According to a Staff Report presented at the City Council meeting on July 25, 2017, the City of Santa Monica’s workers’ compensation costs continue to grow at an accelerated pace.

In FY 2017-18 alone, the City’s contributions to the Workers’ Compensation Self-Insurance Fund increased by 50%. Further, contributions are projected to rise by 10% annually thereafter if current claims trends continue.

In response to this, the Finance Director convened a Workers’ Compensation Working Group composed of the Assistant City Manager, City Attorney, Human Resources Director, and Risk Manager for the purpose of promoting initiatives to curb the City’s growing workers’ compensation costs.

Under the guidance of the Working Group, a variety of pilot cost control projects have been put in place across the City. Examples include the “Wow, That’s Fast” Program, which provides comprehensive case management services to injured sworn personnel and post-job-offer functional capacity testing to ensure prospective employees are capable of safely carrying out essential job functions prior to placement.

The most recent idea to emerge from the Working Group involves a BBB/Risk Management Division proposal to contract with a TPA to manage the BBB’s workers’ compensation claims. The idea was intriguing to the Working Group due to the many advantages a reputable and established TPA could have over an in-house program, and it resulted in the development of a three-year pilot program proposal to determine which model is more cost-effective.

The Finance Department and Big Blue Bus (BBB) asked the Council for authorization to engage in a three-year pilot program to determine the most cost-effective model for managing workers’ compensation claims. BBB will serve as the test group for the pilot program.

As proposed, administration of BBB’s workers’ compensation claims will transfer from in-house staff in the Risk Management Division of the Finance Department to a private claims administrator. Pilot program performance will be evaluated and monitored by BBB and Finance throughout the pilot period.

In order to pursue the pilot program, staff from the Finance, BBB and Human Resources Departments solicited formal proposals from TPAs for workers’ compensation claims administration services.

Based on this process, staff recommends that the City enter into an agreement with Intercare Holdings Insurance Services, Inc. for an amount not to exceed $1,699,509 over a five-year period. In addition, staff recommends that the City amend its existing contract with TCS Risk Management Services, the City’s workers’ compensation consultant, for assistance with transitioning claims administration services to the TPA and tracking and monitoring the pilot program’s performance. The amendment will cost $113,800 and result in a new agreement amount not to exceed $326,300.

Cal/OSHA and Chevron have reached a settlement agreement for a comprehensive plan that will improve safety at the Chevron Richmond refinery and for surrounding communities.

The agreement resolves Chevron’s appeal of citations issued by Cal/OSHA on January 30, 2013, following an investigation into a fire that occurred at the Richmond refinery on August 6, 2012. Cal/OSHA cited Chevron for 17 workplace safety and health violations, including six serious and nine willful in nature.

On August 6, 2012, a large fire erupted at the refinery at about 6:15 PM. Flames were seen issuing from at least two of the refinery’s towers. Contra Costa Health Services responded by notifying residents shelter in place. BART shut down local service. Initial reports estimated that 11,000 people sought treatment at area hospitals, and later reports placed the number above 15,000 people. Six employees that were present at the scene of the fire suffered varying degrees of injury.

Cal/OSHA immediately launched an investigation into the fire and the leak repair procedures throughout the refinery, and found that Chevron did not follow the recommendations of its own inspectors and metallurgical scientists to replace the corroded pipe that ultimately ruptured and caused the fire. They also found that Chevron did not follow its own emergency shutdown procedures when the leak was identified, and did not protect its employees and employees of Brand Scaffolding who were working at the leak site. There were also violations in Chevron’s overall implementation of its own “process safety management” (PSM) procedures, required by Cal/OSHA of all refineries. Chevron appealed the Cal/OSHA citations.

In 2013, the company pleaded no contest to six charges in connection with the fire, and agreed to pay $2 million in fines and restitution. The charges were filed by the California Attorney General’s Office and the Contra Costa District Attorney’s Office, including failing to correct deficiencies in equipment and failing to require the use of certain equipment to protect employees from potential harm.

The negotiated Cal/OSHA settlement requires Chevron to institute the following extraordinary measures to ensure process safety at the Richmond refinery:

– Replace all carbon steel piping that transports corrosive liquids with chrome-alloy piping, which has better corrosion resistance, at an estimated cost of $15 million.
– Develop and implement criteria and procedures, at an estimated cost of $5 million, to monitor equipment to alert operators when equipment should be replaced.
– Provide specialized, hands-on training on incident command situational awareness and hazard recognition for all Chevron Fire Department personnel at the Richmond refinery with rank of lieutenant and above. The training will include at least three hours of instruction and focus on emergency response.
– Provide at least eight hours of in-person training on process safety management for operators at the refinery beyond the training that is already provided.
– Continue its collaboration with the United Steelworkers in order to meet the training requirements imposed by the new refinery safety regulation pending approval by the OAL.
– Donate $200,000, in addition to any monies already donated in 2016, to the Regional Occupational Program in Richmond, a job-readiness course offered by the Contra Costa County Office of Education in partnership with Chevron to help prepare students for jobs in the petrochemical and related industries.
– Pay the citation penalties originally proposed by Cal/OSHA in January 2013 ($782,700), plus an additional $227,300.

Cal/OSHA agrees to withdraw nine of the 17 violations cited. The withdrawn citations include four willful-serious category violations, three serious and two general in nature. It will amend five of the remaining eight violations cited,

In USC’s lecture halls, labs and executive offices, Dr. Carmen Anthony Puliafito was a towering figure. The dean of the Keck School of Medicine was a renowned eye surgeon whose skill in the operating room was matched by a gift for attracting money and talent to the university. But, there was another side to the Harvard-educated physician – uncovered by a Los Angeles Times investigation.

During his tenure as the medical school dean, a Los Angles Times investigation claims Puliafito kept company with a circle of criminals and drug users who said he used methamphetamine and other drugs with them. Puliafito, 66, and these much younger acquaintances captured their exploits in photos and videos. The Times reviewed dozens of the images.

Shot in 2015 and 2016, they show Puliafito and the others partying in hotel rooms, cars, apartments and the dean’s office at USC. In one video, a tuxedo-clad Puliafito displays an orange pill on his tongue and says into the camera, “Thought I’d take an ecstasy before the ball.” Then he swallows the pill. In another, Puliafito uses a butane torch to heat a large glass pipe outfitted for methamphetamine use. He inhales and then unleashes a thick plume of white smoke. Seated next to him on a sofa, a young woman smokes heroin from a piece of heated foil.

As dean, Puliafito oversaw hundreds of medical students, thousands of professors and clinicians, and research grants totaling more than $200 million. He was a key fundraiser for USC, bringing in more than $1 billion in donations, by his estimation. It was a tip about an incident in a Pasadena hotel that led The Times to discover Puliafito’s other life.

Puliafito resigned his $1.1-million-a-year post in March 2016, in the middle of the spring term, three weeks after a 21-year-old woman allegedly overdosed in the former dean’s hotel room. After he stepped down as dean, USC kept Puliafito on the medical school faculty, and he continued to accept new patients at campus eye clinics, according to Keck’s website.

Sarah Warren, was allegedly the woman who overdosed in the Pasadena hotel room. She told the Times she met Puliafito in early 2015 while working as a prostitute. She said they were constant companions for more than a year and a half, and that Puliafito used drugs with her and sometimes brought her and other members of their circle to the USC campus after hours to party.

Just before 5 p.m. on March 4, 2016, an employee of the Hotel Constance, an upscale Colorado Boulevard landmark, called 911 to report that a guest had suffered an apparent overdose. The hotel employee transferred a Fire Department dispatcher to a third-floor room. A man answered, identified himself as a doctor and said his companion’s condition was not serious, according to a recording of the call. “My girlfriend here had a bunch of drinks and she’s sleeping,” he told the dispatcher. Asked whether the woman had taken anything else, he replied, “I think just the alcohol.”

After she awoke in the hospital six hours later, Puliafito picked her up, and “we went back to the hotel and got another room and continued the party,” she said.

Initially, a Pasadena Police department spokeswoman said there was no report, apart from a call-for-service log. After The Times made repeated requests for additional information, the department acknowledged that an officer at the scene should have prepared a report. The officer was ordered to do so in June 2016 – three months after the incident. In the report, Puliafito is identified as a witness to the overdose and a “friend” of the victim. The rest of the document is heavily redacted. The department also released an evidence report that shows officers seized a little over a gram of methamphetamine from the hotel room. The name of the drug’s “owner” is redacted, and the Pasadena address listed as that person’s residence does not exist.

Under state law, illegal possession of methamphetamine could be charged as a misdemeanor. Asked why no one was charged, Pasadena police spokeswoman Tracey Ibarra said officers would have had to determine who was “responsible” for the drugs. She declined to answer questions about the extent of the officers’ investigation. Warren said they never interviewed her.

But, a recording made the night before the overdose shows Puliafito and Warren in a room at the hotel. Warren asks him to help her crush methamphetamine in preparation for doing a “hot rail,” a method of snorting the drug. “Absolutely,” Puliafito replies. Warren is later shown bending over a tray with several lines of white powder.

USC’s medicine department climbed from #38 to #31 on on U.S. News & World Report’s rankings during Puliafito’s tenure as dean. The doctor had secured millions of dollars in donations for the school.

USC fundraising galas can be glittering affairs with movie stars and billionaire donors rubbing elbows in Beverly Hills ballrooms. Puliafito glided confidently through these events, posing for photos with Gwyneth Paltrow and Pierce Brosnan and chatting up tech mogul Larry Ellison and mega-developer Rick Caruso.

California Medical Board records show his license is current and that no disciplinary charges are pending. Methamphetamine is classified as a Schedule II drug under the Controlled Substance Act. A case can be made for discipline of a physician who abuses a controlled substance. Despite an abundance of physical and other evidence available publicly for more than a year, the Medical Board has not taken any action that can be discovered on its website.

The evidence seems to be hidden in plain sight.

A Superseding Indictment was filed against Beverly Hills radiologist Ronald Grusd M.D. by federal prosecutors on July 11. His prosecution is part of the aftermath of Operation Backlash.

The Superseding Indictment contains forty five counts against the Defendants, the Original Indictment contained only eight. The Superseding Indictment now charges violations of federal health care law under the health care fraud statutes. In the Original Indictment, the counts were based on violations of state health care law and brought into the federal sphere by the Travel Act. The Superseding Indictment now charges violations of money laundering, not included in the Original Indictment and now includes allegations of conspiring with Fermin Iglesias, Carlos Arguello, Julian Garcia, and Jonathan Pena, not included in the Original Indictment.

Operation Backlash, has been an extensive FBI-led undercover investigation that revealed a widespread workers’ compensation kickback scheme, including attorneys, doctors and medical providers who referred patients for health services in exchange for money. Operation Backlash was first announced in November 2015 when the initial round of federal indictments was handed down. San Diego chiropractor Steven J. Rigler and San Diego workers’ compensation attorney Sean O’Keefe previously pleaded guilty to federal charges.

Grusd’s practice, California Imaging Network Medical Group, has clinics in San Diego, Los Angeles, Beverly Hills, Fresno, Rialto, Santa Ana, Studio City, Bakersfield, Calexico, East Los Angeles, Lancaster, Victorville and Visalia.

Trial in the case pending against Grusd was set for June 6, 2017. On March 31, 2017, Defendants Grusd, California Imaging Network Medical Group, and Willows Consulting Company rejected a plea offer in this case.

On April 7, his attorneys moved for a continuance, claiming that they did not have sufficient time to prepare his defense. Last December they say they were provided with digital discovery documents by the prosecutors which were placed on a 2 terabyte drive that can hold millions of documents and recordings.

It would appear that the newly filed indictment would provide the defense attorneys with details about the evidence they will face including specific events, dates, times and places.

For example, on page 12 of the 29 page Indictment prosecutors introduce the topic of “Overt Acts” with paragraph 22. The list of Overt Acts is lengthy, specific and detailed, referring at times to emails, presumably contained on the discovery hard drive, and to specific meetings between Grusd and alleged co-conspirators.

Paragraph 22(s) is illustrative of many of the allegations he will face. “In or about March 2015, in a meeting at GRUSD’s Beverly Hills office, GRUSD suggested that it would be “cleaner,” or words to that effect, to pay Jonathan Pena a flat monthly fee instead of per item referred.” These allegations, if true, directly implicate Grusd in the operation of the enterprise.

There are so many specific allegations in the Superseding Indictment, such as the above, as to statistically make a conviction more probable than not. Prosecutors do not need to convince a jury that all of them are true, just some of them, or maybe even just one of them. One “Overt Act” alone may be enough to support conviction of a crime.

The Superseding Indictment also seeks the forfeiture of Grusd’s title to, and interest in an amount of proceeds not less than $206,330.56 in real property located at 14655 Mulholland Drive, Los Angeles, CA 90077, and all appurtenances affixed thereto. Prosecutors filed a Lis Pendens which creates a lien on this real property.

Arraignment is set on the new indictment for 7/27/2017 02:00 PM in Courtroom 2B before Magistrate Judge Jan M. Adler. On that date Grusd’s attorneys intend to ask the Court for a continuance for the start of trial currently scheduled to begin on October 10, 2017 in order to allow them time to prepare a defense to the Superseding Indictment.

Hospitals and pharmacies are required to toss expired drugs, no matter how expensive or vital. The idea that drugs expire on specified dates goes back at least a half-century, when the FDA began requiring manufacturers to add this information to the label. Meanwhile the FDA has long known that many remain safe and potent for years longer.

Federal and state laws prohibit pharmacists from dispensing expired drugs and The Joint Commission, which accredits thousands of health care organizations, requires facilities to remove expired medication from their supply. Outdated drugs are shunted to shelves in the back of the pharmacy and marked with a sign that says: “Do Not Dispense.” The piles grow for weeks until they are hauled away by a third-party company that has them destroyed. And then the bins fill again.

Though the government requires pharmacies to throw away expired drugs, it doesn’t always follow these instructions itself. Instead, for more than 30 years, it has pulled some medicines and tested their quality. The story on ProPublica claims that the federal government has stockpiled massive stashes of medication for decades, antidotes and vaccines in secure locations throughout the country. The drugs are worth tens of billions of dollars and would provide a first line of defense in case of a large-scale emergency.

The federal agencies that stockpile drugs – including the military, the Centers for Disease Control and Prevention and the Department of Veterans Affairs – have long realized the savings in revisiting expiration dates.

In 1986, the Air Force, hoping to save on replacement costs, asked the FDA if certain drugs’ expiration dates could be extended. In response, the FDA and Defense Department created the Shelf Life Extension Program. The program authorizes governmental stockpiling and use of expired drugs.

FDA’s Office of Regulatory Affairs (ORA) Field Science Laboratories centrally manages the program, including interacting with DoD and coordinating laboratory work. The FDA Center for Drug Evaluation and Research (CDER) Division of Product Quality Research analyzes the data and makes decisions regarding shelf life extensions.

Each year, drugs from the stockpiles are selected based on their value and pending expiration and analyzed in batches to determine whether their end dates could be safely extended. For several decades, the program has found that the actual shelf life of many drugs is well beyond the original expiration dates.

A 2006 study of 122 drugs tested by the program showed that two-thirds of the expired medications were stable every time a lot was tested. Each of them had their expiration dates extended, on average, by more than four years, according to research published in the Journal of Pharmaceutical Sciences.

The billion dollar question asks why it is this research has not extended to the private sector? Pharmacists and researchers say there is no economic “win” for drug companies to investigate further. They ring up more sales when medications are tossed as “expired” by hospitals, retail pharmacies and consumers despite retaining their safety and effectiveness.

Some medical providers have pushed for a changed approach to drug expiration dates – with no success. In 2000, the American Medical Association, foretelling the current prescription drug crisis, adopted a resolution urging action. The shelf life of many drugs, it wrote, seems to be “considerably longer” than their expiration dates, leading to “unnecessary waste, higher pharmaceutical costs, and possibly reduced access to necessary drugs for some patients.”

No one remembers the details of the AMA resolution – just that the effort fell flat. “Nothing happened, but we tried,” says rheumatologist Roy Altman, now 80, who helped write the AMA report.  Experts estimate such squandering eats up about $765 billion a year – as much as a quarter of all the country’s health care spending.