent were referred by cappers who were also charged.

Rosenberg entered a no contest plea in the case on Jan. 24, 2014. Attorneys have been working since the no contest plea to assess the gastroenterologist's assets and determine how much he should pay in restitution.

The Unity cappers, or recruiters, targeted employees from businesses in more than 32 states and covered by PPO insurance plans, as pre-approval from the insurance company would not be a requirement for surgery.

More than 1,600 employers were affected by employees who were involved in this scheme. The cappers arranged transportation for the patients, scheduled the surgeries, and coached the healthy patients on what to say. In exchange for undergoing surgery, the "patients" would receive a cash payment, usually between $300 and $1,000 per surgery, or credit toward a free or discounted cosmetic surgery.

Many of the surgeries were performed on Saturdays and Sundays by the doctors. Often, they operated on members of the same household on the same day. The doctors are accused of ignoring basic medical protocols such as: 1) patients receiving surgeries on consecutive days instead of while under one anesthesia; 2) doctors not meeting the patients prior to operating; 3) doctors not following up with patients after the procedure was completed; and 4) doctors not obtaining necessary medical information.

In a rare move, Fourth District Appellate Court Justice Thomas Goethals, who presided over the no contest plea and the trials and plea bargains of the other defendants, returned to Orange County Superior Court to hand down Rosenberg's punishment ...

The California Attorney General announced the creation of the Worker Rights and Fair Labor Section within the California Department of Justice’s Division of Public Rights.

The Section initially operated as a bureau within the Civil Rights Enforcement Section. The establishment of the unit as a new Section will expand DOJ’s capacity to protect the health, safety, and rights of workers.

Expanding on and elevating DOJ’s existing efforts, the Section will, among other things, help bring increased focus and expertise to implement policy and protect against workplace issues - including in the underground economy.

One target will be wage theft, by working with partner agencies to help address systemic deficiencies that result in workers losing out on the wages they are due, including in instances where businesses fail to pay overtime or allow for meal and rest breaks;

Another will be Health and Safety violations, by stepping up DOJ’s ability to tackle current and emerging trends such as those brought on by the coronavirus; and

Also employee misclassification, by protecting workers from being inappropriately classified as independent contractors, which can allow companies to evade legal obligations such as minimum wage, sick leave, and overtime.

In December of 2020, the Attorney General’s Office took action in court against Amazon as part of an ongoing investigation into the company’s coronavirus policies and protocols.

In November of 2020, the Attorney General secured a court decision protecting the rights of more than half a million healthcare workers in California’s In-Home Supportive Services program.

In October of 2020, the Attorney General secured an appellate court decision against Uber and Lyft as part of an ongoing case involving employee classification in the state.

In 2019, the Attorney General - alongside the California Labor Commissioner’s Office - filed criminal charges against the operators of an alleged illegal garment shop licensing scheme.

The AG also secured settlements with four major fast food companies to end the use of "no-poach policies" that harm workers by making it more difficult to seek better pay and benefits at competing franchises ...

The Division of Workers’ Compensation has posted an order adjusting the Pathology and Clinical Laboratory section of the Official Medical Fee Schedule (OMFS) to conform to relevant 2021 changes in the Medicare payment system as required by Labor Code section 5307.1.

The order is the third Administrative Director order for the January 2021 annual update to the Pathology and Clinical Laboratory Fee Schedule.

The Centers for Medicare and Medicaid Services issued a revised 2021 Clinical Laboratory Fee Schedule file dated January 25, 2021. The revised file supersedes the previous file.

In addition, the order adopts continued use of the prices of specified COVID-19 related testing codes that do not have national prices but are priced by the California Medicare Administrative Contractor.

The Administrative Director update order dated January 26, 2021 adopting the OMFS adjustment is effective for services rendered on or after January 1, 2021, and can be found on the website of the Division of Workers’ Compensation on the Pathology and Clinical Laboratory webpage ...

On Monday, Julie Su, a veteran labor union leader who heads the California Labor and Workforce Development Agency, publicly acknowledged that EDD, one of the line departments she oversees, had failed miserably to stop rampant fraud in the distribution of pandemic-related unemployment insurance (UI) benefits.

"There is no sugarcoating the reality," Su told a news conference. "California did not have enough security measures in place."

