Rene Thomas Folse, JD, Ph.D. is the host for this edition which reports on the following news stories: Abbvie Resolves CDI Insurance Fraud Act Claim for $24M. DOL Accuses Uber and Lyft of Wage Theft. Floyd Skeren Firm Outlines COVID-19 Defense Strategies. Indictments Say 10 ChiroMed Operatives Ran “Sham” Clinics. San Jose Cop Faces $18M Payroll Fraud Charges. Claimant Convicted for Forging Medical Reports. CWCI Tracking Tool Reports 14,470 COVID-19 Claims So Far. Healthcare Workers at High COVID-19 Risk Despite PPP. Coventry Workers’ Comp Services Sale Closes. Liberty Mutual Reports $320M Q2 Loss From COVID-19.
$2.6 billion! That’s how much Tuft’s University research says it costs to bring a new drug from the research lab to the pharmacy counter. The full research, development and approval process can last from 12 to 15 years.
The U.S. Food and Drug Administration’s (FDA’s) Center for Drug Evaluation and Research (CDER) is a science-led organization in charge of overseeing the drug approval process before a drug is marketed. CDER ensures that both brand and generic drugs work correctly and that the health benefits outweigh the known risks.
In the manufacturer’s early phases of drug discovery (preclinical research) they are synthesizing and screening a drug candidate for toxicity in animals before the medicine moves on to human trials. The sponsor files an Investigational New Drug (IND) Application that details specifics such as chemistry, manufacturing and the initial plans for human testing.
A drug then undergoes several years of laboratory testing before a New Drug Application (NDA) is made to the FDA to begin testing the drug in humans. Only one in 1000 of the compounds that enter laboratory testing will ever make it to human testing.
If the FDA gives the green light, the investigational drug will then enter three phases of human clinical trials:
— Phase 1: About 20 to 80 healthy volunteers to establish a drug’s safety and profile, and takes about 1 year.
— Phase 2: Roughly 100 to 300 patient volunteers to assess the drug’s effectiveness in those with a specific condition or disease. This phase runs about 2 years.
— Phase 3: Typically, several thousand patients are monitored in clinics and hospitals to carefully determine effectiveness and identify further side effects.This phase runs about about 3 years on average.
For an NDA, the company writes and submits an application which includes thousands of pages to the FDA for review and approval. The NDA is the official request for US approval of a drug. The FDA team has 60 days to review the NDA and determine if it will be filed for further review.
A group of independent physicians and other clinicians, called an FDA Advisory Board, meets to discuss the NDA with the FDA reviewers and manufacturer of the product. These meetings often take one or two days. After the meeting, the Advisory Board will make a recommendation for approval, or not, to the FDA, usually through a vote. The FDA often follows the advice of the Board, but is not obligated to do so.
After final approval, the drug becomes available for physicians to prescribe. However, drugs may not come to the market immediately because of patents disputes, manufacturing issues, or controlled substance designation from the DEA.
The Workers’ Compensation Insurance Rating Bureau of California Governing Committee voted to authorize the WCIRB to submit a January 1, 2021 Advisory Pure Premium Rate Filing to the California Insurance Commissioner.
The filing will propose advisory pure premium rates that will be on average approximately 2.6 percent above the average approved January 1, 2020 advisory pure premium rates.
In his presentation to the Governing Committee, WCIRB Executive Vice President and Chief Actuary Dave Bellusci noted that absent the estimated impact of COVID-19 claims on 2021 policies, the WCIRB’s recommendation would reflect a modest decrease (1.3 percent) in advisory pure premium rates.
In addition to projecting the cost of COVID-19 claims to be incurred on 2021 policies, the WCIRB’s recommendation also reflected the impact of the pandemic related economic slowdown on wage growth, claim frequency and claim severity.
The WCIRB expects to submit its January 1, 2021 Advisory Pure Premium Rate Filing to the California Department of Insurance (CDI) during the week of August 24, 2020.
The CDI will schedule a public hearing to consider the filing, and once the Notice of Proposed Action and Notice of Public Hearing is issued, the WCIRB will post a copy in the Filings and Plans section of the WCIRB website.
The Division of Workers’ Compensation and Workers’ Compensation Appeals Board continue to improve their ability to hold hearings during the COVID-19 pandemic. The following changes are effective August 17.
