A surge in prescription drug abuse among older Americans has been accompanied by a big increase in urine and blood tests nationwide. Part of an effort to detect that abuse, the tests generate millions of dollars for providers. Medicare, the government insurance system for the disabled and people 65 years and older, is footing the bill. One illustrative example, a review of Medicare data released last month by Reuters Health found three Connecticut doctors billed Medicare for nearly 24,000 drug tests in 2012 – on just 145 patients. Despite the extraordinary number, Medicare administrators paid the doctors a total of $1.4 million. Each of the doctors requested only the most expensive and comprehensive drug test, for as much as $94, rather than the simpler $19 one. This was done to improve the accuracy of the results, one said.

“Those numbers are ridiculously high,” said Dr Stuart Gitlow, acting president of the American Society of Addiction Medicine. “There is no medical indication I can think of that would require such frequency of testing. I can’t come up with a scenario at all.”

Medicare paid medical providers $457 million in 2012 for 16 million tests to detect everything from prescription narcotics to cocaine and heroin, according to the Reuters analysis. “In some parts of the country every doctor and his cousin is hanging out a shingle to do (addiction) treatment. There’s a tailor-made opportunity for ordering a profusion of tests instead of one,” said Bill Mahon, former executive director of the National Health Care Anti-Fraud Association. “It’s like turning on a spigot of money,” he said. Urine and blood tests are potential areas of fraud and abuse because guidelines for drug testing are vague, leaving the frequency of testing to the discretion of the provider.

Yet, there is often a legitimate need for such drug tests, to determine whether an addict has relapsed or to ensure that patients prescribed painkillers are taking them rather than selling them. In 2011, the average number of older Americans misusing or dependent on prescription pain relievers grew to about 336,000, up from 132,000 a decade earlier, according to the Substance Abuse and Mental Health Services Administration.

Aggressive plaintiff attorneys have tried for years to up the ante in workers’ compensation claims in various ways, including attempts at filing RICO cases against employers, carriers and claims professionals. Racketeer Influenced and Corrupt Organizations Act, commonly referred to as the RICO Act or simply RICO, is a United States federal law that provides for extended criminal penalties and a civil cause of action for acts performed as part of an ongoing criminal organization. But, a new appellate case in the 6th Circuit rules out a RICO case based upon a workers’ compensation claim. at least in that Circuit (Kentucky, Michigan, Ohio, and Tennessee).

Jay Brown claimed that he injured his shoulder while paving a road for his employer Ajax Paving, and sought workers’ compensation in Michigan. Ajax introduced medical testimony suggesting that the injury occurred outside of work. While the case remained pending before the Michigan administrative agency, Brown and Ajax settled. Brown, however, thought that Ajax had introduced false medical testimony and that it had done the same to other employees, and sued Ajax and its insurers, claims administrators and the doctor, under the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. 1964(c).

The district court dismissed. The Sixth Circuit affirmed the dismissal. Under the Act, Brown must show that illegal racketeering activities have “injured [him] in his business or property.” The Sixth Circuit has held that “loss or diminution of benefits the plaintiff expects to receive under a workers’ compensation scheme does not constitute an injury to ‘business or property’ under RICO.” The case is Brown v. Ajax Paving Industries, Inc., No. 11-1391 (6th Cir. May 19, 2014)

The Sixth Circuit pointed out that, in Jackson v. Sedgwick Claims Management Services,731 F.3d 556 (6th Cir. 2013) (en banc), it had rejected a lawsuit challenging a scheme to introduce false testimony at workers’ compensation hearings, holding that “loss or diminution of benefits the plaintiff expects to receive under a workers’ compensation scheme does not constitute an injury to ‘business or property’ under RICO.” There, the circuit court continued, it gave two key reasons for its holding: One was that workers’ compensation compensated for personal injury, while RICO, with its spotlight on “business or property,” did not cover losses that flowed from personal injuries. Second, it reasoned, a contrary rule would allow RICO to police fraud in the workers’ compensation system, “planting the national banner on land traditionally patrolled by the States.” In the circuit court’s opinion, RICO did not speak with enough clarity to authorize such an intrusion.