At least 10% of the $100-plus billion in state and federal benefits EDD paid out were fraudulent, she said, adding that the final total could be much higher.

Journalists at the Sacramento Bee now estimate the loss to be upward of $11 billion. A few weeks ago, the loss estimates were about $8 billion.

Organized crime rings and prison inmates filed thousands of fraudulent claims for benefits that EDD readily paid. One reason: EDD had canceled a contract with a firm that flagged suspicious claims, then rehired the contractor only after the rampant fraud became apparent.

As Su spoke, political media reported that President Joe Biden has chosen her for the No. 2 spot in the U.S. Department of Labor. They also predicted rough sledding in her Senate confirmation hearings due to the fraud scandal and EDD’s truly monumental failures in processing legitimate unemployment insurance claims and causing needless stress to jobless workers and their families.

On Tuesday, State Auditor Elaine Howle issued a damning report on the EDD’s failings, while pointing out that they had been evident for many years.

One passage of Howle’s letter was directed at Su. "In spring of 2020," it said, "the secretary of the Labor and Workforce Development Agency directed EDD to pay certain claimants UI benefits without making key eligibility determinations and to temporarily stop collecting biweekly eligibility certifications. Although both directives were designed to provide Californians with benefit payments as quickly as possible, the U.S. Department of Labor has not waived these requirements and, consequently, EDD now faces a very large impending workload of eligibility certifications that threatens its ability to operate effectively."

"Moreover," Howle said, "EDD struggled to provide claimants assistance with their claims. At the beginning of the claim surge, EDD’s call center answered less than 1% of the calls it received. EDD quadrupled its available call center staff to more than 5,600 people in response to its call center problems, but these staff were often unable to assist callers and only marginally improved the percentage of calls it answered."

Howle’s report did not delve into the fraud scandal but she will issue another report this week on that aspect and it’s not likely to pull any punches.

Su may not be the only political figure tarnished by the auditor’s twin reports. They generate more ammunition for the nascent recall campaign against Newsom that’s centered on his handling of the pandemic response.

Recall backers, mostly Republican Party leaders and would-be Newsom successors, say they are very close to having enough signatures on petitions to force a recall election. He would be forced to defend why EDD plummeted off the rails, handing out billions of taxpayer dollars to crooks while failing to quickly process legitimate claims ...

In a civil complaint filed in the Eastern District of California, the United States alleges that Lawrence Howen and the pharmacy he owns, Nor-Cal Pharmacies Inc. doing business as Lockeford Drug, which operates in Lockford California, unlawfully dispensed controlled substances from 2016 through 2019, in violation of the Controlled Substances Act.

The complaint alleges that Howen failed to meet his obligations as the pharmacist of Lockeford Drug in dispensing dangerous opioids and other drugs. According to the complaint,

Howen knowingly filled over 700 controlled substance prescriptions that were not issued for a legitimate medical purpose, and he filled prescriptions outside the ordinary course of pharmacy practice.

This unlawful conduct resulted in the improper dispensing of over a hundred thousand of doses of controlled substances, primarily prescription opioids.

Civil penalties and injunctive relief are sought to prevent Howen from committing further violations.

"As a pharmacist who filled prescriptions for dangerous controlled substances, Howen had an obligation to fill only those prescriptions that he ensured were legitimate," said U.S. Attorney Scott.

"Too many lives have been lost during the opioid crisis because those entrusted with responsibility turned a blind eye. This filing represents an important step in our efforts to hold pharmacists and others in the chain of opioid distribution accountable for misconduct."

"Pharmacists are often the last line of defense to ensure controlled substances are dispensed lawfully and do not fall into the wrong hands. DEA will continue to hold those accountable who choose to ignore red flags and put the public at risk," stated DEA Special Agent in Charge Daniel C. Comeaux.

This case is the product of an investigation by the Drug Enforcement Administration’s Sacramento Tactical Diversion Squad. Assistant U.S. Attorney Steven Tennyson is prosecuting the case ...

Marcelo Develasco, Sr., a construction worker, was killed when a concrete column formwork toppled over at a construction worksite. The worker’s surviving family members brought this wrongful death action against general contractor Swinerton Builders and formwork supplier Atlas Construction Supply.

Atlas cross-complained against Swinerton for equitable indemnity, contribution, and declaratory relief.

