Rene Thomas Folse, JD, Ph.D. is the host for this edition which reports on the following news stories: Cal. Supreme Ct. Clarifies Vertical v Horizontal Integration of Excess Insurance. Court of Appeal Reinstates COVID-19 Wrongful Death Case Against Employer. After Imposing $40K in Sanctions WCAB Seeks More Against Garretts. Amazon Cited $6M for Violating California’s Warehouse Quotas Law. CEO and President of ADHD Telehealth Company Arrested for $100M Fraud. Newsom and Business Leaders Announce PAGA Reform Agreement. CWCI Examines California’s Proposed Agricultural Heat Injuries Presumption.
OSHA has released the long-anticipated proposed rule with the goal of protecting millions of workers from the health risks of extreme heat. If finalized, the proposed rule would help protect approximately 36 million workers in indoor and outdoor work settings and arguably substantially reduce heat injuries, illnesses and deaths in the workplace.
The proposed rule would require employers to develop an injury and illness prevention plan to control heat hazards in workplaces affected by excessive heat. Among other things, the plan would require employers to evaluate heat risks and – when heat increases risks to workers – implement requirements for drinking water, rest breaks and control of indoor heat. It would also require a plan to protect new or returning workers unaccustomed to working in high heat conditions.
Employers would also be required to provide training, have procedures to respond if a worker is experiencing signs and symptoms of a heat-related illness, and take immediate action to help a worker experiencing signs and symptoms of a heat emergency.
If adopted, the Rule will become the first nationwide standard for addressing the hazards of excessive heat in the workplace.The rule comes as the U.S. Supreme Court has been scrutinizing federal agencies’ rulemaking and Congress’s delegation of authority to federal agencies.Some major employment law attorneys are predicting the new SCOTUS opinion may cause OSHA some headaches.
In a landmark case decided in June 2024, Loper Bright Enterprises v. Raimondo, a group of commercial fishermen, challenged a regulation by the National Marine Fisheries Service (NMFS) that required them to fund on-board observers in the Atlantic herring fishery. This program came with a hefty price tag of $710 per day for the fishermen.
The crux of the issue was whether the NMFS had the legal authority to impose this financial burden. The fishermen argued that the law governing fishery management, the Magnuson-Stevens Fishery Conservation and Management Act (MSFCA), didn’t grant the NMFS such power. They also felt the agency didn’t follow proper procedures when setting up the rule.
The case hinged on a legal principle called Chevron deference. Established in a previous case, Chevron U. S. A. Inc. v. Natural Resources Defense Council, Inc., 467 U. S. 837, Chevron deference instructed courts to defer to an agency’s interpretation of a law it enforces, especially if the law was ambiguous.
Loper Bright Enterprises asked the Supreme Court to not only decide on the specific regulation, but also to reconsider Chevron deference altogether. The Supreme Court agreed to hear the case specifically on the question of Chevron deference.
In a 6-2 decision, the Supreme Court sided with the fishermen and threw out Chevron deference. The Court ruled that courts must make their own independent judgment about whether an agency is acting within the legal limits of its authority. They cannot simply accept an agency’s interpretation of the law, even if the law is unclear.
This decision was a major shift in the balance of power between courts and regulatory agencies. It gives courts more authority to review agency actions and ensure they comply with the law.
Moreover, on July 2, 2024, Justice Clarence Thomas dissented from the Court’s decision not to take a case, Allstates Refractory Contractors, LLC v. Su, which raised the issue of whether Congress’s delegation of authority to OSHA in the Occupational Safety and Health (OSH) Act to write “reasonably necessary or appropriate” workplace safety standards was unconstitutional. In his dissenting opinion, Justice Thomas argued the Court should reconsider its standard of allowing congressional delegation when a statute creating an agency contains an “intelligible principle” that guides the agency’s exercise of authority. This principle “does not adequately reinforce the Constitution’s allocation of legislative power” in Congress, Thomas argued.
