Rene Thomas Folse, JD, Ph.D. is the host for this edition which reports on the following news stories: WCAB Orders Retroactive Application of 4903.05(c)(1) Lien Declaration. Employee Awarded Attorney Fees After Appeal of “Berman” Hearing. Imprisoned SoCal Doctor Must Forfeit All Proceeds of Fraud. Kerlan-Jobe Orthopaedic Alleges Cedars-Sinai Conspiracy. 2024 Was Another Bad Year For US Health Care Cyberattacks. P/C Insurance Market Profitability Improves in 2024.
Riverside Healthcare System, LP, doing business as Riverside Community Hospital filed a Petition to Confirm an Arbitration Award against Service Employees International Union, Local 121 RN. The Hospital asked the court to confirm arbitration Opinions and Awards between the parties.
The Arbitrator found SEIU Local 121 RN struck for permissible reasons, related to staffing issues, and impermissible reasons, over safety issues related to COVID-19, which was not allowed under the Collective Bargaining Agreement.Further, the Arbitrator found the pre-strike flyer SEIU Local 121 RN issued to its members expanded the purpose of the strike beyond the staffing dispute to include the availability of Personal Protective Equipment and other staffing concerns.
On May 31, 2024, the Arbitrator issued a second written opinion awarding the Hospital damages in the amount of $6,262,192.11.
In the Motion to Confirm, the Riverside Community Hospital argued (1) the awards draw their essence from the CBA; (2) the arbitrator did not exceed the scope of the issues submitted; and (3) the awards do not conflict with public policy. Therefore there is no basis to vacate the Awards issued by the Arbitrator, and the Court should confirm the Awards and enter judgment against the SEIU Local 121 RN in the amount of $6,262,192.11.
In the Motion to Vacate, SEIU Local 121 RN argued (1) the awards do not draw their essence from the CBA; (2) the Arbitrator exceeded the scope of her authority because (i) she impermissibly added to the CBA and (ii) she lacked jurisdiction to hear the matter; and (3) the awards conflict with three public policies. Therefore, SEIU Local 121 RN argues the Arbitrator’s awards should be vacated.
Kenly Kiya Kato, United States District Judge found no basis to vacate the arbitration awards in the case of Riverside Healthcare System, LP, d/b/a Riverside Community Hospital v. Service Employees International Union, Local 121 RN -EDCV 24-1316-KK-PVCx (January 2025).
The Court found that the awards do not violate public policy. SEIU Local 121 RN has maintained that the labor strike was solely “over [Petitioner’s] failure to provide appropriate staffing levels,” as permitted by the CBA, and any discussion of “PPE, COVID-19, or other abnormally dangerous conditions . . . did not convert the staffing strike into a non-staffing strike.”
The Arbitrator rejected the SEIU Local 121 RN position, finding the strike was for both permissible (staffing) and impermissible (PPE and COVID-19) reasons under the CBA. “Respondent’s Motion to Vacate is ground, in part, on the awards supposed conflict with standing public policy: (1) § 502 of the Taft-Hartley Act; (2) California Labor Code Section 6311; and (3) § 301 of the LMRA.”
“None of these arguments were asserted during the arbitration, hence, this Court will not consider them at this stage….see McClatchy Newspapers v. Central Valley Typographical Union No. 46, 686 F.2d 731, 733-34 (9th Cir. 1982) (holding arbitrators exhaust their right to review disputes after they issue a final award); see also United Steelworkers, 74 F.3d 169 at 174. Further, Respondent failed to meet its obligation to identify the specific laws “
According to a report by Beckers’ Hospital Review Rosanna Mendez, executive director for SEIU 121RN, stood by the union’s belief that hospital nurses were within their rights to strike.
“The union and its members will never stop fighting and speaking out to protect patient care and to ensure safe working conditions in healthcare, including when we see troubling patterns of management decision-making at Riverside Community Hospital,” Ms. Mendez said in a statement shared with Becker’s.
