Tag: 2013 News

The Division of Workers’ Compensation (DWC) is pleased to announce a Carve-out Agreement between seven Southern California United Food and Commercial Workers (UFCW) local unions, Vons and Super A Foods. The agreement covers an estimated 20,000 workers in the region. These workers increase the total California workforce covered by such programs over 55 percent. There are a total of 32 active Labor-Management Carve-out agreements in California, eleven of them active Labor Code 3201.7 Non-Construction Carve-out programs.

Carve-out programs allow employers and unionized workforces to create their own alternatives for workers’ compensation benefit delivery and dispute resolution under a collective bargaining agreement. Since 2004 carve-out programs in California have handled over 25,000 injured workers’ claims . Eligibility of parties to participate in a program must be approved by the administrative director of the Division of Workers’ Compensation.

With Senate Bill (SB) 983 (Chapter 117, Statutes of 1993), the California Legislature established the “Construction Carve-Out Program” under Labor Code section 3201.5. In doing so, it permitted employers, groups of employers, and employee organizations involved in the construction industry to use collective bargaining as a way to create alternatives to the traditional workers’ compensation dispute resolution process. The passage of SB 228 (Chapter 639, Statutes of 2003) amended Labor Code section 3201.7 to allow non-construction employers, groups of employers, and employee organizations to participate in carve-out programs. In 2013 SB 863 added “The State of California” to industries that can establish carve-outs.

Disputes between employers and injured workers over benefits under the carve-out program are generally heard in arbitration and/or mediation. In 2011, carve-out programs reported resolving 19 claims using litigation. Fourteen claims were resolved at mediation, one at arbitration, four at the WCAB, and none at the Court of Appeals. Of the litigated claims, non-construction programs litigated only four claims at mediation; the rest were litigated by construction carve-outs

The requirements to participate and the elements required to be in carve-out programs are contained in Labor Code section 3201.5 for the construction industry and Labor Code section 3201.7 for all other industries, as well as California Code of Regulations, title 8, sections 10200 – 10204 . Reports covering prior years o f the program, which has been in force for construction trades since 1993 and for non – construction workforces since 2004 are available on DWC’s informational page.

Scott Lowery was employed as a heating and air conditioning technician in the HVAC department of Pierce College in Woodland Hills. On March 1, 2006, Lowery experienced sharp pain in his lower back during a two-day project fitting sound-deadening panels on electrical generating equipment, a task that required lifting and prolonged and repetitive squatting. Lowery filed a worker’s compensation claim form for his March 1, 2006 back injury. After working for the next eighteen months with varying degrees of accommodation for his inability to lift heavy tools and equipment and to work in difficult positions and locations, the employer placed the technician on disability leave, to which he was entitled under his collective bargaining agreement.

In 2007 Dr. Grahek the PTP, gave permanent work restrictions of no bending, kneeling, or squatting that causes pain, and no lifting over 30 pounds. Because permanent work restrictions had been prescribed, the District scheduled an interactive meeting for October 8, 2007 to determine whether the permanent work restrictions can be accommodated based on the essential functions of his job, and if they cannot, to evaluate alternative positions.

There was conflicting testimony about what occurred at this meeting. Lowery was provided with a copy of his work restrictions taken from Dr. Grahek’s Permanent and Stationary Report, and reviewed the job function analysis, function-by-function. A number of participants reported that Lowery did not express any objections or disagreements with Dr. Grahek’s restrictions. Lowery testified at trial that he had told everyone at the meeting that the work restriction information was wrong – that he “was doing a lot more than this already. I didn’t realize those restrictions were enforced at the time.” The District concluded that the HVAC department had accommodated Lowery’s work restrictions for 18 months, but it was not reasonably feasible to continue doing so on a permanent basis. Lowery was removed from his modified duty position at the October 8, 2007 interactive process meeting, and was placed on paid industrial injury leave for 36 months, until October 2010. He was advised by letter on a number of occasions about other possible positions, and to respond with his resume and any additional medical information, but did not.

But, on November 29, 2007 Dr. Grahek responded to a letter sent by the claims administrator indicating that he had removed all the restrictions that would have required accommodation. This information was not sent to the employer until 2009. Nonetheless the trial court charged the employer with constructive knowledge of this information as of November 29, 2007.

Lowery was aware that his workers’ compensation attorneys had scheduled him for six Agreed Medical Examinations (AME’s) between August 2010 and November 2011 (including an AME by a court-appointed workers’ compensation doctor). However, he declined to attend any of them, because he did not believe they would help him recover his job, and because one of these examinations was scheduled during a time he was caring for his mother. He had been told by other workers that the AME’s purpose was not to get his job back—which was his goal—but to obtain a job rating in order to prepare for a settlement and dismissal of his workers’ compensation claim.

