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WCRI’s 2019 Annual Report Now Online

The Workers Compensation Research Institute (WCRI) has released an online version of its 2019 Annual Report. This report was distributed in hard copy at the Institute’s recently held annual conference.

WCRI’s 2019 Annual Report takes a comprehensive look at all of the Institute’s activities in 2018. It begins with a letter from WCRI CEO John Ruser, who compares the Institute now with 35 years ago. The following are among the information included in the report:

— Studies published in 2018, as well as a review of some of them
— Where the research was used and shared
— Presentations given, including webinars
— Corporate social responsibility
— Impact of social media
— Number of media mentions
— Interviews with WCRI members
— List of WCRI’s members and supporters

The report thanks WCRI’s members and friends for their support, which has enabled WCRI to produce independent, credible, and high-quality research on state workers’ compensation systems for 35 years.

“I hope everyone gets a chance to view our annual report. It provides an overview of the research we published last year as well as how that research was used by policymakers and other stakeholders to make more informed decisions,” said John Ruser, president and CEO of WCRI.

March 25, 2019 News Podcast


Rene Thomas Folse, JD, Ph.D. is the host for this edition which reports on the following news stories: Prosecutors Recover $317M Including $65M from Prime Healthcare, Pain Clinic Resolves Fraud Claim for $860K, California Cannabis Industry Plagued by Corruption, Legislative and Judicial Developments vs Fighting Fraud, DWC Updates MTUS, U.C. Berkeley Claims Gig Economy Workers are “Exploited”, Cannabis and Psychosis: Review of the Evidence, CWCI Reports on Drug Formulary, Surgical Outcomes Inconsistent Across Hospitals, Brown & Brown Acquires MEDVAL LLC.

Historic $270M Settlement in First Opiate Trial

More than 1,000 lawsuits accusing Purdue Pharma and other opioid manufacturers of using deceptive practices to push addictive drugs that led to fatal overdoses are consolidated in an Ohio federal court.  One of them, a lesser-known opioid case: Oklahoma v. Purdue Pharma, was scheduled for trial in May in Norman, Oklahoma.

The Oklahoma trial was expected to presage many of the arguments the jury may be presented in the national case set in the fall on 2019, and others being scheduled for trial out of the 1000 or so that are in process.

Business Insurance reported a few weeks ago that Purdue Pharma was exploring filing for bankruptcy to address potentially significant liabilities from the lawsuits.

In an unexpected turn of events, the Oklahoma Attorney General just announced an historic settlement with Purdue Pharma that will establish a nearly $200 million endowment at the Oklahoma State University’s Center for Wellness and Recovery, which will go toward treating the ongoing addiction epidemic nationwide.

The trial against Johnson & Johnson, Teva and the other defendants named in the state’s lawsuit remains on track for May 28.

The endowment provides funding for an entity that will receive the initial $102.5 million that will go to the Oklahoma State University Center for Health Sciences Center for Wellness and Recovery, Oklahoma’s most comprehensive treatment and research center for treating pain and addiction.

Beginning Jan. 1, 2020, the entity will receive an annual $15 million payment over a five year period. During the same five year timeframe, it will receive ongoing contributions of addiction treatment medicine, valued at $20 million.

Oklahoma State University President Burns Hargis, who spoke at the news conference congratulated Attorney General Hunter and his team.

“We extend our congratulations to Oklahoma Attorney General Mike Hunter and the legal team for their foresight to skillfully craft a settlement that will position Oklahoma State University’s Center for Wellness and Recovery to serve as the premiere institution for research, education and treatment for addiction in the United States,” President Hargis said.

$12.5 million will go towards providing funds to directly abate and address the opioid epidemic’s effects in Oklahoma’s cities and counties. Purdue will also make a $60 million payment to offset all litigation costs up to this point.
Purdue will not promote opioids in Oklahoma, including employing or contracting with sales representatives to health care providers in Oklahoma.

“We appreciate that Purdue Pharma and its owners chose to work constructively with us to resolve this litigation in a way that will bring to life a new and unique national center with the goal of creating breakthrough innovations in the prevention and treatment of addiction,” Attorney General Hunter said.