“We disagree with the way that HCA has characterized the strike both generally and in the appeal process, and we disagree with this current ruling around the arbitration. As such, nurses will continue to weigh our next legal options along with how to best raise awareness about the many concerns that frontline nurses have about the HCA business model above and beyond this one particular ruling, which we consider to be at odds with the facts on the ground and the broader interests of patients and the public.”
A new study from the Workers Compensation Research Institute (WCRI) analyzes recent changes in the composition of the medical workforce. These changes, including medical provider shortages and an increase in the demand for health care, may affect care for injured workers.
“Timely access to care is important for workers recovering from injuries,” said Sebastian Negrusa, vice president of research at WCRI. “Provider shortages can cause delays in treatment, longer recovery times, and higher workers’ compensation costs. These challenges were particularly noticeable during the pandemic and continue to be a concern.”
The study, Changes in the Medical Workforce and Impact on Claims, reviewed workers’ compensation data from 2013 to 2022 and addressed questions such as the following:
– – How has workers’ access to primary care physicians, as opposed to nurse practitioners or physician assistants, changed since 2013, including during the pandemic?
– – Did the use of advanced practitioners (nurse practitioners and physician assistants) instead of physicians vary across states and between urban and rural areas?
– – How did the increases in the number of advanced practitioners impact claim costs, disability duration, and types of care provided?
The study uses data from the WCRI Detailed Benchmark/Evaluation (DBE) database, which includes information on workers’ compensation claims, medical care payments, income benefits, and detailed billing data from insurers, state funds, and self-insured employers.
For more information or to purchase the study, visit www.wcrinet.org. The report was authored by Drs. Bogdan Savych and Olesya Fomenko.
The Workers Compensation Research Institute (WCRI) is an independent, non-profit research organization based in Waltham, MA. Established in 1983, WCRI remains neutral on the issues it investigates, providing objective information from studies and data collection efforts that adhere to recognized scientific methods. Rigorous, impartial peer review procedures further ensure objectivity. WCRI’s diverse membership includes employers, insurers, government entities, managed care organizations, health care providers, insurance regulators, state labor groups, and state administrative agencies across the U.S., Canada, Australia, and New Zealand.
Rene Thomas Folse, JD, Ph.D. is the host for this edition which reports on the following news stories: FDA Continues Resisting Production of Pfizer Vaccine Documents. Legislators Propose Law to Help Finance Insurance Fire Losses. Palisades Firefighters Participate in First-of-its-Kind Cancer Study. Sutter Health to Invest $1B in AI Imaging With GE HealthCare. Dermatologicals Now Most Expensive WorkComp Drug Group. NSC MSD Solutions Index Reveals Workplace Safety Progress. Public Self-Insured Paid & Incurred Losses Increase. Latest Gallop Ratings of Lawyers & Judges Stay Historically Low.
Founded in 1898, the National Community Pharmacists Association is the voice for the community pharmacist, representing over 18,900 pharmacies that employ more than 205,000 individuals nationwide. Community pharmacies are rooted in the communities where they are located and are among America’s most accessible health care providers.
The Association recently submitted comments to the Centers for Medicare & Medicaid Services with a stern warning that more than 90 percent of independent pharmacies may decide, or have already decided, to not stock drugs in the Medicare Drug Price Negotiation Program because they will cause massive financial losses and potentially put them out of business.
“Pharmacies will have to float thousands of dollars every month waiting for refunds from the manufacturers. That will cause a massive cash flow problem in an environment where thousands of pharmacies have already closed,” said NCPA CEO B. Douglas Hoey.
In its comments, NCPA cited a recent national survey of independent pharmacists that found a jaw-dropping 93.2 percent of respondents have already decided to not stock the drugs in the program, or they are considering not stocking them.