By letter dated May 21, 2010, Lowery was advised that his leave was nearing an end, and offered him four options. The first option was to return to work “ith or without request for accommodation.” The other three options involved his resignation and/or retirement. Lowery did not respond.

Lowery sued the District and the TPA for damages under FEHA. The TPA was dismissed before trial. The trial court found that Lowery was able to perform the essential functions of his HVAC Technician position “with or without reasonable accommodation”; that the District failed to provide reasonable accommodations; that Lowery’s disability was a motivating factor in the District’s failure to accommodate and failure to reinstate Lowery to his position; and that the District’s failure to accommodate caused Lowery harm. ordered back-pay and non-economic damages totaling $437,460, and ordering his reinstatement to his position as an HVAC Technician at Pierce College, as of January 1, 2012, in lieu of front-pay. The District Appealed.

The Court of Appeal in the unpublished case of Lowery v. LA Community College Dist. found that the trial court’s decision as to the employer’s failure to engage in a good faith interactive process supported in part, but the decision as to the employee’s claims for wrongful discharge and failure to accommodate were unsupported.

It was Lowery’s burden to present evidence that he was able to perform the essential duties of his position, with or without reasonable accommodation. The record contains no substantial evidence that on October 8, 2007, Lowery was able to perform the essential duties of his position, with or without reasonable accommodation. All the District could do was to compare those work restrictions with the job’s essential functions identified by those in charge of the college facilities and the HVAC department (to which Lowery had voiced no dispute, and had presented no contrary evidence), and to hear from those in charge that the HVAC department could not permanently accommodate a technician who could perform only under those restrictions. The evidence did not identify any reasonable accommodation that would have enabled Lowery to perform all the essential functions of his position as of October 8, 2007. However, there was such evidence that was constructively received by the TPA after that date The damages awarded by the trial court, both for back pay and for noneconomic damages, must be reversed for redetermination of the damages to which Lowery is entitled as a result of the District’s breach of its obligation to engage in the good faith interactive process after November 29, 2007.

In 2011, U.S. doctors wrote more than 131 million prescriptions for hydrocodone, making it the most prescribed drug in the country, according to government figures. The ingredient is found in blockbusters drugs like Vicodin as well as dozens of other generic formulations. The FDA has long supported the more lax prescribing classification for hydrocodone, which is also backed by professional societies like the American Medical Association.

But the agency’s top drug regulator, Dr. Janet Woodcock, said “the FDA has become increasingly concerned about the abuse and misuse of opioid products, which have sadly reached epidemic proportions in certain parts of the United States.” In a major policy shift, the FDA said in an online notice that hydrocodone-containing drugs should be subject to the same restrictions as other narcotic drugs like oxycodone and morphine.

The Controlled Substances Act, passed in 1970, put hydrocodone drugs in the Schedule III class, which is subject to fewer controls. Under that classification, a prescription for Vicodin can be refilled five times before the patient has to see a physician again. If the drug is reclassified to Schedule II, patients will only be able to receive one 90-day prescription, similar to drugs like OxyContin. The drug could also not be prescribed by nurses and physician assistants.

Over the past several years, the U.S. Food and Drug Administration (FDA) has been carefully evaluating and weighing the appropriate use of opioid analgesic drug products. For the millions of American patients experiencing an acute medical need or living with chronic pain, opioids, when prescribed appropriately, can allow patients to manage their pain as well as significantly improve their quality of life.

However, in recent years, the FDA has become increasingly concerned about the abuse and misuse of opioid products, which have sadly reached epidemic proportions in certain parts of the United States. While the value of and access to these drugs has been a consistent source of public debate, the FDA has been challenged with determining how to balance the need to ensure continued access to those patients who rely on continuous pain relief while addressing the ongoing concerns about abuse and misuse.

In 2009, the U.S. Drug Enforcement Administration (DEA) asked the U.S. Department of Health and Human Services (HHS) for a recommendation regarding whether to change the schedule for hydrocodone combination products, such as Vicodin. The proposed change was from Schedule III to Schedule II, which would increase the controls on these products.  Due to the unique history of this issue and the tremendous amount of public interest, we are announcing the agency’s intent to recommend to HHS that hydrocodone combination products should be reclassified to a different and more restrictive schedule. This determination comes after a thorough and careful analysis of extensive scientific literature, review of hundreds of public comments on the issue, and several public meetings, during which we received input from a wide range of stakeholders, including patients, health care providers, outside experts, and other government entities.

