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DWC Updates Time of Hire Pamphlet

The Division of Workers’ Compensation (DWC) has posted an updated time of hire pamphlet on its website. The updates reflect changes made to California’s workers’ compensation system by Senate Bill 863, which took effect Jan. 1, 2013.

The pamphlet is posted in English and Spanish versions, and meets the requirements under Labor Code section 3551 to notify new employees about California workers’ compensation rights and benefits either at the time of hire or by the end of the first pay period.

The pamphlet was initially developed in 2011 in response to requests from claims administrators and provides employees with information about what to do if they are injured on the job and ways to resolve disputes over workers’ compensation benefits. In addition, it discusses the role of the primary treating physician and medical provider networks (MPNs). Predesignation forms are included as part of the document.

Changes to the pamphlet prompted by SB 863 include material on permanent disability, temporary disability and supplemental job displacement benefits. This model time of hire pamphlet is offered in “text only” format in English and Spanish, which gives claims administrators the option to more fully customize the presentation. The text of the pamphlet meets the “time of hire” legal requirements.

From the DWC home page, employers, workers and claims administrators can easily find information related to their specific needs.

California Legislature May Act to Limit NFL Injury Claims

Over the last three decades, California’s workers’ compensation system has awarded millions of dollars in benefits for job-related injuries to thousands of professional athletes. The vast majority worked for out-of-state teams; some played as little as one game in the Golden State. All states allow professional athletes to claim workers’ compensation payments for specific job-related injuries – such as a busted knee, torn tendon or ruptured spinal disc – that happened within their borders. But California is one of the few that provides additional payments for the cumulative effect of injuries that occur over years of playing.

A growing roster of athletes are using this provision in California law to claim benefits. Since the early 1980s, an estimated $747 million has been paid out to about 4,500 players, according to an August study commissioned by major professional sports leagues. California taxpayers are not on the hook for these payments. Workers’ compensation is an employer-funded program.

But, the Los Angeles Times article says that a major battle is brewing in Sacramento to make out-of-state players ineligible for these benefits, which are paid by the leagues and their insurers. They have hired consultants and lobbyists and expect to unveil legislation next week that would halt the practice. “The system is completely out of whack right now,” said Jeff Gewirtz, vice president of the Brooklyn Nets – formerly the New Jersey Nets – of the National Basketball Assn.

Major retired stars who scored six-figure California workers’ compensation benefits include Moses Malone, a three-time NBA most valuable player with the Houston Rockets, Philadelphia 76ers and other teams. He was awarded $155,000. Pro Football Hall of Fame wide receiver Michael Irvin, formerly with the Dallas Cowboys, received $249,000. The benefits usually are calculated as lump-sum payments but sometimes are accompanied by open-ended agreements to provide lifetime medical services.

Players, their lawyers and their unions plan to mount a political offensive to protect these payouts.

Although the monster salaries of players such as Los Angeles Lakers guard Kobe Bryant and Denver Broncos quarterback Peyton Manning make headlines, few players bring in that kind of money. Most have very short careers. And some, particularly football players, end up with costly, debilitating injuries that haunt them for a lifetime but aren’t sufficiently covered by league disability benefits. Retired pros increasingly are turning to California, not only because of its cumulative benefits but also because there’s a longer window to file a claim. The statute of limitations in some states expires in as little as a year or two. “California is a last resort for a lot of these guys because they’ve already been cut off in the other states,” said Mel Owens, a former Los Angeles Rams linebacker-turned-workers’ compensation lawyer who has represented a number of ex-players.

To understand how it works, consider the career of Ernie Conwell. A former tight end for the St. Louis Rams and New Orleans Saints, he was paid $1.6 million for his last season in 2006. Conwell said that during his 11-year career, he underwent about 18 surgeries, including 11 knee operations. Now 40, he works for the NFL players union and lives in Nashville. Hobbled by injuries, he filed for workers’ compensation in Louisiana and got $181,000 in benefits to cover his last, career-ending knee surgery in 2006, according to the Saints. The team said it also provided $195,000 in injury-related benefits as part of a collective-bargaining agreement with the players union.

But such workers’ compensation benefits paid by Louisiana cover only specific injuries. So, to deal with what he expects to be the costs of ongoing health problems that he said affect his arms, legs, muscles, bones and head, Conwell filed for compensation in California and won.