“That will be devastating to the program,” said Hoey. “Patients who need these prescriptions will be unable to get them, because their pharmacies cannot participate in the program. It’s great the government removed big insurance’s PBMs from the negotiations and the result was lower prices for these prescription medications. That’s an important outcome for patients and taxpayers. But if almost no pharmacies can stock the drugs because they will sustain huge financial losses, the program will collapse before it even starts.”
According to the survey independent pharmacists:
– – 60.4 percent are considering not stocking one or more of the first 10 drugs listed in the Medicare Drug Price Negotiation Program.
– – 32.8 percent have already decided not to stock one or more of the drugs listed in the Medicare Drug Price Negotiation Program.
– – 96.5 percent said PBM and plan reimbursement for Medicare Part D threatened the viability of their business.
– – 40.8 percent said they were paid below what they pay to buy the drug, approximated by the National Average Drug Acquisition Cost (NADAC), on more than 40 percent of the prescriptions they filled for Medicare Part D patients.
– – 29.2 percent said they were paid below NADAC on 50 percent or more of the prescriptions they filled for Medicare Part D patients.
– – 80.3 percent said the financial health of their business declined in 2024.
– – 48.6 percent said the financial health of their business declined significantly in 2024.
– – 30.3 percent said they are considering closing their business in Calendar Year 2025.
If CMS and the new administration want to save the program, and if they want to prevent the disappearance of many more pharmacies, they will make a number of changes, said NCPA.
Among the changes the organization proposed, CMS should bar PBMs from requiring pharmacies to participate in the program in order to serve Medicare Part D patients, and it must also give pharmacies the ability to cancel PBM contracts without cause. NCPA made many additional recommendations.
On January 1, 2025, the Department of Industrial Relations’ (DIR) Division of Occupational Safety and Health (Cal/OSHA) increased penalties for certain violations.
For citations issued on or after January 1, 2025, the maximum penalties for violations classified as regulatory, general, willful, or repeat are as follows:
– – The maximum penalty for general and regulatory violations, including posting and recordkeeping violations, is $16,285.
– – The maximum penalty for willful and repeat violations is $162,851.
– – The maximum penalty for violations classified as serious is $25,000; it did not increase.
– – The minimum penalty for willful violations is $11,632.
This annual increase is required by law and was enacted by the California Legislature in 2017. This legislation authorizes increases in certain minimum and maximum civil penalties, making them consistent with federal OSHA’s civil penalties.
The increase is based on the Bureau of Labor Statistics’ report on the October Consumer Price Index for All Urban Consumers each year. This year’s adjustment for inflation rate was approximately 2.6%.
In 1996, Todd Hearn began working for PG&E as a meter reader. A few years later, he began training as a lineman and completed his apprenticeship in 2004. During the relevant time period, Hearn worked out of PG&E’s facility in Napa. PG&E became aware of performance issues at the Napa yard around 2016, including delays in maintenance and repair projects and rising overtime claims. Roy Surges, PG&E’s Electric Superintendent, began working with Tanya Moniz-Witten, a senior director at PG&E, to help address the situation.
In early 2018, Surges noted “excessive meal costs, suspicions of misconduct, a high number of rest periods, poor attendance, schedule performance, multiple retaliatory compliance and ethics complaints, poor moral and bad attitude” among “the bulk” of the senior crew and foreman in the Napa yard. Surges was working with the supervisors to provide “added oversight measures” and brought in corporate security to assist. PG&E began gathering data, including timecards and vehicle GPS records, in order to “deal with” some “bad apples.” Moniz-Witten also brought in ”HR/Labor” for “advisement and help” in addressing the situation.
The investigation was subsequently narrowed down to five and Hearn was identified as one of the five based on “potentially false time cards.” In late June 2018, Hearn and four other linemen were suspended. Hearn was informed he was being placed on “crisis leave” due to an “alarming amount of discrepancies” in Hearn’s timecards.The investigation was transferred to Kevin Cashman, a senior investigator in PG&E’s Corporate Security Department (CSD). In August 2018, Cashman interviewed Hearn.
