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Claimant Sentenced for Working While on TTD

43-year-old Rashimir Salazar, of Woodland, was sentenced by Judge David Rosenberg for committing workers’ compensation insurance fraud.

Judge Rosenberg sentenced Salazar to 30 days county jail, two years felony probation and 40 hours of community service. Salazar had pled no contest On August 23, 2018, to one count of felony workers’ compensation insurance fraud. Salazar was also ordered to pay restitution in the amount of $9,820.86.

While working for Woodland Residential Services in February 2014, Salazar was injured while working. She received $13,567.92 in temporary total disability (TTD) payments in lost wages due to the injury.

It was discovered that Salazar was also working separately for a private customer while she was receiving TTD payments.

Salazar intentionally withheld this information from the workers’ compensation insurance company in order to continue to receive TTD payments. This fraudulent conduct went unnoticed until the Special Investigations Unit (SIU) for CompWest Insurance started investigating the facts surrounding Salazar’s claim.

This case was investigated by the Yolo County District Attorney’s Workers’ Compensation Insurance Fraud Investigator and prosecuted by the Yolo County District Attorney Office.

The Workers’ Compensation Insurance Fraud unit works to prevent and investigate claimant fraud, medical provider fraud, premium fraud, and uninsured employers throughout Colusa, Sutter, Yuba, and Yolo Counties.

The most common type of workers’ compensation insurance fraud is claimant fraud, for which Salazar was convicted. Claimant fraud occurs when an employee lies or omits a material fact in order to obtain benefits that they would not have otherwise been entitled to. Examples would be to lie about how an injury occurred, the extent of their injury, or not to report outside employment and income.

While government resources are dedicated to determining fraudulent action, the public’s attention to this workers’ compensation fraud is important. To report workers’ compensation insurance fraud, call the DA’s hotline at 530-406-4524. Additional resources can be found at www.yoloda.org.

CDI Streamlines Adjuster Licensing Process

Insurance Commissioner Dave Jones has approved a Universal Claims Certification (UCC) program from Claims and Litigation Management Alliance (CLM) designed to streamline the licensing process for independent insurance adjusters.

The UCC makes the process of licensing independent insurance adjusters who wish to acquire and manage their independent insurance adjuster licenses in multiple states more efficient. The UCC does not replace an independent insurance adjuster license, but makes the process of securing a license more efficient. Both licensed and unlicensed individuals can acquire a UCC. However, unlicensed individuals must first go through an intensive training by completing a 40-hour online pre-certification education program and successfully pass an examination to earn the UCC.

Insurance Commissioner Dave Jones said “The Universal Claims Certification process is designed to streamline the independent insurance adjuster licensing process and reduce costs. Also, the UCC program sets requirements for licensees that exceed the requirements under current California law, meaning it requires licensees to complete more continuing education, which greatly benefits the independent insurance adjusters and consumers.”

Currently, independent insurance adjuster applicants are not required to complete any prelicensing education. California’s applicants are only required to take and pass the independent insurance adjuster license examination and meet the license requirements to receive an independent insurance adjuster license.

For a licensee to maintain the UCC, the independent insurance adjusters must complete 24 hours of continuing education every two years including five hours of insurance law and ethics. The UCC program’s insurance law and ethics requirement exceeds California’s required three hours of law and ethics that is a part of and not in addition to the 24-hour continuing education requirement.

Once independent insurance adjusters acquire the UCC, they will be able to more quickly obtain a license in the states where the UCC is currently approved, including Alabama, Florida, Georgia, Mississippi, Texas, and now California. This will allow out-of-state adjusters to be more readily available when a natural disaster occurs.

“For years, the CLM membership has complained of the tedious state-by-state adjuster licensing process. We first worked to tackle the process of managing multiple licenses with our Tracker product, then we started to work with various states to actually change the licensing process,” says CLM Founder and former CEO Adam Potter. “It’s exciting to see this work come to life as we launch the UCC.”

CLM is an insurance industry association with more than 45,000 members that focuses on education and resources. CLM offers over 300 live courses, events and conferences annually.

Hospital Chain Settles Fraud Case for $260M

Health Management Associates, LLC (HMA) will pay over $260 million to resolve criminal charges and civil claims relating to a scheme to defraud the United States. The government alleged that HMA knowingly billed government health care programs for inpatient services that should have been billed as outpatient or observation services, paid remuneration to physicians in return for patient referrals, and submitted inflated claims for emergency department facility fees.

