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Officials Note Increase in Pharmacy Burglaries

The Ventura County Star reports that in 2015, law enforcement agencies had six pharmacy burglaries in Ventura County. The following year, these burglaries numbered 64, resulting in an average of more than five burglaries per month and leaving law enforcement officials scrambling for answers. Capt. Garo Kuredjian, of the Ventura County Sheriff’s Office, described the 58-burglary increase as a “statistically significant ” change in criminal behavior.

Detective Chip Buttell, of the Oxnard Police Department’s property crimes unit, said most of the burglaries had specific targets, such as opioid-based narcotics, with little variation. The burglars generally have not tried to take everything of value, such as computers or patient information, from a location, officials said.

“It was obvious the criminals were seeking high-priced drugs such as oxycodone,” said Mary Jarvis, a public affairs representative for Kaiser Permanente, whose Oxnard pharmacy was burglarized twice in 2016.

Thieves can potentially make hundreds of dollars from the illicit sale of such opioid drugs on the black market. “Typically, the opioid-based drugs are selling for about 50 cents per milligram,” Kuredjian said. “So it’s $7 to $18 for a 15-milligram pill and $15 to $36 for a 30-milligram pill.”

Indications of the spike began showing up early last year when the Ventura County Sheriff’s Office alerted the public to a string of burglaries in Thousand Oaks and Camarillo. Between January and March, six pharmacies had been burglarized, with the thieves forcing entry into small, independent pharmacies during non-operating hours. They primarily took opioid-based medications, then fled. As the year drew on, the county’s cities – large and small – were plagued by pharmacy break-ins.

In total for 2016, Ventura saw 14 break-ins and Camarillo had 12, while both Oxnard and Thousand Oaks finished the year with 10. Santa Paula reported five and Simi Valley had six pharmacy burglaries. Newbury Park saw two.

Law enforcement officials stressed that the problem is not confined to Ventura County. Regions such as Santa Barbara County, which was unaffected in 2015, reported multiple instances last year, according to the Santa Barbara County Sheriff’s Office. Five pharmacy burglaries were reported in 2016, four in Santa Barbara and one in Montecito.

While law enforcement officials have noted the likely financial motive for the burglaries, there are challenges in alleviating the issue. Authorities are unsure precisely why Ventura County and other parts of Southern California have seen a sudden surge in incidents.

Most of the burglaries have occurred at smaller, independent pharmacies, not chain stores such as CVS or Rite Aid where traffic is higher and security is more prevalent.  A Kaiser Permanente representative confirmed that measures had been taken at its Oxnard location to avoid further incidents, although specifics were not shared.

The decreased supply of legitimate drugs has increased the demand from illicit sources, according to authorities. Burglars are only too happy to fill the void left behind by a decline in prescriptions.

FS&K Announces 7th Annual Employment Law Conference

Floyd, Skeren & Kelly’s “Annual Employment Law Conference” now enters its 7th year. This year the firm has another stellar group of employment law and workers’ compensation experts to present a comprehensive learning experience for employers, human resource administrators, risk managers and claims adjusters on important topics impacting the workplace.

Kevin Kish, Director of the Department of Fair Employment and Housing (DFEH) will be the keynote speaker during an important year for employers as we transition to a new President and federal administration, along with the inevitable changes in employment law and regulations that will follow.

Tina Walker, Regional Administrator for the DFEH will be joining Mr. Kish to provide her valuable input on the topics covered.

Mark ‘RX Professor’ Pew from PRIUM, will cover recent developments impacting employer policies on marijuana in the workplace and to address the many questions that have arisen since the passage of Proposition 64.