DWC Schedules Public Hearing on IBR Regulations

The Division of Workers’ Compensation (DWC) has issued a notice of public hearing for the Independent Bill Review (IBR) regulations. A public hearing on the proposed regulations has been scheduled at 10 a.m., April 9, in the auditorium of the Elihu Harris Building, 1515 Clay Street, Oakland, CA, 94612. Members of the public may also submit written comment on the regulations until 5 p.m. that day.

The proposed rulemaking is to permanently adopt the IBR emergency regulations which became effective on Jan. 1, 2013. The IBR regulations implement Senate Bill (SB) 863’s mandate to establish an efficient procedure to resolve medical treatment and medical-legal billing disputes in the workers’ compensation system. Prior to this year, such disputes could only be resolved through litigation after the filing of a lien with the Workers’ Compensation Appeals Board. Under the proposed regulations, for dates of service on or after Jan. 1, 2013, a medical provider who disputes the amount of payment made on a bill must first submit a timely request to the claims administrator for a second review.

If the provider disagrees with the outcome of the second review, they may request further review by an independent, conflict-free medical payment and billing expert applying fee schedules adopted by DWC. The regulations detail the IBR process, and include the timeframes and manner for a medical provider to seek a second review and IBR, the forms that must be completed, the billing documents that must be filed, and the IBR fee. Additionally, the regulations update and clarify the standard for the electronic submission of medical treatment bills, and amend the Medical-Legal Fee Schedule to conform to statutory changes made by SB 863.

DWC will consider all public comments, and may modify the proposed regulations for consideration during an additional 15-day public comment period. The notice of rulemaking, text of the regulations, and the initial statement of reasons can be found at on the DWC rulemaking page.

Owner of Janitorial Company Sentenced to One Year for Fraud

The owner of a San Mateo pest and janitorial services company who prosecutors say under-reported more than $10 million of payroll to avoid paying more than $2 million in workers’ compensation insurance was sentenced to a year in jail and ordered to repay the money.

The SM Daily Journal reports that Teresa Reif, 34, faced up to 17 years in prison after pleading no contest in April to eight various counts of fraud without any sentencing promises. On Tuesday, Judge Craig Parson instead handed down the year jail followed by five years supervised probation. She must also repay $1,651,148 to the State Compensation Insurance Fund and $451,310 to Berkshire Hathaway.

Defense attorney Chuck Smith said he was “disappointed” in the sentence, calling the case a “sad, unfortunate situation” in which his client didn’t profit a nickel but insurance companies will now receive an extra $2 million. Prison was never a realistic concern, he said, but five years incarceration rather than the financial penalty would affect the life of her husband and three children much less significantly. “She was given financial penalties akin to an inside trader,” Smith said. “This is unfair and far beyond the conduct that she committed.”

Smith had requested house arrest for Reif and said the Probation Department recommended the same.

The prosecution was pleased with the outcome, said District Attorney Steve Wagstaffe.

Reif has operated the business with her brother since 2003 as the fourth-generation offshoot of the family business, according to the company’s website. The site also notes it has ‘grown by providing superior service, at a reasonable price, with honesty and reliability for over 80 years.’

Between 2004 and 2009, Reif purchased workers compensation insurance through Redwood Fire and Casualty Insurance Company and the State Compensation Insurance Fund for her business, Genesis Building Services. In 2008, the insurance company said it received conflicting data from Genesis staff about the number of employees and began suspecting it was under-reporting its payroll by approximately $544,440. Further investigation by the California Department of Insurance placed the under-reported amount at $10,657,776.69 which resulted in Reif avoiding paying $2,957,089.20 in insurance premiums.

The CDI claims Reif misrepresented both the number of employees and its payroll when applying for insurance, while insured and during annual audits conducted by the carriers. Genesis allegedly employed more than 140 employees but Reif reported less than half the staff and gave auditors fraudulent paperwork to support the false monthly reports. During a search of the business, investigators actually found the fraudulent books, according to prosecutors.

