If COVID-19 behaves like other workers’ compensation lung and disease claims, about two out of 100 cases may result in some degree of permanent partial disability and one out of 5,000 may result in permanent total disability, according to a new report by the National Council on Compensation Insurance.

In a follow up to the report by the Claims Journal, Jeff Eddinger, NCCI’s senior division executive for regulatory business management, said Thursday that’s not enough to be a major cost driver, but does represent a real risk that insurers should keep in mind when assessing the potential impact of the pandemic on losses.

“The vast majority of COVID claims are small-dollar claims,” Eddinger said in a telephone interview. “There is a small percentage that will result in permanent disability claims.”

NCCI has included the potential for permanent disability into its Hypothetical Scenarios Tool, a calculator released in May that models COVID-19 costs under various scenarios. The calculator allows users to adjust assumptions, such as the percentage of workers who are infected, the percentage hospitalized and now the percentage who are permanently disabled.

Adjusting the calculator to assume no permanent disability claims results in projected COVID-19 costs of $25.1 billion for the 38 states that use NCCI services. But the total cost increases by $4 billion when using the new default settings for permanent disability provided by NCCI.

NCCI said in a previous study that it assumes 8.5% of workers who file claims will require hospitalization for moderate symptoms and 1.5% will develop severe cases that require critical care.

The bottom line: There is a 2.3% chance that a reported COVID-19 claim will result in permanent partial injury and there’s a 0.05% chance that a COVID claim will result in a permanent total injury.

The Claims Journal analysis continues to note that data reported by state officials in California and Florida suggests that COVID-19 claims have become a sizable fraction of the total number of workers compensation claims filed. According to the California Division of Workers’ Compensation, COVID-19 was the cause of 44,354 first reports of injury from Jan. 1 to Sept. 30, or 11% of the total number.

The Florida Division of Workers’ Compensation reports that 21,221 COVID-19 indemnity claims have been filed as of Sept. 30, or 31.8% of the total number of injury and illness claims in the state.

Marsh issued a report this week that concludes, “many of the most dire predictions about COVID-19’s impact on workers’ compensation systems have not been realized.”

“Claims of COVID-19 exposure in the workplace have been outpaced by a decline in other types of reported occupational injuries, and the workers’ compensation insurance market remains competitive,” the report says.

Marsh said data from its clients shows that the number of new claims reported from January through August showed illness and injury rates ranged from a 29% decrease in April to a 5% increase in June.

The claims filed so far have proven to be inexpensive: 96% cost less than $3,500, according to one respondent to the Health Strategy Associates survey.

The US healthcare industry is undergoing significant disruptions as the coronavirus pandemic catalyzed the need for improved healthcare delivery and digital health startups are at the helm of this transformation.

Globally, healthcare funding to private firms reached $18.09 billion in Q2 2020, establishing a new quarterly record, with equity investments growing 6.3% quarter-over-quarter from 1,197 deals in Q1 2020 to 1,272 deals in Q2 2020.

In a new report, Insider Intelligence examined the top five US digital health startups in AI, telehealth, and medical devices – the areas of digital health with the most number of deals in the first half of 2020.

The companies mentioned in this report are: 98point6, Abbott, Aetion, Anthem, Bigfoot Biomedical, Biofourmis, Bright.md, Chugai, Cigna, Element Science, Firefly Health, Gaido Health, Genesis Health, Happify Health, K Health, Komodo Health, Mindstrong, Modern Fertility, Oak Street Health, Onera Health, Premera Blue Cross, Vicarious Surgical, and Virta Health.

Here are some key takeaways from this report:

— Digital health startups are transforming the US healthcare system amid the growing demand for improved healthcare delivery catalyzed by the coronavirus pandemic.
— The AI, telehealth, and medical device spaces are the three areas of healthcare where technology is causing the biggest disruptions. These spaces represent the digital health market areas that scored the most number of deals in the first half of 2020.
— AI’s ability to rapidly sift through vast sums of data, facilitate remote patient monitoring, and power digital therapeutics highlights the transformative power of the tech in healthcare – and it’s attracting substantial investor attention.
— Telehealth usage – and investments – have surged amid the coronavirus pandemic, underscoring how virtual care solutions are already making a sizable impact on the US healthcare delivery landscape.
— The medical device market, with tech ranging from remote monitoring devices to robotics-based surgical tools, is experiencing record-breaking investment activity.

