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Officials Warn: “Fentanyl Crisis Raging in San Diego”

In the wake of four fentanyl overdose deaths in San Diego County in 24 hours last week, U.S. Attorney Robert Brewer issued a public safety alert for drug users to be aware that a lethal strain of fentanyl designed to look like oxycodone is being sold on the streets to unwitting buyers and the price may be the buyer’s life.

Brewer also warned that the fentanyl crisis is raging here as border seizures, prosecutions and overdoses are on pace to hit all-time highs in San Diego County at the end of 2019.

Fentanyl-related deaths are rapidly climbing to unprecedented levels. The Medical Examiner’s Office reports 50 confirmed fentanyl-related overdose deaths so far this year, plus another 28 suspected but yet-to-be confirmed cases with four months remaining in the year. Should this trend continue for the remainder of 2019, the death toll could potentially reach 130, which would amount to a 47 percent increase over last year’s total of 90 deaths, and a staggering 787 percent hike over five years ago when there were 15. The victims are overwhelmingly male, and the average age is 36, with the youngest 18 and the oldest 66.

Federal authorities, led by U.S. Customs and Border Protection and Homeland Security Investigations, have confiscated an estimated 533 kilograms – or 1,175 pounds – of illicit fentanyl at and near the international border so far this year. That’s more than half a ton. Just four years ago, authorities seized a fraction of that – only 30 kilograms.  In addition, there has been a record number of seizures involving counterfeit blue pills labeled M-30 that contain fentanyl.

The DEA is working in conjunction with local law enforcement agencies in San Diego to ensure the most effective overdose death investigations and prosecutions.  DEA is actively investigating fatal overdose deaths that occur in the San Diego County and has established an Overdose Response Group, which consists law enforcement from DEA, SDPD, Homeland Security Investigations, California Department of Health Care Services and FBI.  The goal of this specialized group is to identify the distributors of these deadly drugs that are bringing heartbreak to our communities.

Fentanyl is 30-50 times more powerful than heroin and so dangerous that in its purest form, even a tiny amount touching the skin can be deadly. According to law enforcement reports, the price of fentanyl in 2019 – whether in powder form and pill form – is declining, meaning that both forms are readily available in our community.

Users are also ordering up fentanyl from the so-called “Dark Web” like they would order something from Amazon. The drug is being purchased online and sent directly to customers by mail or express delivery service in the U.S.

In November, U.S. Attorney Brewer, DEA, HIDTA and the San Diego Prescription Drug Abuse Task Force are sponsoring a Western States Opioid Summit that will bring together hundreds of professionals from multiple disciplines to provide training and best practices to combat the fentanyl scourge.  Surgeon General Jerome Adams will address the group.

The U.S. Attorney’s Office and its partners created a local Fentanyl Working Group in early 2017, which meets quarterly.  This is a multi-dimensional group that includes local, state and federal investigative agencies, toxicologists, the Medical Examiner’s Office, DEA Lab Chemists, first responders, plus local, county and federal prosecutors. This collaboration is a significant step in working together to promote streamlined investigations.

Another SJDB Vendor Under Investigation

Earlier this year the Los Angeles District Attorney charged operators of,Technical School, Inc., doing business as Technical College, Inc., and Graduates Do Succeed Institute, doing business as GDS Institute with workers’ compensation fraud arising out of the use of SJDB vouchers.

Now, 23ABC News reports that a Bakersfield vocational training business is being investigated by the California Department of Insurance for alleged workers’ compensation fraud, according to court documents obtained by 23ABC News.

The court documents show the CDI is looking into the practices of Instituto Hispano Americano , located on Chester Avenue in Central Bakersfield.

A search warrant requested by the CDI shows multiple insurance companies contacted the department in 2018 over concerns of suspected fraud dating back to 2013.

One report, from Berkshire Hathaway Homestate Company, included as much as $248,600 in suspected fraud since 2013. The insurance company reached out to CDI in March of 2018 after suspicious arose about educational vouchers redeemed by Instituto Hispano Americano. BHHC told CDI they believed the services for the vouchers were not provided.

