The California Attorney General in partnership with the U.S. Department of Justice, announced a settlement with the owner of one of California’s largest chains of pain management clinics over allegations that he defrauded Medi-Cal and Medicare of millions of dollars. Dr. Francis Lagattuta and his business, Lags Spine & Sportscare Medical Centers Inc (Lags Medical Clinics), which ran more than 20 facilities in California’s Central Valley and Central Coast, carried out medically unnecessary tests and procedures on thousands of patients, and billed Medi-Cal and Medicare for these services over the course of more than five years. The settlement totals nearly $11.4 million. The funds were allocated in proportion to losses faced due to the alleged fraud scheme. The United States will receive around $8.5 million, California will receive over $2.7 million, and Oregon will receive over $130,000. Dr. Lagattuta will also be barred for five years from serving any Medi-Cal beneficiaries, billing for services to any Medi-Cal beneficiary, or receiving reimbursement for any services provided to any Medi-Cal beneficiary. The settlement amount of $11,388,887 is based on Lagattuta’s and Lags Medical’s ability to pay and includes proceeds from Lagattuta’s sale of a remotely operated underwater vehicle. The settlement resolves allegations that, from 2018 to 2021, Lagattuta and Lags Medical performed medically unnecessary surgeries to implant spinal cord stimulators, which is an invasive surgery of last resort for the treatment of chronic pain. Lagattuta paid a psychiatrist to state to Medicare and Medicaid insurers that the psychiatrist had performed a necessary psychological evaluation on each patient prior to receiving the surgery and that the patient did not have any preexisting psychological or active substance abuse disorders that would adversely affect their response to the surgery. But Lagattuta and Lags Medical knew that the psychiatrist did not perform in-person psychological evaluations of any patients and ignored indications that many patients suffered from psychological or substance use disorders before receiving spinal cord stimulation surgery. Lagattuta and Lags Medical also allegedly performed medically unnecessary skin biopsies to test patients for small fiber neuropathy. As part of the settlement, Lagattuta and Lags Medical acknowledged that Lagattuta created what he named an "Artificial Intelligence Team" of non-provider staff who were required to order at least 150 skin biopsies per week for patients without the consent of the patients’ treating providers at Lags Medical. Each biopsy order stated that the patient had identical symptoms of small fiber neuropathy, yet those symptoms were generally inconsistent with those patients’ actual symptoms. Lagattuta and Lags Medical also acknowledged as part of this settlement that, if a patient refused a skin biopsy, Lags Medical told the patient that they would reduce their opioid medication and instructed the patient’s provider to immediately taper the patient’s medication Finally, the settlement resolves allegations that Lagattuta and Lags Medical performed medically unnecessary definitive urine drug testing, which identifies the concentration of specific medications, illicit substances, and metabolites in urine samples. Blanket orders of urine drug testing - identical orders for all patients without regtard to each patient’s individualized medical necessity for the test - are not covered by Medicare. Lagattuta and Lags Medical acknowledged that they made identical orders of urine drug tests for all patients to be tested every four months and ordered the maximum number of drug panels for each patient, using Healthcare Common Procedure Coding System Code G0483. Lags Medical’s CEO stated to Lagattuta that performing urine drug tests on all their patients "[s]hould be a big money maker" and called it "Operation GO483!" When a new consultant for Lags Medical told Lagattuta that it was "medically unnecessary but also wasteful" to order the maximum number of drug panels for each patient, Lagattuta directed a Lags Medical executive not to contact the consultant "because she might report us. For anything." The civil settlement includes the resolution of claims brought under the qui tam or whistleblower provisions of the False Claims Act by Steven Capeder, Lags Medical’s former operations director and marketing director. Under those provisions, a private party can file an action on behalf of the United States and receive a portion of any recovery. The qui tam case is captioned United States and California ex rel. Steven Capeder v. Francis P. Lagattuta, M.D., Lagz Corporation, Spine & Pain Treatment Medical Center of Santa Barbara, Inc., and LAGS Spine & Sportscare Medical Centers, Inc., No. 2:18-cv-2928 KJM KJN (E.D. Cal.). As part of the settlement Capeder will receive approximately $2.1 million whistleblower fee. On May 19, 2021, he California Department of Health Care Services (DHCS) temporarily suspended select Lags Medical Centers locations from participation in the Medi-Cal program because of an ongoing investigation by the California Department of Justice (DOJ), Division of Medi-Cal Fraud and Elder Abuse, involving allegations of fraudulent billing and potential patient harm. On May 25, 2021, DHCS learned that Lags Medical Centers voluntarily closed 29 California locations even though DHCS only suspended seven National Provider Identifier numbers associated with up to 17 locations, potentially impacting about 20,000 beneficiaries access to pain management care. The Los Angeles Times published a comprehensive report on the abrupt closure of the Lags Clinics ...

Paul Thai was a direct employee of International Business Machines (IBM). To accomplish his duties, he required, among other things, internet access, telephone service, a telephone headset, and a computer and accessories that IBM provided to its employees in its offices. On March 19, 2020, Governor Newsom signed an Executive Order that instructed all California residents to stay home or at their place of residence except as needed to maintain continuity of operations of the federal critical infrastructure sectors and any other additional sectors later designated as critical. (E.O. N-33-20.) As a result, IBM directed Mr. Thai and several thousand of his coworkers to continue performing their regular job duties from home. Mr. Thai and his coworkers personally paid for the services and equipment necessary to do their jobs while working from home. IBM never reimbursed its employees for these expenses, despite knowing that its employees incurred them. IBM was joined as a defendant in a PAGA action complaint which alleged IBM failed to reimburse employees for work-from-home expenses that were incurred. IBM demurred to the second amended complaint and the trial court sustained the demurrer. The plaintiffs appealed contending that the trial court’s ruling is contrary to the plain language of Labor Code section 2802(a) which requires that "An employer shall indemnify his or her employee for all necessary expenditures or losses incurred by the employee in direct consequence of the discharge of his or her duties, or of his or her obedience to the directions of the employer, ..." The Court of Appeal agreed with the plaintiffs, and reversed and remanded in the published case of Thai v International Business Machines -A165390 (July 2023). "Section 2802 is designed to protect workers from bearing the costs of business expenses that are incurred by workers doing their jobs in service of an employer." (Gallano v. Burlington Coat Factory of California, LLC (2021) 67 Cal.App.5th 953, 963 (Gallano); see also Edwards v. Arthur Andersen LLP (2008) 44 Cal.4th 937, 952 (Edwards) [section 2802 codifies " 'strong public policy that favors' " reimbursement of employees]; Janken v. GM Hughes Electronics (1996) 46 Cal.App.4th 55, 74, fn. 24 [section 2802 "shows a legislative intent that duty-related losses ultimately fall on the business enterprise, not on the individual employee"]; Grissom v. Vons Companies, Inc. (1991) 1 Cal.App.4th 52, 59-60 [the purpose of section 2802 is "to protect employees from suffering expenses in direct consequence of doing their jobs"].) In Gattuso v. Harte-Hanks Shoppers, Inc. (2007) 42 Cal.4th 554 at page 562, the California Supreme Court observed, "At the time of the 2000 amendment of section 2802, legislative committee analyses identified the purpose of that provision: 'The author [of the amending legislation] states that Section 2802 is designed to prevent employers from passing their operating expenses on to their employees.' " "In light of the remedial purpose of statutes that regulate 'wages, hours and working conditions for the protection and benefit of employees, the statutory provisions are to be liberally construed with an eye to promoting such protection . . .' " (Gallano, supra, 67 Cal.App.5th at p. 963 [applying liberal construction rule to section 2802].) The trial court concluded the March 2020 order was an "intervening cause precluding direct causation by IBM." The court and IBM read the statute as if it requires reimbursement only for expenses directly caused by the employer. The Court of Appeal disagreed with IBM and the trial court since "that inserts into the analysis a tort-like causation inquiry that is not rooted in the statutory language. (See Akins v. County of Sonoma (1967) 67 Cal.2d 185, 199 [discussing the 'intervening cause' concept in the context of determining proximate cause in a negligence action].) Instead, the plain language of section 2802(a) flatly requires the employer to reimburse an employee for all expenses that are a 'direct consequence of the discharge of [the employee’s] duties.' " Under the statutory language, the obligation does not turn on whether the employer’s order was the proximate cause of the expenses; it turns on whether the expenses were actually due to performance of the employee’s duties ...