Swinerton moved for summary judgment as to plaintiffs’ complaint on grounds that the common law Privette doctrine precluded Swinerton from being held liable to plaintiffs. Under the Privette doctrine, the hirer of a contractor generally may not be held liable in tort when the contractor is hired to do inherently dangerous work and an employee of the contractor suffers work-related injuries due to the contractor’s negligence.

The trial court entered summary judgment in favor of Swinerton as to plaintiffs’ wrongful death complaint.

Thereafter, Swinerton - in lieu of seeking entry of judgment on the summary judgment order - settled with plaintiffs. Under the settlement, plaintiffs agreed to dismiss their case against Swinerton and Swinerton waived its costs.

Swinerton then requested, and the trial court granted, a good faith settlement determination under Code of Civil Procedure section 877.6.

Apparently under the shared belief that the good faith settlement determination barred Atlas’s cross-complaint against Swinerton, Atlas and Swinerton stipulated to the dismissal of Atlas’s cross-complaint against Swinerton.

Atlas appealed the summary judgment order in favor of Swinerton, the good faith settlement determination, and the dismissal of Atlas’s cross-complaint.

The Court of Appeal dismissed the appeal to the extent it concerns the summary judgment order. In all other respects, the challenged orders were affirmed in the published case of Atlas Construction Supply v. Swinerton Builders.

Atlas claimed that the trial court erroneously ruled that Atlas lacked standing to oppose Swinerton’s motion for summary judgment and, on that basis, the court did not consider a meritorious opposition brief filed by Atlas. Atlas argues that if the court had considered the opposition brief, it is reasonably likely the court would have denied Swinerton’s motion for summary judgment, plaintiffs and Swinerton never would have settled plaintiffs’ wrongful death complaint, the court never would have made the good faith settlement determination, and Swinerton and Atlas never would have stipulated to the dismissal of Atlas’s cross-complaint.

The Court of Appeal concluded that Atlas was not aggrieved by the trial court’s exoneration of Swinerton in the wrongful death action. Therefore, Atlas lacks standing to appeal the summary judgment order in favor of Swinerton.

As for the good faith settlement determination and the dismissal of Atlas’s cross-complaint, it concluded Atlas waived its challenge to those orders by failing to make substantive legal arguments specific to those orders. Therefore, it dismissed the appeal insofar as it pertains to the summary judgment order and affirmed the remaining challenged orders ...

Cal/OSHA is reminding employers in California to post their 2020 annual summary of work-related injuries and illnesses, including those related to COVID-19, in a visible and easily accessible area at each worksite. The Form 300A summary must be posted each year from February 1 through April 30.

Instructions and form templates are available for download from Cal/OSHA’s Record Keeping Overview. The overview gives instructions on completing both the log (Form 300) and annual summary (Form 300A) of work-related injuries and illnesses. The annual summary must be placed in a visible and easily accessible area at each worksite.

Employers that are required to record work-related fatalities, injuries and illnesses must record a work-related COVID-19 fatality or illness like any other occupational illness. To be recordable, an illness must be work-related and result in one of the following:

- - Death.
- - Days away from work.
- - Restricted work or transfer to another job.
- - Medical treatment beyond first aid.
- - Loss of consciousness.
- - A significant injury or illness diagnosed by a physician or other licensed health care professional.

If a work-related COVID-19 case meets one of these criteria, then covered employers in California must record the case on their 300, 300A and 301 or equivalent forms.

Posting of the summary helps ensure workers are aware of work-related injuries and illnesses that occurred the previous year. Current and former employees and their representatives are entitled to a copy of the summary or the log upon request.

The 2020 definitions and requirements for recordable work-related fatalities, injuries and illnesses are outlined in the California Code of Regulations, Title 8, sections 14300 through 14300.48. Employers are required to complete and post the Form 300A even if no workplace injuries occurred.

Many employers in California must also comply with electronic submission of workplace injury and illness records requirements by March 2nd each year. Cal/OSHA has posted details on which employers are required to submit the electronic reports as well as other information online ...

The emergence of the COVID-19 worldwide pandemic in December of 2019 and efforts by all levels of government to control the spread of the disease through lock-downs and travel restrictions, has reduced business activity in many industries.

