Individuals from two Bay Area construction companies were arraigned on charges of conspiring to misclassify workers to avoid paying workers' compensation insurance, payroll taxes, and insurance premiums. Complaints were filed in the Contra Costa County Superior Court. The first complaint against 57-year-old Candido Silva, 42-year-old Itamar De Morais Junior, and 42-year-old Irma Ruiz-Alarcon of Atlas Pavers of Concord details how they unlawfully paid over $12 million to its unlicensed and misclassified construction crews from 2016 through 2019. The complaint also alleges that the defendants discussed a desire to avoid insurance with the State Compensation Insurance Fund because they knew that SCIF would require an audit of the company’s books. The second complaint charged 62-year-old Christopher Ray Vieira and 60-year-old Gilbert Roland Guiotti with operating Centrox Construction of San Bruno as a shell company to route unlawful payments to unlicensed subcontractors for Atlas Pavers and others. Both men have been charged with the unlawful use of their CSLB license to aid and abet payments from companies advertising to consumers as licensed contractors to their unlicensed and misclassified subcontractor labor crews. Moreover, the complaint alleges Centrox received a percentage for routing millions of dollars in payroll funds to unlicensed and misclassified subcontractor crews -- while fraudulently underreporting the worker’s total compensation amounts to SCIF. The investigation into Atlas Pavers and Centrox Construction was conducted by the Contra Costa District Attorney’s Office, Contractors’ State Licensing Board, and the California Department of Insurance. District Attorney Diana Becton said that "Prosecuting insurance fraud is about protecting workers, holding those responsible accountable, and stopping unlawful business schemes." California law requires contractors to be licensed in their specialized field, obtain workers’ compensation insurance ...

Following a one week trial, a federal jury convicted Donald Siao, a 58 year old licensed physician who practices family medicine in San Jose, of twelve counts of distributing the controlled substances Oxycodone and Hydrocodone outside of the usual course of his professional practice and without a legitimate medical purpose. The evidence at his trial, showed that after identifying Siao in a separate prescription fraud investigation, investigators reviewed a California state database and discovered Siao had written 8,201 prescriptions for controlled substance medications in just the one-year period from May 2016 to May 2017. An investigation followed and resulted in Siao prescribing Oxycodone and Hydrocodone in increasing quantities over seventeen visits by four separate undercover law enforcement agents posing as patients. The undercover agents received prescriptions from Siao despite complaining of only vague pain or discomfort, requesting specific opioids by name, and admitting to sharing the pills with friends and coworkers. Evidence at trial further established that Siao prescribed dangerous opioids to his patients E.J. and A.J., a mother and son, notwithstanding obvious red flags. Siao continued to prescribe opioids to the mother E.J. after she repeatedly claimed that her pills had been lost or stolen, despite Siao receiving an alert from E.J.’s insurer regarding her opioid prescriptions and despite Siao being advised that E.J. was jailed for selling pills, which was documented in Siao’s medical file for E.J. Similarly, Siao prescribed opioids to the son A.J. after he overdosed twice. Siao continued to prescribe opioids to A.J. after A.J. repeatedly claimed the opioids were lost or stolen and even after he had been flagged by his prior medical provider for drug-seeking behavior, after his mother reported he had stolen her medications, and after A.J.’s mother E.J. fatally overdosed on opioids. These facts were all documented in Siao’s medical file for A.J. Trial evidence also demonstrated that Siao refused to heed warnings that his prescriptions were dangerous. Evidence showed Siao was aware that DEA closely scrutinized opioid prescriptions and pointed out to one of the undercover officers posing as a patient that a nationwide epidemic was underway in which large numbers of people were addicted to and dying from opioids. Siao nevertheless continued to prescribe opioids to the agents upon their request and with little to no physical examination, sometimes after visits lasting only a few minutes. Law enforcement agents interviewed Siao in November 2018 about his prescribing practices, and Siao admitted he was aware of the California Medical Board’s Guidelines for Prescribing Controlled Substances for Pain. During trial, Siao also admitted that he had been taught about the dangers of addiction and how to identify drug-seeking patients. The jury convicted Siao of twelve counts of distributing opioids outside the usual course of professional practice and without a legitimate medical purpose, all in violation of 21 U.S.C. § 841(a)(1). Of the 12 counts, four related to the undercover agents and eight related to E.J. and A.J. U.S. District Judge Freeman scheduled Siao’s sentencing for November 7, 2023. Each of the twelve counts carries a maximum sentence of 20 years in prison. The United States is also seeking forfeiture of Siao’s medical license. The court may also order additional fines, restitution, and supervision upon release from prison as part of any sentence. However, any sentence will be imposed by a court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553. Assistant U.S. Attorneys Amani Floyd and Dan Karmel are prosecuting the case with the assistance of Mimi Lam. The prosecution is the result of an investigation by DEA, HHS-OIG, and the California Department of Justice Division of Medi-Cal Fraud and Elder Abuse. The case was investigated and prosecuted by member agencies of the Organized Crime Drug Enforcement Task Force (OCDETF), a focused multi-agency, multi-jurisdictional task force investigating and prosecuting the most significant drug trafficking organizations throughout the United States by leveraging the combined expertise of federal, state, and local law enforcement agencies ...

Career satisfaction, intention to leave jobs, and mental health and wellbeing issues among registered nurses have gotten significantly worse since the midst of the COVID-19 pandemic, according to the AMN Healthcare 2023 Survey of Registered Nurses. The AMN Healthcare 2023 Survey of Registered Nurses, based on responses from more than 18,000 nurses in January 2023, found that career satisfaction dropped by 10 percentage points since the middle of the pandemic in 2021. In addition, the likelihood of encouraging others to become a nurse declined 14 points since 2021. Workforce challenges are the number one problem faced by healthcare executives, replacing financial issues, which for decades were cited as the top problem. Among the survey’s findings: - - Only 15% of hospital nurses say they will continue in the same job in one year. - - 30% of nurses are likely to leave career due to the pandemic, up 7 points since 2021. - - Four of five nurses experience a great deal or a lot of stress, up 16 points since 2021. - - More nurses worry that their job is affecting their health, up 19 points from 2021. - - Nurses who said they often feel emotionally drained was up 15 points from 2021. - - Career satisfaction dropped to 71% in 2023 after holding steady at 80-85% for a decade. The survey shows how the Great Resignation has impacted the healthcare workforce, with only 15% of hospital nurses saying they will "continue working as I am" in one year. Among all nurses, only 40% said they will continue in the same job in one year -- a 5-percentage-point drop since 2021. The remainder will seek a new staff nursing job; work as a travel nurse, part-time or per diem; take a job outside patient care; return to school; or leave nursing altogether. Nurse satisfaction and quitting issues may be driven by rising mental health and wellbeing problems for nurses, which have dramatically increased since the middle of the pandemic in 2021. Mental health problems increased by double digits. Meanwhile, more than one-third of nurses (35%) never address mental health and wellbeing issues. One in five nurses (20%) address their mental health and wellbeing at least four times a week, a decrease of 4 points from 2021 (24%). Particularly concerning is that younger nurses’ responses were more negative than older nurses regarding satisfaction and mental health and wellbeing. One cause of the post-pandemic rise in problems affecting nurses may be a shift in public attention. "During the pandemic, nurses were widely lauded as heroes in the media and public acclaim, which buoyed our spirits and pride during the worst national public health crisis in our lifetimes," Edmonson said. "But as pandemic conditions waned, the accolades subsided and the focus on nurse wellbeing wavered." Data from the 2023 survey points the way toward solutions to the current situation. Comparisons show that positives are interrelated - reduction in stress and utilization of mental health and wellbeing services result in better career satisfaction and job retention. Also needed is a systemic transformation in how organizations view and deploy the healthcare workforce and widespread adoption of technology and systems that can help ease the stress on nurses. Healthcare organizations need the flexibility for the most effective and efficient way to cover the work that needs to be done at the unit and enterprise levels. Achieving these goals requires a collaborative national campaign of healthcare organizations; professional organizations; organizations representing patient groups; civil society such as the major health nonprofits; government agencies; elected officials; and nurses themselves. "The survey data reveal the depth of the problems faced in nursing today and concludes with solutions that could help alleviate the strain posed by systemic staffing shortages and exacerbated by the pandemic," said AMN Healthcare Chief Clinical Officer Dr. Cole Edmonson, DNP, RN, NEA-BC, FACHE, FAONL, FNAP, FAAN. "The health of our nation is tied directly to the health of the nursing workforce." The full report is available on AMNHealthcare.com ...