PG&E then hired Tony Mar, a retired PG&E Director of Electric Operations, to conduct a separate investigation into the Napa yard. While Mar claimed he was not asked to investigate any specific employees, Mar acknowledged he only wrote reports on the five suspended linemen. In early December 2018, Mar informed PG&E he provided Internal Auditing “what we have identified related to Hearn,” including that he took multiple trips to his house, claimed overtime when he was not on site, requested unearned meals, and delayed his arrival to work locations.
Hearn presented evidence that beginning in 2017, he repeatedly expressed safety concerns to PG&E management about a device called a “Tripsaver” that PG&E began installing on its electrical lines in 2016. PG&E Superintendent Roy Surges responded negatively to Hearn and others who raised these safety concerns. As a result, PG&E retained a lawyer named Kelly Applegate to conduct an external investigation of retaliation claims made by employees against PG&E management, including the report Hearn made.
After additional investigations transpired, in a January 18, 2019 letter, PG&E informed Hearn his employment was terminated based on findings of an investigation into his conduct. Hearn filed a lawsuit against PG&E, alleging four causes of action: (1) retaliation for disclosing the company’s safety violations (Lab. Code, § 1102.5); (2) retaliation for lodging a bona fide complaint about unsafe working conditions (Lab. Code, § 6310); (3) wrongful termination in violation of public policy; and (4) defamation.
The jury found PG&E liable for defamation but rejected Hearn’s retaliation claim. The jury awarded damages totaling $2,160,417, comprised of separate awards as to past and future economic and non-economic damages. The verdict form did not ask the jury to consider or award any assumed reputational harm damages. The jury declined to award punitive damages.
On appeal, PG&E contends the trial court erred by denying its motion for judgment notwithstanding the verdict (JNOV) because Hearn’s defamation claim was not separately actionable – i.e., the defamation claim was premised on the same conduct that gave rise to his termination and the damages sought were solely related to his loss of employment. In his cross-appeal, Hearn alleges the verdict rejecting his retaliation claim is not supported by sufficient evidence and contends the trial court erroneously excluded relevant evidence.
The Court of Appeal reversed the judgment entered in Hearn’s favor on his defamation cause of action. The costs award premised on Hearn prevailing consequently was likewise reversed in the partially published case of Hearn v. Pacific Gas & Electric Co. -A167742 (January 2025).
The question PG&E asked to be resolved on appeal was “In a wrongful termination case, can a plaintiff recover in tort based on the same underlying harm as caused by the discharge?”
The California Supreme Court ruled that employees may generally assert tort claims against their employer, even in the context of their termination in three key cases, Foley v. Interactive Data Corp. (1988) 47 Cal.3d 654 (Foley), Hunter v. Up-Right, Inc. (1993) 6 Cal.4th 1174 (Hunter), and Lazar v. Superior Court (1996) 12 Cal.4th 631 (Lazar).
Specifically, the California Supreme Court has specified two hurdles employees must overcome: (1) such tort claims must be based on conduct other than that giving rise to the employee’s termination and (2) the damages sought cannot exclusively “result from [the] termination itself.”
“Based on these principles, the trial court erred in denying PG&E’s JNOV because Hearn may not recover for defamation when it arose from the same conduct giving rise to his termination and the only result is the loss of his employment. In other words, Hearn cannot recover damages for wrongful termination by recasting his claim as one for defamation.”
TUCHER, P.J., Dissented in part with the majority opinion.
The Division of Workers’ Compensation (DWC) announced the agendas for the 32nd Annual Educational Conference.
– – Oakland Agenda
– – Los Angeles Agenda
The conference will take place on March 6-7, 2025 at the Oakland Marriott City Center Hotel and on March 20-21, 2025 at the Los Angeles Airport Marriott. This premier event will offer valuable insights into the latest workers’ compensation development, featuring expert speakers and networking opportunities.