The County of Santa Clara operates a health care service plan called Valley Health Plan, which is licensed and regulated by the Department of Managed Health Care (DMHC) under the Knox-Keene Act. The Knox-Keene Act applies to private and public entities that operate health care service plans. State and federal laws require hospitals and other medical providers to provide emergency medical services regardless of the patient’s insurance status or ability to pay. If the patient is enrolled in a health care service plan, the Knox-Keene Act requires the plan to reimburse the medical provider for providing such emergency care. If no contract exists between the plan and medical provider, the plan must pay the "reasonable and customary value" of the emergency care provided. In 2016 and 2017, the Doctors Medical Center of Modesto, Inc., and Doctors Hospital of Manteca, Inc., provided emergency medical services to three patients enrolled in Valley Health Plan. The two Hospitals are licensed acute care hospitals in the Central Valley, but did not have a contract with the County governing the rates payable for medical services provided to Valley Health Plan enrollees. The Hospitals submitted to the County claims for reimbursement totaling approximately $144,000 for the services provided. The County paid the Hospitals approximately $28,500. The Hospitals challenged the reimbursement decisions by submitting written administrative appeals, which the County denied. The Hospitals then sued the County for the remaining amounts based on the Knox-Keene Act’s reimbursement provision. The trial court found that the Hospitals could state a quantum meruit claim against the County. On petition for writ of mandate, the Court of Appeal disagreed, holding that the County is immune from suit under the Government Claims Act and that no exception to immunity applies. The California Supreme Court disagreed with the Court of Appeal and reversed in the case of County of Santa Clara v Superior Court - S274927 (July 2023) The case called upon the California Supreme Court to determine how the Government Claims Act should be interpreted and whether a litigant may circumvent sovereign immunity with a common law claim founded on equitable principles. The Supreme Court concluded that the Government Claims Act does not bar the Hospitals’ action against the County. Hospitals and other medical providers are required by law to provide emergency medical services without regard to the patient’s insurance status or ability to pay. (42 U.S.C. § 1395dd(b); Health & Saf. Code, § 1317, subds. (a) & (b).) If the patient is enrolled in a health care service plan, by statute the plan must reimburse the medical provider for providing such emergency care under the Knox-Keene Health Care Service Plan Act of 1975. (Health & Saf. Code, § 1340 et seq. If the plan does not have a contract with the medical provider addressing the reimbursement rate, the plan must pay the provider the "reasonable and customary value" of the emergency care provided. (Cal. Code Regs., tit. 28, § 1300.71, subd. (a)(3)(B).) If the plan fails to pay the reasonable and customary value of such services, the medical provider may sue the plan directly for reimbursement under a quantum meruit theory. (Prospect Medical Group, Inc. v. Northridge Emergency Medical Group (2009) 45 Cal.4th 497, 506 (Prospect Medical Group); Bell v. Blue Cross of California (2005) 131 Cal.App.4th 211, 216–217 (Bell).) The Supreme Court concluded that "the immunity provisions of the Government Claims Act are directed toward tort claims; they do not foreclose liability based on contract or the right to obtain relief other than money or damages. (Gov. Code, § 814.)" "The Hospitals have not alleged a conventional common law tort claim seeking money damages. Instead, they have alleged an implied-in-law contract claim based on the reimbursement provision of the Knox-Keene Act, and seek only to compel the County to comply with its statutory duty. Accordingly, the County is not immune from suit under the circumstances and the Hospitals’ claim may proceed." ...

On April 19, 2023, Beverly Community Hospital Association, et al. (a Nonprofit Public Benefit Corporation) filed voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Code. While under protection of the bankruptcy court, it struggled to avoid closure while hoping to find a buyer. The hospital secured $13 million in financing to keep operating as it searched for a buyer. Hospital officials said rising costs outpacing government reimbursement rates were to blame for the situation. More than 90 percent of Beverly's patients rely on government programs such as Medi-Cal and Medicare. Dealing with the COVID-19 pandemic and the rising cost of labor left the hospital in the red since 2020. Beverly had unsuccessfully attempted to merge with three systems. Hospital officials blamed the failed mergers on the review process by the California attorney general, according to a Los Angeles Times report. Fortunately, last week the California Attorney General announced his conditional approval of the sale of Beverly Community Hospital to nonprofit American Healthcare Systems (AHS). Beverly provides critical medical services, including low-cost Medicare and Medi-Cal services, to the community of Montebello in Los Angeles County. When the hospital filed for bankruptcy earlier this year, it led to a disruption in services such as pediatric care, gynecology, maternity services, and wound care. To help restore these essential services for patients, the California Department of Justice (DOJ) reported that it has for weeks worked actively with AHS and Beverly to put together a successful sale agreement with strong conditions that AHS has committed to fulfilling. Under California law, the Attorney General has a statutory duty to review all non-profit healthcare facility transactions, including those that go through bankruptcy court. In his review of the potential sale of Beverly, Under the Attorney General's conditions, approved by the bankruptcy court, AHS has committed to: - - Using commercially reasonable efforts to maintain all of Beverly’s current services, including an emergency room, accompanying medical surgical unit, cardiology, diagnostic imaging, laboratory services, and intensive care unit. - - Ensuring continued access to Medi-Cal and Medicare for eligible patients. Over 75% of the patients served by Beverly are Medicare or Medi-Cal beneficiaries. - - Using commercially reasonable efforts to reinstate services closed during bankruptcy including, obstetrics, gynecological, and maternity services, pediatrics, breast center, and wound and hyperbaric care. - - Providing charity care and a notice of financial assistance policy. - - Providing language access and deaf and hearing-impaired interpreter services. - - Maintaining a Community Board, including to comment on compliance with conditions in the Annual Report to the Attorney General. - - Maintaining medical staff in good standing and ensuring compliance with state staffing levels. For further details of the approved agreement please download a copy of the Attorney General's conditional approval. DOJ’s Healthcare Rights and Access Section (HRA) works proactively to increase and protect the affordability, accessibility, and quality of healthcare in California. HRA’s attorneys monitor and contribute to various areas of the Attorney General’s healthcare work, including nonprofit healthcare transactions; consumer rights; anticompetitive consolidation in the healthcare market; anticompetitive drug pricing; privacy issues; civil rights, such as reproductive rights and LGBTQ healthcare-related rights; and public health work on tobacco, e-cigarettes, and other products ...

Healthcare spending is still on the rise, according to a new analysis from the Health Care Cost Institute (HCCI). Median per person healthcare spending increased by 24 percent from 2017 through 2021, HCCI’s latest Healthy Marketplace Index shows. But healthcare spending varied significantly depending on where people lived. For example, patients in metropolitan areas with the highest utilization rates paid nearly three times more for healthcare services that year compared to their neighbors in metropolitan areas with the lowest utilization rates. Rising medical prices impacted healthcare spending, with overall spending growth reflecting a 9 percent increase in prices, on average, and 14 percent increase in service use, on average. The American Medical Association (AMA) reports health spending in the U.S. increased by 2.7% in 2021 to $4.3 trillion or $12,914 per capita. This growth rate is substantially lower than 2020 (10.3% percent). This substantial deceleration in spending can be attributed to the decline in pandemic-related government expenditures offsetting increased utilization of medical goods and services that rebounded due to delayed care and pent-up demand from 2020. Although physician services was the second largest category of health spending, prior to the pandemic, spending on physician services generally grew more slowly than spending in the other large categories of personal health care. Physician spending grew by an average of 3.8% per year between 2009 and 2019 while hospital services (4.5%) and clinical services (6.6%) had higher growth rates. In 2020, spending on physician services grew 7.0%, a substantially higher growth rate compared to previous years. This acceleration was driven by spending on federal relief programs (classified as "other federal programs" in the following chart). Spending growth decreased to 5.1% in 2021 as the decline in pandemic-related government expenditures offset the rebound in utilization of medical goods and services. A Health Affairs study from May 2022 found that vertical consolidation - for example, health systems buying physician practices - resulted in a 12 percent increase in primary care physician prices and a 6 percent increase in specialist prices. Research has also shown similar price increases when markets experience horizontal consolidation, which is when hospitals merge or acquire other hospitals. Hospital markets tended to be less concentrated in larger metropolitan areas, such as San Franciso, New York City, and Philadelphia. Meanwhile, according to HCCI’s analysis, the most concentrated areas were metropolitan areas with populations of less than 350,000 in 2021. The most concentrated areas included Johnson City, Tennessee, Kingsport, Tennessee, and Wilmington, North Carolina. HCCI notes that a potential factor in market consolidation is the degree to which patients from one metropolitan area seek care in a neighboring region. Healthcare spending is only expected to rise, with the latest healthcare spending projections from federal actuaries estimating healthcare to account for nearly 20 percent of gross domestic product (GDP) by 2031. HCCI’s Healthy Marketplace Index provides interactive reports in which readers can compare prices and hospital market concentration across metropolitan areas ...

