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Tag: 2013 News

Kaiser Permanente Announces New Occupational Medicine Regional Chief

Kaiser Permanente Southern California announced that Sang Manoharan, MD, has been appointed regional chief of Occupational Medicine for the Southern California Permanente Medical Group. In his new role, Dr. Manoharan will lead Kaiser On-the-Job, Kaiser Permanente’s employer-based injury care health program.

“I am very pleased to be able to contribute to the value that Kaiser On-the-Job already brings, beyond workers’ compensation costs reduction, but most importantly, the opportunity to lead the most dominant employer-based health care strategy for injury care in the foreseeable future of California,” says Dr. Manoharan. “I am honored to be part of Kaiser On-the-Job, an integrated health care delivery system that increases effectiveness, boosts productivity, protects long-term health and lowers costs. This is coordination that delivers quantifiable results that no other provider can offer.”

In addition to overseeing Kaiser On-the-Job occupational injury care and return-to-work services, Dr. Manoharan will coordinate an integrated approach to care with Kaiser On-the-Job physicians, associates and health care professionals, providing other non-injury medical services including pre-placement/post-job-offer examinations; fitness-for-duty and return-to-work examinations; Department of Transportation examinations; among other medical screenings and services.

Dr. Manoharan will be responsible for the 19 dedicated occupational health centers located within Kaiser Permanente’s Southern California facilities, many of which are conveniently located on Kaiser Permanente campuses. Nationwide, Kaiser Permanente has 74 dedicated occupational health centers throughout California, Washington, Hawaii, Oregon and Colorado.

With Kaiser On-the-Job, any worker – regardless of health insurance membership – who is employed by a company that chooses this essential benefit as part of its health care strategy, is able to access Kaiser On-the-Job health care services. Some of these additional services include urgent and after-hours care, available 24 hours a day, every day; and coordinated clinical services such as lab testing, X-rays, pharmacy, specialty care and physical therapy, all within the Kaiser Permanente integrated care model. Some services are offered at Kaiser On-the-Job occupational health centers, and many others can be made available at the workplace.

With over 24 years of practice, for the past five and a half years, Dr. Manoharan served as chief of Occupational Health Services for Kaiser Permanente Downey Medical Center. He will be working closely with John T. Harbaugh, MD, Occupational Medicine physician director, Southern California Permanente Medical Group. Dr. Harbaugh has provided leadership to Kaiser-On-the-Job since 2001. As part of a new leadership structure for the program, Dr. Manoharan and Dr. Harbaugh anticipate continued program growth and delivering quality occupational medical care in Southern California.

Prosecutors Provide Details on International Medical Fraud Ring

An elaborate, international health-care fraud ring that stole millions from taxpayers started to come unraveled when an Ohio gynecologist called investigators after receiving insurance payments for male patients. Ultimately, according to the story in the Dayton Daily News, two California men went to federal prison as purported ringleaders of the operation, but not before making off with more than $13 million in Medicare payments for nonexistent medical services. In a case that illustrates a common health-care fraud scheme.Karen Chilyan and Eduard Oganesyan are serving eight and 11 years, respectively. At large are Lilit Galstyan, Julieta Ghazaryan and Marine Movsisyan, who were last week placed on the U.S. Department of Health and Human Services’ most-wanted list. Federal prosecutors say these people were involved in an Armenian criminal network that billed Medicare for more than $48 million, using the stolen identities of doctors and patients from Ohio and 39 other states.

“This is the new face of organized crime,” Steven Dettelbach, U.S. Attorney for the Northern District of Ohio, said. “It used to be what you saw in ‘The Godfather” but now it’s someone with Internet access stealing hundreds of millions of dollars. This money is being sucked right out of our health-care system.”

The bust was part of a nationwide sweep in 2010 in which 73 people were indicted in New York, Georgia, California and New Mexico. Overall, the fraud ring submitted more than $100 million in bogus Medicare claims. The group ripped pages straight from the medical fraud playbook, executing what federal investigators call a “drop box scheme.”

