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Tag: 2013 News

FDA Approves New Drug for Opioid Addiction

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The U.S. Food and Drug Administration has approved Swedish drugmaker Orexo AB’s drug to treat opioid addiction. The tablet, Zubsolv, dissolves under the tongue. It combines the drugs buprenorphine and naloxone and will compete with similar products, Subutex and Suboxone, made by Britain’s Reckitt-Benckiser Group Plc. Orexo said its drug offers a benefit to patients over Suboxone because less is required to achieve the same effect. It also has a menthol flavor that it said patients in a study preferred.

According to the report in Reuters Health, nearly three out of four prescription drug overdoses are caused by painkillers known as opioids that include such drugs as oxycodone, hydrocodone, fentanyl, methadone and codeine, according to the Centers for Disease Control and Prevention, and since 2003 have caused more overdose deaths than cocaine and heroin combined.

In March, the FDA rejected a drug similar to Orexo’s from Titan Pharmaceuticals Inc and asked for additional data proving it worked. Titan’s drug, Probuphine, is a long-acting version of Suboxone that is implanted under the skin.

To date, the market for buprenorphine has been dominated by Reckitt, a consumer goods company whose products range from cleaning supplies to condoms. Suboxone and Subutex generated sales of roughly $1.3 billion in 2012.

Orexo said opioid dependence affects nearly 5 million people in the United States and that only 20 percent receive treatment. The company said it expects peak sales of the drug to be at least $500 million.

Suboxone and Subutex lost market exclusivity in 2009, and while generic competitors introduced cheap copies of Subutex, they were slow to develop alternatives to Suboxone. In the meantime, Reckitt persuaded many physicians to switch from Suboxone tablets to Suboxone Film, a newer, patent-protected wafer-like strip that patients dissolve under the tongue. At the end of 2012, according to Reckitt, Suboxone Film had captured 64 percent of the market.

Earlier this year, the FDA approved generic versions of Suboxone tablets from Amneal Pharmaceuticals LLC and Actavis Inc. The agency also said, in April, that it would not approve any generic versions of the original form of OxyContin, which could be crushed and snorted for a quick high. OxyContin’s maker, Purdue Pharma LP, stopped shipping its branded version of the drug in August. It now sells a reformulated version that is less easy to abuse.

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Second Carrier Exits California Health Care Market

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A second health insurer notified state regulators Tuesday that it will stop selling individual policies in California. UnitedHealthcare announced it will no longer offer individual insurance plans after the end of the year. It will focus instead on its core business of group plans for large and small employers. The announcement comes two weeks after Aetna Inc. said it also plans to exit California’s individual insurance market. Both insurers avoided participating in the state exchange that is being established as part of the Affordable Care Act. State Insurance Commissioner Dave Jones says the departure of UnitedHealthcare and Aetna is bad news for consumers. “While both UnitedHealthcare and Aetna have a very small share of California’s individual health insurance market, their departure means less choice, less competition, and more market consolidation by the remaining big three health insurers – Anthem Blue Cross, Blue Shield of California, and Kaiser – which means an increased likelihood of even higher prices from those health insurers downstream,” Jones, a Democrat, said in a statement.

According to 2011 figures compiled by the California HealthCare Foundation, Anthem Blue Cross, Blue Shield and Kaiser have 87 percent of the individual market. Aetna had approximately 60,000 people covered by individual policies as of March 31, 2013, and it projects it will have approximately 50,000 people covered by individual policies at the end of 2013, when the company exits the individual market. United Healthcare, through its subsidiary PacifiCare, had approximately 10,000 individual policyholders late in 2012. Policyholders from both companies have been informed they can keep their existing health insurance until December 31, 2013. Aetna and United Healthcare policyholders will be able to purchase health insurance from other health insurers inside and outside the new California health benefits exchange. Starting Oct. 1, those seeking to buy their own health insurance will be directed to Covered California, the state’s new exchange, where 13 insurance carriers will sell individual policies. Aetna and UnitedHealthcare chose not to participate in the exchange.