DWC Adjusts ASC Section of MTUS

The Division of Workers’ Compensation (DWC) has posted an order adjusting the Hospital Outpatient Departments and Ambulatory Surgical Centers section of the Official Medical Fee Schedule (OMFS) to conform to changes in the Medicare payment system as required by Labor Code section 5307.1.

The Hospital Outpatient Departments and Ambulatory Surgical Centers fee schedule update order adopts the following Centers for Medicare & Medicaid Services (CMS) Medicare changes:

— The CMS Medicare Hospital Outpatient Prospective Payment System (OPPS) April 2019 Addendum A quarterly update
— The CMS Medicare OPPS April 2019 Addendum B quarterly update
— The CMS Ambulatory Surgical Center Payment System, April 2019 ASC Approved HCPCS Code and Payment Rates, Column A entitled “HCPCS Code” of “Apr 2019 ASC AA” and Column A entitled “HCPCS Code” of “Apr 2019 ASC EE”
— Certain sections of the CMS Medicare OPPS April 2019 Integrated Outpatient Code Editor (I/OCE), IOCE Quarterly Data Files V20.1 quarterly update
— CMS April 2019 Update of the Hospital Outpatient Prospective Payment System (OPPS), Change Request (CR) 11216 (March 15, 2019), Transmittal R4255CP

The order adopting the OMFS adjustments is effective for services rendered on or after April 1, 2019 and is posted on the DWC website.

San Jose QME and Pain Physician Convicted

South Bay QME, Venkat Aachi M.D. pleaded guilty to distributing hydrocodone outside the scope of his professional practice and without a legitimate medical need, and to health care fraud. The guilty plea was accepted by the Honorable Edward J. Davila, U.S. District Judge.

The DWC lists Vankat Aachi M.D. as a QME in Physical Medicine and Rehabilitation with offices at 221 E. Hacienda Avenue Suite D , Campbell, CA 95008-6625 and 2324 Montplelier Drive, Suite 2 , San Jose , Ca., 95116-1612

At the time of his arrest, federal prosecutors contended that Aachi submitted to an insurance company in July a false and fraudulent claim for payment for healthcare benefits, items and services.

According to the plea agreement, Aachi, 52, of Saratoga, was a licensed physician in the state of California who operated a pain clinic in San Jose. He maintained a DEA registration number authorizing him to prescribe controlled substances. Aachi admitted that from September 18, 2017, through July 2, 2018, he wrote hydrocodone-acetaminophen prescriptions that were outside the scope of his professional practice and not for a legitimate medical purpose.

The plea agreement describes transactions in which Aachi improperly distributed hydrocodone. For example, in November of 2017, he wrote a prescription enabling a patient to receive 90 hydrocodone-acetaminophen pills. Aachi did not conduct a physical examination of the patient nor discuss the patient’s pain or response to prior medication. Aachi acknowledged that he knew the prescriptions were not for a legitimate medical purpose and that he did not write the prescriptions in the usual course of his professional practice.

Further, Aachi admitted that on July 2, 2018, he falsely submitted to an insurance company a false and fraudulent claim for payment for healthcare benefits, items, and services. Aachi admitted he acted with the intend to defraud the insurance company.

On October 9, 2018, a federal grand jury indicted Aachi and charged him with six counts of distributing drugs outside the scope of professional practice, in violation of 21 U.S.C. § 841(a)(1) and (b)(1)(C), and one count of health care fraud, in violation of 18 U.S.C. § 1347. Aachi pleaded guilty to one count under each statute.

Aachi remains free on bail pending sentencing. Judge Davila scheduled Aachi’s sentencing hearing for July 1, 2019.

Aachi faces a maximum sentence of 20 years in prison and a fine of $1,000,000 for the illegal distribution of hydrocodone count and 10 years in prison and a $250,000 fine for the health care fraud count.

Additional fines, restitution, and additional periods of supervised release also could be ordered at sentencing. However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.