Here’s how the scam worked. Chilyan, Oganesyan and others in California first stole doctors’ identities, finding most of the basic information on the Internet. The hard part was getting Social Security numbers, although those were available on the black market. They then leased office space in Canfield, Ohio, and claimed it was occupied by those doctors. They also set up an empty storefront in Columbus for the gynecologist, along with other businesses in other states. True to the real estate axiom, Columbus and Canfield were chosen because of their locations. The doctors’ real offices were in Columbus and Cleveland, and the scammers needed a spot at least 60 miles away so their mail wouldn’t accidentally be sent to the real offices. Sometimes, the scammers rented an empty storefront as the business location. But often they used a private mailbox company which, unlike a post office box, gives the appearance of a street address while leaving a smaller paper trial. After registering the business with the state, scammers then registered each fake company with the federal government as a medical provider, often listing the mailbox as its address.

The next step was finding patients. Again, they used identity theft. Court records say Chilyan and Oganesyan used the identities of several Medicare recipients in Ohio. “A lot of the information is available for public websites for doctors. (For) the Medicare beneficiaries, there seems to be a stolen list that is pretty obtainable from the black market,” said John Leahy, special agent with the U.S. Department of Health and Human Services Office of Inspector General in Cleveland. Scammers often call senior citizens pretending to be with Medicare and ask for their information. And just like that, they were in business.

Court documents say Chilyan and Oganesyan billed Medicare for more than $2.1 million between Feb. 25 and March 21, 2008, for two Ohio doctors. They received nearly $280,000, wired to investment accounts in the doctors’ names.Then they laundered the money, according to court records, setting up fake businesses to do so. They also deposited cash into casino accounts and withdrew it as gambling chips.When the suspicious gynecologist started receiving private insurance payments with men’s names, he called the HHS inspector general’s hotline. Special agents visited the address listed as the practice location in the government’s medical provider database. “When we checked the office out, it was an empty store room in Columbus,” said special agent in charge Verne Waldow, who supervises Leahy. “The doctor’s name was stenciled on the door in the strip mall. There were eviction notices stuffed into the mailbox and under the door.” By the time investigators shut off the money faucet, Chylan and Ogansyan had billed Medicare for more than $48 million. Nearly $13 million of that was paid out, according to the court documents.

Court records illustrate how lucrative the group’s scam was: Investigators seized three kilograms of gold pellets valued at $130,086 from a California home, along with jewelry and a watch valued at $14,500. As part of their sentencing, Chylan and Ogansyan were ordered to pay more than $10 million in restitution. Waldow said after these two men and 71 other people were rounded up in 2010, “the problem for the most part stopped with the false fronts.”

Study Shows High Medical Costs for 20 Year Old Legacy Claims

It is likely that more than 10% of the cost of medical benefits for the workplace injuries that occur this year will be for services provided more than two decades into the future. That percentage has been growing and might continue to grow. A new study by NCCI looks at workers compensation medical services provided beyond 20 years after the injury, with a view toward anticipating: which medical service categories will account for the largest shares of costs and future treatment and utilization that will drive those costs.

NCCI first looks at the demographics of claimants who are still being treated for job-related injuries that were suffered more than two decades ago. The focus then shifts from patients to their medical care, looking at medical costs by service and diagnosis categories. Some key findings concerning services provided from 20 to 30 years following the date of injury are as follows:

  • Patients are predominantly male, more so than can be explained by historical gender differences in the workforce
  • Deteriorating medical conditions of the more elderly claimants is not a main cost driver; indeed, claimants younger than age 60 cost more per year, per claimant, to treat than those older than age 60
  • Relative to services within the first 20 years after injury, care provided later has a significantly greater portion of cost going for prescription medications, supplies, home health services, and the maintenance of implants, orthotics, and prosthetics.

Because drugs account for a large proportion of late-term-care costs, prescription data can suggest the nature of late-term care. The study compares the share of WC medication costs for several specific drugs. It compares late-term-care experience with all WC medication costs in 2009 and includes the top 10 WC drugs, either overall or within late-term care:

  • The top drug, OxyContin, accounts for 6% of WC medication costs in 2009 and that share rises another 5 percentage points to 11% for late-term care
  • The shares for opioid chronic pain medications, such as Oxycodone (OxyContin, Percocet) and Fentanyl (Duragesic), are generally higher within late-term care than within all medication costs for 2009
  • The shares within late-term care for muscle relaxants, such as Skelaxin and Cyclobenzaprine HCL are substantially lower than their overall shares for 2009

The specific medications given late-term provide a further indication for the shift in focus from treating the loss of function to relieving pain.