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Carriers Report S.B. 866 Lien Provisions Are Reducing Costs

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The Insurance Journal reports that the S.B. 863 lien provisions seem to be reducing costs. EMPLOYERS Insurance, a monoline workers’ comp carrier that conducts more than 60 percent of its business in California, where it also sees more than half of its claims, is reporting that the lien fees are already easing the company’s losses. “It will save us on medical costs, and it will save us on defense costs,” said Christina Ozuna, vice president of claims for the Western Region for EMPLOYERS. Ozuna said it’s too soon to provide estimates on how much cost savings there will be, but she said they will be worth noting. “We believe we’re going to have significant cost savings,” she said.

Those savings should continue due to the January en banc decision in the case of Figueroa v. B.C. Doering Co., in which the WCAB detailed the process for lien activation and the consequences for not activating a lien prior to a lien conference set after 2013. The WCAB ruled the lien activation fee must be paid prior to the commencement of a lien conference, and if the lien claimant fails to pay, its lien must be dismissed with prejudice. In Figueroa WCAB ruled the judge was required to dismiss the case and that the failure to enter into negotiation or provide a proper notice is not excuse from paying the fee.

Operationally, carriers like EMPLOYERS will still be required to negotiate, Ozuna said, adding, “but going forward we’ll see many liens fall out of the system.” She added, “We’re seeing many, many dismissals of liens out of the system.” The dismissals are having a direct impact on EMPLOYERS by reducing the cost of defense of these liens, however some people are still poking at the loopholes in the lien filing process, she said. Instead of liens, many copy services and interpreting agencies with charges they want paid have acted to avoid the fees by instead filing petitions for costs. “Their argument is they are not medical providers and are not trying to provide claim for cost in the form of a lien,” Ozuna said. “This is their effort to sort of get outside of that.”

As far as liens go, Estelle Freeman, claims supervisor for Carl Warren and Co. in Tustin, Calif. said, while the organization has not felt the full impact of the new law, she’s noticed some changes. “I have noticed a lot more lien claimants trying to aggressively settle their liens before the case goes to a hearing to avoid paying the lien filing and/or lien activation fee,” Freeman said.

In fact, it appears that in 2012 in anticipation of the lien fees taking affect several lien filers got aggressive and made their claims as soon as possible, according to WCIRB’s Actuarial Committee. According to the committee, there was a sharp increase in lien filings in the fourth quarter of 2012 in anticipation of new lien filing and activation fees as part of SB 863. Citing Department of Workers’ Compensation data, WCIRB notes that nearly 1.2 million liens were filed in 2012 compared with less than 500,000 in 2011.

The lawmaker who originally introduced the lien filing fees before they were integrated into the workers’ comp reform bill was state Sen. Ted Lieu, D-Torrance, who had intended the bill to eliminate some of these loopholes that allow people to game the system. However, there was one thing he didn’t intend, and that was to make the fees retroactive. To fix that Lieu has authored cleanup legislation, Senate Bill 258, which clarifies that liens assigned prior to Jan. 1, 2013 can still be pursued even if the medical provider is still in business. “To do otherwise would probably be unconstitutional,” said Ray Sotero, a spokesman for Lieu.

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DWC Posts Third Notice of Modifications to SJDB Regulations

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A third15-day notice of modification to the supplemental job displacement benefit regulations has been distributed to interested parties and posted to the DWC website. Members of the public are invited to present written comments regarding the proposed modifications to dwcrules@dir.ca.gov by 5 p.m., July 18, 2013. The proposed modifications include changes to Section 10117. “Offer of Work; Adjustment of Permanent Disability.” Subdivision (f) is deleted and the subdivisions were relettered to accommodate the change in order.

Section 10133.31. “Supplemental Job Displacement Nontransferable Voucher for Injuries Occurring on or After 1/1/13” has been changed. Subdivision (f)(5) is amended to allow injured workers to submit written bids from a computer retailer to obtain payment for the purchase of computer equipment because they may not have the funds to purchase the equipment up-front. If the injured worker receives funds based upon submission of a written bid, the injured worker will be required to submit receipts. Failure to submit receipts will result in a $1,000 deduction from the total amount allowable by the voucher.

Section 10133.32. Form DWC-AD 10133.32 “Supplemental Job Displacement Nontransferable Voucher for Injuries Occurring on or After 1/1/13” has also been changed. A separate Request for Purchase of Computer Equipment was added to the form. Injured workers can submit either a written bid from a computer retailer or receipts of purchase. Following the purchase, receipts for the computer equipment must be submitted to the claims administrator.

