Tag: 2013 News

Johnson and Johnson will pay more than $4 billion to settle thousands of lawsuits over its recalled defective hip implants. The tentative plan, which must win court approval, represents one of the largest payouts for product liability claims involving a medical device.The agreement will include those patients who have already been forced to have the device, known as the Articular Surface Replacement, or A.S.R., removed and replaced with another artificial hip, said the lawyers who spoke about the agreement only on the condition of anonymity.

According to the story in the New York Times, each patient would receive about $350,000 on average in compensation, though that figure will vary depending on factors like a patient’s age and medical condition.The precise value of the settlement is unclear because lawyers for patients are still trying to estimate how many of the 12,000 related lawsuits involve patients who had a replacement. Lawyers believe that number may be 7,000 to 8,000 cases.The final cost of the deal to Johnson and Johnson could rise, depending on how many claimants who received the device undergo replacement operations in the future, the lawyers said. Under the plan, patients who have not had a replacement would not receive compensation, the lawyers said.

The A.S.R. hip was sold by DePuy until mid-2010, when the company recalled it amid sharply rising early failure rates. The device, which had a metal ball and a metal cup, sheds metallic debris as it wears, generating particles that have damaged tissue in some patients or caused crippling injuries. DePuy officials have long insisted that they acted appropriately in recalling the device when they did. However, internal company documents disclosed during the trial of a patient lawsuit this year showed that DePuy officials were long aware that the hip had a flawed design and was failing prematurely at a high rate.

Many artificial hips last 15 years or more before they wear out and need to be replaced. But by 2008, data from orthopedic databases outside the United States also showed that the A.S.R. was failing at high rates in patients after just a few years. Internal DePuy projections estimate that it will fail in 40 percent of those patients in five years, a rate eight times higher than for many other hip devices.

The hip was first sold by DePuy in 2003 outside the United States for use in an alternative hip replacement procedure called resurfacing. Two years later, DePuy started selling another version for use here in standard hip replacements that used the same cup component as the resurfacing device. Only the standard version was sold in the United States; both were sold outside the country.About 93,000 patients received an A.S.R., about one-third of them in the United States.

Problems with the design first came to light in Australia and England just a few years after its marketing began. But DePuy officials insisted for years to surgeons who complained about that device that patient problems reflected their surgical technique rather than the implant’s design.

Last year, The New York Times reported that DePuy executives decided in 2009 to phase out the A.S.R. and sell existing inventories weeks after the Food and Drug Administration asked the company for more safety data about the implant.

There remains some potential for claims administrators to seek credit for recoveries received by claimants who received these defective hip replacements as a result of an admitted industrial injury. However, few claim files reflect the product details of surgical implants used in surgeries. This lack of information poses a significant problem for the task of identifying appropriate claims.

Workers’ compensation claim frequency among California’s private self-insured employers showed almost no change in 2012 as a slight increase in the incidence of medical-only claims was offset by a slight reduction in indemnity claim frequency according to a California Workers’ Compensation Institute (CWCI) analysis of data compiled by the state Office of Self-Insurance Plans (OSIP).

OSIP’s annual summary of private self-insured data, released October 30, provides the first snapshot of California private, self-insured claims experience for cases reported in 2012, including the total number of covered employees, medical-only and indemnity claim counts, and total paid and incurred losses on those claims through the end of the year. The latest summary reflects the experience of private self-insured employers who covered 2.12 million California employees last year (vs. 2.11 million in the 2011 initial report), and who reported a total of 77,557 claims in 2012 – nearly unchanged from the 77,386 claims noted in the 2011 initial report. That translates to frequency rate of 3.65 claims (2.33 medical-only + 1.32 indemnity) per 100 employees – almost identical to the 2011 rate of 3.66 claims (2.29 medical-only + 1.37 indemnity) per 100 employees. Total wages and salaries for private self-insured employees totaled $83.6 billion last year, up 3.2 percent from 2011.

Though the number of reported private self-insured claims has dwindled over the last decade, and claim frequency has shown little change since 2005, average paid and average incurred losses on private self-insured claims remain above the pre-reform levels recorded a decade ago. The initial results for 2012, however, show that last year was the first time since 2005 that both average paid and average incurred losses per private self-insured claim declined, with all of the year-to year reduction in the average paid and most of the reduction in average incurred due to declining medical losses. With claim severity declining, and almost no change in claim volume, total paid losses for 2012 private self-insured claims at the first report fell to $186.2 million, $6 million less than in the 2011first reports, while first report incurred losses fell by $25 million to $594.6 million.