In concluding, the circuit court added that Jackson applied not only to disputes between employer and employee, but also to an employee’s claims against insurers, claims administrators, and doctors – “all of the defendants.” RICO’s applicability “turns on the nature of the injury – that the plaintiff was ‘injured in his business or property.’… It does not turn on the nature of the defendant.”

The Sixth Circuit was the first federal appellate court to rule on the issue, but similar cases are pending across the country. A case was filed recently against York Risk Services Group in Arizona on behalf of injured firefighters. The case is Laurie Miller et al. v. York Risk Services Group. U.S District Court Judge John Sedwick denied York’s requests to dismiss the employees’ claims last December. Judge Sedwick found that the employees “possess a property right in their workers compensation benefits under Arizona law,” which allows them to have a property interest under RICO law, the opposite of the finding in Brown.

Arizona is in the United States Court of Appeals for the Ninth Circuit, (as is California) and the 9th Circuit is not bound by cases in the 6th Circuit. Nonetheless the opinion in Brown will be persuasive if not controlling law. Should the 9th Circuit differ when the York case ultimately reaches the appellate tribunals, it would be an invitation for the U.S. Supreme Court to weigh in, perhaps resolving the issue of the application RICO to workers’ compensation cases nationwide .But, an adverse ruling at the 9th Circuit would open the floodgates for RICO litigation in California unless the U.S. Supreme Court intervened. The 9th Circuit is generally viewed as the most liberal venue in the nation. Thus the York case needs to be carefully followed.

Shirley Lappi sustained a workplace injury in 2003 while working as an administrative assistant for the University of California at Irvine and she filed a claim against the University for workers’ compensation benefits.

In 2007, Lappi noticed the deposition of the Sedgwick claims examiner assigned to her case and sought production of all unprivileged documents pertaining to her case, including Sedgwick’s claims file. After the University moved to quash the deposition, the WCJ ordered the claims examiner to make himself available for deposition and to “produce all non-privileged portions of the claims file.” At the deposition, the claims examiner produced the claims file, which included computer notes identified as “Notepad Detail.” However, he produced none of these notes for the period after January 11, 2008, when the University initially retained counsel in this matter. Lappi made a further demand for the missing documents, which the University refused to produce on the basis of claimed privilege. The parties returned to court on February 28, 2012. The WCJ noted the parties were unable to agree on the release of the notes and ordered the University “to file a copy of computer ‘Notepad detail’ with the WCJ . . . for [an] in camera review of alleged confidentiality of said notes.”

The discovery dispute continued between the parties until it was ultimately removed to the WCAB for resolution. The WCAB noted that if the disputed documents “do not refer to an attorney’s communication, they may not be protected by the attorney-client privilege. Moreover, if a note with an action plan does not refer to an attorney’s impressions, it is difficult to see how the action plan would fall within the work product doctrine.” However, the WCAB explained that “it is not clear from the testimony at trial or from the petition whether the notes sought actually summarize or refer to attorney communications.” Given this dearth of concrete information, the WCAB concluded the WCJ’s decision requiring production must be rescinded and that the “best course is to return the matter to the WCJ so that she may appoint a special master” who would “conduct an in camera review of the disputed documents and to provide that report to the parties and to the WCJ.”

The University petitioned the Court of Appeal for review of the WCAB’s decision, presenting this question for determination: “Do the attorney-client privilege, the absolute work product doctrine and Evidence Code section 915 operate within workers’ compensation proceedings in the same fashion as in judicial proceedings; i.e., can the [WCAB] order an in camera review of documents in order to determine whether attorney-client privilege or the absolute [work product doctrine] apply despite Evidence Code section 915?” The answer to that question in the unpublished decision of Regents of the University of California v WCAB was: Yes they do and therefore, no it cannot.