Data released by the Department of Commerce's Bureau of Economic Analysis (BEA) in late July of 2020 indicated that the country's GDP decreased by an annual rate of 32.9%. The BEA attributed the decline to "state and local government responses to control the spread of the epidemic"

Consequently, the frequency of musculoskeletal work-related injuries especially in the entertainment, travel and hospitality industries has decreased, as indicated in the California Workers’ Compensation Institute’s interactive app.

As the frequency of the traditional injuries associated with work declined, the risk of exposure to SARS-CoV-2 the virus causing Covid-19, increased significantly for various occupational groups. Many jobs that may typically not be considered high-risk, became high-risk for workers exposed to and infected by SARS-CoV-2.

Recently, a new study published in the Journal of Occupational and Environmental Medicine, sought to determine the industries with the highest proportion of accepted COVID-19 related workers’ compensation claims.

The purpose of this investigation is to quantify the differences in the proportion of COVID- 19 related and non-COVID-19 related injuries and illnesses reported through the workers’ compensation system by industrial classification.

The study included 21,336 WC claims (1,898 COVID-19 and 19,438 other claims) that were filed between Jan 1, 2020 and August 31, 2020 from 11 states in the Midwest U.S.

The overwhelming proportion of all COVID-19 related WC claims submitted and accepted were from healthcare workers (83.77%) followed by individuals employed in retail trades (2.42%) and real estate and leasing (2.37%).

Within healthcare employment, WC claims submitted by workers in medical laboratories had the highest risk.

Conversely, in the study population, employment outside healthcare did not appear to consistently elevate the risk of infection with SARS CoV-2 and filing a claim for workers’ compensation to pay for the medical care and lost time associated with this condition ...

The National Association of Insurance Commissioners (NAIC) released the Report on Profitability By Line By State in 2019. The report estimates and allocates profitability in property/casualty insurance by state and line of insurance.

The ability to analyze results by state and line of business enhances transparency on the financial impact the economic climate has had on each of these lines. When combined with other information, the report can be utilized in further analysis of competition and market performance.

The Report on Profitability By Line By State in 2019 includes aggregate data from annual statement exhibits to develop estimates of profits on earned premium and the return on net worth by line and by state.

Some key highlights from the report include:

- - Total premiums earned increased over the nine years included in the report, while losses incurred, and loss adjustment expenses have remained relatively flat.
- - The countrywide direct return on net worth for the total property and casualty insurance market increased for a second consecutive year to 8.6%.
- - Private Passenger Auto (PPA) makes up a large portion of the Property & Casualty market, accounting for approximately 37% of the total direct premiums earned in 2019.
- - The return for PPA decreased minimally over the prior year moving from 7.5% in 2018 to 7.15% in 2019. In 2018 and 2019, losses and loss adjustment expenses accounted for over 70% of direct premiums earned countrywide for all property and casualty lines combined.

The report also shows the various components of estimated profits including: premiums earned; losses incurred; loss adjustment expense; general expenses; selling expenses; state taxes, licenses and fees; dividends to policyholders; changes in premium deficiency reserves; underwriting profits; investment income and federal income taxes. As fluctuations in calendar year financial results occur, long-term historical averages are also provided.

The complete report is available on the NAIC publications page ...

The statistics, released on Wednesday by the county’s Department of Health Services, suggest a spread much wider than even the county’s own confirmed toll.

The summary of the statistics reported by the Los Angeles Daily News says that as of Thursday, the county’s total number of officially confirmed positive cases throughout the year was 975,299, with a seven-day average positivity rate of 18.2% - nearly 1 in every 5.

But officials continue to believe that in a region of 10 million people, the virus likely infected many more people who simply have not been tested or exhibited symptoms. Their scientific projections arrived at a one-of-three ratio, or about 3.2 million infections, officials said.

Officials believe that for every reported case, between three and four actual infections have occurred, officials said. And the results, if traditional patterns of behavior during the pandemic hold up, could spur crisis-level demand at hospitals, if the expected holiday surge takes hold.

But even if there wasn’t more transmission over the holidays, county researchers estimate that 1 in every 115 county residents is infectious to others - a higher rate than a week ago, when 1 in 125 residents were infectious.

The estimated undercount is a function of various patterns of behavior, said Dr. Roger Lewis, director of COVID-19 demand modeling for L.A. County Department of Health Services.

"There’s a period when you may be infected without any symptoms, and some people never ever have symptoms and have no way of ever knowing they got sick," Lewis said - so they don’t get tested.