This years conference sessions will include:

1) Expanded Employee Protections: Key Developments on Conducting Lawful Background Checks, Transgender Protections, and Discrimination, Harassment and Retaliation Policies
2) New Laws Impacting Work Place Drug Testing- The Good, the Bad and the Unknown
3) HR Compliance is Complicated – 2017 Update Includes New Legislation, Cases and Key Trends Impacting the Workplace
4) Reducing the Risk of Costly Disability Discrimination Claims – Recommendations for Employer Best Practices (Legislative and Case Law Update Included)
5) Workers’ Compensation Case Law Update
6) Employer’s Fraud Task Force Update
7) Post Brinker-Costly Class Actions For Meal And Rest Period Violations Continue- Key Strategies For Avoiding Liability
8) Is My Employee Drunk, Sick or Simply Sleeping- Training Managers on ‘Reasonable Suspicion’ Based Drug Testing
9) Defending Good Faith Personnel Actions and Post-Termination Workers’ Compensation Claims
10) 2017 Hot Topics in Workers’ Compensation

Please see our Complete Agenda for more details.

The Conference is set for April 28, 2017 from 8:00 am to 5:00 pm at the Disneyland Hotel, 1150 Magic Way in Anaheim. Our conference is in the approval process for MCLE, CE, SPHR, HRCI and Credits for ARPM, CPDM and CCMP.

Employers Must Post Annual Injury and Illness Summaries

Cal/OSHA is reminding employers in California with more than 10 employees to post their 2016 annual summaries of work-related injuries and illnesses. These employers must post the annual summary no later than February 1 of the year following the year covered by the records and keep the posting in place until April 30.

“This important posting requirement increases awareness of health and safety hazards in the workplace and helps employers and employees understand how to reduce risks,” said Cal/OSHA Chief Juliann Sum.

Employers’ requirements to record occupational fatalities, injuries, and illnesses are in the California Code of Regulations, Title 8, Sections 14300 through 14300.48. Section 14300.32 describes the annual posting requirement. Section 14300.2 lists exempted industries.

To satisfy this requirements, at the end of each calendar year, employers must:

(1) Review the Cal/OSHA Form 300 to verify that the entries are complete and accurate, and correct any deficiencies identified;
(2) Create an annual summary of injuries and illnesses recorded on the Cal/OSHA Form 300 using the Cal/OSHA Form 300A Annual Summary of Work-related Injuries and Illnesses;
(3) Certify the annual summary; and
(4) Post the annual summary.

The employer must review the entries as extensively as necessary to make sure that they are complete and correct. A company executive (as defined) must certify that he or she has examined the Cal/OSHA Form 300 and that he or she reasonably believes, based on his or her knowledge of the process by which the information was recorded, that the annual summary is correct and complete.

The employer must then post a copy of the annual summary in each establishment in a conspicuous place or places where notices to employees are customarily posted. The employer must ensure that the posted annual summary is not altered, defaced or covered by other material.

Instructions and form templates can be downloaded for free on Cal/OSHA’s Record Keeping Overview. The overview includes the summary template, Form 300A, which is the required workplace posting that must be placed in a visible, easily accessible location at each worksite. Current and former employees, including employee representatives, have the right to review the summary in its entirety.

Senators Probe Overdose Antidote 550% Price Surge

First came Martin Shkreli, the brash young pharmaceutical entrepreneur who raised the price for an AIDS treatment by 5,000 percent. Then, Heather Bresch, the CEO of Mylan, who oversaw the price hike for its signature Epi-Pen to more than $600 for a twin-pack, though its active ingredient costs pennies by comparison.

Now a small Virginia company called Kaleo is joining their ranks. It makes an injector device that is suddenly in demand because of the nation’s epidemic use of opioids, a class of drugs that includes heavy painkillers and heroin.

Called Evzio, it is used to deliver naloxone, a life-saving antidote to overdoses of opioids. And as demand for Kaleo’s product has grown, the privately held firm has raised its twin-pack price to $4,500, from $690 in 2014. Founded by twin brothers Eric and Evan Edwards, 36, the company first sought to develop an Epi-Pen competitor, thanks to their own food allergies. Now, they’ve taken that model and marketed it for a major public health crisis. It’s another auto-injector that delivers an inexpensive medicine.

And the cost of generic, injectable naloxone – which has been on the market since 1971 – has been climbing. A 10-mililiter vial sold by one of the dominant vendors costs close to $150, more than double its price from even a few years ago, and far beyond the production costs of the naloxone chemical, researchers say. The other common injectable, which comes in a smaller but more potent dose, costs closer to $40, still about double its 2009 cost.