The Institute also reviewed more developed loss data from private self-insured’s 2nd through 5th reports on 1999 to 2011 claims which all indicated that private self-insured claim severity (the average loss per claim) fell sharply following the 2002-04 reforms, but after bottoming out with calendar year 2005 claims, began to increase rapidly. As a result, even though claims volume has declined and claim frequency has been flat, total losses for California private self-insured employers measured at the 24-, 36-, 48-, and 60-month benchmarks have continued to trend up.

OSIP’s 2012 summary of private self-insured data, which reports on calendar year data, follows the March release of public self-insured claims data, which is reported on a fiscal year basis. Thus, the data from public self-insured employers now lags the private self-insured data by six months, reflecting claims and losses reported through June 2012 rather than through December. The OSIP annual summaries for both private and public self-insured claims from each of the 10 most recent years are posted online. CWCI members and subscribers may also log on to the Institute’s website to view an Institute Bulletin that includes more details and graphics.

Some professional athletes have a history of filing and settling workers’ compensation claims against their former teams, and later filing a second claim against the same employer. The language of the standard compromise and release agreement is not exactly air tight. The fear of loopholes inspire many employers attempt to strengthen the pre-printed language with a customized addendum that attempts to more specifically make the settlement binding on not only known, but unknown claims. Some WCJs refuse to approve a settlement with an air tight addendum. The claim of National Football League player Tony Dorsett case is a good example. But in his case, the WCJ decided one settled claim is enough for Mr. Dorsett.

The Los Angeles Times reports that a brain-injury claim by former Tony Dorsett was thrown out by a California workers’ compensation panel just months before he was diagnosed with early signs of chronic traumatic encephalopathy, a debilitating condition allegedly linked to repeated blows to the head. Following brain scans and other tests, UCLA researchers informed Dorsett, along with Hall of Fame offensive lineman Joe DeLamielleure and three-time All-Pro defensive lineman Leonard Marshall of their diagnoses a few weeks ago.

The 59-year-old Hall of Fame running back’s claim was dismissed in May when a workers’ compensation judge ruled that because Dorsett had agreed to an $85,000 settlement for injuries to “multiple orthopaedic body parts” in 1991, he could not file another claim for any subsequent injury. Dorsett appealed that workers’ compensation decision, but it was upheld in August. A three-judge panel found that language in the 1991 settlement released the Dallas Cowboys and Denver Broncos from all future claims involving virtually any body part, including the head.

Mel Owens, Dorsett’s attorney, said that he was not available to discuss the case, which claimed cumulative head injuries but did not specify CTE. Owens had 45 days to appeal the decision to the California Court of Appeal, but court records indicate no such action has been filed.

Dorsett’s diagnosis is the latest high-profile case linking America’s richest professional sports league to brain injuries that appear years after players retire. Since 2006, more than 3,500 former NFL athletes have filed workers’ compensation claims in California alleging head and brain injuries, The Times found. NFL teams routinely fight such claims, which can cost millions in cash awards and lifetime medical care. The league backed legislation signed last month by Gov. Jerry Brown that will bar many athletes from filing such claims in California.

The Times reports on one athlete with a brain injury claim who had previously won a workers’ compensation award in California, however, is Jimmie Giles, a pro-bowl tight end in the 1970s and 1980s with the Tampa Bay Buccaneers, among other teams. In 1991 Giles accepted a $75,000 settlement from five NFL teams for numerous orthopedic injuries to his back, wrist, ankles and knees among other parts – described in a medical report at the time as involving “virtually the entire musculoskeletal system.” Among the listed body parts was Giles’ head. Roughly five years ago, Giles, who turn 59 on Thursday, began complaining of memory loss and other problems and was eventually diagnosed with initial symptoms of dementia, which is progressing steadily. He filed a brain injury claim in California in 2010 and in late September, a workers’ compensation judge dismissed the claim. Like in Dorsett’s case, a workers’ compensation judge found that boilerplate language in the settlement precluded future injury claims. The document, in part, reads, “employee releases and forever discharges said employer from all claims or causes of action, whether now known or ascertained, or which may hereafter arise or develop as a result of said injury.”