HMA was acquired by Community Health Systems Inc. (CHS), a major U.S. hospital chain, in January 2014, after the alleged conduct at HMA occurred. ;Since July 2014, HMA has been operating under a Corporate Integrity Agreement (CIA) between CHS and the HHS-OIG.

In addition, an HMA subsidiary, Carlisle HMA, LLC, formerly doing business as Carlisle Regional Medical Center, has agreed to plead guilty to one count of conspiracy to commit health care fraud.

HMA admitted in settlement agreements that it instituted a formal and aggressive plan to improperly increase overall emergency department inpatient admissions at all HMA hospitals. As part of the plan, HMA set mandatory company-wide admission rate benchmarks for patients presenting to HMA hospital emergency departments – a range of 15 to 20 percent for all patients presenting to the emergency department, depending on the HMA hospital, and 50 percent for patients 65 and older (i.e. Medicare beneficiaries) – solely to increase HMA revenue.

HMA executives and HMA hospital administrators executed the scheme by pressuring, coercing and inducing physicians and medical directors to meet the mandatory admission rate benchmarks and admit patients who did not need impatient admission through a variety of means, including by threatening to fire physicians and medical directors if they did not increase the number of patients admitted.

The civil settlement also resolves allegations that two HMA hospitals billed federal health care programs for services referred by physicians to whom HMA provided remuneration in return for patient referrals or kickbacks. HMA agreed to pay $93.5 million to resolve these civil allegations, with the United States receiving $87.96 million, and the State of Florida receiving $5.54 million.

The government further alleged that certain HMA hospitals submitted claims to Medicare and Medicaid seeking reimbursement for falsely inflated emergency department facility charges. HMA agreed to pay $12 million to resolve these civil allegations.

WCAB Must Follow Rating Schedule Steps

A WCJ found Dean Fitzpatrick “100 percent permanently totally disabled” as a result of injury to his heart and psyche sustained during the course of his employment as a correctional officer. The award was based on the reports of two doctors regarding Fitzpatrick’s injury — Peter Chang-Sing for his heart and Richard Lieberman for his psyche.

Chang-Sing rated Fitzpatrick’s WPI for his heart at 75 percent and his resulting permanent disability at 97 percent. Lieberman rated Fitzpatrick’s GAF score at 45, resulting in 40 percent WPI, and permanent disability of 71 percent for his psyche. It is undisputed that, combining the 97 percent and 71 percent ratings under the Combined Values Chart Fitzpatrick’s permanent disability scheduled rating is 99 percent — permanent partial disability.

Thus Fitzpatrick’s permanent disability scheduled rating is 99 percent — permanent partial disability.

In the July 16, 2015 report, Dr. Lieberman felt that applicant was”on strict psychiatric grounds totally and permanently disabled” . . . Dr. Lieberman elaborated further: “I am dubious that this patient will return to work in any capacity.”

The ALJ concluded: “Based upon [Fitzpatrick’s] credible testimony, the medical reports of Dr. Chang-Sing and Dr. Lieberman, and in accordance with the facts (see Labor Code §4662(b)), it is found that applicant is permanently totally disabled.” The administrative law judge did not mention or discuss the combined rating under the 2005 Schedule. No vocational expert presented evidence in the case.

The Board affirmed the Decision in its opinion and order denying the petition for reconsideration. However, the Court of Appeal reversed in the published case of Department of Corrections v WCAB (Dean Fitzpatrick).

The question presented on appeal is whether the Board correctly interpreted and applied sections 4660 and 4662, subdivision (b).

“We easily harmonize sections 4660 and 4662, subdivision (b). Section 4662, subdivision (b), provides that, in nonconclusively presumed permanent total disability cases (i.e., those cases not enumerated in section 4662, subdivision (a)), permanent total disability may be found ‘in accordance with the fact.’ This section does not, however, address how such a determination shall be made; read plainly, it merely provides that a determination of permanent total disability shall be made on the facts of the case.”

Section 4660 addresses how the determination on the facts shall be made in each case for injuries occurring before January 1, 2013. Indeed, section 4660 expressly applies to the determination of “the percentages of permanent disability.” A “final permanent disability rating” is obtained by going through the steps outlined in the 2005 Schedule.

Our interpretation of sections 4660 and 4662, subdivision (b), is squarely at odds with the Board panel’s interpretation of those statutes in Jaramillo (on which the administrative law judge and the Board relied in this case).” [Coca-Cola Enterprises, Inc. v. Workers’ Comp. Appeals Bd. (Jaramillo) (2012) 77 Cal.Comp.Cases 445 [writ. den.].