Study Finds Minimally Invasive Surgery Effective for Thoracic Outlet Syndrome

Two new studies from Washington University School of Medicine in St. Louis suggest ways to improve surgical treatment for a debilitating condition caused by compressed nerves in the neck and shoulder. The condition, neurogenic thoracic outlet syndrome, causes pain, numbness or tingling in the shoulder, arm or hand and is perhaps best known for affecting baseball pitchers and other elite athletes. Patients often describe pain and tension in the neck and upper back, numbness and tingling in the fingers, headaches and perceived muscle weakness in the affected limb.

Treatment begins with physical therapy and sometimes medications such as anti-inflammatory drugs and muscle relaxants. When these treatments fail to improve symptoms and there is substantial disability in the use of the affected upper extremity, surgery can help relieve pressure on the nerves, often by removing the first rib and other structures thought to be causing the compression.

According to the summary in Science Daily, one of the studies showed that certain patients may do just as well with a minimally invasive procedure done on an outpatient basis as those who require the traditional surgery. The traditional procedure has an average five-day hospital stay. This study looked at 200 patients treated for neurogenic thoracic outlet syndrome from 2008 through 2011. To determine the best surgical approach for each patient, the doctor examined two locations of potential nerve compression — the side of the neck above the collarbone and the upper chest just below the collarbone, near the shoulder.

If patients experienced pain and tenderness in both places, they were offered the traditional procedure that includes removing the first rib and scalene muscles in the neck and detaching the tendon of the pectoralis minor muscle, which connects to the top and front of the shoulder blade. Of the 200 patients, 143 underwent this procedure.

When symptoms occurred exclusively under the collarbone, patients only received detachment of the pectoralis minor tendon as a minimally invasive procedure. The remaining 57 participants in the study underwent this outpatient procedure.

To determine outcomes, the researchers compared various measures of the patients’ arm and shoulder function before surgery and again three months after surgery. Both sets of patients improved significantly after surgery, and the extent of their improvement was not statistically different. At the three-month mark, about 75 percent of patients in both groups demonstrated improved function in the affected areas.

“The ideal candidate for the minimally invasive procedure would be a patient with characteristic and debilitating symptoms, no response to physical therapy and clinical exam findings that were completely localized to the pectoralis minor tendon,” Thompson says. “That’s the really exciting subset of patients. You might be able to have a big impact with a minor outpatient procedure. The trick is to properly identify these patients. We still have to rely primarily on the experience of the physician and old-fashioned diagnosis by physical exam — knowing the anatomy, knowing what we’re feeling and what elicits symptoms.”

Carriers Challenge Surgery Center Inflated Bills

An $87,500 bill for a 20-minute knee procedure is just an extreme example of high amounts that insurers are billed by out-of-network surgery centers, experts say. Insurers are starting to fight back.

A Southern California surgery center charged a Long Beach Unified School District teacher $87,500 for a routine, 20-minute knee operation that normally costs about $3,000. According to the report in the Los Angeles Times, despite the huge markup, the Long Beach Unified School District and its insurer, Blue Shield of California, paid virtually all of the bill from Advanced Surgical Partners in Costa Mesa. Blue Shield mailed the $84,800 check to the high school Spanish teacher last month and told her to sign it over to the surgery center.

This case points to a growing battle nationwide over billing by outpatient surgery centers. Industry experts say some of these surgery centers seek out well-insured patients, sometimes by waiving their copays and deductibles, and then bill their insurers exorbitant amounts for out-of-network care. All too often, critics say, insurers pay these large sums and then cite high medical bills for why insurance premiums keep rising for businesses and consumers.

In response to questions from The Times, Blue Shield defended its $84,800 payment as proper. Advanced Surgical Partners, through its lawyer, said the bill was excessive. Amid the scrutiny, the two sides agreed to a lower amount this week. Henry Fenton, an attorney for the surgery center, said this bill “was excessive and not correct. I’m sure they will be more careful in the future.” Blue Shield said its typical rate for this arthroscopic knee procedure in Southern California is about $3,000 among in-network providers.

“This surgery center is charging 30 times the average by remaining out of network to advance this outrageous and anti-consumer practice,” said Blue Shield spokesman Steve Shivinsky. “This is a national problem.” Yet the company said it was obligated to pay nearly all of Advanced Surgical’s bill because it is bound by the health plan rules set by the teacher’s employer, the Long Beach school district. The school system is self-insured, meaning it pays its own medical bills and uses Blue Shield to administer its benefits and process claims.