U.S. Senator Claire McCaskill on Thursday asked Kaleo Pharmaceuticals to justify the more than 550 percent surge in the price of its device to treat painkiller overdoses, becoming the second senator to question Evzio’s $4,500 price tag.  Senator Amy Klobuchar sent Kaleo a letter earlier this month, voicing similar concerns.

Evzio contains the overdose-reversing drug naloxone and can be used in emergencies by people without medical training. Privately held Kaleo has raised the price of a twin-pack to $4,500, from $690 in 2014, according to a Kaiser Health News report.

The concerns over Evzio’s price comes at a time when pharmaceutical companies are facing intense scrutiny over “price-gouging”, and as lawmakers struggle with the epidemic of opioid abuse.

“At a time when Congress has worked to expand access to naloxone products and to assist state and local communities to equip first responders with this life-saving drug, this startling price hike is very concerning,” McCaskill said in a letter to Kaleo Chief Executive Spencer Williamson. The letter, which was signed by 30 U.S. senators, asked Kaleo for information on Evzio’s price structure and why the company chose to adjust prices.

“We received the letter from the Senators and are in communication with them to ensure all questions are addressed,” Williamson told Reuters in an e-mailed statement.

“There’s absolutely nothing that warrants them charging what they’re charging,” said Leo Beletsky, an associate professor of law and health sciences at Northeastern University in Boston.

Opioid Drugmaker Lobbying Ramps Up

A leading drugmaker ramped up its lobbying in Canada fivefold last year, urging government officials to enact a rule that would give it an effective monopoly on long-acting narcotic painkillers.

Purdue Pharma’s efforts came as the government pledged a new attack on the county’s deadly opioid crisis. The privately owned maker of the blockbuster OxyContin pushed for a requirement that all long-acting narcotic painkillers, known as opioids, be made tamper resistant. The company, which sells the only tamper-resistant, long-acting opioids in Canada, met with 40 officeholders last year, up from eight in 2015 and three in 2014, records show.

The rule it proposed could edge out companies that don’t sell tamper-resistant opioids, including Novartis’, Sandoz AG , Johnson & Johnson’s Janssen, Teva, Pharmascience and Apotex SA <Apotex SA> and others.

Health Canada issued a statement last April saying it had no plans to require tamper resistance. Purdue sent lobbyists on four occasions to Health Canada officials last year, including a May meeting seeking an explanation for the government’s stance, department spokesperson Anna Maddison said in an email.

Conservative Member of Parliament Kevin Sorenson revived the idea in September with a bill to require all controlled substances be tamper resistant. Records show Sorenson met with Purdue representatives six days before he introduced the bill and spoke with them again two days before it went to second reading in November.

Purdue’s lobbying illustrates the stakes for drugmakers in efforts to curb what policymakers have called North America’s biggest public health crisis.  Canada’s $881-million annual opioid sales are dwarfed by the U.S. market, the biggest in the world. Any action by Canada is likely to attract interest south of the border.

Purdue said it was pushing for the rule to improve safety. Canadian officials have passed on that proposal and instead are looking at measures that could hurt sales of long-acting opioids, including Purdue’s best-selling painkillers.

Long-acting opioids contain high doses of narcotics designed to be released over time. If crushed pills are snorted or injected, they release their full dose all at once, which makes them dangerous and valuable among addicts.  In 2012, Purdue replaced OxyContin with tamper-resistant OxyNEO in Canada and now wants that standard mandated for all long-acting opioids.

Many experts and public health officials see the research differently. They said there’s little evidence tamper resistance reduces addiction or death and that it may even prompt doctors to more readily prescribe opioids. Research shows opioids are most often abused not by crushing but by swallowing pills whole, said David Juurlink, a drug-safety researcher at Toronto’s Sunnybrook Health Sciences Centre.  “It’s very easy to get the sense that this push in favor of tamper-resistant opioids is rooted more in financial considerations than in the public interest,” he said.