DWC has applied for continuing educational credits from attorney, rehabilitation counselor, case manager, disability management, human resource and qualified medical examiner certifying organizations, among others.
Organizations who would like to become sponsors of the DWC conference can do so by going to the IWCF Website.
Attendee, exhibitor, and sponsor registration may be found at the DWC Educational Conference Webpage.
Register today and receive the iconic DWC tote bag upon arrival!
Rene Thomas Folse, JD, Ph.D. is the host for this edition which reports on the following news stories: WCAB to Sanction Attorney After Admonishments in 5 Cases. California Staffing Company Starts Gig Economy Legal Battle. Court Rules on FEHA Fees After Trip to Supreme Ct and Settlement. EEOC Says Wearable Technologies May Violate Employment Law. Two New Federal Laws Reduce Employer Administrative Burdens. New Law Limits Use of AI Alone in Making UR Determinations. Cal/OSHA Issues Safeway a $182K Citation For Unsafe Conditions. State Compensation Insurance Fund Declares 15% Dividend.
Before Ozempic and similar “wonder drugs,” medically- assisted weight loss had to happen the old-fashioned way— surgical intervention. For Southern California residents in the 2010s the Wizard of Weight Loss was Dr. Julian Omidi. To make a long story short, Omidi helmed a massive health insurance fraud scheme called “Get Thin.” Omidi’s scheme promised dramatic weight loss through Lap-Band surgery and other medical procedures.
A grand jury indicted Omidi and his company Surgery Center Management, LLC (“SCM”) for mail fraud, wire fraud, money laundering, and other related charges arising from the Get Thin scheme. In a nutshell, the government alleged that Omidi and SCM defrauded insurance companies by submitting false claims for reimbursement.
The claims included, among other misrepresentations, fraudulent patient test results and false assertions that a doctor had reviewed and approved the medical procedures at issue. After three-and-a-half years of pretrial litigation and a 48-day jury trial, the jury convicted Omidi and SCM of all charges. The district court sentenced Omidi to 84 months imprisonment and fined SCM over $22 million.
At a subsequent hearing, the district court considered forfeiture for both defendants. The government argued that the total proceeds of Get Thin’s business during the fraud period – $98,280,221 – should be forfeited because the whole business was “permeated with fraud.” In other words, even if some parts of Get Thin seemed legitimate, the government argued that “all proceeds of that business are forfeitable,” as “the proceeds of that so-called ‘legitimate’ side of the business would not exist but for the ‘fraudulent beginnings’ of the entire operation” (namely, the call center). Omidi and SCM objected to the forfeiture amount, arguing that Get Thin was “not entirely a fraud,” and the forfeiture amount should be limited to the proceeds traceable to falsified insurance claims.
The district court agreed with the government. Reviewing the relevant statutes and persuasive out-of-circuit authority, it agreed that the $98,280,221 in proceeds were directly or indirectly derived from the fraudulent Get Thin scheme.
The 9th Circuit Court of Appeal affirmed in the published case of USA v Omidi – 23-1719 (January 2023).
The question in this case is whether the district court erred in ordering the forfeiture of all Get Thin’s proceeds, even though conceivably some of the incoming funds ultimately paid for legitimate and medically necessary procedures.
Under § 981(a)(1)(C), any property which “constitutes or is derived from proceeds traceable to” a mail or wire fraud scheme is subject to forfeiture. Section 981(a)(2)(A) defines “proceeds” in a health care fraud scheme as “property of any kind obtained directly or indirectly, as the result of the commission of the offense giving rise to forfeiture, and any property traceable thereto, and is not limited to the net gain or profit realized from the offense”
Said more simply, any proceeds that directly or indirectly derive from the fraudulent scheme must be forfeited, even if particular proceeds were not profits from the offense itself.
Applying the above rules to this case, any money acquired via the fraudulent Get Thin funnel was subject to forfeiture.”