DWC will continue to hear all mandatory settlement conferences, priority conferences, status conferences, case-in-chief trials, lien conferences and expedited hearings telephonically via the individually assigned judges’ conference lines as announced in newslines issued on April 3, April 28 and May 28.
Beginning August 17, DWC will have a video option available for trials and expedited hearings only. Parties will continue to use individually assigned judges’ conference lines on the day of trial. However, judges will have the option of conducting the trial through the judge’s virtual courtroom if needed. If that is required, the judge will provide a link to the parties allowing them to log into the video platform.
DWC will be using the video platform called LifeSize. Stakeholders should download the software prior to a hearing where a video option may become necessary. Neither DWC nor LifeSize will charge for participants to use the platform.
However, parties will need to have certain system requirements to fully participate in the video option. Parties will also need to have a web camera. Participants without access to a web camera may use a smart phone with the program, although it is not recommended. Additional information on LifeSize and how to use the program may be found on the DWC website.
All parties scheduled for a hearing should continue to call the conference line for the judge in front of whom the case is set, at the designated time listed on the hearing notice. When prompted, the parties should enter the access code assigned to that line. DWC staff will instruct participants as to the procedure to follow during the call.
DWC is in the process of updating its hearing notices to reflect the judges’ conference lines. That change will be implemented on or about August 15.
DWC has also begun hearing Special Adjudication Unit (SAU) lien trials. The same procedure described above will apply for SAU trials.
At this time all other lien trials will be continued. However, DWC anticipates adding lien trials back to the calendar in the near future.
District offices will not hold in-person hearings.
DWC will not accept walk-in filings, walk-through documents or in-person requests at this time. DWC will only accept electronic filing via EAMS and JET File, and paper filing by U.S. mail.
DWC will accept limited email filings pursuant to WCAB’s en banc decision dated April 6 and its newsline issued on April 23. Email filings are limited to documents that are subject to a statute of limitations that cannot otherwise be efiled, JET filed or filed by U.S. mail.
DWC will continue to accept an electronic signature on any settlement documents, applications, pleadings, petitions or motions that are sent to the district offices or filed in EAMS. For all e-forms, parties should utilize “S signature” as shown in the E-forms Filing Reference Guide and the JET File Business Rules.
Injured workers who are unable to file utilizing the available options or need assistance may contact DWC’s call center at 909-383-4522.
The WCAB office in San Francisco is operating with limited in-office staff. The WCAB commissioners and staff continue to work remotely. All practitioners are encouraged to regularly check the WCAB and DWC websites for updates about the district offices’ and the WCAB’s operations during this period.
The Labor Commissioner’s Office has reached a $2.6 million settlement with the owners of Kome Japanese Seafood & Buffet in Daly City, securing compensation for 133 workers for unpaid minimum wage, overtime and split shift premiums that were uncovered in a 2018 wage theft investigation. The settlement will also compensate workers for WARN Act violations, which occurred when the restaurant closed without notice.
The Labor Commissioner’s Office in June 2018 issued wage assessments and penalties of $5.16 million to Kome Japanese Seafood & Buffet in Daly City including $4,381,461 for unpaid back wages and $780,400 for penalties. The wage theft violations and civil penalties included failure to pay minimum wage, overtime and split shift premiums. In 2019, the civil penalties were adjusted to $754,950 and the unpaid wages were adjusted to $3,575,433 based on evidence presented prior to hearing.
Notification has been delivered to the current and former restaurant workers of their expected settlement payments and workers began receiving checks this month. The workers are receiving settlement payments ranging from $20 to $47,253 with an average of $14,217 per worker. The settlement also includes $55,000 in civil penalties payable to the state.
The Labor Commissioner’s Office launched its investigation into Kome Japanese Seafood & Buffet after receiving complaints from workers who reported wage theft. The Labor Commissioner’s Office worked with Asian Americans Advancing Justice – Asian Law Caucus and the Chinese Progressive Association, which represented many of the workers who cooperated in the investigation.
The Department of Industrial Relations’ Division of Labor Standards Enforcement, also known as the California Labor Commissioner’s Office, combats wage theft and unfair competition by investigating allegations of illegal and unfair business practices.
