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Tag: 2015 News

Governor Brown Appoints New Cal/OSHA Deputy Chiefs

Governor Brown has appointed of Debra Lee and Eric Berg as the newest Cal/OSHA Deputy Chiefs. The appointments build on Lee and Berg’s combined 39 years of experience working with Cal/OSHA to strengthen workplace health and safety.

“Governor Brown appointed two of the most experienced and informed Cal/OSHA employees to help guide the division into the future,” said DIR Director Christine Baker. Cal/OSHA, officially known as the Division of Occupational Safety and Health, is a division of DIR.

As Deputy Chief of Safety with Cal/OSHA’s Enforcement Branch, Debra Lee will oversee investigations and inspections of California’s worksites. Her duties will include managing Cal/OSHA’s regular enforcement offices statewide, as well as the specialized Mining and Tunneling, High Hazard and Labor Enforcement Task Force units.

As Deputy Chief of Health, Eric Berg will manage Cal/OSHA’s research and standards activities, including the development of health and safety regulations. He will also oversee Cal/OSHA’s Medical and Toxicology, Asbestos and Carcinogen and Crane units.

The new appointees will serve under the general direction of Cal/OSHA Chief Juliann Sum. “I have worked closely with both Debra Lee and Eric Berg, and have complete confidence in their ability to carry out our critical responsibilities in enforcement, research and standards,” said Chief Sum.

Debra Lee originally joined Cal/OSHA as an industrial hygienist with the High Hazard Unit in 1994. She was promoted several times, most recently to Acting Deputy Chief of Field Enforcement in April 2015. Lee holds a bachelor’s degree in health science from Cal State University Northridge and knew at an early age that she wanted a career protecting working people. She is inspired by Dr. Martin Luther King Jr.’s quote, “All labor has dignity.”

Eric Berg also started his career with Cal/OSHA as an industrial hygienist in 1997. He has served as a safety engineer in multiple units, and was promoted to Acting Deputy Chief of Research and Standards in April 2015. Berg holds a master’s degree in environmental health engineering from University of California, Berkeley, and a bachelor’s in civil engineering from Cal State University Chico. He is also fluent in the Spanish language.

Orange County Landscapers Convicted of Wage Theft

A father and son were convicted of embezzling over $300,000 from employee wages on public works jobs. Daniel Jacob Siapin, 60, and his son Gabriel Daniel Siapin, 37, both of La Habra Heights, pleaded guilty to a court offer of 28 felony counts of taking and receiving a portion of worker’s wage on public works, and 32 felony counts of recording a false and forged instrument with a sentencing enhancement for property loss over $200,000.

At the time of the crime, Daniel Siapin owned Siapin Horticulture, a landscaping, irrigation, and maintenance company, which he ran with his son Gabriel Siapin.

Daniel Siapin’s California state contractor’s license was revoked by the court. Daniel Siapin and Gabriel Siapin are each expected to sentenced to 90 days in jail, three years formal probation, ordered to pay over $227,000 in restitution, and are prohibited from working on any other public works contracts at their sentencing on April 11, 2016, at 9:00 a.m. in Department C-57, Central Justice Center, Santa Ana.

The defendants violated the law on a public works job, which requires a minimum “prevailing wage” be paid to workers. Prevailing wage consists of a base salary and “fringe benefits,” or benefits in addition to base pay such as vacation pay and pension money. Fringe benefits must be paid directly to the worker or may be put into a fund for later withdrawal by the worker if they do not work a full 40 hours a week.

In June 2010, both Daniel and Gabriel Siapin met with employees and offered to contract with a third party administrator to hold the employees’ fringe benefits in a savings account. However they failed to deposit over $300,000 in employee fringe benefits into the savings account from work performed in Orange County and other Southern California counties. The defendants instead embezzled the money meant for employee fringe benefits.