Los Angeles attorney Ron Feenberg, who is representing Giles, is appealing the decision according to the Times story. Neither Giles, “the defendants, medical science nor the law knew the existence of a relationship between high velocity bodily impacts and brain injury,” Feenberg wrote in the appeal, filed last month. He argues that the case draws strong parallels to asbestos-related claims because it take years for symptoms to surface. In some cases, workers exposed to asbestos had reached workers’ compensation settlements for asthma claims only to file asbestosis or mesothelioma claims decades later. The courts ultimately allowed those cases to proceed. “How can you release your right to a claim for a condition that hasn’t manifest itself?” Feenberg said. If Giles’ appeal is successful, it could open the door to many more claims from athletes who long ago accepted workers’ compensation awards only to develop serious brain disease years later.

Another of Feenberg’s clients, former Minnesota Viking linebacker Fred McNeill, was diagnosed with symptoms of CTE by the same group of UCLA researchers in January. McNeill has no prior workers’ compensation claims and Feenberg said a trial could begin by late January. Still, he worries about how to handle the case. McNeill, 61, has advanced cognitive dysfunction, Feenberg said, and had severe difficulties with memory and basic conversation. “I don’t even know if I can put McNeill on a witness stand,” Feenberg said.

After hearing oral arguments on Monday, and again on Thursday, federal judge George H. Wu indicated he will sign an order next week implementing his tentative ruling that the retroactive lien activation fee violates the equal protection clause of the U.S. Constitution. The scope of the preliminary injunction has yet to be decided. It may apply to just the named plaintiffs, or to all lien claimants subject to the mandatory lien activation fee. Judge Wu will further consider the scope of the injunction in the next few days, and then the actual order will issue.

Angelotti Chiropractic, Mooney and Shamsbod Chiropractic, Christina-Arana and Associates, Joyce Altman Interpreters, Scandoc Imaging and Buena Vista Medical Services filed a lawsuit last July in the United States District Court contesting the constitutionality of certain provisions of SB 863, and seeking to avoid payment of millions of dollars in lien activation fees before the end of 2013. They may be the only beneficiaries of the injunction, or the injunction may apply to lien claimants who are not a party.

The tentative ruling seemed to agree with the arguments that the retroactive lien filing fee violated the equal protection clause of the US Constitution since it discriminated against one class of smaller lien claimants and in favor of large lien claimants who are exempt from the fee. To state a claim under 42 U.S.C. § 1983 for a violation of the Equal Protection Clause of the Fourteenth Amendment a plaintiff must show that the defendants acted with an intent or purpose to discriminate ’against the plaintiff based upon membership in a protected class. Where the group excluded or discriminated against does not constitute a suspect class a plaintiff may still state a claim, but for equal protection purposes, a governmental policy that purposefully treats groups differently need only be ’rationally related to legitimate legislative goals’ to pass constitutional muster. As with suspect classes, differential treatment impinging on a fundamental right will “draw strict scrutiny” attention under the Equal Protection Clause.

The retroactive $100 lien activation fee at issue in this case specifically does not apply to any lien filed by a health care service plan licensed pursuant to [Cal. Health and Safety Code § 1349], a group disability insurer under a policy issued in this state pursuant to the provisions of [Cal. Ins. Code § 10270.5], a self-insured employee welfare benefit plan, as defined in [Cal. Ins. Code § 10121], that is issued in this state, a Taft-Hartley health and welfare fund, or a publicly funded program providing medical benefits on a nonindustrial basis.

Under the “rational basis” review of the lien activation fee, the Equal Protection Clause is satisfied if: (1) ’there is a plausible policy reason for the classification,’ (2) ’the legislative facts on which the classification is apparently based rationally may have been considered to be true by the governmental decisionmaker,’ and (3) ’the relationship of the classification to its goal is not so attenuated as to render the distinction arbitrary or irrational.

On this issue, the tentative ruling said there “is no question that the legislature has a legitimate legislative goal in its implementation of fees to the extent those fees have a purpose of funding the workers’ compensation adjudicative system and/or deterring lien filings so as to not clog the system. The question is whether a retroactive fee like the activation fee herein involved, that is designed to clear the backlog currently in the system (as well as provide funding for the system) can, while accomplishing those purposes, also discriminate amongst lienholders. If it cannot, then the case for a rational relationship to that (or those) legitimate governmental interest(s) is severely weakened.”