“The [OSH Act] may be the broadest delegation of power to an administrative agency found in the United States Code,” Justice Thomas wrote. “If this far-reaching grant of authority does not impermissibly confer legislative power on an agency, it is hard to imagine what would.”
At least five justices have already indicated an interest in reconsidering Congress’s delegation to federal agencies, including Justice Neil Gorsuch, who separately indicated he would have granted the petition for a writ of certiorari in Allstates
In the interim, OSHA continues to direct significant existing outreach and enforcement resources to educate employers and workers and hold businesses accountable for violations of the Occupational Safety and Health Act’s general duty clause, 29 U.S.C. § 654(a)(1) and other applicable regulations. Record-breaking temperatures across the nation have increased the risks people face on-the-job, especially in summer months. Every year, dozens of workers die and thousands more suffer illnesses related to hazardous heat exposure that, sadly, are most often preventable.
The agency continues to conduct heat-related inspections under its National Emphasis Program – Outdoor and Indoor Heat-Related Hazards, launched in 2022. The program inspects workplaces with the highest exposures to heat-related hazards proactively to prevent workers from suffering injury, illness or death needlessly. Since the launch, OSHA has conducted more than 5,000 federal heat-related inspections.
In addition, the agency is prioritizing programmed inspections in agricultural industries that employ temporary, nonimmigrant H-2A workers for seasonal labor. These workers face unique vulnerabilities, including potential language barriers, less control over their living and working conditions, and possible lack of acclimatization, and are at high risk of hazardous heat exposure.
Private self-insured claim volume in the California workers’ compensation system fell 9.5% in 2023, producing the biggest year-to-year decline in private self-insured claim frequency in more than 15 years, but double-digit increases in the average amounts paid and incurred on these claims drove total paid and incurred losses for private self-insured employers sharply higher according to a California Workers’ Compensation Institute (CWCI) review of initial data from the state Office of Self-Insurance Plans (OSIP).
OSIP’s annual summary of private self-insured data, issued June 27, provides the first look at California private, self-insured claims experience for cases reported in 2023. It includes 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 2023 summary shows the experience of private self-insured employers who covered 2.34 million California employees last year (down from 2.42 million in the 2022 initial report) and who reported 94,386 claims in 2023, down from 104,278 claims in the 2022 initial report.
The distribution by claim type shows private self-insured employers reported 48,404 medical-only claims in 2023 (down 7.4% from 52,300 in 2022, the final year of the pandemic), though that was 10.6% above the 43,779 med-only claims noted in 2020, when COVID closures suppressed med-only claim volume as the state’s economy went through a brief but steep recession.
Meanwhile private self-insured indemnity claim volume, which spiked during the pandemic (climbing from 34,307 claims in 2019 to 51,978 claims in 2022, likely due to the influx of lost-time claims involving COVID) fell 13.0% to 45,982 claims in 2023. The latest claim count works out to an overall frequency rate of 4.03 claims (2.07 med-only and 1.96 indemnity) per 100 private self-insured employees in 2023, down from an overall rate of 4.31 in 2022 (2.16 med-only and 2.15 indemnity), marking the first decline in private self-insured claim frequency since the pre-pandemic year of 2019, and the most significant drop in the 16 years covered by the CWCI review.
CWCI notes that despite the declines in claim volume and claim frequency, private self-insured’s first report total paid and incurred losses were both up in 2023. Paid losses on 2023 private self-insured claims through the fourth quarter totaled $340.2 million, 9.4% more than the first report total for 2022, as total paid indemnity (primarily temporary disability payments) increased by $10.9 million (6.7%) to $172.8 million, and total paid medical increased by $18.2 million (12.2%) to $167.4 million.