This prosecution is the result of investigations by the DEA, FBI, HHS-OIG, and the BMFEA. Through the BMFEA, the California Department of Justice regularly works with other law enforcement agencies to investigate and prosecute fraud perpetrated on the Medi Cal program against a wide variety of healthcare providers, including doctors and pharmaceutical companies.

This case was investigated and prosecuted by member agencies of the Organized Crime Drug Enforcement Task Force, a focused multi-agency, multi-jurisdictional task force investigating and prosecuting the most significant drug trafficking organizations throughout the United States by leveraging the combined expertise of federal, state, and local law enforcement agencies.

Stockton Man Convicted for EDD Fraud

John Michael “Mike” Herron II, 36, of Stockton, pleaded guilty to mail fraud and aggravated identify theft in connection with an unemployment benefits fraud and identity theft scheme, U.S. Attorney McGregor W. Scott announced.

According to court documents, from at least December 2014 through January 2018, Herron participated in a scheme to defraud the State of California Employment Development Department (EDD) by filing fraudulent claims for unemployment insurance benefits.

In furtherance of this scheme, Herron and his co-defendant, Robert Maher, formerly of Stockton, created fictitious companies and fictitious employees (by using the real identities of persons with and without their knowledge), and filed claims with EDD, falsely stating that the employees had been laid-off or fired.

The unemployment benefits were deposited onto debit cards that were mailed to addresses controlled by Herron, Maher, or their associates. In at least one instance, ATM cameras captured Herron withdrawing unemployment benefit funds using a debit card registered to an identity theft victim. Herron was connected to approximately $578,185 in fraudulent claims to EDD, of which approximately $485,685 was paid out by EDD.

Herron is scheduled to be sentenced by U.S. District Judge John A. Mendez on July 2. Herron faces a maximum statutory penalty of 20 years in prison and a $250,000 fine for the mail fraud count, and a mandatory two-year consecutive sentence and $250,000 fine for the aggravated identity theft count. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.

This case is the product of an investigation by the U.S. Department of Labor Office of Inspector General, the Federal Bureau of Investigation, and the California Employment Development Department’s Investigation Division. Assistant U.S. Attorneys Amy Schuller Hitchcock and Shelley D. Weger are prosecuting the case.

CHS – An Acute Illness From Cannabis Use

While state lawmakers are rushing to legalize cannabis for various reasons, including so called “medical reasons,” and courts are moving toward approving none FDA approved cannabis for treatment of workers’ compensation pain management, the medical research is trailing these decisions.

A good metaphor for this approach is “fire, ready, aim” since little is known about the relative harms of edible and inhalable cannabis products. And not all of the emerging medical research is good news for cannabis users

A new study funded by the Colorado Department of Public Health and Environment., and published in the Annals of Internal Medicine, documented a sharp rise in emergency-room visits linked with marijuana following legalization in Colorado. One of the key drivers of the ER visits was a mysterious syndrome characterized by severe nausea and repeated vomiting.

The researchers were tasked to describe and compare adult emergency department (ED) visits related to edible and inhaled cannabis exposure. The study focused on a chart review of emergency room visits between 1 January 2012 and 31 December 2016 at a large urban academic hospital in Colorado.

They found 9973 visits with an ICD-9-CM or ICD-10-CM code for cannabis use. Of these, 2567 (25.7%) visits were at least partially attributable to cannabis, and 238 of those (9.3%) were related to edible cannabis.

Very little is known about the condition, called cannabinoid hyperemesis syndrome, or CHS. Cannabinoid hyperemesis syndrome can occur with cannabis use and is characterized by recurrent nausea, vomiting, and crampy abdominal pain.

The pathogenesis of cannabinoid hyperemesis syndrome is unclear, but it may involve accumulation of exogenous cannabinoids or alterations in the brain’s regulation of body temperature.

The prodromal phase is characterized by subsyndromal symptoms of cannabinoid hyperemesis syndrome, including mild discomfort and nausea upon waking. Prior to the use of compensatory exposure to hot water to treat symptoms, people sometimes increase their intake of cannabinoids in an effort to treat the persistent nausea they experience. This phase can last for months or even years

The hyperemetic phase is characterized by the full syndromal symptoms of cannabinoid hyperemesis syndrome, including persistent nausea, vomiting, abdominal pain, and retching. Retching can occur up to 5 times per hour. It is very difficult to take food or medicine by mouth during this stage, and patients may develop a fear of eating. Weight loss and dehydration due to decreased oral intake and vomiting are possible.

Compensatory exposure to hot water, even for hours at a time, may be attempted for symptomatic relief, resulting in compulsive bathing/showering. People have described the hot water relief as “temperature-dependent,” meaning that hotter temperatures provide greater relief. It is during this phase that people with cannabinoid hyperemesis syndrome are likely to present to the emergency department of the hospital for treatment.

Individual attacks can lead to complications, such as acute kidney injury. In the setting of cannabinoid hyperemesis syndrome, this may be defined as cannabinoid hyperemesis acute renal failure (CHARF).

CHARF occurs through dehydration secondary due to persistent vomiting and hot showers, leading to prerenal azotemia. A case report of acute renal failure, albeit in the setting of rhabdomyolysis, has been reported with the use of synthetic cannabinoids.

While definitive treatment involves abstinence from cannabinoids, various drug therapies have been studied for symptomatic relief in the acute presentation of a patient suffering from cannabinoid hyperemesis syndrome, often in the setting of a hospital emergency department.

HHS Spends $1.4B for State Opioid Response Programs

The U.S. Department of Health and Human Services (HHS) released an additional $487 million to supplement first-year funding through its State Opioid Response (SOR) grant program. The awards to states and territories are part of HHS’s Five-Point Opioid Strategy to combat the opioid crisis.

Together with the $933 million in second-year, continuation awards to be provided under this program later this year, the total amount of SOR grants to states and territories this year will total more than $1.4 billion.

This funding will expand access to treatment that works, especially to medication-assisted treatment (MAT) with appropriate social supports.

The State Opioid Response grants administered by HHS’s Substance Abuse and Mental Health Services Administration (SAMHSA) aim to address the opioid crisis by increasing access to MAT using the three Food and Drug Administration (FDA) approved medications for the treatment of opioid use disorder, reducing unmet treatment need, and reducing opioid overdose-related deaths through the provision of prevention, treatment and recovery activities for opioid use disorder.

Strategies such as employing psychosocial supports, community recovery services and MAT using medicines approved by the FDA constitute the gold standard of treatment for opioid use disorders,” said Dr. Elinore F. McCance-Katz, Assistant Secretary for Mental Health and Substance Use.

Last summer, SAMHSA announced the first year of SOR funding. States and territories received funding based on a formula, with a 15 percent set-aside for the 10 states with the highest mortality rates related to drug overdose deaths.

Other funding, including $50 million for tribal communities under the Tribal Opioid Response (TOR) grant program, has been awarded separately. These programs are built from the foundations laid in the $1 billion provided to states and territories through SAMHSA’s Opioid State Targeted Response (STR) program. SAMHSA has complemented the work of the STR program with a national center of excellence that provides technical assistance and training to leverage local subject matter experts at the community level to sharpen treatment access and delivery.

SAMHSA also operates a 24/7, national Helpline that people can call to find treatment referral resources for mental health or substance use disorders: 800-662-HELP (4357). People can visit https://findtreatment.samhsa.gov/ to locate those resources, as well.

To learn more about SAMHSA-supported resources, please visit SAMHSA’s Prescription Drug Misuse and Abuse page.

Electronic Health Records – “Death By 1000 Clicks”

Food and Drug Administration Commissioner Scott Gottlieb called for tighter scrutiny of electronic health records systems, which have prompted thousands of reports of patient injuries and other safety problems over the past decade.

“What we really need is a much more tailored approach, so that we have appropriate oversight of EHRs when they’re doing things that could create risk for patients,” Gottlieb said in an interview with Kaiser Health News.

Gottlieb was responding to Botched Operation,” a report published this week by KHN and Fortune magazine.

The investigation found that the federal government has spent more than $36 billion over the past 10 years to switch doctors and hospitals from paper to digital records systems. In that time, electronic health records have created a host of risks to patient safety.