Defendants contended that the exempted entities are not major contributors to the backlog. However the ruling noted that “if they are not major contributors to the backlog, and if one of the purposes behind the imposition of fees is to fund the system, why any lienholder whose liens are tied up in the ‘backlog’ would be exempted is somewhat curious, especially ones who would not be greatly impacted because they are not major contributors to the backlog. The backlog is the backlog, and if clearing it is your purpose, then you attempt to clear it. It. makes little sense to clear only part of it.”

The ruling concluded that the court would “grant Plaintiffs’ motion for preliminary injunction, and discuss with the parties the appropriate scope of preliminary injunctive relief.” The scope of the injunction will be decided in the next few weeks.

So what does this mean to California employers? Essentially, they have lost a great deal of the employer’s “benefit” of SB 863, especially if the injunction will apply to all lien claimants. Lien claim resolution was a major component of the bargained for law. Additionally, a new WCIRB study noted once IMR became effective for all injuries regardless of the accident date starting on July 1, 2013, IMR requests have increased significantly. If the higher volume of August (15,731) and September (14,990) IMR requests are indicative of filing rates for subsequent months, the number of IMRs requested per year would be over three times greater than that projected in the WCIRB’s prospective cost estimate, potentially eliminating any savings in administrative costs due to IMR and also potentially negatively impacting medical treatment costs. Employers have yet to learn how litigation over the “catastrophic injury” exception to AMA Guides add-on ratings will be resolved. As a whole, the employer economics of S.B. 863 seems to be getting rapidly eroded.

This report was commissioned by the California Department of Industrial Relations to examine the different types of inspections that the California Department of Industrial Relations Division of Occupational Safety and Health (Cal-OSHA) carries out and the roles that they play. It focuses on the three major inspection types in California: programmed (planned) inspections, complaint inspections, and accident investigations.

As is well known, programmed inspections in general industry cite substantially more serious violations (and total violations) than other inspection types do. However, complaint inspections take inspectors to workplaces whose injury rates are higher.

The number of complaint inspections fell sharply after 1992, dropping from 8,000 per year to fewer than 3,000 in recent years. Cal- OSHA (and OSHA) adopted a policy for dealing with “informal” complaints (defined as cases in which the complainant was unwilling to give his or her name) that relied primarily on a letter or fax to the employer rather than on an inspection. The employer was required to respond and to explain what it had done to abate the alleged hazard. One out of five of these fax-letter cases is supposed to be followed up by an inspection. Unfortunately, neither Cal-OSHA nor OSHA maintains records on the number of these faxletter complaints or on the subject of the hazard in its computerized files. In addition, there is no way to identify the inspections that were conducted to verify the employer’s compliance statements. Thus, we have almost no information on either the magnitude of this procedure or on how it is working.

CHSWC noted that one idea behind the original fax-letter procedure was that the agency would check back with the complainant to see whether he or she was satisfied with what the employer had said and done. But Cal-OSHA cannot check back if it lacks contact information. The absence of that information makes it more important to maintain data on the complaints that are handled through the fax-letter procedure. Currently, there is no simple way to track the results of those one in five inspections that are carried out to validate employer compliance. In addition, for regular complaint inspections, Cal-OSHA should maintain information about the subject of the complaints; it could use that information to assess how good workers were at identifying different hazards.

California requires that acute injuries that involve hospitalization for more than 24 hours (except for observation) and amputations must, along with fatalities, be reported to Cal-OSHA within eight hours. Except for cases in which other law enforcement agencies have jurisdiction (assaults and highway crashes), Cal-OSHA is obligated to investigate these injuries. Although most believe that fatalities are well-reported, the quality of reporting of nonfatal cases is less clear. National data suggest that the number of hospitalizations is probably well above the roughly 2,000 cases reported in California. The implication is that there is a great deal of underreporting of hospitalizations, at least in construction.

The CHSWC report concludes that the Department of Industrial Relations needs to develop a system for identifying the hospitalizations (and amputations) that employers are supposed to immediately report to Cal-OSHA.

Earlier studies of federal OSHA inspections showed that the number of serious violations cited per inspections fell by about 50 percent after the first inspection and more slowly thereafter. In California, the fall-off is not as fast and varies by inspection type. However, the results do suggest that it may be useful to put a priority on workplaces that have not had frequent inspections.

The CHSWC report recommends that workplaces in high-injury-rate industries that have not been inspected at all or not for many years should be identified and deserve some priority in programmed inspections.