Vineyard Manager Gets Jail Time for Safety Violation

Sonoma County District Attorney Jill Ravitch announced the resolution of a case involving the removal of a safety device from a tractor that killed a vineyard worker when the defendants pled no contest to a misdemeanor violation of Labor Code section 6425, which prohibits removal of a manufacturer’s safety device. The Honorable Peter Ottenweller sentenced defendant James Poole, 61, of Windsor, to 30 days in jail and 80 hours of community service work for an organization dedicated to worker safety. Additionally, Vino Farms, Inc. was ordered to pay restitution and fines totaling two-hundred thousand dollars ($200,000).

District Attorney Ravitch stated: “All workers have the right to expect that they will come home at the end of the workday and that their employers will keep in place all manufacturers’ safety devices on equipment used for work. Companies and supervisors who disable safety devices will be held accountable for the sake of workers who depend on them.”

The single misdemeanor charge resulted from an investigation by the Occupational Safety and Health Administration (OSHA) which revealed that the victim was working alone at a local vineyard on a tractor that had its “kill switch” removed. (The “kill switch” causes the tractor’s engine to stop running and moving forward when the driver leaves the seat.) OSHA investigators concluded that on January 22, 2011, when Mr. Ambriz-Luquin tried to get out of the tractor’s narrow opening, his clothing was caught, and, without the kill switch operable, the tractor moved forward pinning him beneath it over night. The victim survived for several days before the injuries he sustained resulted in his death. OSHA discovered that Vino Farms, Inc.’s manager, James Poole, had ordered the safety device removed from the tractor seat.

As part of the plea agreement,Vino Farms, Inc. agreed to pay restitution to the family of the deceased victim in the amount of one-hundred thousand dollars ($100,000) and be placed on probation for two years. The company was ordered to pay an additional fine in the amount of seventy-five thousand dollars ($75,000) to the State of California, as well as twenty-five thousand dollars ($25,000) to Ag Safe, an organization dedicated to worker safety. An additional penalty in the amount of seventy-five thousand dollars ($75,000) was suspended, pending successful completion of probation by Vino Farms, Inc. Vino Farms, Inc. agreed to change some of its procedures to comply with worker safety laws and to strengthen some of its policies to ensure that its workers will be able to get emergency help when working alone.

The case was prosecuted by Deputy District Attorney Ann Gallagher White, and was investigated by the Division of Occupational Safety and Health’s Associate Engineer, Mark Harrington, by Senior Engineer, Steven Fenton and by OSHA Bureau of Investigation’s Mike Byrne.

Hip Maker Considers $2 Billion Settlement Offer With Trial Pending in Los Angeles

Bloomberg New reports that Johnson and Johnson which is fighting more than 10,000 lawsuits over its recalled hip implants, is negotiating a potential settlement with patients that may eventually total more than $2 billion, according to five people familiar with the matter. The world’s biggest seller of health-care products, offered to pay more than $200,000 a case, according to the people, a deal which could exceed $2 billion if most plaintiffs accept the terms. Lawyers for hip recipients have so far rejected the offer as too low, the people said.

In 2010, J and J recalled 93,000 all-metal hips worldwide, including 37,000 in the U.S., saying more than 12 percent failed within five years. Patients who sued contend they suffer pain and are immobilized by joint dislocations, infections and bone fractures. They alleged metal debris from the hips causes tissue death around the joints. The settlement talks probably won’t end until after the first trials of the lawsuits begin, starting next week, with more set for next month and May, according to the people, who asked not to be identified because they aren’t authorized to speak publicly about the talks.

J and J faced 10,100 suits over the hips through September. Most pretrial collection of evidence has been consolidated in federal court in Toledo, Ohio, where 7,240 cases are pending, and California state court in San Francisco, where more than 2,000 cases are filed. Other cases have been filed in state courts around the U.S. The three cases going to trial in the next few months may offer lawyers guidance on potential liability and damages. The first proceeding starts Jan. 23 in state court in Los Angeles; the second begins next month in state court in Chicago; and a third is slated for May in federal court in Toledo, Ohio.