Grace Nunes sustained two admitted industrial injuries while employed by the State of California, Department of Motor Vehicles. In Case No. ADJ8210063, she sustained injury to her neck, upper extremities, and left shoulder, on September 13, 2011. In Case No. ADJ8621818, she sustained injury to her bilateral upper extremities from September 13, 2010 to September 13, 2011. The parties selected Melinda Brown, M.D., to act as the qualified medical evaluator (QME) in orthopedic medicine. Dr. Brown opined that "[functionally, I do not believe [applicant] would be employable in the open-labor market based on evaluation today ... I do believe her inability to work is based on a pain basis and function." Applicant’s vocational expert Gene Gonzales evaluated her and issued a report addressing her feasibility for vocational retraining. He Mr. concluded that the "transferable skills analysis tool revealed that applicant sustained a 100 percent loss of access to her open labor market." Gonzales also addressed apportionment by acknowledging Dr. Brown’s determination that applicant’s left shoulder injury was 100 percent industrial, while 40 percent of the cervical spine injury was attributed to nonindustrial factors. Mr. Gonzales said that "From a vocational standpoint, Ms. Nunes’ preexisting/non-industrial degenerative condition had zero impact to her earning capacity given applicant’s work history." Gonzalez went on to say that "the limitations that have rendered Ms. Nunes 100 percent permanently and totally disabled are a direct result of the left shoulder and cervical spine injury on September 13, 2011. It should be noted that standing alone, absent the right elbow/shoulder condition, carpal tunnel syndrome, and diabetic condition, Ms. Nunes’ functional limitations and chronic pain clearly render her 100 percent permanently and totally disabled. Without question, vocational apportionment in Ms. Nunes’ case is 100 percent industrial and attributable to the specific injury of September 13, 2011." Dr. Koobatian performed a VR assessment on behalf of the employer and concluded that "it is likely that Ms. Nunes is not employable in the competitive labor market resulting in a substantial loss of future earning capacity." However, the report also detailed nonindustrial factors of apportionment to the cervical spine, right upper limb, and left carpal tunnel, as identified by Dr. Brown. He concluded that "while the majority of Ms. Nunes’ present medical barriers are industrial in origin .... at least 10% vocational apportionment from non-industrial medical factors is attributable to Ms. Nunes’ inability to compete in the open labor market and participate in vocational rehabilitation services." The parties proceeded to trial on the issue of permanent disability, apportionment, attorney’s fees, and whether "applicant rebutted the AMA Guides for permanent total disability." The WCJ found that applicant is entitled to an unapportioned award of 100 percent industrial disability based on the analysis that "applicant has rebutted the AMA Guides. She’s found to be 100% disabled as there is no evidence of previous loss of earnings capacity." Reconsideration was granted and the F&A was rescinded in the En Bank decision of Grace Nunes v State of California, Department of Motor Vehicles -ADJ8210063- ADJ8621818 (June 2023). Section 4663(c) does not provide for collateral sources of expert opinion as to apportionment, and further does not authorize the application of any other standard of apportionment. "Accordingly, 'vocational apportionment' offered by a non-physician is not a statutorily authorized form of apportionment. In addition, apportionment determinations that deviate from the mandatory standards described in section 4663(c) are not a valid basis upon which to determine permanent disability." "Pursuant to section 4663(c), evaluating physicians play an integral role in the determination of permanent disability. It is therefore appropriate and often necessary that evaluating physicians consider the vocational evidence as part of their determination of permanent disability, including factors such as whether applicant is feasible for vocational rehabilitation, and whether the reasons underlying applicant’s non-feasibility for vocational retraining arise solely out of the present industrial injury or are multifactorial." "The same considerations used to evaluate whether a medical expert’s opinion constitutes substantial evidence are equally applicable to vocational reporting. In order to constitute substantial evidence, a vocational expert’s opinion must detail the history and evidence in support of its conclusions, as well as "how and why" any specific condition or factor is causing permanent disability." "While vocational evidence may be utilized to assess factors of permanent disability, including whether an injured employee is feasible for vocational retraining, in order to constitute substantial evidence, vocational reporting must consider valid medical apportionment." ... "The apportionment analysis required under 4663(a) and Escobedo, supra, does not permit reliance on facts offered in support of a competing theory of apportionment." "Accordingly, a vocational report is not substantial evidence if it relies upon facts that are not germane, marshalled in the service of an incorrect legal theory. Examples of reliance on facts that are not germane often fall under the rubric of "vocational apportionment," and include assertions that applicant’s disability is solely attributable to the current industrial injury because applicant had no prior work restrictions." Thus the WCAB En Banc concluded by saying: 1. Section 4663 requires a reporting physician to make an apportionment determination and prescribes the standard for apportionment. The Labor Code makes no statutory provision for "vocational apportionment." 2. Vocational evidence may be used to address issues relevant to the determination of permanent disability. 3. Vocational evidence must address apportionment, and may not substitute impermissible "vocational apportionment" in place of otherwise valid medical apportionment. "Applying these principles to the present matter, we conclude that the current medical and vocational record is analytically incomplete. Accordingly, we will rescind the F&A and return this matter to the trial level for further proceedings consistent with this opinion." ...

The health care system has undergone major changes in the past decade, and emergency department (ED) crowding has worsened over time; however, the most recent patterns in ED capacity and use in California have yet to be studied. Given this increased burden on EDs, ensuring a sufficient supply of ED resources is important, particularly for California, which ranked ninth in the nation in 2022 for states with the longest ED waiting times, with a median waiting time of 164 minutes. Crowding in the ED is a substantial concern because it has been associated with increased mortality, longer lengths of stay, and clinician error. So researchers from the University of California San Francisco decided to investigate how have emergency department (ED) capacity and use changed in California since 2011, and has the supply of acute care resources kept up with the demand for ED care? This retrospective cohort study used data from the California Department of Health Care Access and Information and the US Census Bureau to analyze ED facility characteristics from more than 400 general acute care hospitals with more than 320 EDs in California as well as patients who presented to those EDs between January 1, 2011, and December 31, 2021. The study was published Thursday in the Journal of the American Medical Association Network Open, and it found that statewide, emergency departments and hospital beds both declined, by 3.8% and 2.5%, respectively, over the 10-year period. At the same time, the number of annual visits to ERs grew by 7.4%, from 12.1 million to 12.9 million. The number of annual visits for severe conditions shot up in particular, by 68%, from 2 million to 3.4 million. The decrease in the number of EDs from 2011 to 2021, may be a result of facility closures and/or hospital consolidation. Closures of EDs are often a symptom of insufficient hospital funding, and staffing shortages have also been cited as a major challenge in keeping EDs open. With a greater number of sick days and higher rates of burnout among nurses, technicians, and other staff, the strain on EDs has worsened in recent years. In contrast, the number of ED treatment stations and treatment stations per 1 million people increased over the study period, revealing somewhat conflicting results regarding overall changes in capacity. However, this expansion has happened within a smaller number of total EDs, meaning that certain geographic areas have seen their access to emergency care wane while other areas have seen it expand. A previous study found that most ED expansion has been localized in affluent (or more commercially insured) areas, supporting the idea that increased ED capacity has not occurred evenly across all populations. When examining facilities by ownership, we found that not-for-profit hospitals were consistently the most common type of hospital in California, while the number of government-owned hospitals decreased over time. This finding is consistent with results from a study of previous patterns in ownership, which found that nationally, public hospitals have closed at a faster rate than private hospitals, mainly due to the government’s financial constraints after the 2008 recession. This pattern is particularly concerning because public hospitals are major sources of safety net care, and closures have been associated with decreased access to care and worse overall health among patients in surrounding communities ...