“Prevailing wage laws ensure that workers on public works projects are paid a just day’s pay for a hard day’s work, and those who violate those laws engage in wage theft,” said Labor Commissioner Julie A. Su. “Wage theft is a crime and my office is working with District Attorneys across the State to investigate and prosecute these cases. I am proud of and grateful for our collaboration with the Orange County District Attorney to bring scofflaw employers to justice.”

Labor Commissioner “Routinely” Finds Misclassification of Truck Drivers

A port trucking firm in Carson has been ordered to turn over nearly $7 million in back pay to 38 drivers, the latest in a series of recent wins for port drivers and the Teamsters union that has been trying to organize them.

The state Labor Commissioner’s Office ruled this month that the drivers at Pacific 9 Transportation were improperly treated as independent contractors rather than as employees. It ordered the company to compensate drivers for illegal paycheck deductions, back wages and legal costs, payouts that amount to hundreds of thousands of dollars for some.

According to the report in the Los Angeles Times, the decision affects just a fraction of the nearly 12,000 drivers who haul cargo at the local ports. But the order shows that labor organizers are having some success in using employee classification claims to push trucking firms to treat drivers as employees – who, unlike contractors, are allowed to unionize.

Disputes between trucking companies and port truck drivers have become common in recent years, but typically state labor regulators handle classification complaints individually or in small groups. But the recent case involving Pacific 9 – as well as two others involving trucking firms – was heard en masse, with the Labor Commissioner’s Office ruling in favor of dozens of drivers at once. These larger actions could spark an acceleration in the number of claims against trucking firms at the ports of Los Angeles and Long Beach, most of which say their workers are independent contractors, according to labor organizers.

“There are hundreds of trucking companies at the ports, and the vast majority are misclassifying drivers,” said Julie Gutman Dickinson, an attorney who has represented the Teamsters union and is on the advisory board of the Los Angeles Alliance for a New Economy, a labor-backed advocacy group that represented drivers in the Pacific 9 case.

Labor Commissioner Julie Su said 720 truck drivers have filed complaints with her office since 2012. The office has ruled in three cases affecting more than 100 drivers since July. “In this industry, we have found misclassification routinely in the case we’ve heard,” she said.

It is likely that these misclassification situations have an adverse effect on workers’ compensation premiums for the trucking industry.

Researchers Pioneer Promising Arthritis Treatment

Around 52.5 million adults in the US have been diagnosed with some form of arthritis, and this number is expected to grow in coming years, emphasizing the need for new treatments. Arthritis is the most common cause of disability in the US, affecting around 1 in 5 adults. There is no cure for the condition, but there are medications and non-pharmacologic treatments available to help manage symptoms caused by the condition. Now, a new study may have paved the way for just that, revealing how patients with arthritis could be treated using their own “microvesicles.”

Researchers say a patient’s own microvesicles – small particles released by cells – could help treat arthritis.Microvesicles are tiny, fluid-filled particles – around 0.5-1 micrometer in diameter – that are released by cells in large numbers. While it is known these particles transfer lipids and proteins to other cell types, their role in disease remains unclear.

According to the research team microvesicles released from some white blood cells, such as neutrophils, tend to accrue in the joints of patients with rheumatoid arthritis. But what do these microvesicles do once they reach the joints? This is what the team decided to investigate by analyzing genetically modified mouse models of arthritis and human cartilage cells from patients with the disease.

It is widely believed that cells and other small particles are unable to penetrate cartilage, making delivering therapies to the joints of patients with arthritis very challenging. From their research, however, Prof. Perretti and colleagues found that microvesicles released from neutrophils have the ability to enter cartilage – a discovery that could open the door to novel treatment strategies for arthritis. Their findings are published in the journal Science Translational Medicine.

The team says further studies are needed to determine the potential of translating their findings into a new therapeutic approach for arthritis. “Our study indicates that these vesicles could be a novel form of therapeutic strategy for patients suffering from cartilage damage due to a range of diseases, including osteoarthritis, rheumatoid arthritis and trauma. Treating patients with their own vesicles may only require a day in hospital, and the vesicles could even be ‘fortified’ with other therapeutic agents, for example, omega-3 fatty acids or other small molecules.”