In other situations involving out-of-network care, it’s common for insurers to pay only about 60% of what’s deemed to be “usual and customary” charges or some percentage of Medicare rates. Insurers and out-of-network medical providers routinely spar over what constitutes a reasonable amount. Kominski, a UCLA professor, said he faulted both Blue Shield and the school district for “dropping the ball on this. There were lots of opportunities for red flags to go off on such an outlandish bill.”

Nationwide, some insurers have begun to challenge these bills from outpatient centers. Last year, a unit of insurance giant Aetna Inc. sued several surgery centers in Northern California and accused them of overbilling the insurer more than $20 million. It has pursued similar actions against providers in New Jersey and Texas. Other insurers such as UnitedHealth Group Inc. have filed similar suits in California.

In one instance, Aetna said, a California surgery center charged $73,536 for a kidney stone procedure when the average in-network charge was $7,612. Aetna said it paid some of these bills before disputing them in court.

Doctors and surgery centers say the criticism is unjustified. Surgery centers say they have helped reduce healthcare costs by offering convenient care at a fraction of what hospitals charge for colonoscopies, cataract surgeries and other outpatient procedures. These facilities now handle up to 40% of all outpatient surgeries, according to the Ambulatory Surgery Center Assn.

Medical Societies Identify 135 Unnecessary Medical Tests

Now there are 135. That’s how many medical tests, treatments and other procedures – many used for decades – physicians have now identified as almost always unnecessary and often harmful, and which doctors and patients should therefore avoid or at least seriously question. According to the story in Reuters Health, the lists of procedures, released on Thursday by the professional societies of 17 medical specialties ranging from neurology and ophthalmology to thoracic surgery, are part of a campaign called Choosing Wisely. Organized by the American Board of Internal Medicine’s foundation, it aims to get doctors to stop performing useless procedures and spread the word to patients that some don’t help and might hurt.

“Americans’ view of healthcare is that more is better,” said Dr Glenn Stream, a family physician in Spokane, Washington, and board chairman of the American Academy of Family Physicians, which has identified 10 unnecessary procedures. “But there are a lot of things that are done frequently but don’t contribute to people’s health and may be harmful.”

For the most part, the medical specialty groups did not consider cost when they made their lists. If their advice is followed, however, it would save billions of dollars a year in wasteful spending, said Dr John Santa, director of Consumer Reports’ Health Ratings Center and a partner in Choosing Wisely. One large medical group with 300,000 patients, Santa said, calculated that following the Choosing Wisely advice on just two procedures, superfluous EKGs (electrocardiograms) and bone-density scans, would reduce its billings by $1 million a year. Nationally, that translates into some $1 billion in savings.

The medical specialty groups each came up with five procedures to “question,” but most of the items begin with an emphatic “don’t.” The targeted procedures range from the common to the esoteric. Anyone who has ever had surgery while in generally good health can sympathize with the recommendation against multiple pre-op tests: Ophthalmologists now advise against EKGs and blood glucose measurements before eye surgery, except for patients with heart disease or diabetes.

Physicians recommend against many procedures patients have come to expect, including imaging for low back pain (unless it has lasted more than six weeks) and any cardiac screening, including EKGs, in patients without heart symptoms.

The widely used “DEXA” X-ray screening for osteoporosis landed in rheumatologists’ crosshairs. It should not be done more than once every two years, they advise, because changes in bone density over shorter periods are typically less than the machines’ measurement error, which can cause women to think they’re losing bone mass when they’re not.

If doctors adopt the recommendations of their specialty, doctor visits for some chronic diseases would be very different. Patients with recurrent headaches would not get EEGs (electroencephalography); they don’t improve outcomes. And rheumatologists would not use MRIs to monitor joints in patients with rheumatoid arthritis; a clinical assessment is just as good.

Many business groups have signed on to Choosing Wisely, hoping it will reduce soaring healthcare costs. For instance, the National Business Council on Health, with 7,000 employer members, and the National Business Group on Health, representing Fortune 500 companies and other large employers, are distributing to their members educational material developed by Consumer Reports, a partner in Choosing Wisely. They are careful to emphasize that the advice comes from doctors. “If employers say you shouldn’t have all these tests or procedures, it’ll inevitably be seen as ‘my employer doesn’t want to spend the money to cover them,'” said Helen Darling, president of the Business Group.