The full report:

— Highlights how the coronavirus pandemic has accelerated growing demand for improved healthcare delivery, and the steps digital health startups are taking to transform the US healthcare system.
— Provides an overview of the three areas of healthcare where technology is causing the biggest disruptions – AI, telehealth, and medical devices – and the factors making these markets particularly ripe for transformation.
— Identifies the top 5 US startups to watch in the AI, telehealth, and medical device market areas.
— Shares forward-looking insights on what’s next for each of the featured startups.

A Santa Monica day spa owner was just charged in federal court with accumulating N95 respirators in anticipation of the COVID-19 pandemic and then price gouging by selling the scarce masks at vastly inflated prices – sometimes nearly 1,100 percent over list price.

Niki Schwarz, 55, of Santa Monica, the owner of Tikkun Holistic Spa, was named in a criminal information charging her with one count of hoarding and price gouging. In a plea agreement also just filed, Schwarz agreed to plead guilty to the misdemeanor offense.

In the plea agreement, Schwarz admitted that in February she began accumulating N95 respirators in anticipation of a shortage that would be caused by a global pandemic resulting from the spread of the novel coronavirus. From the beginning of February until the end of June, Schwarz accumulated nearly 20,000 N95 masks that had been manufactured by 3M (list price ranging from $1.02 to $1.27) and Alpha Pro (list price of 86 cents).

In March, the United States government designated N95 respirators as “scarce materials” under the Defense Production Act of 1950 due to the overwhelming need of health care providers dealing with COVID-19 patients to use personal protective equipment.

Schwarz admitted that she obtained the N95 respirators for the purpose of reselling them at above-market rates, and that she sold the masks for up to $15 each.

Schwarz “accumulated and resold the masks at prices in excess of the prevailing market prices willfully, that is, with knowledge that masks had been designated as scarce materials and with knowledge that accumulation of the designated materials to resell in excess of prevailing market prices was unlawful,” according to the plea agreement.

On March 1, an associate informed Schwarz that the associate was going to stop selling N95 masks because she believed it was crime – and that price gouging could result in one year in prison – but Schwarz continued to sell the masks at inflated prices.

The hoarding and price gouging offense that Schwarz admits in the plea agreement carries a statutory maximum sentence of one year in federal prison.

The case is being prosecuted by Assistant United States Attorney Jeff Mitchell of the Major Frauds Section, who is a regional coordinator of the Justice Department’s COVID-19 Hoarding and Price Gouging Task Force.

Jaime Chavez Jr. claimed injury to his left leg, right shoulder, bilateral knees, cervical spine, psyche, vision and internal system on October I 3, 2017 while employed as a tree trimmer by Cut It Right Tree Service.

He was assigned to cut multiple mulberry trees and a camphor tree. He was given a harness that was missing the right thigh strap. His task was to strip the three mulberry trees, to clear and shape them, and to clear and shape the camphor tree.

He became concerned, however, with how the ground crew was handling the debris. The brush was being moved in a manner that tangled his rope. He spoke with both the members of the ground crew to “stop playing with his life.” It appeared that they improved in their work.

But after lunch, approximately 3:00 p.m, he heard “an explosion.” He thought that the chainsaw had blown or the wood chipper. But his harness had cinched up and he saw that his leg had been ripped off and was hanging. As he came to realize later, the rope had wrapped around his leg, pulled tight, and then noticed that the left pant leg was now hanging flat. He knew that his leg had been popped out of the socket. As he understood later, the rope auto-amputated his leg from the knee down.

Mr. Chavez stated he had 15 years working in the tree trimming business. Prior to what happened to him, he has not heard of anyone suffering a leg amputation.

The matter proceeded to trial on February 3, 2020. The parties stipulated to injury AOE/COE to the following parts: left leg (amputation), right shoulder, bilateral knees and cervical spine. One of the issues was “sudden and extraordinary event.”