The education vouchers, according to the warrant, are from the California workers’ compensation system known as Supplemental Job Displacement Benefit. The vouchers are used to pay as much as $6,000 for educational and retraining or skill enhancement for workers who are injured on the job, suffering a permanent partial disability, according to the court documents.

Insurance Company of the West, in May of 2018, also reached out to CDI to report suspected fraud related to Instituto Hispano Americano. The insurance company told investigators the business allowed ineligible students to enroll in a training program without passing a required exam.

According to the documents, when ICW requested the students’ exam results, “[t]he results were on a non-descript [sic] letter, with basic typing and no letterhead. The score also appeared seemingly high at 118.” Results from four additional students were also forwarded showing “three out of the four claimants scored 118, and the fourth scored 123.”

Another insurance company, Zenith Insurance, also reported suspected fraudulent test results from Instituto Hispano Americano.

RAND Reports on Firefighter Musculoskeletal Disorders

The severity of recent wildfire seasons underscores the importance of a healthy firefighting workforce, and awareness of the psychiatric burden borne by public safety workers exposed to traumatic events has grown in recent years. Musculoskeletal disorders (MSDs) are the most common type of occupational injury or illness suffered by firefighters.

A 2010 RAND study on MSDs in California firefighters confirmed that firefighters experience MSDs at a significantly elevated rate compared to other workers, even compared to workers in other high-risk jobs. The California Commission on Health and Safety and Workers’ Compensation (CHSWC) commissioned RAND to update the analyses from the 2010 RAND study. and consider the impacts on outcomes for firefighters with MSDs.

According to the new 2019 Study, as expected, firefighters continue to face elevated risk of work-related musculoskeletal disorders, especially injuries to the lower extremities and trunk.

As in the 2010 study, firefighters with musculoskeletal disorders appear to have less severe economic consequences from their injuries than do workers in similar occupations. Post-injury earnings relative to in the second year after injury were sharply lower in comparable occupations: 88 percent for police, 85 percent for other public-sector workers, and 87 percent for private-sector workers.

This is an unusual pattern of post-injury outcomes, both because at-injury employment is nearly as high as overall employment and because it is much higher than observed in comparison occupations. Fire departments appear to do better than other employers – even public-sector employers – at retaining injured workers.

DEU ratings and statutory permanent disability benefits rose for firefighters after SB 863 implementation. Firefighters have relatively high occupational adjustments, and their slightly older age at injury may also results in more favorable adjustments under the current disability rating schedule.

Firefighters with musculoskeletal disorders rarely receive treatment or permanent disability benefits for PTSD or other psychiatric conditions. A troubling, caveat is that mental health stigma could lead to the patterns observed in these data. Stigma is widely recognized as a barrier to diagnosis and treatment of PTSD and mental disorders more generally among public-safety workers, but the scope of this study did not encompass measurement of firefighter mental health independently of care provided through workers’ compensation.

RAND did not find evidence that treatment caps on chiropractors, occupational therapy, and physical medicine had a substantial impact on most workers.

Disability and Wage Loss Not Inconsistent in Discrimination Case

Citizens of Humanity LLC, designs, markets, and manufactures blue jeans and other apparel under the trademark “Citizens of Humanity.” Noe Abarca worked in Citizens’s quality control department, separating and inspecting boxes of jeans from February 2006 until his termination on August 28, 2012.

After approximately four months with Citizens, Abarca started experiencing pain in his chest and clavicle area, which became more intense when lifting. The pain worsened and in July of 2012, the pain became unbearable.

His direct supervisor, Augustina Manzano, instructed him to see a doctor and referred him to Citizens’s head of human resources, Alma Casas, who did not advise Abarca to fill out a workers’ compensation claim form, so Abarca was not aware that he could file a claim for injury.

Abarca saw a doctor who issued a work restriction that Abarca was “unable to lift heavy objects” and that “15 to 20 lbs is the most” he could lift. The certificate also said that Abarca could return to work only doing “light work” from July 24, 2012 through August 24, 2012.

Two business days after the restriction expired, Citizens terminated Abarca. On the day of his termination, Casas, who Citizens entrusted to oversee employee terminations, thanked Abarca for his work, but said his services were no longer needed. Abarca insisted that he could continue inspecting jeans, but Casas responded that Citizens could not accommodate him.

On the day of his termination, Casas instructed Abarca to complete a workers’ compensation claim form which she did not explain and Abarca did not understand. This was the first workers’ compensation claim form that Abarca filled out. Under the heading, “Date employer first knew of injury,” Casas instructed Abarca to write, “August 28, 2012,” that same day.

Abarca sued Citizens for: retaliation, disability discrimination, failure to engage in the interactive process, failure to provide reasonable accommodation, failure to prevent/remedy discrimination and retaliation under the Fair Employment and Housing Act (FEHA), and wrongful termination in violation of public policy.

The jury awarded Abarca a total of $100,000 in compensatory damages: $35,000 for past lost earnings; $20,000 in other past economic loss; $45,000 in past non-economic losses including mental suffering; and nothing for future non-economic losses. The jury also awarded Abarca $550,000 in punitive damages.

The Court of Appeal affirmed the judgment in the unpublished case of Abarca v. Citizens of Humanity, LLC.

One of the eight issues raised on appeal by Citizens was judicial estopple. Citizens contended that judicial estoppel bars Abarca’s claims because, in his successful application for disability benefits, Abarca represented that he was unable to work, but then sued Citizens for lost wages contending that he could have worked all along. According to Citizens, Abarca cannot reconcile the conflict between the finding that he was “temporarily totally disabled” for purposes of receiving state disability benefits and his present claim for lost wages.

Cleveland v. Policy Management Systems Corp., supra, 526 U.S. at page 807 held that an employee should have the opportunity to explain how she can be both entitled to disability and recover lost wages in a disability discrimination action based on her ability to perform at her job with reasonable accommodations.

Abarca’s explanation at trial was that he could have continued working for Citizens had they continued to honor his work restriction. This is critical because disability determinations do not consider whether an employee can perform his job duties with reasonable accommodations.

Proposed Regs Increase Copy Service Fees

The Division of Workers’ Compensation (DWC) has posted proposed amendments to the Copy Service Fee Schedule to its online forum where members of the public may review and comment on the proposal. The proposed updates to the regulations include:

A one-time increase of the flat fee rate for copy services from $180 to $210

Annual cost-of-living adjustments to the flat fee for copy services

– Mandatory billing codes, including proposed new codes for sales tax, contracted fees and additional sets

– Requirements that bills for both canceled services and certificates of no records include specified information regarding the request for the services, including the name of the requestor and the date of the request.

Claim Administrators should also take note of proposed § 9981 “Bills for Copy Services” which adds a number of new items of information to be supplied to Administrators for review along with the bill for payment.

The forum can be found on the DWC forums webpage under “Current forums.- Comments will be accepted on the forum until 5 p.m. on Friday, August 16.

July 29, 2019 News Podcast


Rene Thomas Folse, JD, Ph.D. is the host for this edition which reports on the following news stories: $2B Roundup-Cancer Jury Verdict Reduced to $87M, $13.4M Restitution Affirmed in Largest Premium Fraud Scam, Drobot to Plead Guilty – Faces 50 Years – in NEW Case, Patient “Recruiter” Pleads Guilty in $65M Case, Man Convicted of Stealing Medicare Set Aside Funds, Truck Driver Jailed for Comp Fraud, Chief Judge Says “Degradation of Civility” at WCAB, Applied Underwriters Fined $3 Million for Side Agreements, Self-Insured Employers Claim Frequency Increasing, Study Reviews Side Effects of Short Term Opiates.

Angel Transportation Loses Claim for $1.2M in WCAB Liens

Milad Demetry was the president and principal actor for both plaintiffs Errands and its successor company American Angel Transportation Inc..

In 2012, Errands entered into a business relationship with Wayne Walz , wherein Errands would transport individuals claiming workers’ compensation benefits to and from their medical appointments. In 2013, American Angel Transportation Inc., effectively became the successor of Errands, with respect to its business dealings with Walz.

According to the written contracts with Walz, titled the “Billing & Collections Agreement.” Walz was responsible for negotiating and securing payments from the workers’ compensation insurers (or their third party administrators) connected to the applicants transported by plaintiffs. Walz was to be paid 20 percent of the actual payments collected for the transportation companies.

The companies provided transportation services to applicants based upon requests by Waltz, typically ranging between 10 to 50 requests per day. Insurers would issue payment checks naming the transportation companies as payees, but would deliver them to Walz’s office. Demetry, as president of the transportation companies, would periodically go to his office to collect the payment checks and simultaneously pay 20 percent of the amounts received.

The transportation companies filed their lawsuits against Walz as well as individual doctors, alleging seven causes of action. They alleged that because of Waltz conduct and omissions, over $1.2 million in billed trips went unpaid by insurers and became uncollectible.

Their argument at trial focused on a theory that defendant had breached the Agreements by failing to obtain authorizations for plaintiffs’ trips ahead of time from insurers and by failing to file liens at the WCAB so that plaintiffs’ rights to payment for their billed trips could be formally adjudicated by the WCAB in the event an insurer refused to pay.

The evidence at trial was insufficient to show causation, as the trial judge reasoned that many bills were paid without having obtained prior authorization or filing liens before the WCAB. There was thus no direct evidence that failure to obtain prior authorization or file a lien resulted in loss of the payment in every transportation event, since some were paid and some were not. The plaintiffs were provided an opportunity to provide evidence showing a link between the failures, and the non payment on a bill by bill basis, and they could not.

Thus the trial court entered judgment in favor of Wayne Walz, which was affirmed by the Court of Appeal in the unpublished case of America Angel Transportation Inc. v Wayne Walz.

The Court of Appeal concluded that the “Plaintiffs have not carried their burden to demonstrate reversible error under a substantial evidence standard of review.”

Director at Cedars-Sinai Faces Child Porn Charges

A director for a division at Cedars-Sinai hospital has been accused of distributing and possessing child pornography.

The Los Angeles County District Attorney’s Office charged 59 year old Guido Germano Ph.D with one felony count each of distribution of obscene matter and possession of child or youth pornography. He is expected to be arraigned in Department 30 of the Foltz Criminal Justice Center. He faces a possible maximum sentence of three years and eight months in state prison if convicted as charged.

Germano, who is the director of artificial intelligence medicine at Cedars-Sinai hospital, is accused of distributing child pornography videos using peer-to-peer software and downloading them onto his personal computer at his home in Santa Monica, according to Deputy District Attorney Angela Brunson of the Cyber Crime Division.

Guido Germano, PhD is the Scientific Director of the Artificial Intelligence in Medicine Program. Dr. Germano is also a Professor of Medicine at the University of California, Los Angeles (UCLA) David Geffen School of Medicine.

Dr. Germano’s research and expertise played an integral role in Cedars-Sinai’s Nuclear Cardiology program. One of his projects has been his creation of new artificial intelligence techniques to accurately determine the location of the heart from 3-D tomographic (SPECT) images, estimate epicardial and endocardial boundaries and quantify heart volumes in a completely automated fashion.

Widely recognized as an expert in the field of cardiovascular nuclear medicine, Dr. Germano has lectured extensively worldwide. He serves on the national and international committees of numerous professional organizations and editorial boards. He is also the co-director of the two annual American College of Cardiology nuclear cardiology courses for physicians and technologists. In addition, he has written more than 160 original manuscripts, chapters and books and received numerous awards for excellence in research in the fields of heart research, medical physics and nuclear medicine.

Dr. Germano received his doctorate and master’s degrees in biomedical physics from UCLA. He also earned his MBA from GEPI, Ministry of the Treasure in Rome, Italy.

He’s currently an editorial board member of three medical journals, according to a since-removed biography on the hospital’s website. Germano previously served on the board of directors for the American Society of Nuclear Cardiology in 2012 and was a fellow at the American Heart Associated in 2001, among other activities listed on the biography.

He was arrested on June 19 and released on bond. The case was filed on July 23.