We thus disapprove of Jaramillo with respect to its analysis on this issue, and annul the Board’s Opinion for the same reason.

Meeting Set to Discuss Med Legal Fee Pushback

The Division of Workers’ Compensation (DWC) will hold a public meeting on Wednesday, October 17 to discuss the structure of a new medical-legal fee schedule for the workers’ compensation system. This fee schedule is used to compensate physicians for examinations and reports that decide issues of compensability for work-related injuries.

DWC posted a notice of pre-rulemaking proposed amendments to the current medical-legal fee schedule in an open forum on May 3 and says it received an overwhelming response by the workers’ compensation community, with most respondents requesting an overhaul of the entire medical-legal fee schedule.

There were no changes to the amount of fee schedule payments in the May proposed amendments to section 9794 and 9795 of the regulations. It did clarify the use of the complexity factors relating to causation, medical research, record review and apportionment. The factors that indicate the presence of extraordinary circumstances in a medical -legal evaluation were more clearly defined. The language required in a report to define extraordinary circumstances is explained. Realistic limits on certain areas of billing are implemented.

The characterization of the responses as “overwhelming” is an understatement. The file containing the written responses is 520 pages.  For the most part, physicians claim they are not paid enough for QME medical legal work.

The October meeting is intended to respond to this input and develop next steps for revising the fee schedule. DWC seeks input from stakeholders who will be affected by the final version of the medical-legal fee schedule. The Division is particularly interested in:

– Determining the best format for the new fee schedule to offer optimum benefit for QMEs, AMEs, Injured Workers, Employers, Medical Management Organizations and Carriers;
– Identifying any possible obstacles to that process; and
– Identifying representatives to participate in small pre-rulemaking meetings to further develop the best format for the new medical-legal fee schedule.

The public meeting is scheduled for Wednesday, October 17 at 10 a.m. in the auditorium of the Elihu Harris Building, 1515 Clay Street, Oakland.

Meeting attendees will be allowed up to three minutes to express their ideas on changes to the fee schedule. Written comments can also be submitted at the public meeting, emailed to DWCRules@dir.ca.gov, or mailed to: Division of Workers’ Compensation, P.O. Box 420603, San Francisco, CA 94142 – Attn: Medical-Legal Fee Schedule Forum

Governor Brown Signs and Vetoes Work Comp Bills

Governor Brown has signed new provisions that apply to California Workers’ Compensation Benefits. Here are highlights of new law that will take effect next January.

AB 1749 Workers’ compensation: off-duty peace officers.  This new law was created as a result of the October 1, 2017, mass shooting in Las Vegas, Nevada.  The new law provides that an employer, at its discretion or in accordance with specified policies, is not precluded from accepting liability for compensation for an injury sustained by a peace officer by reason of engaging in the apprehension or attempted apprehension of law violators or suspected law violators, or protection or preservation of life or property, or the preservation of the peace, outside the state of California.

AB 2046 Workers’ compensation insurance fraud reporting. Requires data sharing between governmental agencies involved in combating workers’ compensation fraud, and grants the Fraud Assessment Commission (FAC) discretion to augment an assessment with unused funds from a prior year’s assessment.

SB 880 Workers’ compensation prepaid cards. This bill would authorize an employer, with the written consent of the employee, to deposit disability indemnity payments for the employee in a prepaid card account. The bill would require the Commission on Health and Safety and Workers’ Compensation to issue a report  to the Legislature regarding payments made to those prepaid card accounts.

SB 1086 Workers’ compensation: firefighters and peace officers. Section 5406.7 of the Labor Code currently sets extended time limits for death claims for firefighters and peace officers. By its terms, this provision was to expire on January 1, 2019.  The new law  deletes the January 1, 2019, date of repeal of Section 5406.7 so that the time limits will now apply to death cases after January 2019.

Governor Brown has vetoed several bills passed by the legislature that pertain to California Workers’ Compensation Benefits. Here are highlights of what he chose not to sign into law.

AB 479 Workers’ compensation: permanent disability apportionment. This proposed law would have set limits to apportionment of permanent disability in cases involving breast cancer. The veto message notes that is similar to three previous measures that he has vetoed, Assembly Bill 570 in 2017, Assembly Bill 1643 in 2016 and Assembly 305 in 2015. He said that this bill and its predecessors have repeatedly singled out specific conditions and proposed a special set of rules that apply to them. This would result in an even more complex workers’ compensation system that would essentially be “disease by statute,” which would ultimately burden injured workers seeking quick resolution to their claims.