The Food and Drug Administration Safety and Innovation Act (FDASIA) was enacted on July 9, 2012. Title X of FDASIA, which addresses drug shortages, took effect on the date of enactment and, among other things, amended the Federal Food, Drug, and Cosmetic Act by adding section 506C-1, which requires the Food and Drug Administration to file an annual report to Congress on drug shortages. This Tenth Annual Report to Congress published by the FDA on June 7, 2023 summarizes the major actions taken by the U.S. Food and Drug Administration during calendar year 2022 to prevent or mitigate drug shortages in the United States. As a result of presidential, congressional, and Agency actions, manufacturers are notifying FDA earlier than in the past about certain manufacturing interruptions and discontinuances that can lead to shortages. The FDA reports that at the height of the drug shortage crisis, the number of new drug shortages tracked by Center for Drug Evaluation and Research (CDER) quadrupled, from approximately 61 shortages in 2005 to more than 250 in 2011. "The number of new drug shortages per calendar year has declined from a high of 250 in 2011 to 49 in 2022". Although the number of new drug shortages has declined since 2011, the FDA in general terms cautions that "shortages continue to pose a real challenge to public health, particularly when the shortage has involved a critical drug to treat cancer, to provide parenteral nutrition, or to address another serious medical condition, such as a shortage of antibiotics." The FDA report is very general and does not specifically point out a supply crisis on the immediate horizon. But a new report just published by Kaiser Health News does not depict a good picture for shortages, especially in the generic drug marketplace. KHN reports that Cisplatin and carboplatin are among scores of drugs in shortage, including 12 other cancer drugs, attention-deficit/hyperactivity disorder pills, blood thinners, and antibiotics. It claims that "Covid-hangover supply chain issues and limited FDA oversight are part of the problem, but the main cause, experts agree, is the underlying weakness of the generic drug industry. Made mostly overseas, these old but crucial drugs are often sold at a loss or for little profit. Domestic manufacturers have little interest in making them, setting their sights instead on high-priced drugs with plump profit margins." "The 10 cancer clinicians KFF Health News interviewed for this story said that, given current shortages, they prioritize patients who can be cured over later-stage patients, in whom the drugs generally can only slow the disease, and for whom alternatives - though sometimes less effective and often with more side effects - are available. But some doctors are even rationing doses intended to cure." The causes of shortages are well established. The average net price of generic drugs fell by more than half between 2016 and 2022, according to research by Anthony Sardella, a business professor at Washington University in St. Louis. And some generic manufacturers are going out of business. Akorn, which made 75 common generics, went bankrupt and closed in February. Israeli generics giant Teva, which has a portfolio of 3,600 medicines, announced May 18 it was shifting to brand-name drugs and "high-value generics." Lannett Co., with about 120 generics, announced a Chapter 11 reorganization amid declining revenue. Other companies are in trouble too, said David Gaugh, interim CEO of the Association for Accessible Medicines, the leading generics trade group. The generics industry used to lose money on about a third of the drugs it produced, but now it’s more like half, Gaugh said. So when a company stops making a drug, others do not necessarily step up, he said. Officials at Fresenius Kabi and Pfizer said they have increased their carboplatin production since March, but not enough to end the shortage. On June 2, FDA Commissioner Robert Califf announced the agency had given emergency authorization for Chinese-made cisplatin to enter the U.S. market, but the impact of the move wasn’t immediately clear. So KHN concludes by saying "Despite a drug shortage task force and numerous congressional hearings, progress has been slow at best. The 2020 CARES Act gave the FDA the power to require companies to have contingency plans enabling them to respond to shortages, but the agency has not yet implemented guidance to enforce the provisions." ...

Alta Vista Healthcare & Wellness Centre, LLC, a skilled nursing facility in Riverside, California, and its management company, Rockport Healthcare Services, a privately held California corporation that provides management services to skilled nursing facilities, have entered into a settlement agreement to pay the United States and California a total of $3.825 million to resolve allegations that they submitted and caused the submission of false claims to Medicare and Medicaid by paying kickbacks to physicians to induce patient referrals. The settlement amount was negotiated based on Alta Vista’s and Rockport’s lack of ability to pay. The Anti-Kickback Statute prohibits offering or paying remuneration to induce the referral of items or services covered by Medicare, Medicaid, and other federally funded programs. It is intended to ensure that medical decision-making is not compromised by improper financial incentives and is instead based on the best interests of the patient. From 2009 through 2019, Alta Vista, under the direction and control of Rockport, gave certain physicians extravagant gifts, including expensive dinners for the physicians and their spouses, golf trips, limousine rides, massages, e-reader tablets, and gift cards worth up to $1,000. Separately, Alta Vista paid these physicians monthly stipends of $2,500 to $4,000, purportedly for their services as medical directors. At least one purpose of these gifts and payments was to induce these physicians to refer patients to Alta Vista. The defendants’ conduct allegedly resulted in false claims to Medicare and California’s Medicaid programs, the latter of which is jointly funded by the federal government and California. Under the settlement, they will pay $3,228,300 to the United States and $596,700 to California. The settlement stems from a whistleblower complaint filed in 2015 by a former Alta Vista accounting employee, Neyirys Orozco, pursuant to the qui tam provisions of the False Claims Act, which permit private persons to bring a lawsuit on behalf of the government and to share in the proceeds of the suit. Orozco will receive $581,094 as her share of the federal government’s recovery in this case. In addition to resolving their False Claims Act liability, Alta Vista and Rockport have entered into a five-year Corporate Integrity Agreement with the HHS-OIG which requires, among other compliance obligations, an Independent Review Organization’s review of Alta Vista’s and Rockport’s physician relationships. This matter was handled by the Civil Division's Commercial Litigation Branch, Fraud Section, the U.S. Attorney’s Office for the Central District of California, and the California Department of Justice, with investigative support from the HHS-OIG. The case is captioned United States of America ex rel. Neyiris Orozco v. Shlomo Rechnitz et al., No. 15-cv-6177 (C.D. Cal.) ...

Skye Gray was a caregiver who had been hired by Comfort Keepers Home Care. Employees bid on available shifts and are required to have reliable transportation to get to the shifts. An employee would contact the employer via email when the employee was available for a shift. The employee may accept or reject an assignment. She was driving to her shift in her personal vehicle when she was involved in a motor vehicle accident shortly before midnight. This was the first time she had been to this particular location. She was in a coma for a period after the accident, and was pregnant at the time of the injury and miscarried after the auto accident. She did request that she be assigned to this shift, and this specific job did not require her to run errands for the client or take the client anywhere. The distance between Gray’s home and her job assignment was 17-23 miles. She was not traveling between assignments at the time of the MVA. She was not carrying supplies or tools for the employer. Grey was required to have reliable transportation. The employer testified that a bus pass would be sufficient. But in this case,was traveling late at night to a new location, and it is unknown whether any public transportation was even available at that time of day, to the location she was traveling. She was not travelling to a fixed business at a fixed time. The only issue submitted for decision was whether the injury was AOE/COE, specifically whether or not the automobile accident occurred during the course and scope of her employment. The parties requested that the going and coming rule be addressed. The WCJ found the injury to be compensable and that it was not barred by the going and coming rule. The employer's Petition for Reconsideration was denied in the panel decision of Gray v Comfort Keepers Home Care -ADJ13210964 (June 2023). "Under the well established going and coming rule, an employee does not pursue the course of his employment when he is on his way to or from work." (Smith v. Workmen’s Comp.App.Bd. (1968) 69 Cal.2d 814, 815-816 [33 Cal.Comp.Cases 771] Thus, injuries sustained while an employee is "going and coming" to and from the place of employment do not normally arise out of and in the course of employment because the employee is neither providing benefit to the employer nor under the control of the employer during that commute. However, the California Supreme Court held that the rule applies to a "local commute enroute to a fixed place of business at fixed hours." (Hinojosa v. Workers’ Comp. Appeals Bd. (1972) 8 Cal.3d 150, 157 [37 Cal.Comp.Cases 734)] (Zhu v. Workers’ Comp. Appeals Bd. (2017) 12 Cal.App.5th 1031, 1038 [82 Cal.Comp.Cases 692].) The panel went on to conclude that "there is substantial evidence in this case to apply the 'required vehicle' exception to the going and coming rule. The 'required vehicle' exception may be invoked when 'the employee is expressly or impliedly required or expected to furnish his own means of transportation to the job (Smith v. Workmen’s Comp. App. Bd. (1968) 69 Cal.2d 814 [73 Cal. Rptr. 253, 447 P.2d 365]).- (Hinojosa v. Workemen’s’ Comp. Appeals Bd. (1972) 8 Cal.3d 150, 160 [37 Cal.Comp.Cases 734] (Hinojosa).)" "The exception ‘arises from the principle that an employee 'is performing service growing out of and incidental to his employment' (Lab. Code, § 3600) when he engages in conduct reasonably directed toward the fulfillment of his employer's requirements, performed for the benefit and advantage of the employer.’ (Smith, supra, at pp. 819-820.) (Zhu v. Workers’ Comp. Appeals Bd. (2017) 12 Cal.App.5th 1031, 1039 [82 Cal.Comp.Cases 692].) ...