Insurance Commissioner Faces Ethics Investigation

The Sacramento Bee reports that the California Insurance Commissioner Ricardo Lara, is under fire for accepting campaign contributions from insurance executives and their spouses. He has yet to release his office calendars in response to public requests.

But Lara acknowledged last week that he did meet with a CEO whose company has multiple complaints against it in cases before his department.

Lara said he met with CEO Steven M. Menzies, who heads Applied Underwriters, a workers’ compensation agency that the department formerly settled with for “bait and switch” marketing tactics in 2017. Berkshire Hathaway is in the process of selling the company, a sale Lara must approve.

Lara called the May 6 meeting with Menzies “casual” in a July 25 interview with KQED. But he also said he agreed to a meeting after the executive reached out “to see if staff could meet with him to review the cases before him.” His department said the meeting occurred on May 6.

Lara, who was serving as his own campaign treasurer, accepted $46,500 in contributions to his 2022 reelection campaign in April from out-of-state executives with ties to the company. During his campaign for the post, Lara had pledged not to take political money from insurers.

The meeting and decisions refreshed concerns from the advocacy nonprofit Consumer Watchdog, which has pressed Lara’s office to release calendar records of meetings with executives who donated the money in question.

President Jamie Court said the meeting with Menzies raises questions of potential ex parte communication violations because of Lara’s quasi-judicial role as commissioner. Ex parte communications are illegal under California law, but Department spokesman Michael Soller said Lara did not violate ex parte regulations because the conversation was “not about a specific case.”

Lara has not said whether he personally knows the donors who contributed the total $54,000. Stephen and Carole Acunto each donated $15,500 to Lara. Mr. Acunto has spoken on behalf of Applied Underwriters in the past, but did not respond to requests for comment.

Theresa DeBarbrie also donated $15,500, and is the wife of another company executive with ties to Applied Underwriters. Nearly $8,000 came from Darlene Graber, whose husband is also in the insurance industry.

Jessica Levinson, a professor at Loyola Law School in Los Angeles, said because Lara’s role “stands somewhere in the middle” between a lawmaker and a judicial official, the meetings and decisions raise “serious red flags.”

Self-Insured Program Frees up $6B in Working Capital

The California Self-Insurers’ Security Fund’s Board of Trustees has approved and implemented the 2019/20 Alternative Security Program (ASP), which frees $6.6 billion in working capital and provides California self-insured businesses greater financial flexibility.

The ASP is a first-in-the-nation, innovative program operated by the non-profit California Self-Insurers’ Security Fund. The program provides a financial backstop to replace security deposits required to collateralize self-insured workers’ compensation liabilities. The participation fee for the guarantee program was reduced 13% versus last year. These added savings make the program and costs even more competitive for California self-insured businesses.

All employers in California are required to have workers’ compensation insurance to protect themselves and workers, and to minimize the impact of work-related injuries and illnesses. Meeting this requirement can be accomplished either by buying an insurance policy, or through obtaining authority from the DIR’s Office of Self Insurance Plans (OSIP) to self-insure the businesses’ workers’ compensation liabilities.

Self-insured employers are required to maintain a deposit to collateralize their risk in an amount equal to estimated liabilities as determined by an actuary. This deposit, which can be posted in cash, letters of credit, surety bonds or securities, limits the employer’s ability to use their cash or credit line to expand their business.

In contrast, the Security Fund ASP allows members to free up their cash or line of credit, allowing them to invest this capital back into their businesses while the ASP assumes responsibility for their security deposit posting requirement. This essentially provides the ASP member a low cost substitute for collateral with no balance sheet impact.

California currently has more than 3,500 private employers protecting more than 2.3 million workers representing a total payroll of nearly $100 billion through self-insurance workers’ compensation plans.

One of every eight California workers is protected by a self-insurance plan. Self-insured private employers in California represent large and midsized private companies and industry groups.

The California Self-Insurers’ Security Fund (CASISF) has been serving its members for 35 years since its founding on July 6, 1994. It s a member driven non-profit organization with leadership by a volunteer Board of Trustees representing members serving members. The Security Fund is a key partner supporting California self-insured workers’ compensation programs.