Then there are people who have mild symptoms. Maybe a slight cough or a cold. They often feel there’s no reason to be tested. And there’s another group who know they are positive - perhaps they live in a household where another is infected, but they don’t go out or present themselves for care because they don’t want to infect others.

"We’re quite confident that it’s in that range," Lewis said. "If the truth turns out to be 1 in 4, that’ not inconceivable to me. One in 2 seems less likely. I’m quite confident we are in the right range."

What has complicated considerations for public health researchers and the healthcare providers is the devious nature of the disease itself. "It’s a disease that can affect two people who look the same - but one will get over in a week to 10 days and one will end up on on a ventilator or die," he said.

Dr. Thomas Yadegar, medical director of the Intensive Care Unit at Providence Cedars-Sinai Tarzana Medical Center, knows that complex nature well. He said the 3-to-1 ratio seemed a bit high, "but it wouldn’t surprise me," if it was accurate, he said.

"But even if the number was that high, that’s still nowhere near where it needs to be for us to have herd immunity," said Yadegar, who for months has been sounding an alarm about the need to intervene early to prevent out-of-control and inflammatory immune responses called cytokine storms. "I still fear the next few months we are going to continue to be in crisis mode."

Lewis said a new batch of projections will be out next week, and could be the biggest indicator of whether an expected holiday wave will emerge in the coming weeks.
...

The California Attorney General announced a $40 million nationwide settlement with Apria Healthcare Group, Inc. and Apria Healthcare LLC resolving allegations that the respiratory services provider violated the Federal False Claims Act (FCA), along with numerous state anti-fraud laws by seeking Medicaid reimbursement for ventilation machines that were not medically necessary or reasonable.

Of the $40 million nationwide settlement, $4,812,000 relates to violations of Medicaid laws. California’s share of the Medicaid-related settlement is $206,338.30.

In February 2017, a civil action was filed against Apria in a New York District Court claiming the company sought reimbursements for non-invasive ventilators (NIVs) when it was medically unnecessary or unreasonable.

Apria is headquartered in Lake Forest California, and offers three categories of respiratory equipment, with each category performing more complex and costlier procedures than the last. NIVs are in the third tier, and therefore receive the highest and longest paid Medicare and Medicaid reimbursement rate due to their high maintenance.

From January 1, 2014, to December 31, 2019, it was found that Apria aimed to increase profits by attempting to persuade healthcare providers to convert patients from the second category of respiratory devices to NIVs. Apria then billed for NIVs that were either not used by patients, were used inconsistently, or only performed the function of respiratory equipment in the first or second tier. Routine physician visits to confirm individuals were following correct NIV procedures were also neglected, and in 2017, half were not completed.

After analyzing this fraudulent behavior, it was concluded by both the federal and state governments that Apria had failed its duty to correctly and accurately report NIV usage and in turn violated the Federal False Claims Act, along with numerous state anti-fraud statutes including the California False Claims Act.

Nonetheless, Apria filed documents with the Securities and Exchange Commission on January 18, 2021, announcing its intent to go forward with an Initial Public Offering (IPO),

Apria discloses in the SEC documentation, that it served nearly 2 million patients, made nearly 2.4 million deliveries and conducted more than 744,000 clinician interactions with patients in 2019. It generated $1.1 billion in net revenues, $15.6 million in net income, $174 million in adjusted EBITDA and $80.5 million of adjusted EBITDA less patient equipment capex. The company says that home respiratory and sleep therapy represent 80% of its 2019 revenue.

It went on to say "Through various strategic and operational initiatives, we have improved profitability despite reimbursement rate pressure, improving our adjusted EBITDA margin by 110 basis points from 2017-19 on a basis that excludes the impact of new accounting policies adopted in 2018 and 2019."

Apria was a public company before, prior to 2008, when Blackstone Group bought the company for $1.6 billion. In 2014, it was rumored Blackstone Group was in discussions to sell Apria.

The settlement was negotiated by the California Department of Justice’s Division of Medi-Cal Fraud and Elder Abuse (DMFEA), working with a team of other states and the federal government.

The DMFEA receives 75 percent of its funding from the U.S. Department of Health and Human Services under a grant award totaling $33,829,000 for Federal fiscal year 2019-20. The remaining 25 percent, totaling $11,379,000 for fiscal year 2019-20, is funded by the State of California. The Federal fiscal year is defined as October 1, 2019, through September 30, 2020 ...

