Tag: 2013 News

People who have more than a couple of alcoholic drinks every day tend to have more complications after surgery than teetotalers or light drinkers, according to a review of past studies. This finding might be something UR or IMR physicians might want to consider when asked to authorize a surgery, or, this might be the basis of an argument for apportionment of permanent disability based upon causation in a case where a heavy drinker has a bad surgical outcome.

According to the summary in Reuters Health, the analysis confirms that “alcohol and surgery are a bad combination,” Bolette Pedersen of the Clinical Health Promotion Center of Bispebjerg and Frederiksberg University Hospital in Denmark, told Reuters Health by email. But it’s not clear what effect stopping drinking before surgery would have on complications, said Pedersen, who was not involved in the review.

Infections and slow wound healing were the most common complications associated with heavy drinking, according to lead author Marie Eliasen of the National Institute of Public Health at the University of Southern Denmark in Copenhagen.

Eliasen and her coauthors examined the results of 55 studies on pre-op drinking and post-op complications occurring up to 30 days after surgery. The studies looked at head and neck, abdominal and orthopedic surgeries for a variety of conditions, none of which was related to alcohol use. Patients who drank heavily leading up to surgery, including those who abused alcohol or were dependent on it, were more than twice as likely to die in the month after their procedures than abstainers – though the risk of dying varied greatly by procedure.

Heavy drinkers were also 73 percent more likely to contract a post-op infection, 80 percent more likely to have difficulty breathing and 29 percent more likely to be admitted to the intensive care unit than non-drinkers, according to results published in the Annals of Surgery. The associations were stronger with abdominal surgery – which can include gallbladder, liver and stomach procedures – than with other types of operations.

Low to moderate drinking – a drink or two per day or less – was not tied to post-op complications, but only a few studies addressed that group, Eliasen told Reuters Health. Heavy alcohol use over time compromises the immune system, which makes the body more susceptible to infections, she said. “Moreover, high alcohol consumption increases the endocrine stress response to surgery which may worsen existing conditions and reduces blood coagulation giving an increased risk of bleedings and slowing down wound healing processes,” she said.

The studies looked at alcohol consumption over different lengths of time, from months to years, so it’s unclear what duration of alcohol use leads to higher risks or when a patient’s drinking has the strongest effects. But it’s likely that the more you drink, the quicker the extra risks would appear, Eliasen said. A previous study found that post-op risks declined when patients stopped drinking four or more weeks before surgery, she said.

On June 24 the State Fund filed a RICO action in the United States District Court against California Pharmacy Management LLC, Coastal Express Pharmacy Inc, Michael R Drobot Jr, Michael D Drobot Sr, HealthSmart Pacific Inc. (a California corporation), Industrial Pharmacy Management LLC, Long Beach Pain Center Medical Clinic Inc, Long Beach Prescription Pharmacy and Meds Management Group LLC. The case has been assigned to Judge Andrew J. Guilford for all further proceedings.

The complaint alleges “Defendants in this case conspired and participated in a scheme to defraud State Fund in connection with the submission and collection of fraudulent insurance bills for medical services, spinal implant hardware, medications, and other services…” The complaint goes on to specifically allege “Defendants: (a) formed and operated shell corporations and represented that these corporations were manufacturers of spinal hardware and billed as if these corporations did manufacture the spinal hardware, when they did not; (b) billed for services at substantially higher rates than are allowed under the Official Medical Fee Schedule (“OMFS”), which governs rates that may be charged for certain services rendered in workers’ compensation cases by, among other things, “upcoding’; and “unbundling” items in their billings; (c) billed at rates up to ten times the average rate for over-the-counter medication; (d) represented and billed nurses as assisting surgeons; ( e) double-billed State Fund for radiology services; and (f) engaged in further conduct to conceal their various schemes, which were designed to, and did, induce State Fund to pay the fraudulent bills.” SCIF claims that these acts constitute a violation of the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. §§ 1961 et seq. (“RICO”).

State Fund alleges it has paid Pacific Hospital at least $141 million for services purportedly rendered by Pacific Hospital pursuant to its workers’ compensation policies. This includes at least 16,490 bills for services, including spinal surgery and implants. State Fund has also paid over $20 million to the Pharmacy Defendants. State Fund claims to be “one of the largest victims of Defendants’ unlawful behavior.”

In the sixth cause of action, the Fund seeks to rescind settlement agreements to resolve liens filed with the WCAB with the Defendants that resolved lien claims as far back as 2004. The Fund alleges that State Fund’s consent to enter into these settlement agreements was obtained by fraud” and that “At the time State Fund entered into the settlement agreements, it was unaware of the true facts and would have acted differently if it had known the true facts.

The U.S. attorney for the Central District of California has been investigating allegations that the Pacific Hospital of Long Beach executive paid kickbacks to physicians so they would refer their patients for spine surgery at his facility. Over the past 15 years, Michael D. Drobot built a Southern California business empire centered on treating people with back problems, many of them workers’ compensation patients. At the heart of the operation is Pacific Hospital of Long Beach, a 184-bed facility that Mr. Drobot bought in 1997 and turned into a spine-surgery center.