Section 915 is found in division 8 of the Evidence Code (Evid. Code, § 900 et seq.), which governs privileges. It provides, in pertinent part that “the presiding officer may not require disclosure of information claimed to be privileged under this division or attorney work product under subdivision (a) of Section 2018.030 of the Code of Civil Procedure in order to rule on the claim of privilege . . . .” (§ 915, subd. (a).) Section 915 carves out some exceptions to this rule, none of which are applicable here. It is beyond dispute that section 915 would have prohibited the type of document review ordered by the WCAB if this dispute had arisen in the context of an ordinary civil case.

Labor Code section 5708 sets forth a general rule authorizing the WCAB to adopt its own “rules of practice and procedures” and specifies that in the conduct of hearings and investigations, the WCAB “shall not be bound by the common law or statutory rules of evidence and procedure.” However, when it comes to the treatment of privileged information specifically, division 8 of the Evidence Code trumps this provision of the Labor Code. Division 8 expressly applies to “any action, hearing, investigation, inquest or inquiry (whether conducted by a court, administrative agency, hearing officer, arbitrator, legislative body, or any other person authorized by law) in which . . . testimony can be compelled . . . .” Moreover, Evidence Code section 910 explicitly overrides any other statute which might otherwise be viewed as limiting application of the “rules of evidence” generally: “The provisions of any statute making rules of evidence inapplicable in particular proceedings, or limiting the applicability of rules of evidence in particular proceedings, do not make this division inapplicable to such proceedings.”

The Court of Appeal concluded that “In light of these provisions, it is clear that while the WCAB is free to adopt rules of practice and procedures which ignore the “rules of evidence” set forth in the Evidence Code, it nonetheless remains bound by the statutory requirements for dealing with privilege found in division 8 of that code, including section 915. As a consequence, the WCAB erred in this case when it ordered an in camera review of the University’s allegedly privileged documents by a special master for the purpose of assessing the merits of that privilege claim.”

Eight former NFL players – Richard Dent, Jim McMahon, Jeremy Newberry, Roy Green, J.D. Hill, Keith Van Horne, Ron Stone, and Ron Pritchard—filed a class-action lawsuit alleging that the NFL supplied them with illegally prescribed painkillers throughout their careers, which led to medical complications such as addiction later in life.

Specifically, the players are alleging:

1. The NFL illegally and unethically supplied players serious pain medications, including addictive opioids, and NSAIDs such as torodol.
2. The NFL did so for financial gain, in order to keep them in competition rather than allowing them to rest and heal.
3. The NFL “fraudulently concealed” the dangerous side effects of the drugs from players.
4. The illegal prescription of these painkillers has led to dangerous medical conditions later in life, including painkiller addiction, stage 3 renal failure and high blood pressure.

More than 500 other former players have signed on to the lawsuit, which was filed in U.S. District Court in San Francisco, according to lawyers representing the former athletes. They are looking to make the case a class action lawsuit.

The full complaint outlines how plaintiff after plaintiff allegedly went through the same ordeal: illegal prescription of painkillers, deceit about both the injuries and the side effects of the drugs, and subsequent medical damage. Some excerpts include:

“Named Plaintiff Jeremy Newberry received hundreds of Toradol injections over the course of his career and for many games, would receive as many as five or six injections of other medications during the course of a game. He also would receive Vicodin before, during and after games to numb pain and often during a game would simply ask a trainer for medications, which would be provided without record as to who was receiving what.”

“While playing in the NFL, Mr. Hill received hundreds, if not thousands, of pills from trainers and doctors, including but not limited to NSAIDs, Codeine, Valium and Librium. No one from the NFL ever talked to him about the side effects of the medications he was being given or cocktailing. He left the League addicted to painkillers, which he was forced to purchase on the streets to deal with his football-related pain, a path that led him to other street medications. He eventually became homeless and was in and out of 15 drug treatment centers for a period of over 20 years until overcoming his NFL-sponsored drug addiction.”