The Los Angeles court trial involves a lawsuit by Loren Kransky of Montana, a retired corrections officer who got an ASR hip implanted on Dec. 5, 2007. He had the hip replaced in February 2012. Claims by Kransky, 65, include failure to warn, negligent recall and manufacturing defect. “Kransky asserts that his device released metal ions into his body and that as a result he developed elevated chromium and cobalt levels,” J and J said in a Nov. 21 court filing. The instructions with the implant “specifically warned that metal ions may be released from the hip implant into the body and that additional surgery may be required.”

A retiree and a military veteran, Kransky’s health conditions included “diabetes, neuropathy, arteriosclerosis and heart problems, some of which were determined to be associated with his exposure to Agent Orange while serving in Vietnam in the 1970s,” according to the filing.

Kransky’s case was chosen from those pending in the California Judicial Council Coordinated Proceeding before Judge Richard Kramer in San Francisco.

“Any comment relating to settlement that does not come from leadership, the court, or from the company itself, is speculative and uninformed,” said Skikos, of Skikos Crawford Skikos and Joseph in San Francisco and Cleveland.

Task Force Issues Stop Orders for Dangerous Equipment

Two Southern California garment businesses have been ordered to stop any work with dangerous equipment until the employers can ensure the equipment has the appropriate safeguards, the state Labor Enforcement Task Force says.

The task force is a multi-agency group formed to combat the underground economy.

The Central Valley Business Times reports that Vinh Loi Inc., a garment contractor with 26 workers employed at two locations in El Monte, had an industrial fabric cutter with improper safeguards to the cutting blade as well as the belt and pulley, the state says.

Kinary Inc., an El Monte denim washing business that employs 22 workers to dye and stone-wash jeans and other garments, had nine of its eleven industrial washers removed from service by Cal/OSHA until the proper safeguards in the belt and pulley workings on the washers are reinstalled, says the task force. Two of the same washers were not equipped with interlocks to prevent movement of the washer drums while the door is open, it says.

A worker was crushed to death in July 2011 after falling into an open, operating washing machine with missing interlocks at another denim washing shop in Los Angeles.

“Employers are required to ensure that their equipment is safe for workers to operate,” says Department of Industrial Relations Director Christine Baker, who oversees the task force. “When industrial machinery does not have the proper safeguards, workers can be killed or suffer serious injuries including amputation.”

Vinh Loi, Inc. is also under investigation by the Labor Commissioner’s Office and the Employment Development Department for labor law issues including cash pay and overtime as well as possible payroll tax violations. The state agencies have served notice of a pending audit to further investigate the business.

The task force includes investigators with the Department of Industrial Relations’ Division of Labor Standards Enforcement and Cal/OSHA, as well as the Employment Development Department, Contractors State License Board, the Board of Equalization, Alcohol and Beverage Control and the Bureau of Automotive Repair.

Mervyn’s Bankruptcy Court Defers Adjudication of Industrial Claim to California WCAB

The 2008 bankruptcy and default by fallen department store giant Mervyn’s LLC on its self-insured workers’ compensation insurance obligations represents the largest-ever for a state fund that will assume responsibility for the claims. The California Self Insurers Security Fund, believed at the time that Hayward-based Mervyn’s defaulted on almost $20 million in unpaid workers’ compensation claims, though the final total could be significantly lower because many claims are inactive.The Security Fund, a nonprofit mutual benefit corporation created by the state in 1984, is designed to ensure that workers’ comp claims are paid for workers in self-insured plans in the event of a default by their employer. In its 24 years, officials say, it has assumed liability for $160 million in claims involving 64 defaults, ultimately leaving it responsible for $90 million in net costs after accounting for about $70 million in surety bonds or deposits posted by the defaulting organizations. Prior to Mervyn’s, the last big default was National RV in late 2007, leaving $3.5 million in claims and $5 million in security deposits,

Joh Navroth II was an applicant with a pre-bankruptcy industrial injury. He is attempting to recover directly from the bankruptcy court in Delaware.The bankruptcy court issued an order deferring his claim to the WCAB.