The California Supreme Court has approved a new rule of professional conduct, rule 8.3 of the California Rules of Professional Conduct, that requires California attorneys to report any lawyer who commits a criminal act, engages in fraud, misappropriates funds or property, or engages in conduct involving "dishonesty, deceit, and reckless or intentional misrepresentations." The new "Rule 8.3 Reporting Professional Misconduct" will go into effect August 1, and reads as follows: - - (a) A lawyer shall, without undue delay, inform the State Bar, or a tribunal* with jurisdiction to investigate or act upon such misconduct, when the lawyer knows* of credible evidence that another lawyer has committed a criminal act or has engaged in conduct involving dishonesty, fraud,* deceit, or reckless or intentional misrepresentation or misappropriation of funds or property that raises a substantial* question as to that lawyer's honesty, trustworthiness, or fitness as a lawyer in other respects. - - (b) Except as required by paragraph (a), a lawyer may, but is not required to, report to the State Bar a violation of these Rules or the State Bar Act. - - (c) For purposes of this rule, "criminal act" as used in paragraph (a) excludes conduct that would be a criminal act in another state, United States territory, or foreign jurisdiction, but would not be a criminal act in California. - - (d) This rule does not require or authorize disclosure of information gained by a lawyer while participating in a substance use or mental health program, or require disclosure of information protected by Business and Professions Code section 6068, subdivision (e) and rules 1.6 and 1.8.2; mediation confidentiality; the lawyer-client privilege; other applicable privileges; or by other rules or laws, including information that is confidential under Business and Professions Code section 6234. The new rule has a "Comment" section that follows the rule itself, with ten items of clarification about this new rule. For example, the last of the comments provides the following information: - - Comment [10) Communications to the State Bar relating to lawyer misconduct are "privileged, and no lawsuit predicated thereon may be instituted against any person." (Bus. & Prof. Code,§ 6094.) However, lawyers may be subject to criminal penalties for false and malicious reports or complaints filed with the State Bar or be subject to discipline or other penalties by offering false statements or false evidence to a tribunal.* (See rule 3.3(a); Bus. & Prof. Code,§§ 6043.5, subd. (a), 6068, subd. (d).) The new rule follows several other directives from the court for the State Bar, including on noticing about attorney suspensions; updating its conflict of interest code for the Board of Trustees; and to develop new rules requiring candidates for the Board of Trustees and State Bar Court be screened for potential conflicts of interest. Much of this new State Bar activity seems to be the aftermath of the scandal following investigations of the organizations mishandling of ethics complaints against attorneys for several decades, including many that were filed against now disgraced plaintiff personal injury lawyer Tom Girardi, once among the most successful and powerful plaintiff’s attorneys in the country. A redacted version of the corruption probe was publicly released by the State Bar earlier this year. For years, Girardi faced accusations that he’d stolen money from clients and other lawyers. He was forced into bankruptcy in 2021, disbarred in 2022, and was finally indicted by two different federal grand juries, one in California and one in Illinois, on charges of embezzling more than $18 million of his clients’ money ...

House and Senate members from both parties have launched at least nine bills, parts of which may be packaged together this fall, that take aim at Pharmacy Benefit Managers (PBMs), companies that channel prescription drugs to patients. And NPR just published a primer to help decipher this recent activity. Members from both parties talk indignantly about PBM behavior and have fired up bills to address it. The Senate Finance Committee, whose jurisdiction over Medicare and Medicaid gives it a lead role, has introduced a bill that would prohibit PBMs from collecting rebates and fees calculated as a percentage of a drug's list price, to discourage PBMs from favoring expensive drugs. The committee also plans legislation to require PBMs to pass along discounts directly to seniors, allow patients to use the pharmacy they prefer, and release more information about where their money ends up. Sen. Bernie Sanders, who leads the Senate Health, Education, Labor and Pensions Committee, introduced a bill that bans spread pricing, while measures in the Senate and House would crack down on PBM practices seen as harming independent and rural pharmacies. Other measures require more transparency or limit patient waits for drug approvals. PBMs, were created in the 1960s to help employers and insurers select and purchase medications for their health plans. The industry mushroomed as prescription drug spending grew about 200-fold between 1967 and 2021. In addition to negotiating discounts with manufacturers, PBMs set payment terms for the pharmacies that buy and dispense the drugs to patients. In effect, they are the dominant middlemen among drugmakers, drugstores, insurers, employers, and patients. There are around 70 PBMs in the U.S. Through mergers, three of them - CVS Caremark, Optum Rx, and Express Scripts - have come to control 80% of the prescription drug market, and each brings in tens of billions of dollars in revenue annually. The PBMs control the drug pipeline from manufacturers to the pharmacy counter. Their buying power allows them to obtain discounted drugs for health plans while setting prices and terms for sales at drugstores. The big three are part of massive conglomerates with important stakes in almost every sector of health care; each of them owns a powerful health insurer - Aetna, UnitedHealth, and Cigna, respectively - as well as pharmacies and medical providers. Other sectors of health care are alarmed by the power of the PBMs and are appealing to the Biden administration and Congress to rein them in. Drugmakers are especially up in arms, but employers, pharmacies, doctors, and even patients chafe at PBM practices like "spread pricing," in which the companies pocket money negotiated on behalf of health plans. Non-PBM-affiliated pharmacists, from mom and pop stores to large chains like Kroger, say the PBMs squeeze their businesses by forcing them to sign opaque contracts that include clawbacks of money long after sales take place. PBMs often steer patients using expensive drugs to their affiliated pharmacies, cutting revenue to independents. Doctors say PBMs act as gatekeepers for the insurers they represent, blocking or slowing coverage of necessary drugs. Finally, the pharmaceutical industry has lost a share of sales revenue to PBM middlemen in recent years - even while getting most of the bad publicity for high drug prices. (The median launch price for newly marketed brand-name drugs went from $2,100 to $180,000 a year between 2008 and 2021, yet net revenues for drug companies have stagnated in recent years.) PBMs in some cases prefer high producer list prices, because the rebates that drugmakers pay the PBMs in exchange for favorable health plan coverage of their drugs often are calculated as a percentage of those list prices. In recent months ominous ads about prescription drugs have flooded the TV airwaves. Perhaps by design, it's not always clear who's sponsoring the ads or why. The Pharmaceutical Research and Manufacturers of America (PhRMA), the trade group for most of the big drug companies, is the top driver of the anti-PBM campaign. Some of the ads are sponsored by the PBM Accountability Project, a pop-up lobby, funded partly by the drug industry, that includes unions and patient advocates whose membership complains of restrictive PBM and insurance industry policies. In one PhRMA ad, a smarmy guy in a suit snatches away a young woman's prescription. The Pharmaceutical Care Management Association, the PBM trade group, has responded with its own ads, blaming drug companies for high prices and for "targeting your pharmacy benefits." AHIP, the health insurance lobby, has piled on with its own campaign. Meanwhile, several states have taken a pragmatic path to lower PBM-related costs, using high-tech auctions to get the best deals for their employee health care plans ...

On May 6, 2020, Robert Kuciemba began working for defendant Victory Woodworks, Inc. at a construction site in San Francisco. About two months later, without taking COVID-19 precautions required by the county’s health order, Victory transferred a group of workers to the San Francisco site from another location where they may have been exposed to the virus. After being required to work in close contact with these new workers, Robert became infected with COVID and allegedly carried the virus home and transmitted it to his wife, Corby, either directly or through her contact with his clothing and personal effects. Corby was hospitalized for several weeks and, at one point, was kept alive on a respirator. The Kuciembas sued Victory in superior court. Corby asserted claims for negligence, negligence per se, premises liability, and public nuisance. Robert asserted a claim for loss of consortium. Victory removed the case to federal court and moved to dismiss. The federal district court granted a motion to dismiss without leave to amend. A timely appeal was filed in the 9th Circuit Court of Appeals. After briefing concluded, the California Court of Appeal decided See’s Candies, Inc. v. Superior Court, 288 Cal. Rptr. 3d 66 (Cal. Ct. App. 2021). Faced with essentially identical facts to those here, the Court of Appeal largely agreed with the Kuciembas’ arguments, and held that the derivative injury rule does not bar claims brought by an employee’s spouse against an employer for injuries arising from a workplace COVID-19 infection. The 9th Circuit Court of Appeals noted that See’s Candies - although instructive - does not eliminate the need for clear guidance from California’s highest court. "In addition, no controlling precedent resolves whether Victory owed Mrs. Kuciemba a duty of care." Thus the 9th Circuit panel certified to the Supreme Court of California the following questions: (1) If an employee contracts COVID-19 at the workplace and brings the virus home to a spouse, does the California Workers’ Compensation Act (WCA; Lab. Code, § 3200 et seq.) bar the spouse’s negligence claim against the employer? (2) Does an employer owe a duty of care under California law to prevent the spread of COVID-19 to employees’ household members? And yesterday, the California Supreme Court answered both questions in the case of Kuciemba v. Victory Woodworks, Inc. --S274191 (July 2023). The answer to the first question is no. Exclusivity provisions of the WCA do not bar a nonemployee’s recovery for injuries that are not legally dependent upon an injury suffered by the employee. In general, workers’ compensation benefits provide the exclusive remedy for third party claims if the asserted claims are "collateral to or derivative of" the employee’s workplace injury. This aspect of workers’ compensation law is sometimes called the derivative injury doctrine. However, a family member’s claim for her own independent injury, not legally dependent on the employee’s injury, is not barred, even if both injuries were caused by the same negligent conduct of the employer. "Determining the scope of workers’ compensation exclusivity can be analytically challenging." The answer to the second question, however, is also no. Although it is foreseeable that an employer’s negligence in permitting workplace spread of COVID-19 will cause members of employees’ households to contract the disease, recognizing a duty of care to nonemployees in this context would impose an intolerable burden on employers and society in contravention of public policy. "These and other policy considerations lead us to conclude that employers do not owe a tort-based duty to nonemployees to prevent the spread of COVID-19." ...