AB 553 Workers’ compensation: return-to-work program. This bill would have required the Department of Industrial Relations to completely disburse $120 million annually from the Workers’ Compensation Return to Work Fund to eligible injured workers. The veto message noted that the Return-to-Work Program began in 2015 and is relatively new. He was concerned this measure proposes sweeping revisions to the Return-to-Work program that are premature.

AB 1697 Workers’ compensation fraud unit. This would have required the DIR  to establish an anti-fraud unit within the DWC. The veto message notes that the work required by this measure is already underway.

AB 2496 Janitorial employees.The proposed law was a codification of the California Supreme Court new ABC test for an employment relationship in Dynamex Operations West, Inc. v. Superior Court (2018) 4 Cal.5th 903. The bill was vetoed because the Administration and the Legislature are still reviewing this decision and any statutory changes to such tests would be premature.

SB 899 Workers’ compensation permanent disability apportionment. This measure seeks to preclude a physician from using race, gender, or national origin as a basis for apportionment. The Governor vetoed this bill for many of the same reasons that he returned a similar measure in 2011 – Assembly Bill 1155. This bill is unnecessary as it would not change existing law and may disturb settled court decisions, which already provide protection from the inappropriate application of the apportionment statutes.

Paraplegic Walks With Mayo Clinic/UCLA Implant

Five years after he was paralyzed in a snowmobile accident, a man has learned to walk again aided by an electrical implant, in a potential breakthrough for spinal injury sufferers. A team of doctors at the Mayo Clinic in Minnesota say the man, using a front-wheeled walker, was able to cover the equivalent of the length of a football pitch, issuing commands from his brain to transfer weight and maintain balance — all previously thought impossible for paralyzed patients.

The man, now 29, severed his spinal cord in the middle of his back when he crashed his snowmobile in 2013. He is completely paralyzed from the waist down, and cannot move or feel anything below the middle of his torso.

In the study, the results of which were published on Monday in the journal Nature Medicine, doctors in 2016 implanted a small electronic device in the man’s spine. The wirelessly operated implant, about the size of a AA battery, generates electrical pulses to stimulate nerves that — due to the injury — had been permanently disconnected from the brain.

Within weeks of the device being switched on, the man began to take his first steps since the accident — but was still suspended in a harness. Astonishingly, after several more sessions of rehab and physiotherapy, he was able to support most of his own body weight and take steps on a treadmill.

Although the device was able to help generate power and control in the patient’s lower body, it did nothing to restore sensation in his legs. This initially proved challenging. Without the physical feeling of walking registering in his brain, it was hard for him to make the instantaneous balance adjustments most of us make without thinking.

The team overcame the problem by installing mirrors at knee height so the patient could see what position his legs were in while walking. Eventually the man was able to walk on the treadmill with only periodic glances down at his legs. While the device’s effect is remarkable, the man is still paralysed once it is turned off.

In 2011, electrodes implanted on the lower spine of a paraplegic man allowed him to stand and regain some movement in his legs, but the team believes this is the first instance an implant has been used to get a paralyzed person to walk.

The study was conducted in conjunction with the University of California Los Angeles and was partly funded by the Christopher and Dana Reeve Foundation. Christopher Reeve, best known for starring role in the “Superman” film, was left paraplegic after a horse-riding accident in 1995.

September 24, 2018 Edition


Rene Thomas Folse, JD, Ph.D. is the host for this edition which reports on the following news stories: Applicant Waived Right to New Panel for Untimely QME Eval, Unlike NFL Players – 53 Pro Wrestlers Lose CTE Case, UCSF Surgeon to Serve 41 Months in Prison, CDI Files Largest Fraud Case in its History, Prominent Newport Beach Ortho Faces Rape Charges, El Centro Task Force Seizes 20,000 Fake Oxycodone Pills, 15 Workers Recover $450K in Wage Theft Case, California Tightens Cal/OSHA Reporting and Transparency, Death of Driver Run Over by Own Truck Triggers $46K in Fines, Coca-Cola Considering Cannabis Drinks – “For Pain”.

BBSI Pays $1.5M Penalty -CFO Faces 20 Years in Fraud Case

Barrett Business Services Inc. (BBSI) has agreed to pay a $1.5 million civil penalty to resolve accounting fraud allegations by the U.S. Securities and Exchange Commission.