California workers’ comp private self-insured claim frequency rose 6% last year as both medical-only and indemnity claim volume increased, but a California Workers' Compensation Institute (CWCI) review of initial data from the state Office of Self-Insurance Plans (OSIP) suggests that many of the claims may have been low-cost COVID-19 cases, as private self-insureds’ average paid and incurred losses both declined, so their total paid losses at first report fell 1.2% to $311 million, while their incurred losses fell 3.3% to just under $812 million. OSIP's summary of private self-insured data, issued June 6, offers a first glimpse at California private, self-insured claims experience for cases reported in 2022. It notes the total number of covered employees, medical-only and indemnity claim counts, and total paid and incurred losses on those claims through the end of the year. The summary reports on the experience of private self-insured employers who covered 2.49 million California workers last year (vs. 2.38 million in the 2021 initial report) and who reported 104,278 claims in 2022, 11.6% more than the 93,430 claims noted in the 2021 initial report. The distribution by claim type was almost evenly split, as private self-insured employers reported 52,300 medical-only claims in 2022, up 7.2% from 48,766 in 2021; while they reported 51,978 indemnity claims, up 16.4% from the 2021 first report level. This marked the third year in a row that the private self-insured indemnity claim count has risen, as the tally went from 34,307 claims in 2019 (the last year before the pandemic) to 42,724 claims in 2020, then rose to 44,664 claims in 2021, before the addition of 7,314 more indemnity claims last year. The overall claim count for 2022 works out to 4.31 claims (2.16 medical-only and 2.15 indemnity) per 100 private self-insured employees, the highest rate in at least 16 years. Despite increasing claim volume and claim frequency, first report total paid losses for 2022 fell 1.2% to $311 million, as total paid medical declined by $6.9 million to $149.2 million, (-4.4%), more than offsetting the $3.2 million increase in paid indemnity, which rose 2.0% to $161.9 million. The average paid loss on a 2022 claim in the initial report was $2,983, down 11.5% compared to 2021 as average medical payments per claim fell 14.3% to $1,431, and average paid indemnity fell 8.7% to $1,552. First report total incurred losses on the private self-insured incurred claims, which include paid benefits plus reserves for future payments, also fell in 2022, declining by $28.0 million (3.0 percent) to $811.8 million. Here too, the overall decline was due to the decline on the medical side, as total incurred medical fell by $30.5 million (6.1%) to $466.7 million, while total incurred indemnity showed little change, increasing by $2.5 million (0.7%) to $345.1 million. The declines in private self-insureds’ total paid and incurred losses in the face of an 11.5% increase in claim volume - which included an additional 7,314 indemnity claims - suggests an influx of relatively inexpensive claims. CWCI notes that many of those may have been COVID-19 claims as its online COVID-19 claim application shows there were 112,298 COVID-19 claims in 2022, and 61.2% of those involved self-insured employers, including health care employers such as hospitals and large retailers, many of which are private self-insureds. The increased number of inexpensive claims helped drive down private self-insureds’ average incurred medical (-15.9%) and average incurred indemnity (-9.8%) last year, so the total average incurred per claim at first report fell from $8,988 in 2021 to $7,785 in 2022 (-13.4%). OSIP's summary of private self-insured’s calendar year 2022 data follows the December 2022 release of public self-insured claims data for fiscal year 2021/2022. The private and public self-insured claim summaries from the past 20 years are posted at http://www.dir.ca.gov/SIP/StatewideTotals.html. CWCI members and subscribers may log on to the Communications section of the CWCI website www.cwci.org to view a summary Bulletin with more details, analyses, and graphics ...

The VA Accountability and Whistleblower Protection Act of 2017 is a law that was passed by the United States Congress to improve accountability and whistleblower protection within the Department of Veterans Affairs. Prior to passage of this act,it was whistleblowers who helped expose the nationwide scandal over long waits for care. Beginning in 2014, VA medical facilities across the country were found to have covered up delays in providing care, making waits as long as four months appear much shorter. The law created a new Office of Accountability and Whistleblower Protection (OAWP) within the VA, which is responsible for investigating allegations of misconduct and retaliation against whistleblowers. The law also expanded the definition of protected disclosures to include allegations of gross mismanagement, gross waste of funds, and abuse of authority. Following passage of the Act, members of Congress asked the Office of the Inspector General to determine the success or failure of the VA in implementing this Act. The OIG reported in October 2019 that implementation was not successful. For example it said that "A critical purpose of the Act was to facilitate holding Covered Executives accountable for misconduct and poor performance. However, as of May 22, 2019, the Inspector General determined that VA had removed only one Covered Executive from federal service pursuant to the authority provided by the Act." And it does not seem that things have gotten much better since the 2019 OIG report. Earlier this year Rep. Jay Obernolte (R-Calif.) issued a press release stating that the VA informed him that "it will no longer use the tools provided by the bipartisan VA Accountability and Whistleblower Protection Act, which was signed into law in 2017" citing that this was "because the Biden administration paused the use of the law." His consternation at the time of this press release was his request for "answers on a situation at the Loma Linda VA Medical Center (VAMC) where a supervisory employee continues to be employed by the medical center despite creating a hostile work environment, ultimately reducing accountability, impacting employee morale, and hindering the good delivery of services to veterans." Also last April 2023, U.S. Senators Marco Rubio (R-FL) and Steve Daines (R-MT) sent a letter bashing U.S. Department of Veterans Affairs Secretary Denis McDonough for announcing the VA will ignore important provisions of the VA Accountability and Whistleblower Protection Act that require the agency to hold bad employees accountable. The Government Executive website confirmed the VA decision to discontinue use of the Act starting April 3. It claims the reason was that the "Federal Labor Relations Authority found VA violated its collective bargaining agreement with the American Federation of Government Employees when it eliminated 'performance improvement plans' from the pre-disciplinary process. The decision required VA to reinstate all employees fired without first being provided such a plan, a process McDonough told members of Congress on Thursday is currently under negotiation." And the situation at Loma Linda VA is discussed in detail by a news story published on June 18 by Military.com. According to it's report, several VA Loma Linda Healthcare System whistleblowers have come forward with new allegations of retaliation, harassment and hostile working conditions amid a widening investigation by the House Veterans Affairs Committee. Last Friday, committee member Jay Obernolte, met behind closed doors with VA Loma Linda’s interim director Bryan Arnette, and other officials to discuss the whistleblower complaints and map out needed changes. "Sometimes in federal government - we can create a workplace environment that is tolerant of people that don’t follow the rules," Obernolte said during a press briefing following the meetings without offering specific details about what was discussed. "We want to make sure that doesn’t occur." Separately, staff members from the House Veterans Affairs Subcommittee on Oversight and Investigations met with whistleblowers at an undisclosed location to review their complaints that suggest systematic failures by the federal government to address problems at VA Loma Linda. Obernolte declined to disclose the specific nature of the confidential whistleblower allegations Obernolte’s visit follows a Southern California News Group report in May that revealed a 2021 federal investigation found that a VA Loma Linda manager frequently used racial slurs, required workers to buy him food and drive him to and from work, and then punished those who refused his demands with bad assignments.However, instead of being terminated for creating a hostile work environment, the manager - identified by multiple sources as grounds department supervisor Martin Robles - was inexplicably promoted. "There were numerous instances where inappropriate language and racial slurs were used which appears to be a common practice," a Veterans Administration investigative board said in a heavily redacted 61-page report obtained by the Southern California News Group. "Inappropriate and discriminatory hiring practices were found, which have contributed to the lack of trust, poor morale, and fractured culture." The Administrative Investigation Board (AIB) recommended Robles be removed from employment because of "overwhelming evidence to support that the supervisor was intimidating, exhibited bullying behavior, threatening behavior, and contributed to a hostile work environment," said a source familiar with the probe. The AIB investigation, which began on Dec. 9, 2020, and concluded the week of Jan. 11, 2021, included 57 hours of testimony from 36 witnesses and 4,000 pages of exhibits. Robles also was the focus of two other VA Loma Linda investigations in 2020 and 2022 that substantiated allegations he fostered a hostile work environment. Details of those two investigations were not immediately available. The controversy involving Robles is the latest in a string of troubling incidents involving VA Loma Linda employees ...

The U.S. Chamber of Commerce filed a lawsuit this month in U.S. District Court in Dayton, Ohio, arguing that the price-negotiation program created under last year’s Inflation Reduction Act. is unconstitutional, violating due proces and other protections. The Chamber lawsuit was filed just days after pharmaceutical giant Merck & Co. filed a similar federal lawsuit in the U.S. District Court the District of Columbia in early June. Merck alleges the negotiation setup is a violation of the Fifth Amendment, which requires the government to fairly compensate companies or individuals for property that is used for the public good among other theories. Then last Friday, Bristol Myers Squibb filed a similar lawsuit in the U.S. District Court for the District of New Jersey. As part of the Inflation Reduction Act (IRA) passed last summer, Congress established something called the "Drug Price Negotiation Program" for Medicare. The Program’s name suggests a framework under which federal officials sit down with prescription drug manufacturers and negotiate voluntary price agreements that will save money for American taxpayers while ensuring that the companies remain able to continue investing billions of dollars into research and development of new life-saving medicines. Under the Inflation Reduction Act, Medicare will begin negotiating prices for the drugs that it spends the most on beginning in 2026. This provision amends Medicare’s noninterference clause - which prevents the secretary of the U.S. Department of Health & Human Services (HHS) from interfering with negotiations between drug manufacturers, pharmacies and Medicare prescription drug plans - and establishes a new Drug Price Negotiation Program. Days after the IRA was passed, the biopharma industry blasted the policy. According to an analysis by PhRMA "These polices are expected to have a negative impact on access to medicines covered by Medicare Part B and Part D, in addition to discouraging continued drug development." "Biopharmaceutical research companies are having to rethink how and where they invest in medical R&D, with the government essentially picking winners and losers by discouraging the development of some types of medicines and treatments for certain patient populations." According to a white paper published by the University of Southern California Schaeffer Center for Health Policy and Economics last April, the Centers for Medicare and Medicaid Services (CMS) released additional information for the Medicare Drug Price Negotiation program in March 2023, "but how CMS will implement a key feature - the 'maximum fair price' - remains unclear." It suggests that "the calculation of a 'maximum fair price' for drugs should be transparent and focus on measured social value rather than price minimization." ...