In January 2022, Robert Foster, of Morgan Hill, a retired San Jose Police officer with a side security business was convicted of $1.13 million in insurance fraud, $18 million in money laundering to cover it up, tax evasion, and worker exploitation. Foster pleaded no contest to a series of felony fraud charges and will be sentenced to three years in county jail and two years of mandatory supervision. Foster will repay $1.13 million to Everest National Insurance and the Employment Development Department. Foster owns Atlas Private Security (now Genesis Private Security) with his wife, Mikaila Foster, who also pleaded no contest to a variety of related fraud charges In one instance, an "off-the-books" security guard suffered severe injuries during a crash while driving an Atlas security vehicle. Robert Foster responded to the guard’s $1 million medical bill by telling the insurance company that the guard was not an Atlas employee. Investigators found records showing that the guard was driving an Atlas vehicle and wearing an Atlas uniform at the time of the collision. The probe also uncovered that the Fosters allegedly hid millions of dollars of payroll through a complex subcontractor masking scheme. Employees were paid by a different security company, which had no knowledge of the employees’ hours, wages, or schedules. Instead, the other company simply moved money from the Fosters’ firm to the employees so that the Fosters could avoid paying their fair share of taxes, workers’ compensation insurance, and overtime wages. And this month, a 52-year-old San Jose man has pleaded no contest to felony insurance fraud after he used his company to hide payroll for the security company run by the Fosters. Nam Le operated Defense Protection Group to launder millions of dollars in payroll for Atlas Private Security. For operating an under-the-table subcontractor scheme, Le was paid $0.50 to $1 per hour of payroll he helped hide. Le will be sentenced next year for the fraud charges and faces prison if he fails to pay more than $100,000 in restitution. After the Department of Labor questioned Le about the subcontractor scheme, he met with Robert Foster, and Richard McDiarmid, 62, Vice President of Operations for Atlas and former Emeryville police officer, at the Matrix Casino and asked to leave the conspiracy. Instead, the trio decided to expand the scam. In all, Le helped launder approximately $18 million for Atlas Security. He is ordered to pay approximately $109,000 in restitution and penalties, including $60,000 back to the State of California Department of Insurance. If all restitution is paid by sentencing, he will serve six years of formal probation and one year in county jail. If he has not paid all restitution by sentencing, he will be sentenced to four years in state prison. The six-month investigation was spearheaded by the Santa Clara County District Attorney’s Bureau of Investigation in collaboration with the California Department of Insurance, Employment Development Department, CA Department of Justice Division of Medi-Cal Fraud and Elder Abuse, and United States Department of Labor. This case paralleled the formation of the DA’s Workforce Exploitation Task Force ...

Coinbase operates an online platform on which users can buy and sell cryptocurrencies and government-issued currencies. When creating a Coinbase account, individuals agree to the terms in Coinbase’s User Agreement that contains an arbitration provision, which directs that disputes arising under the agreement be resolved through binding arbitration. Abraham Bielski filed a putative class action on behalf of Coinbase users in the U. S. District Court for the Northern District of California. alleging that Coinbase failed to replace funds fraudulently taken from the users’ accounts. Because Coinbase’s User Agreement provides for dispute resolution through binding arbitration, Coinbase filed a motion to compel arbitration. The District Court denied the motion. Coinbase then filed an interlocutory appeal to the Ninth Circuit under the Federal Arbitration Act, 9 U. S. C. §16(a), which authorizes an interlocutory appeal from the denial of a motion to compel arbitration. Coinbase also moved to stay District Court proceedings pending resolution of the arbitrability issue on appeal. The District Court declined to stay its proceedings. After receiving Coinbase’s motion for a stay, the Ninth Circuit likewise declined to stay the District Court’s proceedings. The Ninth Circuit followed its precedent, under which an appeal from the denial of a motion to compel arbitration does not automatically stay district court proceedings. See Britton v. Co-op Banking Group, 916 F. 2d 1405, 1412 (1990). By contrast, however, most other Courts of Appeals to address the question have held that a district court must stay its proceedings while the interlocutory appeal on the question of arbitrability is ongoing. E.g., Bradford-Scott Data Corp. v. Physician Computer Network, Inc., 128 F. 3d 504, 506 (CA7 1997). To resolve that disagreement among the Courts of Appeals, the Supreme Court of the United States granted certiorari. 598 U. S. ___ (2022), and ruled in favor of Coinbase when it held that a district court must stay its proceedings while an interlocutory appeal on the question of arbitrability is ongoing in the case of Coinbase Inc., v Bielski - 22-105_5536 (June 2023). Section 16(a) does not say whether district court proceedings must be stayed pending resolution of an interlocutory appeal. But the Opinion noted that "Congress enacted the provision against a clear background principle prescribed by this Court’s precedents: An appeal, including an interlocutory appeal, 'divests the district court of its control over those aspects of the case involved in the appeal. Griggs v. Provident Consumer Discount Co., 459 U. S. 56, 58." "The Griggs principle resolves this case.Because the question on appeal is whether the case belongs in arbitration or instead in the district court, the entire case is essentially 'involved in the appeal,' id., at 58, and Griggs dictates that the district court stay its proceedings while the interlocutory appeal on arbitrability is ongoing. Most courts of appeals to address this question, as well as leading treatises, agree with that conclusion." "Congress’s longstanding practice reflects the Griggs rule. Given Griggs, when Congress wants to authorize an interlocutory appeal and to automatically stay the district court proceedings during that appeal, Congress ordinarily need not say anything about a stay." "By contrast, when Congress wants to authorize an interlocutory appeal, but not to automatically stay district court proceedings pending that appeal, Congress typically says so. Since the creation of the modern courts of appeals system in 1891, Congress has enacted multiple statutory 'nonstay' provisions ...

National telehealth utilization decreased 5.4 percent in April 2023, from 5.6 percent of medical claim lines in March to 5.3 percent in April, according to FAIR Health's Monthly Telehealth Regional Tracker. The decrease followed an increase in March 2023. In April, telehealth utilization also decreased in all four US census regions - the Midwest (4.7 percent), Northeast (6.3 percent), South (6.8 percent) and West (6.4 percent). The data represent the privately insured population, including Medicare Advantage and excluding Medicare Fee-for-Service and Medicaid. Mental health conditions, the top-ranking telehealth diagnosis nationally and in every region, rose from 67.4 percent of telehealth claim lines nationally in March 2023 to 68.4 percent in April - the fourth straight month of national increases. The percentage of telehealth claim lines for the second-place diagnosis, acute respiratory diseases and infections, decreased nationally in April, falling from 3.2 percent in March to 2.7 percent in April. This was the fourth consecutive national monthly decrease for this diagnosis. Nationally, in April, developmental disorders switched positions with joint/soft tissue diseases and issues in the rankings; developmental disorders rose to third place while joint/soft tissue diseases and issues dropped to fourth place. In April 2023, among the national top five diagnoses via asynchronous telehealth, mental health conditions switched positions with urinary tract infections in the rankings; claims for mental health conditions climbed to third place while those for urinary tract infections fell to fourth place. In April, the percentage of asynchronous telehealth claim lines rose for hypertension nationally and in every region. Nationally, the percentage rose significantly from 9.7 percent in March to 12.5 percent in April. Hypertension rose from second to first place in the West and from fourth to second place in the South. It maintained its position nationally (second place) and in the other regions - second place in the Northeast and first in the Midwest. In April, sleep disorders climbed in the rankings of asynchronous telehealth diagnoses from fifth to fourth place in the Northeast and from fourth to second place in the West. Diabetes mellitus rose in the rankings in three regions: from fifth to third place in the Midwest, from fourth to third place in the Northeast and from fifth to fourth place in the West. In April 2023, utilization of audio-only telehealth services decreased in rural and urban areas nationally and in every region except the West, where it fell in rural areas but rose in urban areas. For April 2023, the Telehealth Cost Corner spotlighted the cost of CPT®3 99213, established patient office or other outpatient visit, 20-29 minutes. Nationally, the median charge amount for this service when rendered via telehealth was $167.77, and the median allowed amount was $89.70 ...