Fed up with the state’s inability to probe and manage the aftermath of a multi-billion-dollar unemployment fraud fiasco, a California congressman is turning to the IRS to protect his constituents.

Courthouse News reports that Representative Josh Harder is warning that a wave of unsuspecting Californians will soon find out they were caught in the massive identity fraud ring that rocked the state during the early stages of the pandemic via a tax bill from the federal government. On Thursday, the second-term congressman urged the IRS to devise a plan to quickly help the still unknown number of victims.

"The California Employment Development Department is an absolute catastrophe - and the IRS isn’t known for its customer service, but we can’t have thousands of Californians getting a tax bill for benefits they didn’t get," Harder said in a statement.

In a letter to IRS Commissioner Charles Rettig, Harder pressed the federal government to take a proactive approach and quickly develop a streamlined system for identity fraud victims to clear wrongful tax bills. Noting that tax season is on the horizon, he says the IRS should be working with the unemployment departments of California and others to get ahead of the problem.

California’s department in particular has failed miserably under the strain of the pandemic.

The problems began shortly after the state’s initial lockdown order was issued by Governor Gavin Newsom as millions of freshly unemployed workers filed for first-time benefits. A massive backlog of pending claims followed, leaving hundreds of thousands without income for months.

Criticism flew at the department from every angle, including during emergency legislative sessions last summer.

"I am embarrassed," said state Assemblymember Tom Lackey last July. "I don’t think government has ever looked more broken than it has right now."

While Newsom appointed a task force and new leadership to rescue the department, a new, more embarrassing crisis emerged in the fall.

Acting on tips from employees within California jails and prisons, investigators uncovered a massive unemployment fraud scheme being perpetuated by inmates.

According to local and federal prosecutors, at least 35,000 California inmates filed for unemployment from March through August. Benefits were not only sent to death row inmates, but applicants such as "Poopy Britches" and "Dianne Feinstein."

"Quite frankly, the inmates are mocking us," said one district attorney.

The next month, police busted a ring in Beverly Hills during which 44 people were arrested and more than $2.5 million in unemployment benefits in the form of pre-loaded debit cards were seized. Police said many of the people arrested were from out of state and traveled to California to collect the fraudulent cards and used them to rent luxury cars, lease short-term rentals and buy high-end items.

The full extent of the fraud is still undetermined, but investigators say it’s likely the state paid out over $8 billion in fraudulent claims since last March. In an attempt to get a handle on the fraud, the department was forced for a stretch to suspend payments to any new applicants.

Nearly a year after the first statewide lockdown and despite promises from Newsom that it would be cleared by the end of the month, the department’s backlog has swelled in recent weeks to over 800,000 cases ...

Jose Zepeda, 45, of Fresno, self-surrendered on multiple felony counts of insurance fraud and attempted perjury after filing a workers’ compensation insurance claim and allegedly misleading the insurance carrier regarding his employment status in order to collect disability benefits he was not entitled to receive.

An investigation by the Department of Insurance revealed Zepeda was injured in August 2017, while employed by a local construction company. Zepeda began collecting disability benefits because his employer could not accommodate his work restrictions. The insurance company handling Zepeda’s workers’ compensation claim instructed him to notify them if he found new employment because that would affect the benefits he was receiving.

In July 2018, surveillance footage showed Zepeda regularly commuting to and from another construction company as an apparent employee. He was later asked by a claims adjuster, and in a deposition, if he found new employment. He told the claims adjuster he had not found new employment and responded in the deposition that he only worked for the new employer for one week in May 2018.

Subpoenaed employment records revealed Zepeda began working for his new employer in April 2018 and was still employed there at the time of the subpoena in March 2019. His actions allowed him to collect over $17,278 in disability benefits he was not entitled to receive.

Zepeda self-surrendered to the Fresno County Jail and is scheduled to be arraigned on March 15, 2021. The Fresno County District Attorney’s Office is prosecuting this case ...

The National Counsel on Compensation Insurance just published it's Quarterly Economics Briefing for the fourth quarter of 2020.