About a decade ago, a great number of former NFL players filed civil and industrial injury claims in California alleging that sport related head trauma and concussions while engaged in professional football resulted in the development of a Alzheimer's like dementia decades later. At the time, this medical condition became known as CTE or Chronic Traumatic Encephalopathy. Their claims were based, in part, on the work of Anne McKee M.D. who is a neuropathologist and expert in neurodegenerative disease at the New England Veterans Affairs Medical Centers and is professor of neurology and pathology at Boston University School of Medicine and director of Boston University CTE Center, which was established in 1996 and funded by the National Institutes of Health to advance research on Alzheimer's disease and related dementias. In her early work published in 2009, she reviewed 48 cases of neuropathologically verified CTE recorded in the literature and document the detailed findings of CTE in 3 professional athletes, 1 football player and 2 boxers, and theorized that "Chronic traumatic encephalopathy is a neuropathologically distinct slowly progressive tauopathy with a clear environmental etiology." Het hypothesis received widespread media attention with the arrival of the movie "Concussion" a 2015 American biographical sports drama film. Will Smith starred as Dr. Bennet Omalu, a forensic pathologist who fights against the National Football League trying to suppress his research on chronic traumatic encephalopathy (CTE). Over the years, much scientific debate ensued over her theory, and the relationship between a head trauma and the development of CTE many years later. And for over two decades, the Concussion in Sport Group (CISG) has held meetings and developed five international statements on concussion in sport. CISG is an international multidisciplinary group of experts who work to improve the understanding and management of concussion in sport. It was founded in 2001 and has met every four years since then to produce consensus statements on the latest evidence about concussion in sport. The CISG is made up of experts from a variety of disciplines, including neurology, neurosurgery, sports medicine, neuropsychology, and epidemiology. The group's work is supported by the International Olympic Committee (IOC) and the World Health Organization (WHO). The 4th Consensus Statement on Concussion in Sport published in the British Journal of Sports Medicine in 2013, reviewed the medical literature at the time and rejected the blanket conclusion that there is a definitive cause and effect connection between repetitive head trauma and CTE. It concluded that 'the speculation that repeated concussion or subconcussive impacts cause CTE remains unproven," The sixth International Consensus Conference on Concussion in Sport was delayed because of the pandemic, and was rescheduled to meet in Amsterdam on 27 October 2022 through 29 October 2022. As a result of this newest Conference, the Consensus statement on concussion in sport: the 6th International Conference on Concussion in Sport - Amsterdam, October 2022 was published in the British Journal of Sports Medicine on June 14, 2023. It was compiled by 114 co-authors. It first noted that "To avoid conceptual confusion between the pathology and a possible clinical condition, the postmortem neuropathology is referred to as CTE neuropathologic change (CTE-NC)." However "CTE-NC is not a clinical diagnosis. The first consensus criteria for traumatic encephalopathy syndrome (TES), a new clinical diagnosis, were published in 2021. Using these new terms, CISG then wrote "These diagnostic criteria can be used to determine the extent to which CTE-NC identified after death was associated with this new clinical diagnosis during life. The prevalence of CTE-NC (a neuropathological entity) and TES (a clinical diagnosis) in former athletes, military veterans and people from the general population is not known. It is also not known whether (1) CTE-NC causes specific neurological or psychiatric problems, (2) the extent to which CTE-NC can be clearly identified within the presence of Alzheimer’s disease neuropathology or (3) whether CTE-NC is inevitably progressive." Critiques of the latest Consensus Conference were immediate. According to an article in Nature, "Their refusal to acknowledge a causal relationship between contact-sports participation and CTE [chronic traumatic encephalopathy] is a danger to the public," said Chris Nowinski, a neuroscientist and chief executive of the Concussion Legacy Foundation in Middletown, Delaware, which supports athletes and veterans affected by concussions and CTE. Yet Robert Cantu M.D. one of the co-authors of the consensus report and colleague of Ann McGee M.D. at the Boston University School of Medicine in Massachusetts said "The CTE literature is almost exclusively case series studies" and he went on to say "And that literature did not meet the inclusion criteria for the systematic review." ...

In a highly-anticipated decision issued this week in The Atlanta Opera, Inc. In this case the National Labor Relations Board returned to the 2014 FedEx Home Delivery (FedEx II) standard for determining independent contractor status under the National Labor Relations Act, and overruled it's Trump era standard in SuperShuttle (2019). In applying the FedEx II standard, the Board found that the makeup artists, wig artists, and hairstylists who work at the Atlanta Opera - and who had filed an election petition with the Board seeking union representation - are not independent contractors, excluded from the Act, but rather are covered employees. In its decision, the Board said it reaffirmed longstanding principles - consistent with the instructions of the Supreme Court - and explained that its independent-contractor analysis will be guided by a list of common-law factors. The Board expressly rejected the holding of the SuperShuttle Board that entrepreneurial opportunity for gain or loss should be the "animating principle" of the independent-contractor test. Super Shuttle, a 2019 case involving the company that transports its passengers primarily to airports, set the primary definition of an Independent Contractor as one who in his or her work for a company can benefit from "entrepreneurial opportunity" and enhance his or her financial gain. The Super Shuttle decision said control and "entrepreneurial opportunity are two sides of the same coin: the more of one, the less of the other." The Board further explained, in Atlanta Opera, that entrepreneurial opportunity would be taken into account, along with the traditional common-law factors, by asking whether the evidence tends to show that a supposed independent contractor is, in fact, rendering services as part of an independent business. In reviewing the facts of this case and applying the FedEx II standard in Atlanta Opera, the Board determined that the majority of the traditional common-law factors point toward employee status. The Board also determined that the evidence did not show that the stylists rendered services as part of their own independent businesses. "In today’s decision, the Board returns to the independent contractor test articulated in FedEx II, and reaffirms the Board’s commitment to the core common-law principles that the Supreme Court has determined should guide the Board’s consideration of questions involving employee status," said Chairman Lauren McFerran. "Applying this clear standard will ensure that workers who seek to organize or exercise their rights under the National Labor Relations Act are not improperly excluded from its protections." Members Wilcox and Prouty joined Chairman McFerran in issuing the decision. Member Kaplan dissented from the overruling of SuperShuttle, but concurred in finding that the stylists were employees, not independent contractors. Teamsters General President Sean M. O'Brien said that "the Teamsters Union is pleased that the NLRB has taken a critical step in putting power back into the hands of workers and reversing an egregious rule that made it easier for corporations to misclassify hardworking men and women. Reuters reports that Kristin Sharp, CEO of gig economy trade association Flex, said Tuesday's ruling was out of step with an increasingly tech-driven economy defined by worker flexibility. America's leading app-based platforms, representing more than 52 million workers, joined together in 2022 to form Flex , a new industry association to serve as the voice of the app-based economy. Founding member companies include DoorDash, Gopuff, Grubhub, HopSkipDrive, Instacart, Lyft, Shipt, and Uber. The U.S. Department of Labor is expected to soon finalize a proposed rule opposed by business groups that would narrow the circumstances in which workers qualify as independent contractors under federal wage laws ...