The pages and pages of lists raise an obvious question: How did so many worthless and even dangerous procedures become so widely used? For one thing, there is no regulatory requirement that physicians prove a new procedure helps patients, as drug makers must do before selling a new pharmaceutical. For another, “Americans want the latest, newest thing,” said Dr Howard Brody of the University of Texas Medical Branch, whose 2010 challenge to physicians to identify worthless tests and treatments inspired Choosing Wisely. “Technological enthusiasm on the part of physicians and the general public makes them willing to adopt new things without rigorous testing. Only years later, and only if studies are done, do we see that it’s no good.”

Authorities Close San Leandro Medical Center in Fraud Case

A San Leandro medical center has been shut down and one of its doctors is facing criminal charges. Authorities say they investigated the As Soon As Possible (ASAP) Medical Clinic for two years. The facility employed Dr. Sultan Said Hamid as well as acupuncturists and chiropractors. It primarily handled worker compensation and automobile accident patients.

According to the story in the San Leandro Patch, Alameda County District Attorney Nancy O’Malley, along with California Insurance Commissioner David Jones, announced they have filed a civil action against the As Soon As Possible Medical Center. Authorities have closed the center at 1460 150th Ave. as well as its other clinics in Hayward, Vacaville and Fairfield.

Officials say they have also filed a criminal complaint against Dr. Sultan Said Hamid. The charges accuse Hamid of insurance fraud, perjury, filing false documents and conspiracy to dispense prescription drugs and other controlled substances by non-authorized personnel. Assistant District Attorney Larry Blazer said Hamid was dispensing drugs such as muscle relaxtants, anti-inflammatory agents and creams to patients who did not need them. “It seems everyone who walked in there walked out with two, three or four of these things,” said Blazer.The main purpose for the fraud, Blazer said, was to drive up insurance payments.

Hamid’s attorney, Ivan Golde, said Thursday his 75-year-old client is making arrangements to pay $100,000 bail. He expected it would be weeks before Hamid is arraigned. Golde said he hadn’t seen all the evidence yet, but he felt the case was not a criminal matter. If anything, he said, it is something for a medical board to investigate. Golde said he doubts there are any patients who are claiming they were harmed. He said the case centers on undercover officers going into the clinic and posing as patients. “Is that what we want law enforcement in Alameda County doing?,” he asked.

Authorities also filed a civil complaint against the clinic and its co-owner, Thomas Vamvouris. Vamvouris set up the corporation in 2004 with himself as a 49 percent owner and Hamid as a 51 percent owner. In reality, Barnes said, Vamvouris was the majority owner and that violates California law requiring a medical professional to be the primary owner of a medical facility. Authorities say Vamvouris has agreed to pay $450,000 in penalties, costs and restitution. He will also be prohibited from owning this type of facility in the future. No criminal charges are pending against Vamvouris.

Vamvouris’ attorney, Daniel Horowitz. said his client agreed to pay the $450,000 in penalties because he believed there was some “gray area” in the situation at the medical clinic and the payment was a compromise to settle the case. Horowitz said Vamvouris also had no knowledge of any of the illegal activities Hamid is accused of engaging in.”He was running the business side of things,” said Horowitz.

San Diego Restaurant Owners Charged for Fake Comp Certificate

The owners of a restaurant in San Marcos, Calif. have been charged with felony counts of workers’ compensation fraud and forgery following a referral by the California Labor Commissioner’s criminal investigation unit to the San Diego District Attorney’s Office.

The Insurance Journal reports that the district attorney’s charges, filed in San Diego Superior Court allege that Rhythm City Grill owners John Fletcher Johnson and Annette Lucille Thomas each committed two felony counts of forgery of a workers comp insurance policy and a misdemeanor charge of conducting business without workers’ compensation insurance. Johnson was also charged with an additional felony for submitting a false document to a government agency. He and Thomas were arraigned Feb. 14.