2016 OMFS Drug Testing Fee Changes Expected Cut Costs

The Division of Workers’ Compensation has posted an adjustment to the pathology and clinical laboratory section of the Official Medical Fee Schedule to conform to the 2016 changes in the Medicare payment system, as required by Labor Code section 5307.1.

The update includes all fee schedule changes identified in Center for Medicare and Medicaid Services (CMS) Change Request (CR) number CR 9465, which can be accessed on the CMS website.

The 2016 update includes significant changes to the codes and rules related to drug testing. The Administrative Director’s order adopts the Medicare 2016 Clinical Laboratory Fee Schedule and the “Calendar Year (CY) 2016 Clinical Laboratory Fee Schedule (CLFS) Final Determinations” document. The order is effective for services rendered on or after Jan. 1, 2016 and can be found on the DWC website .

Some analysts believe the rate changes for lab testing could shave as much as 91% off the price of some tests. Current coding for testing for drugs of abuse relies on a structure of “screening” (known as “presumptive” testing) followed by “confirmation” to confirm the results of the screening tests and quantitative or “definitive” testing that identifies the specific drug and quantity in the patient. CMS was concern about the potential for overpayment when billing for each individual drug test rather than a single code that pays the same amount regardless of the number of drugs that are being tested.

Thus in 2014 CMS created alphanumeric G codes to replace the 2014 CPT codes that were deleted for 2015. In Jul y 2015, CMS proposed to delete all current drug testing G codes, and continue to not recognize the new AMA CPT codes, and create a single G code for presumptive testing and a single G code for definitive testing. After public comment the final rule creates three G codes for presumptive testing and for definitive drug testing, it will create four tiered G codes. The revised fee schedule will continue to not recognize the AMA CPT codes 80300 – 80377

Broker Sentenced for Theft of Comp Premium

Mia Chang, 51, former insurance broker and owner of Lotte Insurance Services, collected full payment for an annual workers’ compensation insurance policy and pocketed a majority of the victim’s premium, forwarding only a small amount to the insurer and leaving the business owner without coverage and at considerable financial risk. Lotte Insurance Services was located at Wilshire Center at 3470 Wilshire Boulevard, Los Angeles, 90010.

After receiving a letter from a collection agency for nonpayment of premium, the victim contacted Chang who assured him there had been an error, that he was still insured and issued him a bogus insurance certificate.

The victim remained suspicious, contacted the insurance company and discovered he had been uninsured for several months. The victim contacted Chang and asked her to return the money, but she ignored his request and shortly after, closed her business and disappeared.

Unaware of the resources available to help him, the victim did not file a complaint with the California Department of Insurance until two years after the premium theft was discovered. By the time the victim requested help, the department had already revoked Chang’s license and she was convicted of grand theft for stealing premiums from five businesses and one individual. The department launched a new investigation and a warrant for Chang’s arrest was issued, which she evaded for over three years until investigators located and arrested her in La Quinta in June 2015.

Chang pleaded no contest and was sentenced to three years formal probation and 200 hours of community service.Just moments after being sentenced Chang returned $19,218 in stolen premiums with interest to the owner of a sizable construction company. This case was prosecuted by the Los Angeles County District Attorney’s Office.

Comp Photocopiers Not Required to be Registered and Bonded

Photocopy services are required to be registered and bonded under Business and Professions Code sections 22450 and 22455. However section 22451(b) exempts “[a]member of the State Bar or his or her employees, agents, or independent contractors” from the registration requirements. This WCAB en banc case considered a photocopy lien claimant’s contention that it was exempt from being registered and bonded.

Rogelio Cornejo through his attorney Jonathan C. Rosen, Esq., of the JCR Law Group, Inc., filed two Applications for Adjudication of Claim. Both were jointly settled by a compromise and release agreement. As part of the agreement, defendant agreed to “pay, adjust or litigate any and all liens filed according to Labor Code § 4903.5, reserving any and all-defenses, with the WCAB retaining jurisdiction in the event of a dispute.”