Liberty Mutual Insurance Company employed Joy Slagel from 1985 to June 30, 2016, most recently as Senior Case Manager in its Glendale claims department. For 30 years, she received consistently positive reviews from supervisors, colleagues and clients. A review of allegations and documentation in the litigation file between them revealed the following allegations. In February 2015, Slagel went on disability leave due to stress and anxiety. After returning in March 2015, Ariam Alemseghed, Regional Claims Manager, overseeing Liberty’s Glendale claims department, instructed Craig Ballard, Slagel’s immediate supervisor, to rate Slagel as "needs improvement" on her performance assessment. When Slagel asked Ballard why she received this rating, he told her he had not wanted to give it but Alemseghed instructed him to do so. When Slagel complained to Alemseghed about the rating, Alemseghed stated that because of her "tenure," Slagel would be held to "higher expectations." On March 4, 2015, Slagel wrote to Glenn Shapiro, Liberty’s Vice President/Chief Claim Officer, complaining that Alemseghed mistreated her and several other long-term employees "in a manner that lacked dignity and respect," and she feared retaliation because Alemseghed had a close relationship with Virginia Bennett, Liberty’s Human Resources Generalist. Slagel received no response. In June 2015, Slagel told Human Resources (HR) Manager Michael Polk that 15 people had left in the last 12 months, and Alemseghed wanted long-term employees to leave so she could hire recent college graduates. Nothing was done. In November 2015, Slagel received a Customer Service Award for her handling of claims for one of Liberty’s accounts. Alemseghed told her, "You just got lucky, it will never happen again." In January 2016, Leann Lo became Slagel’s Claims Manager. Shortly thereafter, Lo accused Slagel of speaking negatively about Liberty, and said, "I am warning you!" Lo and Alemseghed allegedly thereafter inundated Slagel with work and shunned and ostracized her. A protracted dispute between Joy and her managers over the documentation of a social media check made during a claim review with an employer. Slagel complained to Bennett and Lo that she was being targeted because she was a 30-year employee whom Alemseghed wanted to replace. On April 19, 2016, Slagel sought medical care for hypertension, coronary artery disease, hyperlipidemia, and panic attacks related to work-related stress and depression, and subsequently applied for short-term disability leave. While Slagel was on leave, Bennett analyzed her failure to obtain a social media report for the employer in question, and noted that Slagel thought she was being set up because she was a 30-year employee. Bennett resolved Slagel’s complaint with no investigation because he believed she was a "negative influence in the Glendale office." After receiving authorization from attorney Gabriel Williams, Liberty’s Employee Relations Consultant, who could authorize terminating an employee, Lo terminated Slagel on June 30, 2016, the day she returned from leave. Slagel filed a complaint against Liberty, Alemseghed, and Lo, alleging 12 causes of action. During discovery, Slagel attempted to depose Williams concerning his decision to approve Slagel’s termination. During the deposition Williams, an attorney, was unable to understand several basic questions, and according to the review by the Court of Appeal "Williams avoided the entire line of questioning pertaining to Slagel’s termination." Other disputes between arose during plaintiffs discovery process concerning Polk's depostion. Defendants filed motions for summary judgment, arguing no triable existed as to whether they harbored a discriminatory motive for Slagel’s discharge. Slagel sought to continue the summary judgment hearing to complete discovery regarding Polk’s interviews, including the notes and an interview chart he had not produced, and also requested time to depose Latecia Flemming about her discussions with Polk. Slagel further requested time to depose Dan Karnovsky, who controlled some the investigatory reports and notes. The court denied these requests The trial court found that Slagel submitted evidence of a discriminatory motive on the part of Alemseghed, but no triable issue existed as to whether Liberty’s reason for terminating Slagel was pretextual. The court found, Slagel "simply has not submitted evidence to show how Alemseghed’s age bias caused her termination when Alemseghed was not responsible for her termination, and when the proffered reason for Plaintiff’s termination, i.e., the social media report incident, actually did occur." Accordingly, the court granted summary judgment in defendants’ favor and entered judgment. It awarded Liberty and Alemseghed jointly $26,917.61 in costs as prevailing parties, allocated to Slagel’s non-FEHA claims. The court awarded Lo $70,058.15 in attorney’s fees and $15,418.96 in costs as a result of Lo's subsequent sanctions request. The Court of Appeal reversed in the unpublished case of Slagel v. Liberty Mutual Insurance Company -B310132 (June 2023). The Court of Appeal noted that "Here, triable issues exist as to whether Williams’s decision to approve Slagel’s termination was tainted by Alemseghed’s bias. Alemseghed influenced Bennett’s and Williams’s deliberations by portraying Slagel’s performance in the worst possible light. This influence may well have been decisive. Williams’s deliberations were brief, perhaps perfunctory, taking only about half an hour." "Williams testified in deposition that he could not remember having considered the issue. Having no personal knowledge of the facts, Williams, who was not conversant with the possible age animus that may have motivated Alemseghed’s recommendations (as filtered through Bennett), was apt to defer to Bennett’s and Alemseghed’s judgment. If Williams acted as the conduit of Alemseghed’s bias, his innocence would not spare Liberty from liability for Alemseghed’s procuring Slagel’s discharge because of her age." On summary judgment, inferences must be drawn in favor of the opposing party. Here, the trial court should have but failed to draw several inferences in Slagel’s favor. Therefore, summary judgment was improper. The Court of Appeal also concluded that the court arguably found only that Slagel’s claims against Lo lacked evidentiary support, not that they would have been legally insufficient even if supported by evidence. "Because the trial court found only that a subset of Slagel’s allegations lacked legal and evidentiary support, and because some of her allegations against Lo actually did have evidentiary support, sanctions were improper." The judgment was reversed as to Slagel’s first through fifth and tenth and twelfth cause of action. The costs and sanctions awards were vacated. The judgment was otherwise affirmed ...

According to a California Workers’ Compensation Institute study, AB 1213 is a pending legislative proposal to alter the California 104-week cap on temporary disability (TD) benefits, by excluding TD paid or due during the resolution of medical disputes if a utilization review (UR) treatment denial is overturned by independent medical review (IMR) or the Appeals Board, would drive up IT and administrative expenses for claims administrators - but provide only a nominal increase in total TD to less than 0.3% of all claims. To estimate the impact of the proposal included in AB 1213, now being debated by state lawmakers, CWCI compiled special datasets that allowed it to merge insured claims data from its Industry Research Information System (IRIS) database with IMR decision data from Maximus Federal Services, which manages the IMR process for the state. Nearly a third (31.7%) of the 178,956 IRIS claims had paid TD days, which represents the proportion of all claims for which claims administrators would need to develop new tracking systems and protocols to identify and monitor claims that could be covered by AB 1213. Within the subset of TD claims, however, only those that had a UR treatment denial submitted to IMR would be eligible for the proposed tolling of the TD cap, so CWCI matched the IRIS claims data to the IMR data from Maximus and found that 11.7% of all TD claims had a treatment denial that resulted in an IMR determination. A review of the IMR outcomes further narrowed the population of claims that could be affected by AB 1213 down to just 3.2% of the TD claims that had a UR denial overturned by IMR. AB 1213 would only apply to claims that reach the 104-week TD cap, so the final step in estimating the impact of the proposed change was to determine how many of the TD claims in the study sample that had an overturned UR denial were approaching the 104-week TD cap.Those claims represented less than 0.3% of the 178,956 medical-only and indemnity claims that were included in the original IRIS study sample, underscoring the very small proportion of the total injured worker population that would likely receive a nominal increase in their total TD benefits under AB 1213. Meanwhile, the analysis notes that AB 1213’s current language would create costly new requirements for oversight and compliance for claims administrators. Chief among these would be the automation and programming costs required to update claims systems and the ongoing administrative costs for manual processes to identify and track claims with TD payments and UR and IMR activity. These requirements would apply to every workers’ compensation claims administrator in the state, further increasing California’s average loss adjustment expense, which has historically been the most expensive in the country, and as of 2022, exceeded the average amount paid by the median state by 73%. As state lawmakers debate the relative merits of AB 1213, the findings from this study raise the question of whether the minor impact of the proposal merits the substantial cost ...