Generics manufacturers said they do not view tamper resistance as the answer. “We believe that efforts should be made to address the main root cause of opioid abuse and misuse, which appears to be over-prescribing,” Jeff Connell, Canadian Generic Pharmaceutical Association Vice-President, said in an email.

“There is no evidence that tamper-resistant formulations are effective in reducing the level of abuse of opioids,” a Sandoz spokesperson wrote in an email. Sandoz sells a long-acting, crushable oxycodone painkiller.

Judge Blocks Anthem – Cigna Merger

A federal judge has blocked the proposed $54 billion merger of two major health insurance companies, Anthem and Cigna, after the Justice Department concluded that the deal would reduce competition in the health insurance market and raise prices.

Judge Amy Berman Jackson of the U.S. District Court for the District of Columbia made the ruling.

Anthem is determined to ensure Wednesday’s decision isn’t the final word on the issue. The company said in a statement Thursday that it “promptly intends to file a notice of appeal and request an expedited hearing.”

The Justice Department announced last summer that it would oppose both the Anthem-Cigna merger and one by Aetna and Humana, These are four of the major five insurers in the nation.

Both mergers have now been blocked in separate federal court cases citing adverse effects on competition and pricing.

Then-Attorney General Loretta Lynch said: “If allowed to proceed, these mergers would fundamentally reshape the health insurance industry. They would leave much of the multi-trillion dollar health insurance industry in the hands of three mammoth insurance companies, drastically constricting competition in a number of key markets that tens of millions of Americans rely on to receive health care. … If these mergers were to take place, the competition among these insurers that has pushed them to provide lower premiums, higher quality care and better benefits would be eliminated.”

The California Insurance Commissioner said “Today’s federal court decision to block the merger of two of the nation’s largest health insurers is a significant win for consumers who need more choice, not less, in an already highly concentrated health insurance market. Bigger was definitely not better when it comes to the Anthem-Cigna merger.”

“Last year I held an extensive public hearing on the proposed merger. After reviewing all the evidence, I concluded the Anthem-Cigna merger was bad for consumers and businesses, and bad for health insurance and health care markets. I issued detailed findings of fact and law and urged the U.S. Department of Justice to sue to block this merger because it is anti-competitive and would harm California consumers, businesses, and the California health insurance market.”

The commissioner concluded that “Allowing a merger between two of the largest health insurers in the country would have increased the price of health insurance, and decreased choice and the quality of healthcare for consumers and businesses. I am very pleased the federal district court entered a decision consistent with my findings and legal conclusions that the Anthem-Cigna merger is anti-competitive.”

Sacramento Chiropractor Arraigned in Fraud Case

A California chiropractor was arraigned in Sacramento Superior Court on eight felony counts of insurance fraud for his alleged role in a fraud scheme billing health and auto insurers for treatment services never provided.

The chiropractor is William Guenther, 69, of Granite Bay and former owner of Fort Sutter Chiropractic. Former in-house biller Pam Rivas, 58, of Cameron Park, and office managers Cristen Jones-Hassanali, 37, of Sacramento and Stacey Fellows, 37, also of Sacramento, face seven counts of felony insurance charges.

An investigation by department of insurance detectives revealed Guenther and his staff billed several insurers for mechanical traction treatments for 50 to 70 patients per day between 2012 and 2015, when no mechanical traction units were in the office.

Insurers reportedly paid $150,325 to Fort Sutter Chiropractic in fraudulent claims.

Guenther was released on $150,000 bail. Rivas, Jones-Hassanali, and Fellows were scheduled to appear in court at a later date.

This case is being prosecuted by the Sacramento County District Attorney’s Office.

Fort Sutter Chiropractic is under new ownership and Guenther is no longer affiliated with the practice.

Study Says Drugmakers Influence Treatment Guidelines

The long arm of the pharmaceutical industry continues to pervade practically every area of medicine, reaching those who write guidelines that shape doctors’ practices, patient advocacy organizations, letter writers to the Centers for Disease Control and Prevention and even oncologists on Twitter, according to a series of papers on money and influence published in JAMA Internal Medicine and an article on NPR.