The Big Four service sectors - Leisure and Hospitality; Retail Trade; Professional, Business, and Other Services; and Education and Health Services - account for about four out of five lost jobs. In general, the Big Four service sectors are characterized by high physical proximity, low essentiality, or both. Physical proximity refers to the degree of interpersonal contact among workers or between workers and customers, and essentiality refers to the degree to which a service is non-discretionary and cannot be postponed.

The Leisure and Hospitality sector continues be hardest hit, with two out of five lost jobs coming from this sector alone. Restaurants lost employment from October to December following six consecutive months of employment increases. One-half of restaurant operators expect staffing levels to decline from December through February.

Employment recovery stalled during the fourth quarter, including a reversal in December following a massive pandemic resurgence. As the coronavirus recession persists, stresses for households and businesses have increased.

Small businesses contribute a big share of US jobs. One-quarter of US workers are employed at firms with fewer than 50 employees, one-half at firms with fewer than 500 employees. Small businesses also contribute to workers compensation premium in greater proportion relative to their employment because they are less likely than large businesses to self-insure and more likely to purchase non-deductible policies.

The coronavirus recession has been hard on small businesses, especially those in service sectors most impacted by reduced demand. A US Census survey from early December found that the 31% of US small businesses had experienced a “large negative” pandemic effect; for small businesses in various Big Four service sectors, this percentage ranged from 30% to nearly 70%.

The coronavirus pandemic galvanized remote work. While only 6% of the workforce was full-time remote before the pandemic, an estimated 24% worked from home in December. Several surveys conducted during 2020 found that most workers able to work from home would like to continue to do so after the pandemic, at least part-time.

Employer acceptance of remote work also increased during the pandemic. However, a review of recent research concludes that 60% or more of US workers cannot work remotely. As a general observation, occupations most easily adapted to remote settings involve tasks that can be performed on a computer, the internet, or by telephone.

It is increasingly clear that the post-COVID economy will be different than the pre-COVID economy. Changes affecting labor markets are also likely to affect workers compensation in a number of ways. The slowing rate of job recovery and increasing share of permanent layoffs at year-end 2020 suggests that US employment, and hence total workers compensation premium, is likely to recover more slowly during 2021 than during the summer and fall of 2020 ...

Arthur J. Gallagher & Co., announced the acquisition of San Diego-based Atlas General Holdings, LLC, dba Atlas General Insurance Services.

Terms of the transaction were not disclosed.

Atlas General Insurance Services began in 2009, with a niche focus on California workers’ compensation. The company has grown strategically over the past seven years, becoming a national enterprise across numerous territories and diversifying its portfolio of product offerings. Atlas now offers a broad commercial products line, as well as a division dedicated to specialty property needs.

While Atlas’ workers’ comp coverage has grown to include a wide range of industries through their exclusive partnership with Falls Lake Insurance Companies, the company is also focused on growing through the cultivation of its commercial division. Atlas remains dedicated to strengthening its diverse product offerings through the creation of exclusive programs with carrier partners while maintaining excellent service standards.

Mike Mathews, Charles Lasher and their associates will remain in their current location under the direction of Joel Cavaness, president of Risk Placement Services, Inc., Gallagher's U.S.-based wholesale brokerage division.

Mike Mathews is responsible for the development and national distribution of the Workers’ Compensation Division. Prior to Atlas, Mathews led program development and distribution at Arrowhead General Insurance Agency in the Workers’ Compensation Division. He has over twenty years of industry experience with a multi-line underwriting background from Ohio Casualty and Liberty Mutual. Mathews also served as Marsh’s Workers’ Compensation Practice Leader for ten years.

Charles Lasher is responsible for the development and oversight of Atlas General’s commercial division. Charles came to Atlas in 2015 and has built products, managed programs, and national distribution for the commercial division. Charles has over 15 years of experience in the insurance industry working with MGA’s focused on program business. Charles is a graduate from California State University Fullerton.

"Atlas is a highly-regarded program administrator that brings RPS deep market expertise, a complementary book of business and a best-in-class workers comp platform," said J. Patrick Gallagher, Jr., Chairman, President and CEO of Gallagher. "We are delighted to welcome Mike, Charles and their associates to our growing global team."

Arthur J. Gallagher & Co., a global insurance brokerage, risk management and consulting services firm, is headquartered in Rolling Meadows, Illinois. The company has operations in 49 countries and offers client-service capabilities in more than 150 countries around the world through a network of correspondent brokers and consultants ...