The current congressional inquiry into pharmacy benefit managers (PBMs) is being led by the House Committee on Oversight and Accountability, chaired by James Comer (R-KY). The inquiry is focused on the role of PBMs in rising health care costs and their impact on patient care. Comer issued a report in 2021 outlining how pharmacy benefit managers’ (PBMs) practices increase prescription drug prices, impact patient health, hurt competition, and distort the marketplace. The report, entitled "A View from Congress: The Role of Pharmacy Benefit Managers in Pharmaceutical Markets," details findings from a forum held by Comer examining how PBM tactics contribute to the rising cost of prescription drugs for Americans. The report emphasizes the need for greater transparency to determine the extent of the damage PBM practices are having on patients and the marketplace and calls for further congressional review of legislative solutions to provide meaningful reform. Key views from his report include: - - PBMs use their market leverage to increase their profits, not reduce costs for consumers. PBMs control which medications are included on a given health plan’s formulary, or the list of drugs that plan agrees to cover. Drug manufacturers agree to discounts, or pay rebates, in order to get their products placed more favorably on formularies. But the savings from the discounts and rebates do not make their way down to the consumer; they go to the PBMs’ bottom line. - - Drug manufacturers actually raise their prices due to PBMs. As PBMs demand larger and larger rebates or discounts, manufacturers offset these reductions by raising the "list" prices for their drugs. PBMs encourage this practice because they pocket the higher rebates received from higher priced drugs. - - PBMs own their own pharmacies, which creates conflicts of interest, hurts competition, and distorts the market. Another key function of PBMs is to establish a network of pharmacies from which plan beneficiaries can get their prescriptions filled. However, the three largest PBMs - CVS Caremark, Express Scripts, and Optum Rx - own their own pharmacies. They also control 80 percent of the market. But they are not the only ones - smaller PBMs own their own pharmacies too. - - PBMs "steer" patients to the pharmacies they control, making it difficult for independent pharmacies to survive. PBMs also reimburse unaffiliated pharmacies at low rates and charge a number of fees to independent pharmacies. These retroactive fees can be for just participating in the network, or they can be tied to performance metrics, such as pharmacy refill rates, error rates, or audit rates, which the PBM establishes. These retroactive fees add up - sometimes it costs a pharmacy more to fill a prescription than it is reimbursed. For specialty pharmacies, they accrue fees based on irrelevant metrics. - - Rebates are not the only way PBMs drive up costs. A list price is like the sticker price on a car: few people actually pay that amount. Higher list prices still drive-up costs, even if that’s not the actual cost patients are paying. Insurance premiums and copayments are based on list prices. PBMs engage in a number of questionable practices, one of which is "spread pricing," in which PBMs pay a pharmacy a lower amount than they report to a health plan sponsor. The PBM pockets the difference. Sometimes they get caught - PBMs have overcharged state Medicaid programs in Ohio, Kentucky, Illinois, and Arkansas more than $415 million once spread pricing schemes were discovered. More recently, in March 2023, Chairman Comer sent letters to senior officials at the Office of Personnel Management (OPM), Centers for Medicare and Medicaid Services (CMS), and the Defense Health Agency (DHA) requesting documents and communications related to PBMs. The letters stated that the Committee is "examining the extent to which PBMs' tactics impact healthcare programs administered by the federal government." And on May 23, 2023, the Committee held a hearing on the role of PBMs in rising health care costs. The hearing featured testimony from representatives from PBMs, insurers, pharmacies, and patient advocacy groups. The Committee is continuing its investigation into PBMs. It is unclear when the Committee will release its findings or make recommendations for reform. In addition to the congressional inquiry, the Federal Trade Commission (FTC) is also investigating pharmacy benefit managers (PBMs). The FTC's inquiry is focused on whether PBMs are engaging in anti-competitive practices that are driving up the cost of prescription drugs. The FTC issued compulsory orders to six of the largest PBMs in the United States: CVS Caremark, Express Scripts, OptumRx, Humana, Prime Therapeutics, and MedImpact Healthcare Systems. The compulsory orders require these companies to provide the FTC with information and documents about their business practices, including their contracts with drug manufacturers, pharmacies, and health plans. And last month issued two additional orders to Zinc Health Services, LLC, and Ascent Health Services, LLC. Zinc and Ascent refer to themselves as group purchasing organizations or GPOs, sometimes also called rebate aggregators, which negotiate rebates with drug manufacturers on behalf of the PBMs and hold the contracts that govern those rebates. Zinc was founded in 2020 and operates as the GPO for CVS Caremark. Ascent was founded in 2019 and operates as a GPO for Express Scripts, Prime Therapeutics, Envolve Pharmacy Solutions, and Humana Pharmacy Solutions. The FTC is issuing the orders under Section 6(b) of the FTC Act, which authorizes the Commission to conduct studies without a specific law enforcement purpose. The companies will have 90 days from the date they receive the order to respond. The FTC's inquiry is a significant development in the effort to address the high cost of prescription drugs. The FTC has the power to take enforcement action against companies that engage in anti-competitive practices. If the FTC finds that PBMs are engaging in anti-competitive practices, it could take steps to lower the cost of prescription drugs for patients and health plans ...

Maybe it is now time for private health care facilities to step up their game! A nationwide Medicare survey released this month found that veterans rated Veterans Affairs hospitals higher than private health care facilities in all 10 categories of patient satisfaction. The VA takes care of about 9 million veterans at 1,255 facilities - the nation's largest integrated health care system. This most recent survey, known as HCAHPS (Hospital Consumer Assessment of Healthcare Providers and Systems), showed that the VA beat out private facilities in all the categories surveyed, such as patient satisfaction, hospital cleanliness and communication with nurses and doctors. As a part of the survey, Medicare awards star ratings from one star to five stars, with "more stars representing better quality care." Based on patient surveys between July 2021 and June 2022, 72% of VA hospitals received four or five stars for Overall hospital rating compared to 48% of reporting non-VA hospitals. Additionally, VA hospitals received a higher percentage of four or five star ratings than non-VA hospitals for Communication with doctors (87% vs. 48%), Communication with nurses (59% vs. 35%), Responsiveness of hospital staff (63% vs. 34%), Communication about medicines (80% vs. 38%), Cleanliness of the hospital environment (69% vs. 52%), Quietness of the hospital environment (49% vs. 38%), Discharge information (65% vs. 55%), Care transition (76% vs. 35%), and Willingness to recommend the hospital (76% vs. 52%). The results are drawn from Medicare’s Care Compare website. "This offers among the first opportunities to directly compare us with our private sector counterparts, and we're really happy with the results but we won't be content until 100% of hospitals are pinging in the right ratings," Dr. Shereef Elnahal, VA undersecretary for health. told NPR. who reported on this new survey. VA also surveys Veterans in order to understand and improve the Veteran experience with VA. The VA Trust Report for the second quarter of fiscal year 2023 shows that nearly 90% of Veterans who get their care from VA trust VA for their care (based on 560,000 surveys). Additionally, more than 79% of Veterans trust VA overall, reflecting a 1.9% increase from the last quarter and a 24% increase since 2016. And, despite many widely publicized scandals, VA health care has been consistently rated as competitive with private care in dozens of peer-reviewed articles. The Journal of General Internal Medicine and the Journal of the American College of Surgeons published articles based on a systematic review of studies about VA health care, concluding VA health care is consistently as good as - or better than - non-VA health care. The findings come from a national review of peer-reviewed studies that evaluated VA on quality, safety, access, patient experience, and comparative cost/efficiency. Of the 26 studies that looked at non-surgical care, 15 reported VA care was better than non-VA care and seven reported equal or mixed clinical quality outcomes. Of the 13 studies that looked at quality and safety in surgical care, 11 reported VA surgical care is comparable or better than non-VA care. This year’s systematic review included studies published between 2015 and 2021. This is the third systematic review of studies comparing VA care to non-VA care, the most recent of which was published in 2017. Each of these systematic reviews has come to the same overarching conclusion: on average, VA care is better than or comparable to non-VA care in the domains of clinical quality and safety ...

Stephanie Sharp and seven other plaintiffs in this action are former employees of apparel manufacturer S&S Activewear. Seven are women and one is a man. Sharp alleges that S&S permitted its managers and employees to routinely play "sexually graphic, violently misogynistic" music throughout its 700,000-square-foot warehouse in Reno, Nevada. According to Sharp, the songs’ content denigrated women and used offensive terms "very offensive" lyrics that "glorifie[d] prostitution" extreme violence against women. Blasted from commercial-strength speakers placed throughout the warehouse, the music overpowered operational background noise and was nearly impossible to escape. Sometimes employees placed the speakers on forklifts and drove around the warehouse, making it more difficult to predict - let alone evade - the music’s reach. In turn, the music allegedly served as a catalyst for abusive conduct by male employees, who frequently pantomimed sexually graphic gestures, yelled obscenities, made sexually explicit remarks, and openly shared pornographic videos. Although the music was particularly demeaning toward women, who comprised roughly half of the warehouse’s workforce, some male employees also took offense. Despite "almost daily" complaints, S&S management defended the music as motivational and stood by its playing for nearly two years, until litigation was filed. Sharp eventually filed suit, alleging that the music and related conduct created a hostile work environment in violation of Title VII. The district court granted S&S’s motion to dismiss and denied leave to amend the music claim, reasoning that the music’s offensiveness to both men and women and audibility throughout the warehouse nullified any discriminatory potential. The court countenanced S&S’s argument that the fact that "both men and women were offended by the work environment" doomed Sharp’s Title VII claim. The 9th Circuit (with presides over California and other western states) reversed in the published case Sharp et al. v. S&S Activewear, L.L.C., - No. 21-17138 (Jun. 7, 2023). The trial court held that Sharp failed to state an actionable Title VII claim because there was no allegation "that any employee or group of employees were targeted, or that one individual or group was subjected to treatment that another group was not." Because the music offended men and women alike, the district court reasoned, it could not be the basis of a sexual harassment claim. However, the 9th Circuit noted that the offensive conduct must be "sufficiently severe or pervasive to alter the conditions of employment." Christian v. Umpqua Bank, 984 F.3d 801, 809 (9th Cir. 2020). Notably, individual targeting is not required to establish a Title VII violation. See Reynaga v. Roseburg Forest Prods., 847 F.3d 678, 687 (9th Cir. 2017). "It is enough," it has held, "if such hostile conduct pollutes the victim’s workplace, making it more difficult for her to do her job, to take pride in her work, and to desire to stay on in her position." Steiner v. Showboat Operating Co., 25 F.3d 1459, 1463 (9th Cir. 1994). And context matters. "Workplace conduct is to be viewed cumulatively and contextually, rather than in isolation." This approach makes common sense in order to screen out one-off, isolated events and yet benchmark conduct in the context of a specific workplace. Objectionable conduct is not "automatically discrimination because of sex merely because the words used have sexual content or connotations." "Applying these core principles, we conclude that the district court erred in rejecting Sharp’s hostile work environment claim as incurable and legally deficient. More than offhand foul comments, the music at S&S allegedly infused the workplace with sexually demeaning and violent language, which may support a Title VII claim even if it offended men as well as women." "Although we have not before addressed the specific issue of music-as-harassment, this court and our sister circuits have recognized Title VII redress for other auditory offenses in the workplace and for derogatory conduct to which all employees are exposed. The EEOC, which filed an amicus curiae brief on behalf of Sharp, endorses this position. Emphasizing this appeal’s impact on the future 'ability of the EEOC and private parties to enforce Title VII,' the agency agrees that 'exposing employees to misogynistic and sexually graphic music can be discrimination because of sex, even where the employer exposes both women and men to the material and even though both women and men find the material offensive.' " ...