Navroth seeks damages for alleged injuries from a work related accident (dropping a folding table on his foot). The Initial Claim includes allegations of and requests for compensation for physical and emotional suffering and demands for payment of vacation, sick and personal holiday time. The alleged incident occurred in California prior to Mervyn’s bankruptcy. Importantly, Claimant filed a statutory workers’ compensation proceeding (the “State Proceeding”) prior to the commencement of the bankruptcy case. The Amended Claims contain allegations of breaches of fiduciary duties, discrimination, employment discrimination, interference with contractual relations and interference with prospective business advantage. The Amended Claims increase the total sum Claimant seeks to in excess of $21 million. Claimant also alleges that the Amended Claims are secured.

The Amendments are untimely and therefore void, as they were filed after the General Bar Date of January 9, 2009. Claimant’s only timely filed claim is Claim No. 3283 in the amount of $671,759.86. The Amendments are clearly new claims filed after the Bar Date and are therefore void. The Court carefully reviewed the Amended Claims against the Initial Claim and it is beyond any doubt that the Amended Claims are not related to the Initial Claim.

The Initial Claim is the only remaining claim. The Court fully agrees with Debtors that the Court should abstain from hearing the Initial Claim. 28 U.S.C. § 1334(c)(I) directs the Court to consider exercising its discretion to abstain from hearing a matter arising under the Bankruptcy Code or arising in or related to a bankruptcy case, in “the interest of justice, or in the interest of comity with State courts or respect for State law.”

Abstention will limit the necessary tribunals to one, the California Workers’ Compensation Board (“CWCB”) in the State Proceeding. Were the Court to hear the Initial Claim, it could determine the validity but not the amount. The District Court would have to determine the amount. In re Amtrol, 384 B.R.686, 690 (Bankr. D. Del. 2008). The estate would therefore have to litigate in two courts, an obvious burden and waste of judicial resources.The Initial Claim, which is the sole remaining claim, raises only California workers’ compensation law. Abstention is therefore wholly proper. Fruit of the Loom, 407 B.R. at 600, 602; In re Holiday RV Stores, Inc., 362 B.R. 126, 130-31 (D. Del. 2007).

For the foregoing reasons, the Court entered an Order dismissing the Amended Claims and abstaining from hearing the Initial Claim and thereby deferring to the State Proceeding.

Fresno County DA Investigator Guilty of Comp Fraud

A former Fresno County District Attorney’s investigator was ordered to pay restitution after he pleaded no contest to a count of felony grand theft.

As part of his plea deal, John Harding Swenning, 46, of Kingsburg, was ordered Wednesday to pay $23,720 in restitution for investigation costs after he improperly received worker’s compensation benefits following a work-related injury. In 2009, Swenning made false statements to an investigator to get surgery from his worker’s compensation benefits.

His lawyer, Roger Nuttall, said Swenning “exaggerated symptoms” so he could get surgery and return to work.

Swenning is eligible to have the felony count reduced to a misdemeanor if he makes full restitution, Fresno County Superior Court documents said.

Superior Court Denies Applicant Request to Cash In Structured Settlement

The Superior Court of Los Angeles County, California issued an order denying a petition seeking court approval for the transfer to factoring company Fortress Funding LLC of an applicant’s rights to payments under a workers’ compensation settlement according to the report on the Corporate Counsel website. In the matter styled In Re Rudy Andrade, No. BS139876, Superior Court Judge Amy D. Hogue held that the issuer of the annuity that funded the settlement payments was an interested party with standing to appear and oppose the petition, and that, based on the arguments in the annuity issuer’s opposition, the petition was denied.

It is not uncommon in large workers’ compensation or personal injury cases to resolve the claim by way of a structured settlement. The settlement is typically funded by an annuity purchased from another insurance company for a lump sum of money. The annuity pays a regular benefit to the claimant over his or her lifetime, and may even offer a residual payment to the heirs of the claimant. There are advantages to a structured settlement for both parties. The lump sum paid by the carrier is less than the total aggregate of future payments, thus there is cost savings. The carrier no longer has to keep an open file as the future payments are paid directly by the annuity company. The applicant receives an aggregate dollar settlement higher than what the workers’ compensation benefit would have been. And, the annuity payments are tax free.