Last April, Federal Bureau of Investigation agents raided the hospital and another company owned by Mr. Drobot as part of what the agency termed a fraud investigation. Representatives for the FBI and the U.S. attorney’s office declined to give specifics about the probe. According to the article in the Wall Street Journal, people familiar with it say it is focused on allegations that Mr. Drobot operated a kickback scheme, under which he allegedly paid doctors thousands of dollars for each spine surgery they referred to Pacific Hospital. Under California’s anti-kickback statute, it is illegal to pay money to induce patient referrals. The practice is also illegal under federal law if the patients referred are insured by government health programs such as Medicare or Medicaid.

Pursuant to Labor Code section 5307.1(g)(2), the Administrative Director of the Division of Workers’ Compensation ordered that the Durable Medical Equipment, Prosthetics, Orthotics, Supplies portion of the Official Medical Fee Schedule contained in title 8, California Code of Regulations, section 9789.60, be adjusted to conform to changes to the Medicare payment system that were adopted by the Centers for Medicare and Medicaid Services for calendar year 2013.

Effective for services rendered on or after July 1, 2013. the maximum reasonable fees for Durable Medical Equipment, Prosthetics, Orthotics, Supplies shall not exceed 120% of the applicable California fees set forth in the Medicare calendar year 2013 “Durable Medical Equipment, Prosthetics/Orthotics, and Supplies (DMEPOS) Fee Schedule” revised for July 2013, contained in the electronic file “DME13” which is incorporated by reference. The update includes all changes identified in CR8325.

The revision is available on the Internet at the website of the Centers for Medicare and Medicaid Services.

Elia Hinks claimed that she sustained industrial injury to her head, back, shoulder, lower extremities and multiple body parts as a result of a specific injury and a continuous trauma. Two applications were filed accordingly. Lien claimant, MH Express Pharmacy filed a lien in the specific injury case only in 2004. The specific injury case was then dismissed without prejudice in 2006. The pharmacy claims it was never notified of the dismissal.

The pharmacy paid the lien activation fee in the dismissed specific injury case (ADJ2499103) on March 15, 2013, six days prior to the March 21,2013 lien conference. On March 21, 2013, the WCJ issued an Order Dismissing Lien Claim for Failure to Pay Lien Activation Fee with prejudice. The WCJ notes in her Report that there was no lien activation fee paid prior to the lien conference in the remaining continuous trauma case (ADJ3239580). The pharmacy lien claimant filed a petition for reconsideration of that Order.

Administrative Director (AD) Rule 10208, subdivision (a) provides that “Any lien filed pursuant to Labor Code section 4903(b) filed prior to January 1,2013, and any cost filed as a lien prior to January 1, 2013, shall be subject to a lien activation fee in the sum of one hundred dollars ($ 100.00), payable to the Division of Workers’ Compensation prior to filing a Declaration of Readiness to Proceed for a lien conference by that party, prior to appearing at a lien conference for a case, or on or before January 1, 2014, whichever occurs first. The $100 fee is payment for the activation of a lien. A lien activation fee is required for each lien filed prior to January 1, 2013, and for each cost filed as a lien prior to January 1, 2013; however, where one or more liens or one or more costs filed as lien is filed in one or more cases involving the same injured worker and same service or services by the same lien claimant, only one lien activation fee is required.”

As a result of this regulation, the WCAB granted reconsideration and ruled in the case of Hinks vs Pavlo Weinberg and Associates, that only one activation fee was required. The Order dismissing the lien claim was rescinded, and the case was returned to the trial level for further proceedings.

Underwriting results for the U.S. workers’ compensation market is set to improve over the remainder of 2013 reversing several years of poor performance, according to a new Fitch Ratings report.

Workers’ compensation is the largest segment of all U.S. commercial lines, representing 18% of property/casualty industry commercial lines net written premiums in 2012. Workers’ compensation has been the worst-performing major commercial lines segment for some time. However, the 2012 industry aggregate segment combined ratio improved to 110% from 117% in the prior year.Fitch projects a 105% workers’ compensation calendar year combined ratio in 2013.

Following a long period of declining premium rates, workers’ compensation pricing has increased for two consecutive years, with little sign that pricing trends will reverse in the near term. The Council of Insurance Agents smf Brokers most recent commercial lines market survey indicates that workers’ compensation rate hikes are accelerating with a nearly 10% increase in first-quarter 2013.

Fitch notes that workers’ compensation claims costs are influenced greatly by medical cost factors that tend to expand at a higher rate than general inflations. Healthcare costs in 2012 were a bit more stable than historical patterns, but sustainability of this trend is questionable given pending implementation of healthcare reform in the U.S.

A return to economic stability is promoting a return to declining claims frequency trends. Loss reserves in the workers’ compensation segment have developed adversely for the last four consecutive years. Fitch’s analysis suggests that the industry’s loss reserve position in workers’ compensation remain inadequate. Given the prominence of workers’ compensation as a percentage of many insurers’ book of business, continued market hardening and underwriting improvements promote earnings stability that is viewed favorably from a credit perspective. Reductions in workers’ compensation loss reserve deficiencies and uncertainty would also contribute towards stability of insurer ratings at current levels.

The report ‘Workers’ Compensation Insurance Market Update’ dated June 21, 2013, is available at ‘www.fitchratings.com’ under ‘Insurance’ and ‘Special Reports’.