Martin Mariano, an employee of L & S Framing Inc., was working on a residential house under construction when he fell from the unprotected second floor stairwell onto the concrete ground floor below, sustaining serious injuries. Ronald Aruejo, a senior safety engineer for the Cal/OSHA, issued plaintiff L & S Framing Inc., three general citations and one serious accident-related citation. Only the serious accident-related citation is at issue in this appeal. The subsequent citation itself set forth the following: "[T]he employer did not provide the exposed sides of a stairway with temporary railings and toe board as prescribed in Section 1620. As a result, an employee was seriously injured when he fell from the exposed side of the stairway and landed approximately 11 feet below onto a concrete floor." The citation cited section 1626, subdivision (a)(5), which is a section that does not exist. Plaintiff appealed the citation. A hearing before an ALJ followed. The hearing occurred over four days, November 14 and 15, 2017, and September 5 and 6, 2018. On the first day of the hearing, the ALJ granted the Cal/OSHA's request to amend the citation to refer to section 1626, subdivision (b)(5) which provides that "Unprotected sides and edges of stairway landings shall be provided with railings." rather than nonexistent subdivision (a)(5), which according to Ronald Aruejo was a typographical error. During the trial much of the testimony involved describing the correct characterization of the stairway within the meaning of various subsections of section 1626. At one pont the ALJ denied the Division’s mid-hearing request to amend the citation to allege a violation of section 1632, subdivision (b)(1) which requires that "Floor, roof and skylight openings shall be guarded by either temporary railings and toeboards or by covers." And later denied the Division’s post-hearing motion to amend to allege violation of section 1626, subdivision (a)(2), which provides that " Railings and toeboards meeting the requirements of Article 16 of these safety orders shall be installed around stairwells" and concluded the Division failed to prove the alleged violation of section 1626, subdivision (b)(5). The Division filed a petition for reconsideration with the California Occupational Safety and Health Appeals Board which concluded the ALJ improperly denied the two requests to amend and upheld the citation based on violation of both section 1632, subdivision (b)(1) and 1626, subdivision (a)(2). L & S Framing Inc.,filed a petition for a writ of mandate in the trial court and the trial court denied the petition. L & S Framing Inc., then filed an appeal with th California Court of Appeal which affirmed the trial court in the unpublished case of L & S Framing Inc., v Cal/SOSHA - C096386 (June 2023). On appeal the employer asserts the trial court erred in permitting the Appeals Board to amend the citation, and asserts the Appeals Board ultimately found a violation based on two regulations that were not correctly pled. In rejecting this assertion, the Court of Appeal noted that the Labor Code provides that the "rules of practice and procedure adopted by the appeals board shall be consistent with," among other things, Government Code section 11507. which provides, in part: "At any time before the matter is submitted for decision, the agency may file, or permit the filing of, an amended or supplemental accusation . . . ." Thus, Government Code section 11507 contemplates amendments to accusations, and, pursuant to Labor Code section 6603, the rules of practice adopted by the Appeals Board shall be consistent with that provision. Section 371.2, a rule of practice and procedure adopted by the appeals board, expressly addresses amendments of a citation or appeal. Among other things, it provides that a "request for an amendment that does not cause prejudice to any party may be made by a party or the Appeals Board at any time." "[A]mendments to pleadings in the administrative hearing context are liberally allowed." (Calstrip Steel Corporation (Cal. OSHA, June 30, 2017, Nos. 12-R3D6-1998, 1999) 2017 CA OSHA App.Bd. Lexis 66 at p. *15.) The employer also argued the issue of "did the location from which Mariano fell constitute a stairwell within the meaning of section 1626, subdivision (a)(2) and/or a floor opening within the meaning of section 1632, subdivision (b)(1)." Or is 1716.2, subdivision (f) the applicable regulation. That regulation requires fall protection "around all unprotected sides or edges" for work performed on floors that will later be enclosed by framed exterior walls, but only when the work is performed more than 15 feet above the floor level below. The fall here was less than 11 feet to the concrete floor below. The Appeals Board concluded that, when plaintiff’s workers removed the railing, they "create[ed] a hole or empty space from which people or things could fall through." The Appeals Board continued: "Mariano fell through the opening, which was unguarded and unprotected contrary to section 1632, subdivision (b)(1)’s mandate." Thus the Court of Appeal concluded the Appeals Board’s construction and interpretation of section 1632, subdivision (b)(1) comports with the plain meaning of the terms used in that provision. In the particular context of workplace health and safety here at issue, our high court has reviewed the statutory structure and - noting that the relevant provisions "speak in the broadest possible terms" - has concluded that "the terms of the legislation are to be given a liberal interpretation for the purpose of achieving a safe working environment." ...

Daquan Jones brought a tort action against the City of Firebaugh for personal injuries caused by a dangerous condition of public property. and Hiller Aircraft Corporation, among others. On July 2, 2018, Jones and Cheatham were operating an 80-foot-long "sleeper berth: tractor trailer" when they arrived at the loading dock of Red Rooster, a tomato packing operation located near the intersection of M Street and 12th Street. After picking up tomatoes, Jones needed to move his vehicle to accommodate other drivers. After leaving the tomato packing facility he was driving on M Street when the road unexpectedly terminated in front of the private property of Hiller Aircraft Corporation. Unable to turn around due in large part to concrete barricades on the road, Jones and his codriver John Cheatham entered Hiller’s property. Hiller’s general manager Steven Palm refused to let Jones and Cheatham leave until they paid $50. Thereafter, Jones and Palm got into a physical altercation. While being restrained by Palm on the ground, Jones was run over by Cheatham, who was driving the trailer tractor off the property. Jones’s "whole left side" was then crushed by the trailer’s right rear tires while being restrained on the ground by Palm. As of April 8, 2021, four days before trial commenced, workers’ compensation insurance payments in the amount of $1,253,884.43 were paid to Jones by his workers’ compensation insurer, QBE Americas, Inc. However, the workers’ compensation claim remained open, and the amount of the lien continued to grow as more payments are made for additional medical care.. Trial commenced April 12, 2021. On May 4, 2021, the jury returned a special verdict in favor of Jones. The court adjudged City and Hiller Aircraft Corporation jointly and severally liable for $5,743,907.51 in economic damages and City severally liable for $750,000 in noneconomic damages. Postverdict, on July 9, 2021, City moved for reduction of judgment pursuant to Government Code section 985 identifying QBE Americas, Inc., a "private workers’ compensation insurer," as the "sole collateral source." The trial court denied the motion for a reduction of the judgment, "as the City has not provided sufficient evidence of the amounts paid by the collateral source or what plaintiff owes under the lien." The Court of Appeal reversed and remanded in the unpublished case of Jones v City of Firebaugh -F083759 (June 2023); Government Code Section 985, subdivision (b), provides that a public entity may bring a posttrial motion to reduce a judgment against it by the amount a collateral source has paid, or is obligated to pay, for services or benefits provided to plaintiff prior to the commencement of trial. (Ibid.; Garcia v. County of Sacramento (2002) 103 Cal.App.4th 67, 72-73.) A collateral source payment’ includes monetary payments paid or obligated to be paid for services or benefits that were provided' on behalf of the plaintiff by "private medical programs, health maintenance organizations, state disability, unemployment insurance, private disability insurance, or other [similar] sources of compensation . . . ." (§ 985, subds. (a)(1)(B), (f)(2).) The trial court concluded "it [wa]s not possible" "to make a reasoned calculation of the amount of any reduction" because (1) the workers’ compensation claim "has not been closed" and "is not likely to be closed in the foreseeable future because of plaintiff’s ongoing medical needs"; (2) "since the workers’ compensation claim remains open, the amount of the lien will continue to grow as more payments are made"; and (3) "the total amount of the lien has not yet been determined." The court expressed concern "an order under section 985 would have the effect of terminating the lienholder’s right to seek compensation for future payments." However the Court of Appeal noted that the language of section 985 limits the inquiry to payments made "prior to the commencement of trial." "The trial court’s order evinces the mistaken belief that a motion under section 985 reaches payments made for services or benefits provided after the commencement of trial. Since it applied the wrong legal standard, we find an abuse of discretion." The post judgment order was reversed. On remand, "the trial court shall reconsider the motion for reduction in judgment pursuant to section 985 in accordance with the proper legal standard." ...

Gerald Groff is an Evangelical Christian who believes for religious reasons that Sunday should be devoted to worship and rest. In 2012, Groff took a mail delivery job with the United States Postal Service. Groff’s position generally did not involve Sunday work, but that changed after USPS agreed to begin facilitating Sunday deliveries for Amazon. To avoid the requirement to work Sundays on a rotating basis, Groff transferred to a rural USPS station that did not make Sunday deliveries. After Amazon deliveries began at that station as well, Groff remained unwilling to work Sundays, and USPS redistributed Groff’s Sunday deliveries to other USPS staff. Groff received "progressive discipline" for failing to work on Sundays, and he eventually resigned. Groff sued under Title VII of the Civil Rights Act of 1964, asserting that USPS could have accommodated his Sunday Sabbath practice without undue hardship on the conduct of USPS’s business. 42 U. S. C. §2000e(j). The District Court granted summary judgment in favor USPS. The Third Circuit affirmed based on this Court’s decision in Trans World Airlines, Inc. v. Hardison, 432 U. S. 63, which it construed to mean "that requiring an employer ‘to bear more than a de minimis cost’ to provide a religious accommodation is an undue hardship." 35 F. 4th 162, 174, n. 18 (quoting 432 U. S., at 84). The Third Circuit found the de minimis cost standard met here, concluding that exempting Groff from Sunday work had "imposed on his coworkers, disrupted the workplace and workflow, and diminished employee morale." The United States Supreme Court reversed in the case of Groff v DeJoy Postmaster General, - No. 22-174 (June 2023). SCOTUS began it's Opinion by noting "This case presents the Court’s first opportunity in nearly 50 years to explain the contours of Hardison. The background of that decision helps to explain the Court’s disposition of this case." Title VII of the Civil Rights Act of 1964 made it unlawful for covered employers "to fail or refuse to hire or to discharge any individual, or otherwise to discriminate against any individual with respect to his compensation, terms, conditions, or privileges [of] employment,because of such individual’s . . . religion." As originally enacted, Title VII did not spell out what it meant by discrimination "because of . . . religion." Subsequent regulations issued by the EEOC obligated employers "to make reasonable accommodations to the religious needs of employees" whenever doing so would not create "undue hardship on the conduct of the employer’s business." 29 CFR §1605.1 (1968). Hardison concerned an employment dispute that arose prior to the 1972 amendments to Title VII. In 1967, Trans World Airlines hired Larry Hardison to work in a department that operated "24 hours per day, 365 days per year" and played an "essential role" for TWA by providing parts needed to repair and maintain aircraft. Hardison later underwent a religious conversion and began missing work to observe the Sabbath. Attempts at accommodation failed, and TWA discharged Hardison for insubordination. Hardison sued TWA and his union, and the Eighth Circuit sided with Hardison. The Eighth Circuit found that reasonable accommodations were available to TWA. Applying this interpretation of Title VII and disagreeing with the Eighth Circuit’s evaluation of the factual record, the Court identified no way in which TWA, without violating seniority rights, could have feasibly accommodated Hardison’s request for an exemption from work on his Sabbath. However, the parties in Hardison had not focused on determining when increased costs amount to "undue hardship" under Title VII separately from the seniority issue. But the Court’s opinion in Hardison contained this oft-quoted sentence: "To require TWA to bear more than a de minimis cost in order to give Hardison Saturdays off is an undue hardship." Subsequently, "lower courts have latched on to 'de minimis' as the governing standard." Returning to the Groff case, SCOTUS concluded "that showing "more than a de minimis cost," as that phrase is used in common parlance, does not suffice to establish "undue hardship" under Title VII. Hardison cannot be reduced to that one phrase. In describing an employer’s "undue hardship" defense, Hardison referred repeatedly to "substantial" burdens, and that formulation better explains the decision. The Court understands Hardison to mean that "undue hardship" is shown when a burden is substantial in the overall context of an employer’s business. This fact-specific inquiry comports with both Hardison and the meaning of "undue hardship" in ordinary speech. Hence "Title VII requires an employer that denies a religious accommodation to show that the burden of granting an accommodation would result in substantial increased costs in relation to the conduct of its particular business." ...

A county organized health system (COHS) that arranges services for Medi-Cal enrollees in Santa Barbara and San Luis Obispo counties and three Central Coast health care providers have agreed to pay a total of $68 million to resolve allegations that they violated the False Claims Act and the California False Claims Act by submitting false claims to Medi-Cal related to Medicaid Adult Expansion under the Patient Protection and Affordable Care Act (ACA). The four entities that entered into settlement agreements with the United States and the State of California are the Santa Barbara San Luis Obispo Regional Health Authority, doing business as CenCal Health, a COHS that contracts to arrange for the provision of health care services under Medi-Cal, which is California’s Medicaid program; Cottage Health System, a not-for-profit hospital network operating in Santa Barbara County; Sansum Clinic, a non-profit outpatient clinic operating in Santa Barbara County; and Community Health Centers of the Central Coast (CHC), a non-profit community health center operating in Santa Barbara and San Luis Obispo counties. Pursuant to the ACA, beginning in January 2014, Medi-Cal was expanded to cover the previously uninsured "Adult Expansion" population - adults between the ages of 19 and 64 without dependent children with annual incomes up to 133% of the federal poverty level. The federal government fully funded the expansion coverage for the first three years of the program. Under contracts with California’s Department of Health Care Services (DHCS), if CenCal did not spend at least 85% of the funds it received for the Adult Expansion population on "allowed medical expenses," CenCal was required to pay back to the state the difference between 85% and what it actually spent. California, in turn, was required to return that amount to the federal government. The four settlements resolve allegations that CenCal, Cottage, Sansum, and CHC knowingly submitted or caused the submission of false claims to Medi-Cal for "Enhanced Services" that were purportedly provided to Adult Expansion Medi-Cal members: by Cottage between January 1, 2014 and June 30, 2016; by Sansum and CHC between January 1, 2015 and June 30, 2016; and by certain other healthcare providers between January 1, 2014 and June 30, 2016. The United States and California alleged that the payments were not "allowed medical expenses" permissible under the contract between DHCS and CenCal; were pre-determined amounts that did not reflect the fair market value of any Enhanced Services provided; and/or the Enhanced Services were duplicative of services already required to be rendered. The United States and California further alleged that the payments were unlawful gifts of public funds in violation of the California Constitution. As a result of the settlements, CenCal will pay $49.5 million, Cottage will pay $9 million, Sansum will pay $4.5 million, and CHC will pay $3.15 million to the United States. In addition, California will receive payments totaling $1.85 million. The civil settlements include the resolution of claims brought under the qui tam or whistleblower provisions of the False Claims Act by Julio Bordas, CenCal’s former medical director. Under the act, a private party can file an action on behalf of the United States and receive a portion of any recovery. Dr. Bordas will receive approximately $12.56 million as his share of the federal recovery. The United States previously settled similar allegations against Dignity Health (which operates Arroyo Grande Community Hospital, French Hospital Medical Center in San Luis Obispo, and Marian Regional Medical Center in Santa Maria) and Twin Cities Community Hospital and Sierra Vista Regional Medical Center, two subsidiaries of Tenet Healthcare Corporation, relating to payments they received from CenCal under the Adult Expansion program ...

The California Supreme Court agreed to review the constitutionality of Uber and Lyft-backed ballot initiative that allows the companies to classify their drivers as independent contractors. The controversy began In 2019 when the California Legislature enacted AB-5, which established a new test for distinguishing between employees and independent contractors for the purposes of the Labor Code and Unemployment Insurance Code. In response, Davis White and Keith Yandell, supported by a group called Protect App-Based Drivers and Services proposed Proposition 22. Among the supporters of Protect Drivers and Proposition 22 were rideshare and delivery network companies such as Uber Technologies, Inc., Lyft, Inc., and DoorDash, Inc. The voters approved Proposition 22 in November 2020, with 58.6 percent of voters in favor and 41.4 percent opposed. It added sections 7448 to 7467 to the Business and Professions Code. Shortly afterwards, Hector Castellanos, Joseph Delgado, Saori Okawa, Michael Robinson, Service Employees International Union California State Council, and Service Employees International Union filed a petition for writ of mandate seeking a declaration that Proposition 22 is invalid because it violates the California Constitution. The trial court granted the petition, ruling that the proposition (1) is invalid in its entirety because it intrudes on the Legislature’s exclusive authority to create workers’ compensation laws; (2) is invalid to the extent that it limits the Legislature’s authority to enact legislation that would not constitute an amendment to Proposition 22, and (3) is invalid in its entirety because it violates the single-subject rule for initiative statutes. It issued a judgment ordering Katie Hagen, as director of the Department of Industrial Relations, not to enforce any of Proposition 22’s provisions. Proposition 22’s proponents and the state appealed, arguing the trial court was mistaken on all three points. The Court of Appeal agreed that Proposition 22 does not intrude on the Legislature’s workers’ compensation authority or violate the single-subject rule. But it concluded that the initiative’s definition of what constitutes an amendment violates separation of powers principles. Because the unconstitutional provisions can be severed from the rest of the initiative, it affirmed the judgment insofar as it declares those provisions invalid and to the extent the trial court retained jurisdiction to consider an award of attorney’s fees, and otherwise reversed in the published case of Castellanos v. State of California - A163655 (March 2023). The Court of Appeal concluded that sections 7465(c)(3) and (4) are facially invalid on separation of powers grounds because they intrude on the judiciary’s authority to determine what constitutes an amendment to Proposition 22, and section 7465(c)(4) fails for the additional reason that it intrudes on the Legislature’s authority by artificially expanding Proposition 22’s article II, section 10(c) shadow. However, the proper remedy for the separation of powers violation is to sever section 7465(c)(3) and (4) and allow the rest of Proposition 22 to remain in effect, as the voters indicated they wished. (§ 7467, subd. (a).) rather than strike Proposition 22 in its entirety. And the Court of Appeal ruled that the "judgment is affirmed to the extent it declared sections 7465(c)(3) and (c)(4) invalid and to the extent the trial court retained jurisdiction to consider a motion for attorney fees under Code of Civil Proctedure section 1021.5. In all other respects, the judgment is reversed. The matter is remanded to the trial court with instructions to enter a new judgment not inconsistent with this opinion." On April 21. 2023 the plaintiffs filed a Petition for Review with the California Supreme Court. And on June 28, 2023 the Petition for Review was granted. As part of the Order, the Supreme Court wrote "Pending review, the opinion of the Court of Appeal, which is currently published at 89 Cal.App.5th 131, may be cited, not only for its persuasive value, but also for the limited purpose of establishing the existence of a conflict in authority that would in turn allow trial courts to exercise discretion under Auto Equity Sales, Inc. v. Superior Court (1962) 57 Cal.2d 450, 456, to choose between sides of any such conflict." ...

The Department of Justice, together with federal and state law enforcement partners, strategically coordinated a two-week nationwide law enforcement action that resulted in criminal charges against 78 defendants for their alleged participation in health care fraud and opioid abuse schemes that included over $2.5 billion in alleged fraud. The defendants allegedly defrauded programs entrusted for the care of the elderly and disabled, and, in some cases, used the proceeds of the schemes to purchase luxury items, including exotic automobiles, jewelry, and yachts. In connection with the enforcement action, the Department seized or restrained millions of dollars in cash, automobiles, and real estate. The identified defendants include a California chiropractor and acupuncturist. Neda Mehrabani, also known as "Neda Mehrabani Ladjevardi." She is a chiropractor and acupuncturist licensed in the State of California and owned Health Clinic of Southern California, Inc.located at 5530 Corbin Avenue, Tarzana, California. Her website claims she became a Licensed Massage Therapist in 1994, a Doctor of Chiropractic in 1998 and a Licensed Acupuncturist & Herbalist in 2004. Prosecutors allege, in the Criminal Case Filed in Los Angeles Federal Court, that Mehrabani submitted false and fraudulent claims to Medicare for chiropractic services, utilizing CPT code 98942 (Chiropractic Manipulative Treatment, spinal 5 regions), purportedly provided to beneficiaries, when, in fact, the services had not been provided as represented and were not medically necessary. They allege that between June 2018 and in or around June 2022, she submitted approximately $3,332,365.00 in false and fraudulent claims for reimbursement for CPT code 98942 and received approximately $2,465,771.61 in payments on those claims. Authorities in California, Florida, Georgia, Indiana, Kentucky, Louisiana, Michigan, New Jersey, New York, Ohio, Pennsylvania, South Carolina, Texas, Washington and Wisconsin are prosecuting the cases against the 78 defendants, including thee one filed against Neda Mehrabani. Among the charges filed against the accused are allegations of telemedicine fraud, pharmaceutical fraud and accusations of opioid distribution. Charges were filed against 11 defendants in connection with the submission of over $2 billion in fraudulent claims resulting from telemedicine schemes. In a case involving the alleged organizers of one of the largest health care fraud schemes ever prosecuted, an indictment in the Southern District of Florida alleges that the chief executive officer (CEO), former CEO, and Vice President of Business Development of purported software and services companies conspired to generate and sell templated doctors’ orders for orthotic braces and pain creams in exchange for kickbacks and bribes. The conspiracy allegedly resulted in the submission of $1.9 billion in false and fraudulent claims to Medicare and other government insurers for orthotic braces, prescription skin creams, and other items that were medically unnecessary and ineligible for Medicare reimbursement. As part of the alleged conspiracy, individuals in a massive telemarketing operation, located in the United States and abroad, targeted the elderly and disabled with direct mail, television advertisements, and other forms of advertising to induce them to contact offshore boiler-rooms staffed by individuals who "up-sold" the elderly and disabled on unnecessary medical equipment and prescriptions. According to the indictment, the software platform that the defendants allegedly operated was actually a conduit for these telemarketers to coordinate the payment of illegal kickbacks and bribes to telemedicine companies to obtain doctors’ orders for Medicare beneficiaries. The defendants allegedly programmed the software platform to generate false and fraudulent orders for telemedicine practitioners to sign and obstruct Medicare investigations by concealing that the interactions with beneficiaries had occurred remotely using telemedicine. The program-generated orders falsified certifications that the telemedicine doctors had examined the beneficiaries in person, and falsified diagnostic testing that Medicare required for brace orders. After the original CEO sold the company in a corporate acquisition, the new corporate leadership allegedly chose to continue the pre-existing fraud scheme. In another telemedicine fraud case, in the Eastern District of Washington, a licensed physician was charged for signing more than 2800 fraudulent orders for orthotic braces, including for patients whose limbs had already been amputated. As alleged, the physician took less than 40 seconds to review and sign each order. The enforcement action also included charges against 10 defendants in connection with the submission of over $370 million in fraudulent claims submitted in connection with prescription drugs. In one case the owner and corporate officer of a pharmaceutical wholesale distribution company was charged for an alleged $150 million fraud scheme in which the company purchased illegally diverted prescription HIV medication, and then marketed and resold the medication by falsely representing that the company acquired it through legitimate channels. The defendant allegedly purchased the diverted medication at a substantial discount from individuals who obtained the drugs primarily through illegal "buyback" schemes in which they paid HIV patients cash for their expensive HIV medication and repackaged those pills for resale. To cover up their scheme, the defendant and others falsified labeling and product tracing documentation to make it appear legitimate. Pharmacies purchased the misbranded medications, dispensed them to patients, and billed them to health care benefit programs, all while the defendants reaped substantial illegal profits. In a related case, on June 15, an individual in the Southern District of Florida was sentenced to 15 years in prison for his role in this nationwide scheme. According to court documents, the defendant illegally acquired large quantities of prescription drugs from patients for whom the drugs had been prescribed but not yet consumed. The defendant and others then repackaged the drugs and sold them to wholesale companies. In some instances, the medication that the defendant sold contained the wrong medication, broken pills, and even pebbles, leading to complaints by pharmacies. The defendant used his share of the proceeds to purchase luxury goods, including a $280,000 Lamborghini, a $220,000 Mercedes, and three boats. The charges also targeted over $150 million in false billings submitted in connection with other types of health care fraud, including the illegal distribution of opioids and clinical laboratory testing fraud. The Center for Program Integrity of the Centers for Medicare & Medicaid Services (CPI/CMS) separately announced that it took adverse administrative actions in the last six months against 90 medical providers for their alleged involvement in health care fraud ...

A South Bay woman was found guilty of nearly two dozen felonies for billing Medicare more than $24 million by submitting fraudulent claims for medically unnecessary durable medical equipment - mostly power wheelchairs (PWC) - and PWC repairs, many of which were never performed. Tamara Yvonne Motley, 54, a.k.a. "Tamara Ogembe," of Redondo Beach, was found guilty by a federal jury of 20 counts of health care fraud, two counts of aggravated identity theft, and one count of conspiracy to commit money laundering. Following the reading of the guilty verdicts, United States District Judge Stanley Blumenfeld Jr. remanded Motley into custody. According to evidence presented at her five­-day trial, from July 2006 to August 2014, Motley was the de facto owner of the Hawthorne-based Action Medical Equipment and Supplies. From January 2013 to November 2016, Motley was the de facto owner of the Ventura-based Kaja Medical Equipment & Supply. Both companies were enrolled with Medicare in the names of Motley’s out-of-state relatives. Motley orchestrated a scheme in which she paid marketers for patient referrals and then directed them to take patients to corrupt physicians, who prescribed medically unnecessary durable medical equipment, such as PWCs, that Motley’s companies used to submit fraudulent bills to Medicare. In January 2011, when Medicare changed the reimbursement rules for PWCs to make the upfront payments less lucrative to suppliers, Action switched to billing Medicare for PWC repairs, and continued that scheme at Kaja once Action was shut down. These repairs were not medically necessary because the patients did not need the PWCs to begin with, were not needed to make the PWCs serviceable in any event, and often simply were not performed. These repairs were expensive - often billed for $3000-$4000 - and accounted for nearly half of Action’s billings and almost all of Kaja’s. Over an eight-year period, Action billed Medicare more than $18.2 million for DME - most for PWCs, but also for PWC accessories, knee braces and back braces - and the repair or replacement of PWCs. Medicare paid Action nearly $10.3 million. Between July 2013 and November 2016, Kaja billed Medicare $6.3 million, primarily for PWC repairs. Medicare paid Kaja approximately $2.8 million for those claims. Judge Blumenfeld scheduled an October 3 sentencing hearing, at which time Motley will face up to 10 years in federal prison for each health care fraud count, up to 20 years in federal prison for the money laundering conspiracy count, and a mandatory sentence of two years in federal prison consecutive to the other sentences for the aggravated identity theft counts. Two other defendants have been convicted in this case: - - Cynthia Karina Marquez, 47, of Paramount, who worked as an office manager at both Action and Kaja, pleaded guilty in December 2019 to two counts of making false statements affecting a health care program. She received a time-served sentence, was placed on supervised release for three years, and was ordered to pay $9,886,646 in restitution. - - Juan Roberto Murillo, 46, of Montebello, who worked at both medical supply companies as a repair technician, pleaded guilty in November 2019 to one count of conspiracy to commit money laundering. He was sentenced to three years’ probation and was ordered to pay $2,504,119 in restitution. The United States Department of Health and Human Services, Office of Inspector General; the FBI; and the California Department of Justice investigated this matter. Assistant United States Attorneys Kristen A. Williams and David H. Chao of the Major Frauds Section are prosecuting this case ...

Pursuant to Section 11759.1 of the California Insurance Code, the Workers’ Compensation Insurance Rating Bureau has prepared its 2022 California Workers’ Compensation Losses and Expenses report containing estimated California workers’ compensation costs for 2022 based on insured employer experience. The report also reflects payments made by the California Insurance Guarantee Association (CIGA) in the statewide loss payments for calendar years 2010 through 2022. Highlights from the report are as follows: - - Calendar year 2022 earned premium totaled $15.3 billion (as compared to the $13.6 billion of premium earned in 2021). - - Total insurer paid losses (i.e., excluding payments made by CIGA) in 2022 were $8.3 billion, or 54% of calendar year earned premium. Combining insurer paid losses with a $0.8 billion increase in total insurer loss reserves resulted in total insurer incurred losses, excluding payments made by CIGA, of $9.1 billion, or 60% of the premium earned in 2022 - - In 2022, $4.4 billion, or 53% of total loss payments, were for medical benefits. - - In 2022, $4.0 billion, or 47% of total loss payments, were for indemnity benefits (including vocational rehabilitation benefits). - - In total, about $72 million in vocational rehabilitation-related benefits were paid in calendar year 2022. This was 1.8% of all indemnity payments in 2022, of which 92% was for education related benefits. (For comparison purposes, in 2021, vocational rehabilitation benefits paid was $67 million, or 1.8% of all indemnity payments, of which 90% was for education-related benefits.) - - Insurer incurred loss adjustment expenses (allocated and unallocated) in 2022 were $2.7 billion, or 17% of earned premium. This includes the full cost to insurers of administering, adjudicating and settling claims. Incurred loss adjustment expenses include $850 million in defense attorney expenses incurred in 2022. (For comparison purposes, in 2021, incurred loss adjustment expenses were 16% of earned premium, including $806 million in defense attorney expenses.) - - Although generally part of incurred indemnity losses rather than expenses, the amount paid in 2022 to applicant attorneys was derived from the WCIRB’s Annual Expense Call. In 2022, applicant attorneys were paid $395 million. (In 2021, applicant attorneys were paid $389 million) - - In total, incurred losses and expenses in calendar year 2022 were $15.0 billion, or 98% of earned premium. Based on insurer statutory Annual Statement information, the WCIRB estimates policyholder dividends incurred in 2022 to be 0.6% of 2022 earned premium, resulting in an underwriting profit of $0.2 billion ...

66 year old Chunli Zhao, a Chinese citizen, allegedly shot and killed four workers and wounded a fifth employee last January 23rd at California Terra Garden. He then went to nearby Concord Farms, where he had worked previously, and allegedly fatally shot three former co-workers. Zhao told KNTV-TV in a courthouse interview that he committed the shootings, then drove to the police station to turn himself in. But no one was there, so he waited about two hours in the parking lot for officers to finally approach and arrest him. He said he was bullied and worked long hours on the farms and his complaints were ignored, the station reported. He also told the reporter who interviewed him that he has a green card, but had no problem buying a gun in 2021. He also said he thinks he is mentally disturbed, according to the report of the interview. In a jail interview with NBC News Zhao claimed a forklift he was operating was hit by a coworker on a bulldozer and that he was asked to pay $100 to cover the cost of the damage. Zhao went on to say he vented his frustration over the bill 30 minutes before the shooting. He then went back to confront his boss again, shooting both his supervisor and the coworker he blamed for the accident. According to CBS News, the San Mateo County District Attorney confirmed a report that the Half Moon Bay mass shooting suspect claimed the incident stemmed from his anger over a $100 equipment bill. The victims who died have been identified as Zhishen Liu, 73, Aixiang Zhang, 74, Qizhong Cheng, 66, Jingzhi Lu, 64, Marciano Martinez Jimenez, 50, Yetao Bing, 43, and Jose Romero Perez, 38. An eighth victim, Pedro Romero Perez, was critically injured but survived the shooting. A spokesperson for California Terra Garden confirmed Zhao lived on the property with his wife, but said the farm had no knowledge of any bullying complaints. Zhao has a history of threatening coworkers, according to court documents obtained by the ABC7 News I-Team. In 2013, Chunli Zhao had a restraining order filed against him by a former roommate and coworker. They both worked at a restaurant when Zhao reportedly lost his job, the documents say. According to these documents, the roommate says Zhao threatened that if he didn't get his job back, he would kill him. Zhao, at one point, even held a pillow over his face, reportedly trying to suffocate him. The documents also note he said, "he wants to come back to work. If this can't be done, this will be a bigger problem which will not be good, pleasant for anyone." He pleaded not guilty to seven counts of murder and one count of attempted murder at his arraignment on February 16. Prosecutors say this was the deadliest attack in San Mateo County’s history. In the aftermath of this tragedy, Cal/OSHA has now cited the two employers in Half Moon Bay following an investigation into the workplace violence that killed the seven agricultural workers on January 23, 2023. Cal/OSHA cited California Terra Garden, Inc. for 22 violations, including five classified as serious and one classified as serious accident-related for failing to have a plan or procedures to immediately notify employees of an active shooter threat and instruct them to seek shelter. Total proposed penalties are $113,800. Concord Farms Inc. was cited for 19 violations, three of them serious, including failure to address previous incidents of workplace violence and develop procedures to correct and prevent this hazard. Total proposed penalties are $51,770. Both employers were cited for failing to establish a workplace safety plan that evaluated the threat of workplace violence and train workers in a language they can understand. Both employers were also cited for failure to secure labor camp permits for onsite worker housing. Other state agencies continue to investigate at the worksites, which may result in additional enforcement actions ...