BBSI, a publicly traded company, provides human resources and other business management services. It reported $920 million in revenue last year and profits of $25.2 million.Clients hire BBSI to process payroll and payroll taxes, to provide workers’ compensation coverage, and to perform other business administration and consulting services. It has over 50 offices in 12 states and lists 24 offices in Northern and Southern California.

According to the SEC settlement, BBSI’s former chief financial officer, James Douglas Miller hid negative trends in BBSI’s financials by concealing the company’s workers’ compensation expense and liabilities. The SEC said former controller Mark Cannon approved improper journal entries created by Miller to manipulate BBSI’s tax expenses.

Separately, Cannon agreed to pay a $20,000 penalty, the agency said.

Concurrently, federal prosecutors announced they have obtained a criminal indictment against Miller, who’s been accused of falsifying financial reports. Miller served as the CFO of BBSI from 2008 to 2016. He was fired in 2016 when he disclosed to the company that he had falsified entries in the company’s books to improperly report workers’ compensation expenses as payroll taxes and fees.

As a result of Miller’s accounting improprieties, BBSI under reported approximately $12 million in workman’s compensation expenses in 2013. At the same time as he falsified BBSI’s books and falsely certified the periodic reports filed with the U.S. Securities and Exchange Commission,

Miler allegedly profited on BBSI stock, by exercising stock options worth 35,300 shares for $467,261 and selling it for more than $2.4 million.

According to records filed in the case, on four different occasions in 2013 and 2014, Miller falsely certified periodic reports filed with the SEC. His certifications contained a number of false statements including statements that BBSI’s periodic reports fairly presented, in all material respects, the results of BBSI’s operations.

Contrary to his representations, Miller allegedly knew that during each calendar quarter of 2013, he had circumvented BBSI’s internal controls and created a number of accounting entries that improperly classified workers’ compensation expenses as payroll and payroll tax expenses in violation of generally accepted accounting procedures.

“Mr. Miller will be pleading not guilty to the charge and defending the matter vigorously,” said his lawyer, Portland attorney Janet Hoffman.  Willful certification of a false periodic report is punishable by up to 20 years in prison and a fine of up to $5,000,000.  

Medical Malpractice Now 3rd Leading Cause of Death

“Incidence rates for deaths directly attributable to medical care gone awry haven’t been recognized in any standardized method for collecting national statistics,” says Martin Makary, M.D., M.P.H., professor of surgery at the Johns Hopkins University School of Medicine and an authority on health reform.

“The medical coding system was designed to maximize billing for physician services, not to collect national health statistics, as it is currently being used.” In 1949, Makary says, the U.S. adopted an international form that used International Classification of Diseases (ICD) billing codes to tally causes of death.

“At that time, it was under-recognized that diagnostic errors, medical mistakes and the absence of safety nets could result in someone’s death, and because of that, medical errors were unintentionally excluded from national health statistics,” says Makary.

The researchers say that since that time, national mortality statistics have been tabulated using billing codes, which don’t have a built-in way to recognize incidence rates of mortality due to medical care gone wrong.

In their study, the researchers examined four separate studies that analyzed medical death rate data from 2000 to 2008, including one by the U.S. Department of Health and Human Services’ Office of the Inspector General and the Agency for Healthcare Research and Quality.

Then, using hospital admission rates from 2013, they extrapolated that based on a total of 35,416,020 hospitalizations, 251,454 deaths stemmed from a medical error, which the researchers say now translates to 9.5 percent of all deaths each year in the U.S.

According to the CDC, in 2013, 611,105 people died of heart disease, 584,881 died of cancer and 149,205 died of chronic respiratory disease – the top three causes of death in the U.S. The newly calculated figure for medical errors puts this cause of death behind cancer but ahead of respiratory disease.

“Top-ranked causes of death as reported by the CDC inform our country’s research funding and public health priorities,” says Makary. “Right now, cancer and heart disease get a ton of attention, but since medical errors don’t appear on the list, the problem doesn’t get the funding and attention it deserves.”

The researchers caution that most of medical errors aren’t due to inherently bad doctors, and that reporting these errors shouldn’t be addressed by punishment or legal action.

Rather, they say, most errors represent systemic problems, including poorly coordinated care, fragmented insurance networks, the absence or underuse of safety nets, and other protocols, in addition to unwarranted variation in physician practice patterns that lack accountability.