The Labor Commissioner’s Office launched an interdisciplinary outreach campaign, “Reaching Every Californian.” The campaign amplifies basic protections and builds pathways to impacted populations so that workers and employers understand workplace protections, obligations and how to ensure compliance with these laws.
On May 5, 2020, the Attorney General of California, joined by the City Attorneys of Los Angeles, San Diego, and San Francisco, filed a lawsuit on behalf of the People of the State California seeking injunctive relief, restitution, and penalties against Defendants Uber Technologies and Lyft.
The complaint asserts that Uber and Lyft have misclassified their ride-hailing drivers as independent contractors rather than employees in violation of Assembly Bill 5 , which took effect on January 1, 2020. That statute is intended to ensure that all workers who meet its criteria receive the basic rights and protections guaranteed to employees under California law.
On June 25, the People moved for a preliminary injunction enjoining Defendants from classifying their drivers as independent contractors, and from violating any provisions of the Labor Code, the Unemployment Insurance Code, and the wage orders of the Industrial Welfare Commission with regard to their drivers.
Defendants opposed the motion. They also filed three additional motions: a motion to stay the litigation; a demurrer and motion to strike the complaint; and a motion to compel arbitration.
Defendants sought to stay the litigation until the Ninth Circuit rules on Uber’s pending constitutional challenge to A.B. 5; until the November 2020 election, when the voters will consider Proposition 22, an initiative sponsored by Uber and Lyft that would exempt them from the requirements of A.B. 5; or until the final disposition of numerous lawsuits and arbitrations in which similar claims have been raised.
On August 10, the Court ruled on these pending motions after first declaring that “Defendants are not entitled to an indefinite postponement of their day of reckoning. Their threshold motions are groundless.” The case went downhill for the Uber and Lyft from there.
A footnote also proclaimed that the “Court gives no weight to Defendants’ surveys regarding how many of their drivers wish to become employees or remain self-employed. A. B. 5 may be unpopular among some of Defendants’ drivers, but a lawsuit is not a popularity contest. Nor, as Defendants and some amici curiae argue, is it this Court’ s role to decide whether A.B. S ‘s effects on drivers will outweigh its benefits. Policy judgments underlying a statute are left to the Legislature; the judiciary does not pass on the wisdom of legislation.” (
At the conclusion of the 34 page ruling, it was ordered that “During the pendency of this action, Defendants Uber Technologies, Inc. and Lyft, Inc. are hereby enjoined and restrained from classifying their Drivers as independent contractors in violation of Labor Code section 2570.3 .”
“Defendants are further enjoined and restrained from violating any provisions of the Labor Code, the Unemployment Insurance Code, and the wage orders of the Industrial Welfare Commission with regard to their Drivers.”
This injunction was stayed for a period of 10 days to allow the two companies an opportunity to appeal. Thereafter, “it shall remain in effect through and including the trial of this matter or upon further order of this Court.”
Uber said it planned to file an immediate emergency appeal to block the ruling from going into effect.
Meliton Hernandez Martinez Jr., 23, was arraigned at the Merced County Superior Court on multiple felony counts of insurance fraud and a misdemeanor count of filing a false police report, after allegedly instigating a physical altercation resulting in stab wounds to his abdomen and arm.
An investigation by the Department of Insurance revealed Martinez was on an approved mid-morning work break while employed with a construction company.
During the break, surveillance footage and witness statements revealed that Martinez made inappropriate gestures to a female in a parking lot and was then confronted by the female’s boyfriend, a former U.S. Marine, who asked Martinez to be respectful.
Surveillance footage revealed Martinez began punching the boyfriend in the face multiple times, without provocation. As a result, Martinez was stabbed in the abdomen and the arm, which was later determined to be self-defense by local law enforcement.
After being airlifted to a local hospital, Martinez filed a workers’ compensation claim with his employer and provided false statements in regards to the incident.
Advantage Workers’ Compensation Insurance Company later denied all medical bills in relation to the claim after discovering Martinez was the initial physical aggressor, and toxicology results revealed Martinez was under the influence of alcohol and cannabis at the time of the altercation.
The Merced County District Attorney’s Office is prosecuting this case.
A man and his company have been charged with violating the Federal Food, Drug, and Cosmetic Act (FDCA) by selling a drug claiming to treat COVID-19.