“Not only did the owners fail to carry any workers’ comp coverage for their employees, they were willing to lie to authorities to evade the responsibilities that every law-abiding business owner in the state takes seriously,” the Labor Commissioner said in a statement. “Those businesses that cheat hurt working people and make it costlier for honest businesses. These criminal charges are a signal that this type of behavior has no place in the State of California.”

The Labor Commissioner’s office launched an investigation at Rhythm City Grill in January 2012 after receiving an anonymous complaint that the restaurant did not have workers’ comp insurance as required by law. On Feb. 1, 2012, following a visit to the restaurant, authorities issued a civil citation with penalties totaling $18,000 against Johnson and Thomas for failing to insure their 12 employees. A follow-up inspection on Feb. 13 resulted in another notice of labor law violation, after the owners claimed to have coverage but did not produce the documentation.

According to the charges, Johnson prepared a false paper and, with Thomas, forged an insurance certificate showing workers’ comp insurance that they did not have. They were also charged with failure to secure payment of insurance.

If convicted, Johnson and Thomas face up to 16 years in prison for the felony charges. The failure to secure workers’ comp insurance carries a misdemeanor charge of 1 year and a fine.

Under state law, businesses not carrying valid workers’ compensation coverage are considered uninsured and face a “Stop Notice and Penalty Assessment” from the Labor Commissioner and fines of $1,500 per employee, up to $100,000. If an injury occurs, the fine increases to $10,000 per employee. A worker injured while working for an uninsured employer can sue for damages and the employer is presumed negligent in such cases.

Texas-California Battle for Employers Points to Workers’ Comp

Taking umbrage at Texas Gov. Rick Perry’s campaign to lure California businesses, the Sacramento Bee swiped at Texas in an editorial stating that among its shortcomings, Texas is last in workers’ compensation coverage.

The radio ad by the Texas governor said “Building a business is tough, but I hear building a business in California is next to impossible,” the Republican governor says in the ad. “This is Texas Gov. Rick Perry, and I have a message for California businesses: Come check out Texas.”

And the Sacramento Bee editorial responded by saying “Yes, come check out Texas. Check out a state that ranks dead last in the percent of its population with high school diplomas. Come check out a state that is last in mental health expenditures and workers’ compensation coverage. Come check out a state that ranks first in the number of executions, first in the number of uninsured, first in the amount of carbon dioxide emitted and first in the amount of toxic chemicals released into water.”

Fact checkers soon joined the battle.

Stuart Leavenworth, who edits the Bee’s editorial page, offered as a basis for this claim a February 2011 report, “Texas on the Brink,” issued by a Texas House caucus called the Legislative Study Group. The basis for the report’s ranking on “workers’ compensation coverage” was 2006 data on the percentage of workers covered in each state that came from the National Academy of Social Insurance, a Washington, D.C., nonprofit group that researches such issues.

And herein lies an important anomaly: Texas is the only state that does not require all employers to obtain workers’ compensation coverage. Experts we consulted agreed this is the reason why Texas consistently ranks last and well behind other states in the proportion of workers covered.

There are exceptions; the National Federation of Independent Business says in an online comparison of such state laws that those include government construction contracts. In those cases, workers can file compensation claims, a right that employees usually give up in workers’ compensation agreements, “if they think they have a genuine case and the employer is still refusing to pay monetary benefits,” the summary says. And other states exempt certain employers.

The academy’s most recent data on the percentage of workers covered in each state comes from 2010. As charted in an August 2012 report, it shows that while Texas had 78.6 percent of workers covered, no other state had less than 94.9 percent covered. Thirteen states — including California — had 100 percent covered.

Jennifer Wolf, executive director of an association representing state and provincial workers’ compensation systems in the U.S. and Canada, said there can be “quite a bit of difference” between states, especially “when you are comparing different types of benefits (temporary, permanent partial, permanent total).” Wolf’s group, the International Association of Industrial Accident Boards and Commissions, is based in Madison, Wis.

Wolf and Amy Lee, a Texas Department of Insurance expert on workers’ compensation at the Texas Department of Insurance said that most states’ systems have gradually come into line with a set of federal recommendations issued in 1972. Wolf said the most recent check on compliance with those guidelines was a Jan. 1, 2004, report from a branch of the U.S. Department of Labor. States averaged compliance with 12.83 of the 19 recommendations, the report said; Texas’ compliance was slightly below average, at 12.5.