Western Imaging Services (WIS) filed a lien claim for “copy service” in one of the cases in the amount of $1,585.56. At the time WIS was not registered and bonded, but was by the time the case was decided. The WCJ disallowed the lien claim of WIS based upon his finding that “Business and Professions Code Section 22451 did not exempt lien claimant Western Imaging Services from registration and bonding pursuant to Sections 22450 and 22455.”

The WCAB reversed in the en banc decision of Cornejo v. Younique Cafe, Inc., Zenith Insurance.

The WCAB held that the Business and Professions Code requirements by its own terms does not apply to a lien claimant seeking to recover copy service fees that are medical-legal expenses under Labor Code section 4620(a) when the lien claimant is an agent and/or independent contractor of a member of the State Bar at the time the documents are photocopied.

When a lien claimant makes an unrebutted prima facie showing that it is an agent and/or independent contractor of a member of the State Bar at the time the documents are photocopied, proof of compliance with the registration and bonding provisions of Business and Professions Code sections 22450 and 22455 is not required.

Cal/OSHA Fines Northridge Hospital $44,125 for Safety Violations

Cal/OSHA has cited Dignity Health, operator of Northridge Hospital Medical Center, for safety and health violations that exposed the hospital’s 1,700 employees to hazards . These include failure to record information in 18 cases where hospital workers were stuck with needles, and failure to provide closable containers in emergency rooms that would keep biohazard waste from spilling.

Cal/OSHA ’s Van Nuys office opened an investigation in June after receiving a complaint. Investigators aided by Cal/OSHA’s medical unit found 13 health code violations.

There were four serious violations of the bloodborne pathogens standard, which requires employers to protect workers from coming into contact with blood or other disease carrying body fluids. A serious violation is cited when there is a realistic possibility that death or serious harm could result from the actual hazardous condition. In this case, the serious violations included :

1) Failure to gather information required by the Sharps injury log, such as type and brand of needles involved in the 18 injury cases. The employer had no procedure in place to review the log, or to solicit required input from employees about factors contributing to contaminated needle injuries. Well kept injury logs, and their regular review, help to identify the causes of injuries and prevent future occurrences.
2) Failure to provide containers that would prevent spillage or protrusion of contaminated needles in emergency treatment and trauma rooms. Additionally, the employer did not provide readily accessible hand washing facilities for emergency room employees.
3) Failure to provide appropriate sizes of gloves for employees using the medication cart in the trauma room and the after-hours intake area.

Cal/OSHA also issued eight general and regulatory violations because Dignity Health kept broken gurneys in the working area, skipped essential elements of training employees in safe patient handling, and failed to take corrective action after accidents occurred. Fines for all violations total $44,125.

Janitorial Company Owners Face 31 Years for $3.6 Million Premium Fraud

A San Diego grand jury has indicted the owners of Good Neighbor Services as well as six accomplices for a massive, ongoing insurance fraud and tax evasion scheme. Two defendants, Hyok “Steven” and Woo “Stephanie” Kwon, own a janitorial company that provides cleaning staff to major hotels across San Diego, Los Angeles and Riverside Counties, including The Hotel Del Coronado, Loews Coronado, La Costa Resort and Spa, The Grand Del Marin La Jolla, L’Auberge Del Mar, The Ritz Carlton, Four Seasons, Hilton and Hyatt hotel chains.

The Kwons have been indicted on 11 counts of workers’ compensation premium fraud, 18 counts of payroll tax evasion and one count of extortion. The investigation uncovered a methodical and systematic shell game involving six straw owners. These straw owners were used to conceal the existence of hundreds of hotel workers to avoid paying millions of dollars in insurance premiums and payroll taxes. If convicted of all charges, they each face up to 31 years in prison.

Six co-defendants have also been charged with workers’ compensation premium fraud and tax evasion. They are Melquiades Brizuela Jr, Manuel Rodriguez, Veronica Lucas Cuin, