Menu Close

Employer Coalition Speaks Out on Dynamax Case

A coalition of influential California business groups says it will support a bill that would codify a California Supreme Court decision that placed strict limits on classifying workers as independent contractors – if the legislation includes additional exemptions for certain professions.

“We respectfully SUPPORT if AB 5 is further AMENDED to provide a more progressive and holistic approach that fit today’s modern workforce,” the coalition stated in letters to the bill’s author and the Assembly Labor committee submitted Monday afternoon.

The letters – signed by California Chamber of Commerce, California Retailers Association and California Building Industry Association, among othersask for broader exemptions for professionals beyond those already agreed to for doctors and insurance agents.

The coalition also seeks a broader exemption for workers “who prefer to control their own schedule,” including consultants, travel agents, and truck, taxi and “gig economy’ drivers; and exempting short-term projects and business-to-business contracts.

The groups’ new position drew cautious praise from the bill’s author and supporters. “It’s a step forward,” said the bill’s author, Asm. Lorena Gonzalez (D-San Diego). “I’m glad they’re not opposing it.” But Gonzalez called the proposed amendments “too broad.”

“They can’t actually think I would agree to those things,” she said, adding that she will continue “to work industry-by-industry to find appropriate situations” for additional amendments and exemptions.

Gonzalez named hairdressers and real estate agents as industries she’s open to including and added that she is “interested but not sold on short-term projects.”

The California Supreme Court issued the ruling – commonly referred to as the “Dynamex decision” – a year ago. It stemmed from a case brought by delivery drivers who believed the company Dynamex misclassified them as independent contractors instead of employees.

Labor groups hailed the decision as a victory that would extend benefits and protections to more workers. Classifying workers as employees requires employers to pay for unemployment insurance, family leave and workers’ compensation, among other benefits and protections.

The “support-if-amended” position demonstrates the tightrope the Chamber and business groups must walk in the Dynamex debate. Employers argue the current version of the bill would “not only (hurt) the business model of a broad swath of industries and billions of venture capital dollars that are increasingly invested in businesses, but also (hinder) California as a national leader in the innovation economy.”

Travelers Reduces Opioid Use by 40%

The Travelers Companies, Inc. reported an almost 40 percent reduction in the use of opioids among the injured construction workers it has helped, thanks to a combination of its Early Severity Predictor® model and its comprehensive pharmacy management program.

The Early Severity Predictor is the company’s proprietary predictive model that helps forecast which injured employees are at higher risk of developing chronic pain, while the pharmacy management program monitors drug interactions, excessive dosing and abuse patterns to reduce the risk of opioid dependency.

Construction sites contain many health and safety risks for workers, with strains, sprains, broken bones and head traumas among the most common employee injuries. All of these can lead to chronic pain, a condition that is often treated with highly addictive opioids. In fact, roughly half of all workers compensation claims related to the construction industry that are submitted to Travelers involve opioid prescriptions.

“The opioid epidemic is having a profound effect on our society, and the crisis is especially concerning for the construction industry, where the work can be physically demanding,” said Rick Keegan, President of Construction at Travelers. “Identifying safe and effective alternatives to treat injuries and prevent chronic pain will help injured employees avoid the risks associated with opioids while helping our customers better manage the related medical costs.”

Travelers’ nurses and Claim professionals work closely with at-risk injured employees identified by the Early Severity Predictor model, and their physicians, to develop an aggressive, sports-medicine-like treatment regimen, which often includes physical therapy and other interventions to prevent acute pain from becoming chronic. This approach is particularly significant for the construction industry, where Travelers claim data show that injured workers who suffer from chronic pain can be out of work for as much as 50 percent longer than those in other industries.

“We are committed to using our deep domain expertise, and our industry-leading data and analytics, to help address the causes of chronic pain,” said Rich Ives, Vice President of Workers Compensation Claim at Travelers. “We’re finding new ways to curb prescription opioid abuse while getting injured workers the care they need to return to work as soon as is medically appropriate.”

April 1, 2019 News Podcast


Rene Thomas Folse, JD, Ph.D. is the host for this edition which reports on the following news stories: Historic $270M Settlement in First Opiate Trial, Second State AG Investigating PBMs, San Jose QME and Pain Physician Convicted, Stockton Man Convicted for EDD Fraud, HHS Spends $1.4B for State Opioid Response Programs, Cal/OSHA fines Construction Co. for Valley Fever Cases, DWC Adjusts ASC Section of MTUS, WCRI’s 2019 Annual Report Now Online, CHS – An Acute Illness From Cannabis Use, Electronic Health Records – “Death By 1000 Clicks”.

First Lawsuit Pursues Owners for Purdue Pharma Damages

Purdue Pharma L.P. is a privately held pharmaceutical company owned principally by descendants of Mortimer and Raymond Sackler. The company is the target of the Opioid litigation stampede.

In 2007 it paid out one of the largest fines ever levied against a pharmaceutical firm for mislabeling its product OxyContin, and three executives were found guilty of criminal charges. Purdue continues to market and sell opioids

Purdue Pharma was founded in 1892. In 1952, the company was sold to two other medical doctors, Raymond and Mortimer Sackler. OxyContin, was introduced by the company in 1995. Under a marketing strategy that Arthur Sackler had pioneered decades earlier, the company aggressively pressed doctors to prescribe the drug, wooing them with free trips to pain-management seminars and paid speaking engagements. Sales soared.

OxyContin became a blockbuster drug. Purdue had increased its earnings from a few billion in 2007 to US$31 billion by 2016. That had increased to US$35 billion by 2017. According to a 2017 article in The New Yorker, Purdue Pharma is “owned by one of America’s richest families, with a collective net worth of thirteen billion dollars”.

Perhaps in response to rumors that Purdue is considering filing for bankruptcy protection as a strategy to limit its damages, the Massachusetts Attorney General Maura Healey’s lawsuit filed against the company in June in Suffolk County Superior Court, was revised earlier this year to include new allegations. The suit is now the first by a state to try to attempt to hold Sackler family members personally responsible for contributing to the opioid epidemic.

Healey’s complaint cites records to argue that family members, including Purdue’s former President Richard Sackler, personally directed deceptive opioid marketing while making $4.2 billion from Purdue from 2008 to 2016.

They did so even after Purdue and three executives in 2007 pleaded guilty to federal charges related to the misbranding of OxyContin and agreed to pay a total of $634.5 million in penalties, the lawsuit said.

But in their motion, the Sacklers said nothing in the complaint supports allegations they personally took part in efforts to mislead doctors and the public about the benefits and addictive risks of opioids.

They said their role was limited to that of typical corporate board members who participated in “routine” votes to ratify the management’s staffing and budget proposals.

“Not a single document shows an individual director engaging in any unlawful conduct regarding the sale of prescription opioids or ordering anyone else to do so,” the Sacklers’ lawyers wrote.

Healey, in a statement, called the motion “an attempt to avoid accountability.”

Employers Must Post New Notices on April 1

Several weeks ago, the Office of Administrative Law (OAL) approved the Fair Employment and Housing Council’s (FEHC) changes to the Family Care and Medical Leave (CFRA Leave) and Pregnancy Disability notice (now called Family Care and Medical Leave and Pregnancy Disability Leave), adding information about the New Parent Leave Act (NPLA).

The changes are now specified in Title 2, California Code of Regulations starting at section 11087.

California employers covered by the California Family Rights Act (CFRA) and the NPLA are required to post this new revised notice starting April 1, 2019.

The California Chamber of Commerce summary says that the NPLA is a narrowly tailored California leave law that took effect last year. Both the CFRA and NPLA provide 12 weeks of unpaid, job-protected leave to bond with a newborn or a child placed with the employee for adoption or foster care.

The CFRA applies to employers who have 50 or more employees and the NPLA applies to employers who have less than 50 employees but have at least 20 employees.

While the CFRA provides additional medical leave, the NPLA does not and is limited to baby bonding leave.

Effective April 1, 2019, employers with 20 to 49 employees will need to post the Family Care and Medical Leave and Pregnancy Disability Leave notice in their workplace, and employers with 50 or more employees will need to replace their existing notice with the new version.

The CalChamber all-in-one California and Federal Labor Law poster (available at calchamberstore.com) includes the 18 state and federal employment notices every California employer must post, including the Family Care and Medical Leave and Pregnancy Disability Leave notice.

WCAB Rejects AD Limits on Documents Sent to IMR

Jocelyn Bowen injured her neck and right shoulder while working for the County of San Bernardino. Since at least March 9, 2015, she was prescribed, and she used, Norco to control her symptoms of pain.

On November 23, 2015, IMR issued a final determination letter finding, that the prescribed Norco was medically necessary and appropriate. The rationale was that she “rates the pain 8-9 out of 10 on pain scale without medications and 4-5 out of 10 on the pain scale with medications . .. . The injured worker reports functional improvement and improvement in pain with medications. She notes improvement in activities of daily living (ADL) as well as increased ability to reach, lift, grab and hold as a result of her medication usage.”

The following month, the PTP again prescribed Norco based upon the same clinical observations. UR rejected the December RFA which was again appealed to IMR.The second IMR reviewer was a family practice physician, and upheld the UR denial.

The first November 23, 2015 IMR final determination letter was not included, in the information given to the second IMR reviewer, and there is no indication that the second IMR reviewer considered it. The second reviewer noted that “Although the physician noted an improvement in the level of function with medication use, there was no documentation of any specific objective functional improvements with the use of Norco.”

Applicant timely appealed the second IMR determination pursuant to L.C. section 4610.6(h). The WCJ granted the appeal, and found that the IMR determination contained plainly erroneous findings and was without or in excess of the powers of the AD, and rescinded the IMR determination, and ordered the dispute to a new IMR reviewer in the specialty of orthopedic surgery, pain management, and/or physical medicine and rehabilitation. The WCJ also indicated that the new IMR reviewer should review the previous IMR determination.

The former acting Administrative Director objected to the WCJ’s instruction that the new IMR reviewer should review a previous IMR determination approving the prescription for Norco, arguing that review of a prior IMR final determination may detract from the independence of the new review. The AD agreed that the IMR reviewer should be in a specialty more appropriately matched to applicant’s diagnosis, and submitted the matter for a new IMR determination.

The WCAB rejected the limits placed by the Administrative Director and affirmed the WCJ in the panel decision of Bowen v the County of San Bernardino.

The Court of Appeal held that IMR determinations are subject to meaningful review, even if the Appeals Board cannot change medical necessity determinations, noting that “[t]he Board’s authority to review an IMR determination includes the authority to determine whether it was adopted without authority or based on a plainly erroneous fact that is not a matter of expert opinion.” (Stevens v. Workers’ Comp. Appeals Bd. (2015) 241 Cal.App.4th 1074, 1100.)

The record reflects that the IMR reviewer did not review all the documents submitted. The record does not reflect the reason these documents were not included in the IMR review or what information was contained in them. It is unknown whether the IMR organization failed to provide these records to the reviewer, or whether the physician reviewer ignored or overlooked them.

As part of the new IMR, applicant may re-submit the November 23, 2015 IMR final determination and all of the PTP reports to the IMR reviewer.

Monterey County DA Convicts Two Uninsured Employers

It was a busy month for the Monetrey County District attorney who reports two convictions for uninsured employers in March.

The District Attorney announced that Vanessa Lizeth Aguilar, a 37-yearold Soledad resident who owns a cannabis delivery service in Salinas, was sentenced to 3 years’ probation for failing to carry workers’ compensation insurance. Ms. Aguilarto was ordered pay a $3,500 fine and she faces up to 1-year in county jail and additional fines if she violates her probation.

Ms. Aguilar owns Golden Essentials Delivery. Her company, which has 8 employees, began doing business, under state and city licensing, on January 1, 2018. Since she has employees, California law requires that Ms. Aguilar maintain workers’ compensation insurance.

While she initially did have workers’ compensation insurance, her policy with the State Compensation Insurance Fund expired on March 26, 2018.

On June 27, 2018, Monterey County District Attorney Investigators asked Ms. Aguilar to provide verification that she had workers’ compensation insurance.

She conceded that she did not have a policy, which is a misdemeanor under California Labor Code section 3700.5.

The District Attorney filed criminal charges on October 30, 2018. The case was investigated by District Attorney Investigators George Costaand Steve Guidi.

Also in March, the Monterey County District attorney announced that Jorge Luis Calvo Padilla, a 46-year old Seaside resident, was sentenced to 3 years’ probation and ordered to pay a $1,000 fine for failing to carry workers’ compensation insurance.

Mr. Padilla faces up to 1-year in county jail and additional fines if he violates his probation.

On June 18, 2018, the Contractor State Licensing Board (‘CSLB’) investigated a report of unlicensed construction at a property located at Camino Del Monte 4 NW of San Carlos in Carmel by the Seas.

At the property, CSLB investigators observed 2 men constructing a wooden deck behind the residence. Mr. Padilla was identified as the contractor on the project and admitted that he was not a licensed contractor. In addition, Mr. Padilla admitted that he had hired a worker to help with the deck.

On October 30, 2018, the Monterey County District Attorney’s Workers Compensation Fraud Unit charged Mr. Padilla with unlicensed contracting in violation of Business & Professions Code section 7028(a) and not having workers ‘compensation insurance, a violation of Labor Code section 3700.5.

Both offenses are misdemeanors. The case was investigated by the Contractor State Licensing Board.

Fresenius Medical Care Resolves Corruption Claims for $231M

Fresenius Medical Care operates more than 40 production sites on all continents. Its largest plants in terms of production output are in the U.S. (Ogden, Utah, and Concord, California), Germany (Schweinfurt and St. Wendel), and Japan (Buzen).

A division of Fresenius Medical Care North America (FMCNA), Fresenius Kidney Care is the worldwide leader in the treatment of renal disease and an innovative leader in kidney disease research. It claims to serve over 190,000 patients in over 2,400 facilities nationwide.

In 2012, Fresenius acquired Liberty Dialysis Holdings, in a deal which entailed the sale of its outpatient dialysis clinics in 43 local markets within the U.S.

In 2013, Fresenius Medical Care NA acquired Shiel Medical Laboratory Inc, expanding services to New York City metro area. In September 2017 the company announced the divestment of the business of Shiel Medical Laboratory, Inc. to Quest Diagnostics, Inc.

Fresenius Medical Care has just agreed to pay approximately $231 million to resolve investigations by the DOJ and the SEC into violations of the Foreign Corrupt Practices Act (FCPA) in connection with Fresenius’s participation in various corrupt schemes to obtain business in multiple foreign countries.

Fresenius admitted it paid bribes to publicly employed health and/or government officials to obtain or retain business in Angola and Saudi Arabia. as well as in Morocco, Spain, Turkey and countries in West Africa,

Fresenius doled out millions of dollars in bribes across the globe to gain a competitive advantage in the medical services industry, profiting to the tune of over $140 million,” said Assistant Attorney General Benczkowski.

In total, Fresenius admitted to earning more than $140 million in profits from the corrupt schemes.

To resolve the case, Fresenius entered into a nonprosecution agreement (NPA) with the Department and agreed to pay a total criminal penalty of $84,715,273. As part of the NPA, Fresenius also agreed to continue to cooperate with the Department’s investigation, enhance its compliance program, implement rigorous internal controls and retain an independent corporate compliance monitor for at least two years.

Fresenius settled a related FCPA matter with the U.S. Securities and Exchange Commission (SEC), and will pay $147 million in disgorgement and prejudgment interest to the SEC, which the Department credited in its resolution, bringing the total amount paid by Fresenius to over $231 million.

This case is being investigated by the FBI’s International Corruption Squad in New York and the FBI’s Boston Field Office. Trial Attorneys Paul A. Hayden and Sonali D. Patel of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Jordi de Llano of the District of Massachusetts are prosecuting the case.

New Mexico Says “Yes” for Cannabis as Opioid Replacement

The New Mexico Medical Cannabis Advisory Board voted 4-0 to reaffirm its support for adding opioid-use disorder to a long list of qualifying conditions for medical marijuana that currently includes cancer, chronic pain and post-traumatic stress disorder.

Lujan Grisham campaigned for office last year as an advocate for adding opioid dependency as a qualifying condition for legal access to cannabis. Newly appointed state Health Secretary Kathyleen Kunkel has discretion over whether to add new qualifying conditions for medical marijuana use.

Kunkel’s predecessor under Republican Gov. Susana Martinez said it wasn’t clear whether cannabis would be a safe or effective response to opiate dependence and that research was lacking.

Commenting on her support for the measure, Medical Cannabis Advisory Board Chairwoman Laura Brown cited the annual death toll from opioid related overdoses in New Mexico – estimated at 305 people in 2017 – and indications that marijuana reduces reliance on opioids.

This is harm reduction, people need to be reminded,” said Brown, who added that she met with Kunkel this week at the secretary’s invitation.

About 70,000 patients are enrolled in New Mexico’s medical marijuana program. The program was initiated in 2007 and has grown as the list of qualifying conditions has expanded.

Brown said there is no strict deadline for the Health Department to decide whether to add opioid use to the list of qualifying conditions for marijuana access.

Health Department spokesman David Morgan said agency’s secretary also is considering advisory board recommendations to expand medical marijuana access to patients diagnosed with autism and those suffering from degenerative neurological disorders including Alzheimer’s disease.

The advisory board on Friday separately recommended expanding the medical marijuana program to people suffering from diagnosable problems with alcohol, stimulants, hallucinogens and a variety of prescription drugs.

A petition was rejected to automatically provide medical marijuana access to people aged 65 and over.

Cal/OSHA fines Construction Co. for Valley Fever Cases

Cal/OSHA has issued serious health and safety citations to Underground Construction Co., Inc. of Benicia after two of its employees contracted Valley Fever. The workers were exposed to the fungal disease while using hand tools to dig trenches in Kings, Fresno and Merced counties—areas where the soil is known to contain harmful spores that cause the infection.

Cal/OSHA was notified in September 2018 that the employees were hospitalized after being diagnosed with Valley Fever, also known as Coccidioidomycosis. Symptoms of the disease are similar to the flu and include fatigue, shortness of breath and fever. Severe cases can cause serious lung problems.

The workers were tasked with digging trenches up to 5½ feet deep to allow access to gas pipelines for maintenance. Dust was not controlled, and the workers did not wear any respiratory protection. Exposure to the disease could have occurred in any one of the three counties where the fungal spores are known to be endemic.

Cal/OSHA’s investigation found that Underground Construction Co., Inc. did not evaluate the hazard of performing digging work in areas known to contain the coccidioides fungal spores. The employer did not suppress or control harmful dusts and failed to provide employees with respiratory protection. Cal/OSHA issued three citations to the employer with $27,000 in proposed penalties.

Since 2017, Cal/OSHA has cited 12 businesses for work-related Valley Fever.

Valley Fever is caused by a microscopic fungus known as Coccidioides immitis, which lives in the top two to 12 inches of soil in many parts of the state. When soil is disturbed by digging, driving or high winds, fungal spores can become airborne and may be inhaled by workers who are not protected. While the fungal spores are most likely to be present in the soils of the Central Valley, they may also be present in other areas of California. Cal/OSHA’s Valley Fever informational page provides detailed information including resources for workers and employers.

Tips for reducing the risk of Valley Fever exposure include:
— Determine if a worksite is in an area where fungal spores are likely to be present.
— Adopt site plans and work practices that minimize the disturbance of soil and maximize ground cover.
— Use water, appropriate soil stabilizers, and/or re-vegetation to reduce airborne dust.
— Limit workers’ exposure to outdoor dust in disease-endemic areas by (1) providing air-conditioned cabs for vehicles that generate dust and making sure workers keep windows and vents closed, (2) suspending work during heavy winds, and (3) providing sleeping quarters, if applicable, away from sources of dust.
— When exposure to dust is unavoidable, provide approved respiratory protection to filter particles.
– Train supervisors and workers in how to recognize symptoms of Valley Fever and minimize exposure. Cal/OSHA helps protect workers from health and safety hazards on the job in almost every workplace in

California. Cal/OSHA’s Consultation Services Branch provides free and voluntary assistance to employers to improve their health and safety programs. Employers should call (800) 963-9424 for assistance from Cal/OSHA Consultation Services