“Mr. Green, who received hundreds of NSAIDs (which can cause kidney damage) from NFL doctors and trainers, had tests performed on him while he played in the NFL that showed he had high creatinine levels, indicative of a limitation on his kidney function. No one from the NFL ever told him of those findings. In November 2012, he had a kidney transplant.”

This is the second class-action lawsuit filed against the NFL by former players. In August 2013, the league agreed to a $765 million settlement with former players who alleged the league lied to players about the physical danger of concussions, which created long-term disabilities for the players that were not covered by league insurance.

In 2005, Warren Brower sustained an industrial injury to his low back, left knee, and psyche while employed as an ironworker foreman,. The WCJ found that Brower’s injury caused temporary total disability from December 20, 2005 through October 6, 2011 and caused permanent total disability (100%). Although under Labor Code section 4656(c)(1)2 applicant’s entitlement to temporary total disability indemnity payments ceased on December 20, 2007 (i.e., after 104 weeks of payment), the WCJ awarded permanent total disability indemnity commencing October 6, 2011, which was when applicant became permanent and stationary. Accordingly, the WCJ’s award resulted in a nearly four year gap between the last payment of temporary total disability indemnity and the first payment of permanent total disability indemnity.

Applicant filed a petition for reconsideration contending that his permanent total disability payments should have commenced as of December 21, 2007 and not October 6, 2011, arguing that pursuant to section 4650(b), permanent total disability payments should commence on the day after the last payment of temporary total disability. Applicant also contends he is entitled to annual cost of living adjustments (COLAs) commencing on January 1, 2008 pursuant to section 4659.

Based on a review of the relevant statutes, regulations, and case law, the WCAB concluded in the en banc decision of Brower v SCIF that

(1) When a defendant stops paying temporary disability indemnity pursuant to LC 4656(c) before an injured worker is determined to be permanent and stationary , the defendant shall commence paying permanent disability indemnity based on a reasonable estimate of the injured worker’s level of PD.
(2) When an injured worker who is receiving PPD payments pursuant to LC 4650(b)(1) becomes permanent and stationary and is determined to be permanently totally disabled, the defendant shall pay PTD indemnity retroactive to the date its statutory obligation to pay temporary disability indemnity terminated.
(3) COLAs begin on the first day in January after an injured worker becomes entitled to receive permanent disability indemnity pursuant to LC 4650(b)(1) or (b)(2).

Effective January 1, 2013, the Legislature amended section 4650(b) in SB 863 to clarify that an employer is not required to commence permanent disability indemnity after the last payment of temporary disability if the employee has returned to work or been offered work at certain wage thresholds. If the employee is eventually awarded permanent disability, “the amount then due shall be calculated from the last date for which temporary disability indemnity was paid, or the date the employee’s disability became permanent and stationary, whichever is earlier.”

Prior to enacting SB 899, the Legislature amended section 4659 to provide that, for injuries occurring on or after January 1, 2003, permanent total disability indemnity payments are increased annually commencing January 1, 2004 in an amount equal to the percentage increase in the state average weekly wage. Prior to the passage of SB 899, the injured worker’s entitlement to temporary disability indemnity terminated when the injured worker either became permanent and stationary or improved sufficiently to return to work. Historically, permanent disability benefits were not payable until the employee had reached permanent and stationary status. SB 899 amended section 4656(c) [now, § 4656(c)(1)] to provide for a 104-week cap on temporary disability. Thus, injured workers like Mr. Brower could remain temporarily disabled after receiving 104 weeks of temporary disability payments and yet not be entitled to collect temporary disability indemnity. Concurrently, the Legislature also amended section 4650(b) [now,§ 4650(b)(1)] to require that permanent disability commence “[w]hen the last payment of temporary disability indemnity has been made pursuant to subdivision (c) of Section 4656.” As amended by SB 899, section 4650 requires a defendant to pay permanent disability indemnity to an applicant who may be temporarily disabled.