By early December, FDA plans to submit our formal recommendation package to HHS to reclassify hydrocodone combination products into Schedule II. It anticipates that the National Institute on Drug Abuse (NIDA) will concur with FDA recommendation. This will begin a process that will lead to a final decision by the DEA on the appropriate scheduling of these products.

Going forward, the agency will continue working with professional organizations, consumer and patient groups, and industry to ensure that prescriber and patient education tools are readily available so that these products are properly prescribed and appropriately used by the patients who need them most.

Insurance Commissioner Dave Jones announced he has awarded $32 million in grants to district attorneys across 36 counties in California to combat workers’ compensation fraud. The grants, funded through employer assessments, support law enforcement efforts in investigating and prosecuting workers’ compensation insurance fraud.

“Last fiscal year 2012-13, my department received more than 5,000 referrals for suspected workers’ compensation fraud, with losses totaling more than $340 million,” said Commissioner Jones. “The impact of fraud is felt across California businesses and is a drain on our economy. These grants will assist district attorneys across the state in uncovering workers’ compensation fraud schemes and prosecuting those who rip-off insurers and employers.”

Grant funding is based on assessments from California employers. The California Department of Insurance leads the Workers’ Compensation Grant Review Panel that reviews and makes grant funding recommendations based on multiple criteria such as previous year performance, applications, arrests and convictions. The panel sends a recommendation to the Insurance Commissioner who either accepts or amends the panel’s recommendation. Upon completion, the Commissioner’s recommendation is submitted to the Fraud Assessment Commission for their advice and consent, and then the grants are awarded.

Los Angeles County is at the top of the list with $5.8 million awarded. San Diego County will receive $4.5 million, Orange County $3.6 million, and San Bernardino $2.2 million.

In Fiscal Year 2011-12, the district attorneys reported a total of 819 arrests, which also included the majority of Fraud Division arrests. During the same timeframe, district attorneys prosecuted 1,332 cases with 1,565 suspects, resulting in 708 convictions. Restitution of $53,006,082 was ordered in connection with these convictions and $5,943,570 was collected during Fiscal Year 2011-12. The total chargeable fraud was $341,084,553, representing only a small portion of actual fraud since many fraudulent activities had not been identified or investigated.

Effective January 1, 2005, Assembly Bill 2866 (Frommer) enacted Insurance Code Section 1871.9 requiring the posting of all workers’ compensation fraud convictions to the CDI website. One of the more notable convictions of 2013 was the case of Corinna Montenegro in San Bernardino County. This was a conviction for a violation of one count of PC 550(b)(1) for a failure to disclose material Information.

A traditional understanding of a “fraud case” is the assumption that the perpetrator must make an affirmative fraudulent statement that is not true. However, Penal Code section 550(b)(1) allows prosecutors to make a case against someone who does not affirmatively disclose information adverse to their claim. The codes states it is a crime to “conceal, or knowingly fail to disclose the occurrence of, an event that affects any person’s initial or continued right or entitlement to any insurance benefit or payment, or the amount of any benefit or payment to which the person is entitled.” Thus it would seem that a claimant that does not disclose prior injuries or illnesses that could result in apportionment of permanent disability, or collateral income sources that would be an offset to temporary disability runs the risk of criminal charges for a violation of this Penal Code provision.

The Monterey County District Attorney’s Office announced Monday its receipt of a California Department of Insurance grant to investigate and prosecute disability and healthcare fraud.

According to a release, the funding allows the DA’s office to launch a vertical prosecution team specifically directed at this specialized and complicated area of law. The funding will support the salaries for a senior prosecutor and an investigator to work closely with CDI, the California Medical Board, the state Department of Justice, the Employment Development Department and the state Department of Health Services.

The team’s purpose will be to investigate and prosecute cases including the use of another person’s identity to secure healthcare benefits, embezzlement, unlawful solicitations/referrals, fraudulent billing, inflated or falsified pharmacy billings, prescription fraud and abuse, out-patient surgery center fraud and fraudulent disability claims.

Deputy DA Amy Patterson has been selected as the vertical prosecutor for the Disability and Healthcare Fraud unit. She has prosecuted domestic violence, sexual assault and general felony crimes, including fraud cases, since 2006. As part of her new assignment, Patterson will develop an outreach program providing education to inform the public, medical providers, insurance companies and law enforcement agencies about fraud prevention.

An investigator will also be assigned to the unit in the near future.

California takes fraud cases seriously with extended statute of limitations and maximum prison sentences of five years plus substantial fines for various types of medical fraud.