Researchers Ray Moynihan and Lisa Bero wrote in an accompanying commentary that the “very way we all think about disease – and the best ways to research, define, prevent, and treat it – is being subtly distorted because so many of the ostensibly independent players, including patient advocacy groups, are largely singing tunes acceptable to companies seeking to maximize markets for drugs and devices.”

More than two-thirds of patient advocacy organizations that responded to a survey indicated that they had received industry funding in their last fiscal year. For most, the money represented a small share of their budget. But 12 percent said they received more than half of their money from industry.

US Centers for Disease Control and Prevention ( CDC) recently developed guidelines for prescribing opioids for chronic pain. When the draft guidelines were released , there was criticism. Some organizations argued that the development of the guidelines was not transparent and the recommendations were based on weak evidence. Subsequently, the CDC postponed the release of the guidelines and opened them to public comment for a 30-day period.

Researchers Moynihan and Bero analyzed these comments to identify levels of support for the guidelines and whether financial relationships with opioid manufacturers were associated with opposition to the guidelines. The final guidelines were released in March 2016.”

158 organizations formally submitted comments after the proposed guidelines were released in February 2016, and 80 percent of them were supportive, though some had recommendations for changes. Organizations that received funding from opioid manufacturers were less supportive of guidelines proposed by the CDC to limit prescribing of the drugs for chronic pain.

Of the 158 organizations, 45 (28.5%) received funding from opioid manufacturers, 25 (15 .8%) had funding ties to other companies in the life sciences, 64 (40.5%) received no funding from the life sciences industry, and funding of the remaining 24 (15.2%) was not known. Of the organizations that received funding from opioid manufacturers, none disclosed these funding sources in their comments; of the organizations that received funding from the life sciences industry, 6 (24%) disclosed their funding.

Fifty-two organizations (32.9%) were supportive of the guidelines without additional recommendations, 75 (47. 5%) were generally supportive with recommendations, 18 (11.4%) were generally not supportive with recommendations, and 13 ( 8.2%) were not supportive.

Opposition to the guidelines was more frequent among organizations with funding from opioid manufacturers than those without funding from the life sciences industry, both overall and for recommendations about limits on opioid dosing and the length of opioid treatment.

Among the 45 groups that received money from opioid makers, though, the level of support was only 62 percent. And none of those groups disclosed their funding sources in their comments. (The CDC did not ask or require them to do so.)

“More people are dying than ever before from these products, and it’s important to know how the market is shaped by the spending of drug companies,” G. Caleb Alexander, co-director of the Center for Drug Safety and Effectiveness at Johns Hopkins 1University, said in an interview.

WC Claims – What to Expect in 2017

The Property Casualty 360 Out Front Ideas with Kimberly George and Mark Walls webinar of 2017 provided thoughts on Workers’ Compensation Issues to Watch in 2017.

Federal Regulations: The U.S. Department of Labor (DOL) under President Obama felt state workers’ compensation systems needed reform, and they were prepared to recommend minimum benefit standards to the states. President Trump’s nominee for Secretary of Labor, Andrew Puzder, has been a vocal opponent of many federal labor regulations. For now, any talk of the federal government getting involved in state workers’ compensation issues seems to be on hold.

Another potential impact of the election results is the direction OSHA may take in 2017 and beyond. In recent years, employers have complained that OSHA was more focused on enforcement than education and training, noting its shift of resources. Recent OSHA policies such as the publicly accessible online database and restrictions on post-injury drug testing were met with significant resistance from the employer community. OSHA falls under DOL and also is likely to have a new direction under the Trump administration.

Leave-of-absence regulations under the federal Family and Medical Leave Act (FMLA) have become increasingly more complex over the past eight years.

Americans with Disabilities Act (ADA) accommodation requests were initially related to ergonomics and transitional work accommodations following an illness or injury. Today, they have become more complex, including everything from bringing service animals into the workplace, allergies and noise accommodations to establishing work-from-home accommodations.

Market Cycles: Workers’ compensation market cycles are generally driven by changes in competition more than changes in exposures. Claims costs over the last 20 years have steadily increased, yet premiums during this same period have gone up and down.