The WCJ commented in the Opinion on Decision “The defense contends that Applicant’s injuries are, first, barred by the six month rule. However, from a plain reading of the facts of this case, it is clear that this was both a “violent act” (as defined under Labor Code § 4660.1) and a “sudden and extraordinary” event (as defined under Labor Code § 3208.3). Thereby, Applicant is entitled to benefits for his psychiatric injuries, including the possibility of impairment benefits.

Defendants petition for reconsideration of this finding was denied in the panel decision of Chavez v Cut it Right Tree Service, SCIF.

The legislative and judicial history of section 3208.3(d) show that a “sudden and extraordinary” employment condition means something that is not regular and routine, and is uncommon, unusual and unexpected. (See Matea v. Workers’ Comp. Appeals Bd. (2006) 144 Cal.App.4th 1435, 1449 (71 Cal.Comp.Cases 1522].) The Court of Appeal in Matea acknowledged that “[g]as main explosions and workplace violence are certainly uncommon and usually totally unexpected events; thus, they may be sudden and extraordinary employment conditions.”

“Applicant’s unrebutted testimony reflects that the injury occurred so quickly that he did not initially realize what had happened until he saw his leg. Defendant’s contentions that applicant had “notice” that the injury would occur because of his warnings to co-workers to be careful with his rope are unpersuasive. The injury was caused by a sudden employment condition.”

Mallinckrodt filed for bankruptcy protection on Monday, saddled with lawsuits alleging it helped fuel the U.S. opioid epidemic. They are the third major durgmaker to seek bankruptcy protection.

The company had said in February it planned to have its generic drug business file for bankruptcy as part of a tentative $1.6 billion opioid settlement to resolve claims by state attorneys general and U.S. cities and counties.

Last March, the company also lost a court battle to avoid paying higher rebates to state Medicaid programs for its top-selling drug.

In September, Mallinckrodt hired restructuring advisers to help limit its liabilities regarding the opioid settlement and a potential restructuring. The opioid litigation had caused some concern at the company, including a suspension of its plans to spin off its generics business into a standalone entity due to the opioid litigation, as well as “market conditions.”

Mallinckrodt said on Monday it had agreed to pay $1.6 billion over several years to settle opioid-related litigation. About $450 million would be paid as part of its settlement once the company emerged from chapter 11 bankruptcy.

The company would then pay $200 million in the first and second year after its emergence from the bankruptcy, and $150 million subsequently through the seventh year.

Mallinckrodt had agreed to pay $260 million over seven years to resolve disputes related to its multiple-sclerosis drug H.P. Acthar gel and pay out rebates to state Medicaid programs.

Mallinckrodt also plans to dismiss its appeal to a March ruling related to Acthar gel, whose price per-vial has risen from about $50 in 2001 to $38,892 in 2019.

During the bankruptcy protection, the company said it aims to resolve opioid-related claims and reduce its debt by about $1.3 billion, while surviving on cash on hand and cash generated from operations.

The company listed both assets and liabilities in the range of $1 billion to $10 billion in a filing with the U.S. Bankruptcy Court for the District Of Delaware.

Under terms of the settlement announced this morning, the court-supervised process will lead to the creation of a trust, which, as the company said, will “establish an abatement fund to offset the expense of helping to combat opioid addiction and providing support to communities impacted by opioid abuse.” The court-supervised process is also expected to resolve all opioid-related claims against Mallinckrodt and its subsidiaries, the company said.

Mark Trudeau, president and chief executive officer of Mallinckrodt, said reaching the agreement and undergoing debt refinancing are important steps moving the company forward.

“Importantly, when finalized, we believe the proposed settlement and capital restructuring activities will provide us with a clear path forward to achieving our long term strategy, preserving value for our financial stakeholders and providing us with the flexibility to operate effectively,” Trudeau said in a statement.

Trudeau continued but adding that, while the company has had some uncertainties, it has delivered strong earnings and has a strong pipeline that continues to “build momentum.” Trudeau said the company anticipates seeking regulatory approval of terlipressin and StratGraft in the coming months, as well as the completion of key clinical study results and data readouts across the portfolio.