However, after a structured settlement, some applicants have second thoughts, and want to get a lump sum of cash for their structured settlement. Indeed, there are financial companies advertising on television offering cash for assignment of a structured settlement (for a deep discount of course). It would appear that the petition of Rudy Andrade is an example of such cases. Fortress Funding LLC was seeking to buy out his annuity funded structured settlement for a discount of 13.48%. An agreement such as this requires court approval pursuant to the California Structured Settlement Act. In this case the annuity company opposed the petition, and the Superior Court denied the petition to transfer the annuity to Fortress Funding LLC..

n its opposition, the annuity issuer argued, among other things, that:

  • The California structured settlement transfer act, Cal. Ins. Code § 10134 et seq., under which the petition was brought, did not apply to transfers of workers’ compensation payments.
  • The proposed transfer contravened the California Labor Code § 4900 prohibiting assignment of workers’ compensation payments.
  • The proposed transfer would be contrary to California common law, as the compromise and release agreement signed by the payee expressly prohibited assignment of the payments.
  • The proposed transfer would be contrary to a prior order of the Workers’ Compensation Appeals Board of the State of California, which approved the underlying workers’ compensation compromise and release agreement that expressly prohibited assignment of the payments.
  • The factoring transaction involved a transfer with an effective annual discount rate of 13.48%, and did not appear to be in the payee’s best interest.
  • The payee had no rights to the annuity that funded the workers’ compensation payments, and could not lawfully assign the annuity payments.

FDA Published Metal-on-Metal Hip Implant Warning

All artificial hip implants carry risks including wear of the component material. Metal-on-metal (MoM) hip implants have unique risks in addition to the general risks of all hip implants.

In MoM hip implants, the metal ball and the metal cup slide against each other during walking or running. Metal can also be released from other parts of the implant where two implant components connect. Metal release will cause some tiny metal particles to wear off of the device into the space around the implant. Wear and corrosion at the connection between the metal ball and taper of the stem may also occur. Some of the metal ions (e.g. cobalt and chromium) from the metal implant or from the metal particles will enter the bloodstream.

Orthopaedic surgeons take several precautions before and during hip replacement surgery to try to optimize the way in which the ball and socket rub against each other so that fewer wear particles are produced. However, there is no way to fully avoid the production of some metal particles.

Over time, the metal particles around some implants can cause damage to bone and/or tissue surrounding the implant and joint. This is sometimes referred to as an “adverse local tissue reaction (ALTR)” or an “adverse reaction to metal debris (ARMD).” Soft tissue damage may lead to pain, implant loosening, device failure, and the need for revision surgery (the old device is removed and replaced with another one). Patients with a progressing ALTR may be considered for earlier revision to prevent extensive damage to bone, muscle and nerves.Metal-on-metal hip implants can cause soft-tissue damage and pain, which could lead to further surgery to replace the implant, the U.S. health regulator said, following several recalls of the artificial hip parts.

International regulatory agencies have issued alerts and safety communications related to MoM hip implants.

  • In April 2010, the United Kingdom’s (U.K.) Medicines and Healthcare products Regulatory Agency (MHRA) issued a medical device alert that included specific follow-up recommendations for patients with MoM hip replacements. The recommendations included blood tests and imaging for patients with painful MoM hip implants. In February 2012, MHRA published a medical device alert and updated it in June 2012 with advice on the management and monitoring of patients with MoM hip systems.
  • In May 2012 Health Canada issued a public health communication to orthopaedic surgeons and patients regarding MoM hip implants. 
  • The Therapeutic Goods Administration of Australia published their safety information for healthcare professionals on MoM hips in September 2012. 

Johnson and Johnson, the biggest manufacturer of all-metal devices, recalled its ASR hip implant in 2010 following safety problems. Smith and Nephew withdrew a component of one of its all-metal artificial hip systems last June, following higher level of patient problems with the device. Stryker Corp begun recalling some components of its implant in July due to risks associated with corrosion. Other hip implant makers include Zimmer Holdings Inc and Wright Medical Group.

At the current time, there is not enough evidence to support the routine need for checking metal ion levels in the blood or soft tissue imaging if patients with MoM hip implants have none of the signs or symptoms described above and the orthopaedic surgeon feels the hip is functioning properly. The FDA is recommending that asymptomatic patients with MoM hip implants continue to follow-up with their orthopaedic surgeon every 1 to 2 years to monitor for early signs of change in hip status.