During the January 1 renewal cycle, rates trended flat or slightly down compared to expiring premiums. Some problem states saw higher rates, including California, New York, Illinois and Florida. The declining rates compared to increasing claims costs have caused A.M. Best, Fitch and others to issue a negative outlook on workers’ compensation. This hyper-competitive market cycle is expected to end soon as the new entrants into the marketplace start to see the long-tail losses from their business hitting the books.

Lifetime Awards: Workers’ compensation is a challenge for employers and carriers due to the long-tail claims, that is, premiums collected today must cover losses for years to come. It has an impact on both carriers and employers in the cost of insurance today and future reserves.

The biggest drivers are advances in medical science that increase life expectancies, which in turn increase the exposures for lifetime indemnity and medical benefits. In addition, new drugs and treatments cost more than what they are replacing, especially with the cost difference between brand-name drugs and generic medication. Prosthetics are so much more advanced today than they were 10 years ago, but they also cost significantly more.

Treatment Guidelines: States have implemented a variety of guideline solutions, which include creating unique formularies and treatment guides and also adopting industry-available workers’ compensation guidelines. The lack of guideline consensus across stakeholders including physicians, regulators, payers and suppliers is an ongoing challenge to the system.

Constitutional Challenges: In 2016, elements of the workers’ compensation statutes in five states were found to be unconstitutional by each state’s respective Supreme Court, including the following:

1) Caps on temporary total disability benefits
2) Exclusion of coverage for certain farm workers
3) Caps on attorney fees
4) Time limits for filing cumulative trauma claims
5) Use of the current edition of the American Medical Association guidelines for impairment ratings

TeamHealth Settles Fraud Claim for $60 Million

TeamHealth Holdings, Inc. is one of the nation’s largest providers of outsourced physician staffing solutions for hospitals. The company contracts with hospitals and physician groups in the areas of emergency medicine, hospital medicine, anesthesia and specialty hospitalist services. It also offers combined outsourcing services to single hospitals and hospital systems

TeamHealth has a growing presence in California. In 2014 it announced the acquisition of the operations of Burbank, Calif.-based Primary Critical Care Medical Group (PCCMG). Specializing primarily in hospital and critical care medicine, PCCMG provides clinical services through partnerships with four hospitals and two outpatient primary care clinics in the Southern California market.

IPC Healthcare Inc., was purchased by TeamHealth in November 2015. IPC is headquartered in North Hollywood, on Lankershim Boulevard. IPC manages hospitalist practice groups in the San Francisco Bay Area and the Inland Empire, and nationally. The transaction was valued at approximately $1.6 billion.

TeamHealth’s approximately 10,000 affiliated healthcare professionals provide emergency medicine, hospital medicine, anesthesia, urgent care, and pediatric staffing and management services to approximately 900 civilian and military hospitals, clinics, and physician groups in 46 states.

The Department of Justice just announced that TeamHealth Holdings, as successor in interest to IPC has agreed to resolve allegations that IPC violated the False Claims Act by billing Medicare, Medicaid, the Defense Health Agency and the Federal Employees Health Benefits Program for higher and more expensive levels of medical service than were actually performed (a practice known as “up-coding”). Under the settlement agreement, TeamHealth has agreed to pay $60 million, plus interest.

The government contended that IPC knowingly and systematically encouraged false billings by its hospitalists, who are medical professionals whose primary focus is the medical care of hospitalized patients. Specifically, the government alleged that IPC encouraged its hospitalists to bill for a higher level of service than actually provided. IPC’s scheme to improperly maximize billings allegedly included corporate pressure on hospitalists with lower billing levels to “catch up” to their peers.

As part of the settlement, TeamHealth entered into a five-year Corporate Integrity Agreement (CIA) with the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) covering the company’s hospital medicine division. This CIA is designed to increase TeamHealth’s accountability and transparency so that the company will avoid or promptly detect future fraud and abuse.

The settlement resolves allegations filed in a lawsuit by Dr. Bijan Oughatiyan, a physician formerly employed by IPC as a hospitalist. The Act also allows the government to intervene and take over the action, as it did in this case. Dr. Oughatiyan will receive approximately $11.4 million from the settlement.