Patient harm: Electronic health records have created a host of risks to patient safety. Alarming reports of deaths, serious injuries and near misses – thousands of them – tied to software glitches, user errors or other system flaws have piled up for years in government and private repositories. Yet no central database exists to compile and study these incidents to improve safety.

One example, an electronic health records system, or EHR, made by eClinicalWorks (eCW), one of the leading sellers of record-keeping software for physicians in America, currently used by 850,000 health professionals in the U.S. It didn’t take long for Foster to assemble a dossier of troubling reports – Better Business Bureau complaints, issues flagged on an eCW user board, and legal cases filed around the country – suggesting the company’s technology didn’t work quite the way it said it did.

In May 2017, eCW paid a $155 million settlement to the government over alleged false claims and kickbacks – one physician made tens of thousands of dollars – to clients who promoted its product. Despite the record settlement, the company denied wrongdoing

Signs of fraud: Federal officials say the software can be misused to overcharge, a practice known as “upcoding.” Some doctors and health systems are alleged to have overstated their use of the new technology, a potentially enormous fraud against Medicare and Medicaid likely to take years to unravel. Two software makers have paid a total of more than $200 million to settle fraud allegations.

Gaps in interoperability: Proponents of electronic health records expected a seamless system so patients could share computerized medical histories in a flash with doctors and hospitals anywhere in the country. That has yet to materialize, largely because officials allowed hundreds of competing firms to sell medical records software unable to exchange information.

Doctor burnout: Many doctors say they spend half their day or more clicking pulldown menus and typing rather than interacting with patients. An emergency room doctor can be saddled with making up to 4,000 mouse clicks per shift. This has fueled concerns about doctor burnout, which in January the Harvard T.H. Chan School of Public Health and Massachusetts Medical Society called a “public health crisis.”

Web of secrets: Entrenched policies continue to keep software failures out of public view. Vendors of electronic health records have imposed contractual “gag clauses” that discourage buyers from speaking out about safety issues and disastrous software installations – and some hospitals fight to withhold records from injured patients or their families.

For an in-depth examination of electronic health records, read “Death By 1,000 Clicks: Where Electronic Health Records Went Wrong.

Second State AG Investigating PBMs

Kentucky Attorney General Andy Beshear has launched an investigation into allegations that state pharmacy benefit managers (PBMs) have overcharged the state health insurance programs for prescription drugs and discriminated against independent pharmacies.

Beshear is seeking details on how the PBMs, hired by state Medicaid managed-care organizations and the state employee health plan, have determined, billed and paid drug reimbursement rates over the past five years in Kentucky.

A report released last month by the state indicated two PBMs took in $123.5 million last year from the state Medicaid program by paying pharmacies a lower rate to fill prescriptions, while charging the state more for the same drugs.

Beshear said he is investigating PBMs because he wants to identify and recover any profits improperly retained at the expense of the Commonwealth and its taxpayers and ensure Kentucky families have affordable and accessible health care.

“I am demanding answers for Kentucky families and community pharmacies who want greater accountability and transparency surrounding the cost of prescription drugs,” said Beshear. “The current system is failing Kentuckians who just want a straightforward answer on whether they are receiving and paying a fair price.”

Beshear said PBMs were originally established to help companies and government programs better manage pharmacy costs, but have grown into powerful industry middlemen that go to great lengths to hide and complicate drug pricing information.

Last year, Sen. Max Wise, R-Campbellsville, introduced Senate Bill 5, because he said one of the state’s largest PBMs – CVS Caremark, which also owns its own chain of pharmacies – was not pay­ing independent pharmacists enough, putting many at risk of closing.

At the time, discussion centered around the significant decrease in the PBM’s professional dispensing fee of 85 cents per prescription, when the Centers for Medicare and Medicaid Services stated that the fee should be around $10.64, plus the cost of the drug being dispensed.

The provisions of that legislation lead to the recent report by the state and allow the Department for Medicaid Services to have greater oversight of pharmacy benefits once existing contracts expire.

The Ohio attorney general sued to recover nearly $16 million in prescription overcharges to the state for the cost of prescription drugs negotiated by PBMs.