Finally, in Section 10133.34. “Offer of Work for Injuries Occurring on or After 1/1/13” subdivision (b)(4) was deleted and the subdivisions were renumbered to accommodate the change in order.

The notice, text of the regulations, and forms can be found on the proposed regulations page.

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DWC Obtains Extension of Emergency Regulations Until October 1

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The Office of Administrative Law has granted the Division of Workers’ Compensation’s requests for readoption of the six sets of emergency regulations that implemented major reform provisions of Senate Bill 863: supplemental job displacement benefit vouchers, interpreter services, qualified medical evaluator regulations (QME), independent medical review (IMR), independent bill review (IBR) and lien filing fee regulations. The emergency regulations, which were initially approved by OAL on Jan. 1, will remain in effect until Oct. 1, unless another 90-day readoption is requested.

On July 1, DWC filed its certificate of compliance for the interpreter services with OAL and requested an Oct. 1 effective date. DWC expects to issue revised supplemental job displacement benefit voucher regulations for a 15-day comment period this week. In the near future, DWC will also issue revised QME revised QME, IMR, IBR and lien filing fee regulations for 15-day comment periods.

DWC will continue to keep the public informed regarding its progress with the ongoing regulatory process.

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SCIF Distributes $100 Million Dividend After Surge in Income

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State Fund will begin issuing dividend payments to eligible policyholders in early July. The $100 million dividend will be paid on the 2012 policy year; eligible policyholders will receive approximately 10% of their 2012 estimated annual premium.

“The dividend is a direct result of sound investment returns and improved efficiencies at State Fund,” said Tom Rowe, State Fund President and CEO. “We are committed to helping make California business possible and this dividend supports a brighter future for employers.”

Last year, State Fund declared a $50 million dividend. Since its inception in 1914, State Fund has paid more than $5 billion in dividends to policyholders – a record unparalleled among all California workers’ compensation insurance carriers.

State Fund’s Annual Report for 2012 was released last April. The report shows a significant increase in net income for California’s largest workers’ comp insurer. For 2012, State Fund’s income before dividends totaled $458 million, which was $279 million more than the prior year.

The report also indicates that State Fund reduced annual fixed expenses by $150 million dollars compared to 2009, and expects to achieve annual savings of more than $300 million by the end of 2014. These savings will help State Fund maintain fair pricing and bring value to a larger swath of the available market. State Fund announced a rate reduction of 7% effective March 1, 2013.

State Fund maintained a balanced investment portfolio that was focused on both credit quality and investment yield (99.3% of the $18.2 billion bond portfolio was rated NAIC 1, the NAIC’s highest quality credit class). The weighted average credit quality of the overall bond portfolio was Aa1/AA by Moody’s and Standard and Poor’s, respectively. Book yield at December 31, 2012 was 4.10%, down from 4.43% at December 31, 2011.

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Lien Claimants Must Now Use Uniform Assigned Name

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On June 29, 2013, DWC will begin requiring lien claimants to use a Uniform Assigned Name (UAN ). This is a uniform naming convention which ensures that parties are properly associated to cases in EAMS, and is currently used by attorneys and claims administrators. After June 29, 2013, a lien claimant must use a UAN when electronically filing a Notice and Request for Allowance of Lien and Application for Adjudication or their attempt to do so will result in failure. This requirement will extend to OCR filed documents on July 1, 2013.

Most e-form filers already use a quasi UAN to access their DWC case files in EAMS, and aid them in paying lien filing and activation fees. The quasi UANs will convert to mandated UANs automatically. However, it is advised that e-form filers check on the UAN registry page to ensure that their UANs have been properly converted.

Lien claimants that do not have a UAN or do not recall their UAN should contact the Central Registration Unit at CRU@dir.ca.gov . Please enclose your letterhead attachment to the email. Lien claimant UANs are also posted on the DWC website.