Matthew Ryncarz, and his company, Fusion Health and Vitality, LLC d/b/a/ Pharm Origins, are accused of selling a misbranded drug called “Immune Shot” that they falsely claimed would lower consumer’s risk of contracting COVID-19 by nearly 50 percent, said Bobby L. Christine, U.S. Attorney for the Southern District of Georgia.
In March 2020, during the midst of the global COVID-19 public health crisis, Ryncarz, through his company, Pharm Origins, created a website and began selling “Immune Shot” for $19 a bottle. Among other things, the website represented that “YOU will learn in JUST MINUTES… how to LOWER your risk of COVID-19 by nearly 50%.”
Further, to sell “Immune Shot,” Ryncarz and Pharm Origins targeted individuals, ages 50 and older, with heavy-handed sales pitches, such as “The NEXT FIVE MINUTES could save your life,” “We are offering you the exclusive price of only $19 per bottle because we know that Immune Shot could be the most important formula in the WORLD right now due to the new pandemic,” “Immune Shot is Not a Luxury, It is a Necessity Right Now,” “Point Blank, if YOU Leave, YOU are at Risk,” and “Is Your Life Worth $19? Seriously, Is It?”
Ryncarz and Pharm Origins sold “Immune Shot” to consumers in the Southern District of Georgia and outside of the state of Georgia. The defendants were charged by way of an Information, filed in the U.S. District Court for the Southern District of Georgia. The Information alleges that “Immune Shot” was a misbranded drug within the meaning of 21 U.S.C. § 352(a)(1), in that it bore false and misleading labeling.
U.S. Attorney Christine expressed appreciation to investigators in the U.S. Attorney’s Office, and to David A. Frank, Senior Litigation Counsel with the Department of Justice’s Consumer Protection Branch, Lynn M. Marshall, Associate Chief Counsel for Enforcement, Office of the Chief Counsel, FDA, and to the FBI for their assistance in this prosecution.
“The FBI and our law enforcement partners will not allow anyone to take advantage of our citizens’ fears during a pandemic like COVID-19,” said Chris Hacker, Special Agent in Charge of FBI Atlanta. “It is especially concerning because this alleged scheme targeted citizens who are most vulnerable to the virus.”
Please report COVID-19 fraud to the National Center for Disaster Fraud’s National Hotline at (866) 720-5721, or go to justice.gov/disastercomplaintform.
The Division of Workers’ Compensation (DWC) has issued a notice of conference call public hearing for a proposed evidence-based update to the Medical Treatment Utilization Schedule (MTUS), which can be found at California Code of Regulations, title 8, section 9792.24.6.
The conference call public hearing is scheduled for Thursday, September 10, at 10 a.m. and members of the public may attend by calling 866-390-1828 and using access code 5497535#. Members of the public may review and comment on the proposed updates no later than September 10.
The proposed evidence-based update to the MTUS incorporate by reference the latest published guideline from American College of Occupational and Environmental Medicine (ACOEM) for the following:
— Antiemetics Guideline (ACOEM March 27, 2020)
An antiemetic is a drug that is effective against vomiting and nausea. Antiemetics are typically used to treat motion sickness and the side effects of opioid analgesics, general anaesthetics, and chemotherapy directed against cancer. They may be used for severe cases of gastroenteritis, especially if the patient is dehydrated.
The proposed evidence-based update to the MTUS regulations are exempt from Labor Code sections 5307.3 and 5307.4 and the rulemaking provisions of the Administrative Procedure Act.
However, DWC is required under Labor Code section 5307.27 to have a 30-day public comment period, hold a public hearing, respond to all the comments received during the public comment period and publish the order adopting the update online.
Rene Thomas Folse, JD, Ph.D. is the host for this edition which reports on the following news stories: Failure to Warn Teacher Supports Serious and Willful Award. Contra Costa Contractor Convicted for $2M Payroll Fraud. Six NFL Players Charged in Superseding Healthcare Fraud Indictment. San Diego Laboratory Pays $49 Million For Fraud and Kickbacks. California Hospitals Appear on Best Ortho Hospital List. Ergonomics a Big Problem for Workers at Home. CMS Announces Webinar on New NGHP Reporting User Guide. DEA Closes and Fines Yreka Pharmacy for Multiple Violations. 4000 Federal COVID-19 Comp Claims Strain Resources. Lawmakers Consider List of COVID-19 New Workplace Protections.