The latest results also show that first report total incurred losses (paid benefits plus reserves for future payments) on private self-insured claims rose to $864.0 million in 2023, up $52.2 million, or 6.4% from the comparable 2022 figure, as total incurred indemnity at the first report increased by $16.3 million (4.7%) to $361.4 million and total incurred medical increased by $35.9 million (7.7%) to $502.6 million.
Given that there were 9,892 fewer private self-insured claims in 2023 than in 2022 — including 5,996 fewer indemnity claims — the increases in private self-insureds’ total paid and incurred amounts in 2023 can be ascribed to the growth in the average paid and incurred losses at the first report, as average paid losses per claim climbed 20.9% to $3,605 while average incurred losses rose 17.6% to $9,153.
OSIP’s summary of private self-insured’s calendar year 2023 data, follows the December 2023 release of public self-insured claims data for fiscal year 2022/2023. OSIP 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.
July 22, 2019, Haoxiao Liu, a Goldengate bus driver trainee, was on a multi-hour bus trip with a Goldengate driving trainer. He sustained a host of injuries on this bus trip,
On December 26, 2019, Liu filed an action against Goldengate in small claims court, seeking compensation for injuries sustained on July 22, 2019. Following trial, plaintiff obtained a judgment against Goldengate in the amount of $615.
On July 19, 2021, Liu filed the instant lawsuit against Goldengate Bus Inc., and Gang Guo alleging claims for negligence and intentional tort arising out of the injuries sustained on July 22, 2019.
In his negligence cause of action, plaintiff alleges that defendants “failed to provide [him with] the necessary work environment,” “failed to protect [their] employee,” “failed to do anything to care and protect [their] new employee,” “failed to pay wage that [they] promised to pay,” and “failed to report the injury of the plaintiff to its insurance company.”
In his intentional tort claim, plaintiff similarly alleges that “[a]s a direct result of defendants’ [negligence], abuse of power, [and] hostile work environment,” he suffered injuries.
In response, defendants demurred, arguing that plaintiff’s claims were barred by the exclusive remedy rule and the doctrines of res judicata and/or collateral estoppel.
The trial court sustained defendants’ demurrer without leave to amend. It found that defendants “established that the workers’ compensation exclusivity rule bars Plaintiff’s claims” and that plaintiff’s claims against Goldengate were barred by the doctrine of res judicata.
The Court of Appeal affirmed the dismissal in the unpublished case of Liu v. Goldengate Bus -B320846 (July 2024).
Res judicata describes the preclusive effect of a final judgment on the merits. Res judicata, or claim preclusion, prevents relitigation of the same cause of action in a second suit between the same parties or parties in privity with them. Under the doctrine of res judicata a judgment for the defendant serves as a bar to further litigation of the same cause of action.
Claim preclusion applies when (1) the claim raised in the prior adjudication is identical to the claim presented in the later action; (2) the prior proceeding resulted in a final judgment on the merits; and (3) the party against whom the doctrine is being asserted was a party or in privity with a party to the prior adjudication.
“Here, all elements of res judicata are met. There is a final judgment in favor of plaintiff and against Goldengate arising out of the small claims court action. The claims raised therein are the same as those alleged in this action and involve the same parties. And, there was an adjudication on the merits, namely a trial.”
“Even though Guo was not a party to the small claims court action, the doctrine of res judicata bars plaintiff’s claims against him. As alleged in the complaint, his liability, if any, is entirely derived from Goldengate’s liability.”
The California Civil Rights Department (CRD) announced reaching a $14,425,000 proposed settlement with the Microsoft Corporation to resolve allegations of retaliation and discrimination against workers based on their use of protected leave, including parental, disability, pregnancy, and family care taking leave.
State and federal law prohibits employers from interfering with an employee’s use of protected forms of leave, such as leave to bond with a new child, address a serious health condition, or care for a family member. As part of the settlement, which is subject to court approval, Microsoft has committed to taking a range of proactive steps to prevent future discrimination and provide monetary relief to employees who used protected leave at the company in California between 2017 and 2024.