More than $50 billion in settlement funds is being delivered to thousands of state and local governments from companies accused of flooding their communities with opioid painkillers that have left millions addicted or dead. The settlement money comes from a number of legal battles around the nation and the world. Christine Minhee, attorney by training and founder of OpioidSettlementTracker.com, has compiled data on the settlements tracking the amount of money allocated and where states have decided to spend it. According to her data, which is used by state governments and the Centers for Disease Control and Prevention, the total pot of funds available from the settlements has reached around $54 billion dollars, with nearly half of the money coming from a $26 billion dollar 2022 settlement with drug manufacturers and distributors, and more funds expected from ongoing legal battles. However, her website says that "of this sum, about 75% - a whopping $39.8 billion - remains unattached to explicit requirements to publicly report opioid remediation expenditures. Thus they have created a state-by-state "Opiod Settlement Transparency Map" to help answer the question "Will opioid settlements be spent in ways that bolster the public health response to drug addiction?" The California Attorney General confirms that Opioid manufacturers Allergan and Teva have committed to move forward with settlements for up to $2.37 billion and $4.25 billion, respectively, to resolve allegations that, among other things, the companies deceptively marketed opioids by downplaying the risks of addiction and overstating their benefits. If the settlements are approved by the court, California may receive up to approximately $375 million from the Teva settlement and up to approximately $205 million from the Allergan settlement. The settlements with the opioid manufacturers also include strong injunctive relief that prohibits opioid-related marketing by Teva while Allergan is prohibited from selling opioids for the next 10 years. Chain pharmacies CVS and Walgreens also committed to moving forward with national settlements worth up to $5 billion and $5.7 billion, respectively, to resolve claims that the companies ignored signs of prescription abuse and failed to prevent drug diversion. If approved by the court, California may receive up to approximately $470 million from the CVS settlement and up to $510 million from the Walgreens settlement. CVS and Walgreens have also agreed to injunctive relief that requires the pharmacies to monitor, report, and share data about suspicious activity related to opioid prescriptions. A final agreement with Walmart, worth up to $3.1 billion, is not being announced today; however, that settlement is expected to move forward in the coming weeks. In addition to these new announcement, in March of 2022, the California Attorney General announced a $6 billion conditional settlement with Purdue Pharma and the Sackler family over their alleged deceptive and illegal marketing and sales practices, in an agreement that would also allow the family’s name to be removed from buildings, scholarships, and fellowships. In February 2022, a bankruptcy court confirmed a plan that would allow an agreement between certain states, including California, and Mallinckrodt, the largest generic opioid manufacturer in the United States, to move forward. That settlement includes an expected $1.6 billion payment by the company to a trust that would benefit public and private opioid-related claimants. In July 2021, the California Attorney General announced a $26 billion settlement, which was finalized in Spring 2022, with Johnson & Johnson, which manufactured and marketed opioids, and Cardinal Health, McKesson, and AmerisourceBergen, the nation’s three major pharmaceutical distributors. It was the second largest multistate agreement in U.S. history, and its terms bar Johnson & Johnson from being involved in selling or promoting opioids for a decade and require the distributors to monitor, report, and share data about suspicious activity related to opioid sales. In February of 2021, the California Attorney General announced a $573 million settlement with one of the world’s largest consulting firms, McKinsey & Company. The settlement resolves California’s investigation into the company’s role in advising opioid companies (including OxyContin maker Purdue Pharma) in the promotion and sale of their drugs ...

A former federal technology official enlisted by Gov. Gavin Newsom to triage California’s pandemic unemployment response, explains in her new book, how technical and political failures are costly to citizens at all levels of government. According to a report by CalMatters, Jennifer Pahlka, founder of Code For America and former U.S. deputy chief technology officer, writes in her new book, that the turmoil at California’s Employment Development Department is a prime example of failures that have also plagued other major civic tech efforts, such as the post-Obamacare implosion of healthcare.gov or archaic IT systems at the U.S. Department of Veteran Affairs. Pahlka founded Code for America, a San Francisco-based non-profit organization that aims to make government for all people. According to the Washington Post it "is the technology world's equivalent of the Peace Corps or Teach for America" [offering] an alternative to the old, broken path of government IT." In her 2012 TED Talk, Pahlka noted that we will not be able to reinvent government unless we also reinvent citizenship, and asked "Are we just going to be a crowd of voices, or are we going to be a crowd of hands? In her TED Talk she said "We had a team that worked on a project in Boston last year that took three people about two and a half months. It was a way that parents could figure out which were the right public schools for their kids. We were told afterward that if that had gone through normal channels, it would have taken at least two years and it would have cost about two million dollars. And that's nothing. There is one project in the California court system right now that so far cost taxpayers two billion dollars, and it doesn't work. And there are projects like this at every level of government." "Of all the tech disasters I’ve witnessed and tried to help untangle, the one I’ve come to see as most emblematic of these forces - and the ways we consistently misunderstand them - is the story of California’s unemployment insurance in the first year of the pandemic,' Pahlka writes in the book "Recoding America: Why Government is Failing In the Digital Age and How We Can Do Better." Three chapters of the book chronicle Pahlka’s time co-leading a "Strike Team" deployed by Newsom in mid-2020, as long benefit delays and outlandish stories of fraud began to dominate headlines. In the months to follow, state officials would find that payments were delayed to some 5 million workers and may have been improperly denied for another 1 million, all while the state lost as much as $32 billion to fraud, according to varied state and industry estimates. Among the problems and potential solutions detailed in the new book: Why it was easier for scammers to file successful unemployment applications than it was for some workers, how a $100 million-plus tech modernization project by state contractor Deloitte buckled during the pandemic, and why the furor about outdated online systems has more to do with flawed state and federal policy than old software. "Modernizing technology without rationalizing and simplifying the policy and process it must support seldom works," Pahlka wrote. "Mostly, it results in much the same mess you had before, only now in the cloud." An EDD spokesperson declined to comment. The new details come amid a national reckoning over pandemic unemployment failures, including millions in federal funding recently made available for new tech modernization efforts. More than 150,000 workers in the state are still facing long appeals backlogs as they fight for delayed or denied unemployment benefits. Meanwhile, congressional factions have also dragged jobless benefits back into bitter political fights. Last week, questions about responsibility for EDD woes resurfaced during a contentious U.S. House committee hearing led by Republican lawmakers opposed to President Biden’s nomination of ex-California labor chief Julie Su to be the U.S. Labor Secretary. What exactly derailed the EDD’s computer system - or "grab bag of somewhat connected, somewhat separate systems," as Pahlka wrote in the new book - is far more complicated than popular notions that "EDD staff was just incompetent at technology." Even understanding the agency’s layers of antiquated technology, which she likens to an archeological dig, doesn’t get to the heart of the issue. Rather, Pahlka explains, the dysfunction stems from the policy environment at the EDD and the bodies that oversee it. The California Legislature, federal labor regulators and flawed oversight mechanisms have all contributed, she wrote, to ever-growing and often-incompatible regulations, plus a political system that rewards compliance over public access. "The bureaucratic confusion," Pahlka wrote, "ultimately lands on the people." Some of the problems cited by Pahlka and state watchdogs have since been addressed, at least in part. The federal Pandemic Unemployment Program that was the biggest target for fraud has since ended. The EDD also went on a tech buying spree during the pandemic for services including call center support from longtime contractor Deloitte and an online identity verification system recommended by Pahlka’s Strike Team (which, in turn, spurred different complaints about long waits for some workers). The agency is now working on another nascent tech modernization project called EDDNext. Still, Pahlka warns, the biggest underlying issues remain harder to address. "What we need has less to do with updating rigid 1950s code than with updating rigid 1950s thinking," Pahlka wrote. "We need a fundamentally different way of delivering on the promise of policy." ...