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California Comp Surgical Costs Lower Than Group Health

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A new WCRI study says that prices paid for common hospital outpatient shoulder and knee surgeries vary greatly depending on whether the treatments are paid for through workers’ compensation insurance or employer-sponsored group health plans. In most of the 16 states examined by the Workers Compensation Research Institute, workers’ compensation plans paid more — sometimes a lot more. The 16 states included in the study are California, Florida, Illinois, Indiana, Iowa, Louisiana, Maryland, Massachusetts, Michigan, New Jersey, North Carolina, Pennsylvania, Tennessee, Texas, Virginia and Wisconsin. The payments represent 60 percent of the workers’ compensation benefits paid in the United States.

The amounts paid to health care providers on workers’ compensation claims are often regulated by the states, but in some states, the payments are not regulated, but rather are negotiated between insurers and the health care providers. Five states are classified in the report as unregulated, or “no-fee schedule” states. In three of those states — Iowa, New Jersey, and Virginia — the workers’ compensation treatment costs were exceptionally high.

In Massachusetts and California, which have established fixed payment amounts that hospitals can charge in workers’ compensation cases, the payments were actually lower than payments made through group health plans. The average workers’ compensation payment in Massachusetts for shoulder surgery was $2,636 compared with $4,592 for group health plans. In California, workers’ compensation payments were $5,895, 16 percent lower than group health plans.

In Virginia, workers’ compensation insurers paid $11,321 on average for shoulder surgery, more than twice the $5,279 group health average in that state. In Iowa, workers’ compensation insurers paid $8,586 on average for shoulder surgery, which was 50 percent more than the group health care plans.

The average workers’ compensation payment for shoulder surgery in New Jersey was $7,323. Group health plans paid only $4,583 on average, a difference of $2,740, or 37 percent less.

In two-thirds of the states examined by the nonprofit research group, the workers’ compensation payments were higher than those paid by group health.  Another contributing factor to the particularly high costs paid by workers’ compensation insurers in several states where hospital fees are not regulated is that workers’ compensation insurers have less bargaining power in price negotiations with hospitals than the private group insurers, which represent a much larger portion of the market.

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Video Surveillance Convicts Greenfield Woman

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The Monterey County District Attorney’s Office reports that a 52-year-old Greenfield woman was sentenced to three years probation and 90 days in jail for making a false workers’ compensation claim.

Ema Pantoja pleaded guilty on April 30 after claiming for three years she’d extensively damaged her wrist while working at Scheid Vineyards in January 2007. Over the course of several years, Pantoja was examined by a number of doctors and testified under oath concerning her physical limitations.

Continuing to receive treatment through May 2010, Pantoja told doctors she had not driven since her injury, but video surveillance captured her engaged in activities inconsistent with her testimony.

Over the course of the years, Pantoja racked up $16,298.41 in doctors’ bills paid out by Zenith Insurance Company. Prior to sentencing, she paid full restitution.

Keith Wilson, of Zenith, compiled the case and presented it to Martin Sanchez, DA investigator specialized in workers’ compensation fraud cases.

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Illegally Uninsured Salinas Employer Convicted

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Fernando Rodriguez, 47, of Salinas, has admitted that he failed to secure workers’ compensation insurance for his employees, a criminal offense in violation of the Labor Code. Rodriguez, who owns Zavala’s Transmission in Salinas, was immediately sentenced and placed on probation by Monterey County Superior Court Judge Elisabeth Mineta.

Investigators contacted Rodriguez on Feb. 20 during a compliance check on employers who were suspected of not having workers’ compensation insurance for their employees, prosecutors said. The operation was organized and led by the District Attorney investigators from the Workers’ Compensation Fraud Unit. Assisting in the operation were investigators from the California Department of Insurance.

District Attorney Investigator Christy Gunter investigated the case and discovered that, in addition to not having workers’ compensation insurance, Rodriguez was not registered as an employer with California’s Employment Development Department, did not have a Salinas business license and was operating an unregistered auto repair shop, the DA’s office said.

Prior to his court plea, Rodriguez obtained all of the necessary licenses, registered with EDD and obtained workers’ compensation insurance. The judge took all this into consideration at sentencing, prosecutors said. Rodriguez was placed on misdemeanor probation for a period of three years. Along with standard terms and conditions of probation, he was ordered to serve one day in Monterey County Jail and pay a substantial fine.

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