The settlement resolves a multi-year investigation into Microsoft over claims of discrimination related to the use of protected leave under California’s Fair Employment and Housing Act, the California Family Rights Act, California’s Pregnancy Disability Leave law, Title VII of the Civil Rights Act of 1964, and the Americans with Disabilities Act. In a complaint filed by CRD against Microsoft, the department alleged that women and people with disabilities are overrepresented among the group of workers who use these forms of leave and that workers who used protected leave faced unlawful retaliation and discrimination in compensation and promotion opportunities because of their use of the leave.
For example, CRD alleged that employees who used protected leave received lower bonuses and unfavorable performance reviews that, in turn, harmed their eligibility for merit increases, stock awards, and promotions. In addition, CRD alleged that Microsoft failed to take sufficient action to prevent discrimination from occurring, altering the career trajectory of women, people with disabilities, and other employees who worked at the company, ultimately leaving them behind.
As part of the agreed settlement, Microsoft has not admitted to any of these allegations and continues to deny them.
If approved by the court, the settlement will require Microsoft to:
– – Pay $14,200,000 to cover direct relief for workers and $225,000 in costs associated with the department’s enforcement efforts.
– – Retain an independent consultant to make recommendations on Microsoft’s personnel policies and practices to ensure managers do not consider time on protected leave in determining annual rewards and promotions.
– – Work with the independent consultant to also ensure workers know how to raise complaints in instances where they believe that annual rewards and promotion decisions reflect discrimination or retaliation for the use of protected leave.
– – Report annually, via the independent consultant, on compliance with the settlement, including with respect to how complaints of discrimination are received and processed.
– – Ensure managers and human resources personnel complete training concerning prohibitions on discrimination based on the use of protected leave.
Individuals who took protected leave and worked at Microsoft in California between May 2017 and the date of the court’s entry of the settlement agreement may be eligible to receive compensation. At this time, no action is needed by individuals covered under the proposed agreement and additional information will be posted on CRD’s website upon approval by the court. If the court approves the settlement, covered workers will receive further information and updates from a settlement administrator.
CRD may be able to assist victims of employment discrimination, through its complaint process. General information about CRD’s complaint process and how to file a complaint is available on its website. Additional information regarding protections against discrimination and harassment in the workplace is also available.
A copy of the proposed consent decree is available as well as a copy of the complaint. The proposed consent decree is subject to court approval.
Assistant U.S. Attorney Matthew Yelovich, Deputy Chief of the Criminal Division of the U.S. Attorney’s Office for the Northern District of California, announced criminal charges against four defendants in connection with an alleged scheme to defraud federal health care benefit programs including Medicare and Medicaid.
The charges filed in federal court are part of the Department of Justice’s 2024 National Health Care Fraud Enforcement Action, and are part of a strategically coordinated, two-week nationwide law enforcement action that resulted in criminal charges against 193 defendants for their alleged participation in health care fraud and opioid abuse schemes that resulted in the submission of over $2.75 billion in alleged false billings. The defendants allegedly defrauded programs entrusted for the care of the elderly and disabled to line their own pockets, and the Government, in connection with the enforcement action, seized over $231 million in cash, luxury vehicles, gold, and other assets.
The following individuals are charged in the Northern District of California:
– – Riley Levy, 30, of Peoria, Arizona, was charged by information with conspiracy to distribute controlled substances in connection with his role in an unlawful scheme to distribute Adderall and other stimulants. As alleged in the information, in the course and scope of his work for Done Health, P.C. and Done Global Inc. (“Done”), Levy, Done’s Executive Leader, Operations and Strategy, conspired to distribute Adderall and other stimulants by means of the Internet that were not for a legitimate medical purpose in the usual course of professional practice..
– – Christopher Lucchese, 58, of Plano, Texas, was charged by information with conspiracy to defraud the United States and distribute controlled substances in connection with his role in an unlawful scheme to distribute Adderall and other stimulants. As alleged in the information, in the course and scope of his work for Done Health, P.C. and Done Global Inc., Lucchese, a medical doctor, issued prescriptions for Adderall and other stimulants that were not for a legitimate medical purpose in the usual course of professional practice.
– – Yina Cruz, 37, of Glenwood, New Jersey, was charged by information with conspiracy to defraud the United States and distribute controlled substances in connection with her role in an unlawful scheme to distribute Adderall and other stimulants. As alleged in the information, in the course and scope of her work for Done Health, P.C. and Done Global Inc., Cruz, a nurse practitioner, issued prescriptions for Adderall and other stimulants, including to Medicare and Medicaid beneficiaries, that were not for a legitimate medical purpose in the usual course of professional practice. .
– – Katrina Pratcher, 70, of Altadena, California, was charged by information with conspiracy to defraud the United States and distribute controlled substances in connection with her role in an unlawful scheme to distribute Adderall and other stimulants. As alleged, in the course and scope of her work for Done Health, P.C. and Done Global Inc., Pratcher, a nurse practitioner, issued prescriptions for Adderall and other stimulants, including to Medicare and Medicaid beneficiaries, that were not for a legitimate medical purpose in the usual course of professional practice..
The Northern District of California, in particular, worked with the Department’s Criminal Division and other law enforcement organizations to investigate and prosecute the cases filed during the enforcement period: Drug Enforcement Administration, Homeland Security Investigations, the U.S. Department of Health and Human Services Office of Inspector General, and IRS Criminal Investigation.
The Fraud Section leads the Criminal Division’s efforts to combat health care fraud through the Health Care Fraud Strike Force. Prior to the charges announced as part of today’s nationwide enforcement action and since its inception in March 2007, the Health Care Fraud Strike Force, which operates in 27 districts, charged more than 5,400 defendants who collectively billed Medicare, Medicaid, and private health insurers more than $27 billion.
In May 2018, Thomas Lim began his employment with the City of Downey as a police officer. His probationary period ran for 18 months. During this probationary period, Lim was an at-will employee, and City could release him from employment for any legal reason upon giving him two weeks’ notice prior to the end of the period. After Lim’s probation concluded, City could terminate his employment only for good cause.
On December 8, 2018, Lim responded to a traffic collision as part of his official duties. As he investigated the accident, a car struck and injured him. Lim’s personal doctor at Kaiser Permanente provided a list of work restrictions, effective through January 25, 2019. The doctor observed that if the work restrictions could not be accommodated, Lim should be considered temporarily totally disabled. City could not accommodate the work restrictions and placed Lim on temporary total disability leave.
In late March 2019, City’s human resources director James McQueen received information suggesting that Lim might be engaging in physical activities associated with a basketball league while on temporary total disability leave. McQueen contacted City’s workers’ compensation third party administrator, AdminSure, and agreed to their recommendation to investigate Lim for possible fraud. AdminSure hired RJN Investigations (RJN) to conduct a sub rosa investigation.
While on disability leave, Lim engaged in physical activity that violated his work restrictions and then made sworn statements in a workers’ compensation deposition denying such physical activity. After Lim was cleared to return to work, and while he was still a probationary at-will employee, City terminated Lim’s employment because it believed he had engaged in workers’ compensation fraud.
Lim sued City under the Fair Employment and Housing Act (FEHA; Gov. Code, § 12900 et seq.) for disability discrimination, retaliation, failure to accommodate, failure to engage in the interactive process, and failure to prevent discrimination or retaliation.
City moved for summary judgment, arguing it had a legitimate reason to fire Lim because it believed he had engaged in fraud. City further argued Lim could not prove at least one element of each of his causes of action. The trial court granted the motion.
The Court of Appeal affirmed in the unpublished case of Lim v. City of Downey -B326822 (June 2024).
Lim does not directly dispute that City could terminate him for any legal reason during his probationary period, including suspected fraud. Instead, he argues he demonstrated a triable issue of material fact as to pretext because (a) City’s explanation was unworthy of credence, (b) his job performance was satisfactory, (c) City’s investigation was inadequate, (d) City decided to discharge him soon after he went out on disability leave (temporal proximity), and (e) City targeted him when it “raced to terminate [him] in November 2019 before the end of his probation.”
Lim argues City’s proffered reasons for discharging him are not valid because he was not required to use crutches. But this argument that crutches were not part of Lim’s work restrictions does not demonstrate that City’s reason for discharging Lim was unworthy of credence.
“The issue is not whether crutches were required but Lim’s inconsistent use of them and the contexts in which he chose to use and not to use crutches. Lim chose to use crutches on May 22, 2019, when he visited his employer, even though he had been observed not using them previously during a sub rosa investigation.”
“Notably, while at the police station, Lim not only used crutches, but also moved at such a slow pace that motion-activated cameras failed to capture his entire path. From the comparative visual evidence of Lim’s ease of movement in other contexts versus Lim’s plodding path at the police station, Chief Milligan could reasonably conclude that not only had Lim exaggerated the degree of his debilitation, but also that the investigators’ observations were credible. Indeed, Lim offers no explanation why he chose to use crutches during his May 22, 2019 visit to the police station.”
Payments for medical-legal evaluations and reports used to resolve medical disputes in California work injury claims have increased more than expected since a new Med-Legal Fee Schedule (MLFS) took effect in April 2021 according to a new CWCI study, with the average payment for a comprehensive exam up 52%, primarily due to new per-page fees for record review that are paid on top of flat fees for med-legal evaluations services.
When the Division of Workers’ Compensation (DWC) adopted the new schedule, it anticipated it would result in a 25% increase in payment levels to adequately compensate med-legal evaluators
In addition, 2023 saw a 6 percent increase in Qualified Medical Evaluators (QMEs) compared with pre-pandemic levels
Implementation of the updated MLFS for the California workers’ compensation system three years ago led to a comprehensive overhaul of the payment formulas for med-legal evaluations and reports. Complexity and time-based payments that had been in effect since 2006 were replaced with flat fees and payments for record reviews exceeding specific page thresholds were added.
.CWCI’s study, which updates a preliminary analysis from 2021, uses payment data for med-legal evaluations and reports with dates of service from January 2015 through October 2023, valued as of December 2023, to compare the utilization and reimbursement of med-legal services rendered before and after the new schedule’s April 1, 2021, effective date. The study analyzed changes in evaluation and report patterns and payments. One goal of the new MLFS was to attract and retain Qualified Medical Evaluators (QMEs) to conduct medical-legal evaluations to better meet demand. CWCI used DWC data from calendar years 2019 to 2023 to track changes in the number of registered QMEs and the number of QME panel assignments by medical specialty.
A review of the mix of med-legal services found that between April 2021 and 2023 there was a big shift in the use of follow-up exams, which was anticipated as the new MLFS calls for the follow-up evaluation code to be used for 18 months after the preceding comprehensive exam, versus 9 months under the 2006 schedule. Other key findings include:
– – There has been a 52% increase in the average reimbursement for comprehensive evaluations, and a 29% increase for supplemental reports since the new MLFS took effect.
– – Additional charges for excess record review were found on 43.3% of the comprehensive evaluations, 24.9% of the follow-up evaluations, and 30.8% of the supplemental reports. For comprehensive evaluations, the new per-page record review fee added an average of $1,817 to the $2,015 flat fee payment for services with page-review. Page-review payments drove nearly three quarters of the increase in comprehensive evaluation payments under the new schedule. In addition, the per-page record review payments added an average of $1,338 to the flat fee for follow-up evaluations with excess page review and $1,335 to the flat fee for supplemental reports with excess page-review.
– – The number of certified QMEs has increased 5.9% from 2,561 in 2019 to 2,712 in 2023. That improvement, however, has been offset somewhat by a 2.9% increase in the number of panel assignments over the same period, resulting in a net gain of about 3 percent.
– – Physicians specializing in orthopedic surgery provided 44% of the med-legal services in 2023, followed by chiropractors who provided 11% of the services.
CWCI has published its study in a Research Update Report, “Increased Medical-Legal Costs and Current QME Supply – Impact of the 2021 Medical-Legal Fee Schedule.” The report is available to CWCI members and subscribers who log on to the Research section at www.cwci.org. Others may purchase the report from CWCI’s online store, here.
An Inland Empire pharmacist has been charged with using his Montclair pharmacy to submit more than $300 million in fraudulent Medi-Cal claims for prescription medications that were medically unnecessary, often not provided to patients, and were obtained through the payment of tens of millions of dollars in illegal kickbacks, the Justice Department announced today.
Kyrollos Mekail, 36, of Moreno Valley, is charged with two counts of health care fraud. He is expected to be arraigned in the coming weeks in United States District Court. The charges filed in federal court are part of the Department of Justice’s 2024 National Health Care Fraud Enforcement Action.
According to court documents, Mekail is a licensed California pharmacist who owns, operates, and is the pharmacist-in-charge of the Montclair-based Monte VP LLC, which does business as Monte Vista Pharmacy. Monte Vista Pharmacy is a provider under Medi-Cal, a California health care benefit program.
In early 2022, Medi-Cal suspended its requirement that health care providers obtain prior authorization before providing certain health care services or medications as a condition of reimbursement. The suspension of the prior authorization requirements was part of an ongoing transition of Medi-Cal’s prescription drug program to a new payment system.
From May 2022 to March 2023, Mekail and his co-schemers allegedly exploited Medi-Cal’s prior authorization suspension by billing Medi-Cal tens of millions of dollars per month for dispensing high-reimbursement, non-contracted, generic drugs through Monte Vista Pharmacy. Some prescription medications purportedly were to treat pain and also included Folite tablets, a vitamin available over the counter.
Normally, these high-cost reimbursement medications would have required prior authorization under Medi-Cal’s old payment system. The information alleges the medication involved in this scheme was medically unnecessary, frequently was not dispensed to patients, and procured by kickbacks.
In less than one year, Monte Vista Pharmacy billed Medi-Cal approximately $306,521,392 for the medications, of which Medi-Cal paid Monte Vista Pharmacy approximately $204,032,151, according to court documents.
Mekail allegedly paid two co-schemers more than $36 million of the fraudulently obtained Medi-Cal proceeds as kickbacks for referring the prescriptions. He allegedly disguised these kickbacks as payments for “consulting services.”
An information is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
If convicted of all charges, Mekail would face a statutory maximum sentence of 10 years in federal prison for each count of health care fraud.
The United States Department of Health and Human Services Office of Inspector General (HHS-OIG), the FBI, and the California Department of Justice are investigating this matter.
Assistant United States Attorney Roger A. Hsieh of the Major Frauds Section and Assistant Chief Niall M. O’Donnell and Trial Attorney Siobhan M. Namazi of the U.S. Department of Justice, Criminal Division, Fraud Section are prosecuting this case. Assistant United States Attorney James E. Dochterman of the Asset Forfeiture and Recovery Section is handling asset forfeiture matters in this case.
No one tracks how many of Cal Fire’s 12,000 firefighters and other employees suffer from mental health problems, but department leaders say post traumatic stress disorder and suicidal thoughts have become a silent epidemic at the agency responsible for fighting California’s increasingly erratic and destructive wildfires.
In an online survey of wildland firefighters nationwide, about a third reported considering suicide and nearly 40% said they had colleagues who had committed suicide; many also reported depression and anxiety.
Nonetheless, CalMatters claims the response of the California workers’ compensation system for these injured firefighters is a “total system breakdown.”
And CalMatters goes on to say “California’s workers’ comp – which is supposed to help people get medical treatment for workplace illnesses and injuries – can be a nightmare for firefighters and other first responders with PTSD.
Claims filed by firefighters and law enforcement officers are more likely to involve PTSD than claims by the average worker in California – and they have been denied more often than claims for other medical conditions, according to the research institute RAND.
From 2008 to 2019 in California, workers’ comp officials denied PTSD claims filed by firefighters and other first responders at more than twice the rate of their other work-related conditions, such as back injuries and pneumonia, RAND reported. About a quarter of firefighters’ 1,000 PTSD claims were denied, a higher rate than for PTSD claims from other California workers.
“It’s a fail-first system. You have to get a broken leg to show you are in need of support. With mental illness, we are constantly having to prove to everybody why we were ill. You have to get to the point of suicide,” said Jessica Cruz, the California chief executive officer of the National Alliance on Mental Illness.
CalMatters provides an example to back up its claim. Todd Nelson, former Cal Fire captain, “was running on the Foresthill Bridge, the highest in California, fleeing cops and firefighters after his wife reported that he was su icidal. He hurdled a concrete barrier and straddled the railing of the bridge in the Sierra Nevada foothills, staring down at a large rock 730 feet below. As the rescuers closed in, Nelson leaned precariously over the chasm. His strategy – making the fatal plunge appear accidental, allowing his family to collect his life insurance.”It was not Nelson’s first suicide attempt, he had tried to take his life many times before.
“The incident began the firefighter’s arduous, years-long journey toward wellness, threaded through a bureaucratic labyrinth strewn with more obstacles than he’d ever encountered on a California wildfire: finding qualified medical help, battling an insurance company to pay for it and navigating the tangled morass of California’s workers’ comp. All without going broke or returning to his dark place.”
Jennifer Alexander, Nelson’s therapist, said patients in acute crisis simply don’t have the mental capacity to ride herd on stubborn workers’ comp claims. Alexander said she was once on hold for more than six hours with Cal Fire’s mental health provider attempting to get one of her bills paid, and she has waited years to get paid for treating firefighters.
“People give up. It’s a battle … They are not fully functional,” said Alexander, who for 21 years has specialized in treating first responders with trauma and PTSD and has spent an estimated 25,000 hours treating them. “You are not talking about healthy individuals who can sit on the phone for hours.”
Cal Fire firefighters and other workers also have trouble finding qualified therapists, especially outside major cities in rural areas, where many are based. In 2021, less than half of people with a mental illness in the U.S. were able to access timely care. Therapists are reluctant to take workers’ comp, or sometimes any type of insurance. because they often have to wait months or years to be reimbursed.
Michael Dworsky, a senior economist at the research institute RAND and one of the study’s project leaders, called workers’ comp “challenging and bureaucratic.”
“Even if the claim is accepted, there can be disputes about the medical necessity of individual bills. Just because your claim is accepted, doesn’t mean you are done fighting with the insurance company,” he said.
In 2020 lawmakers took a major step,adding a legal shortcut or “presumption” to the state labor code, stipulating that firefighters and other first responders are considered at high risk for PTSD in the course of doing their job. A law enacted last year extended the presumption to 2029.
Before enacting the law, state officials asked RAND researchers to report on the scope of the problem. They analyzed nearly 6 million claims filed between 2008 through 2019 and interviewed dozens of experts, including a representative sample of 13 first responders. The researchers found a consistent and troubling trend among the 13: “Nearly all workers said that they had filed a workers’ compensation claim for their mental health conditions – yet almost none received PTSD care paid for by workers’ compensation.”
Many therapists say they haven’t seen much, if any, improvement. Nelson’s therapist, Alexander, called workers’ comp a “total system breakdown.” A spokesman for the Department of Industrial Relations refused to grant interview requests from CalMatters or answer questions or provide data about firefighters’ mental health claims.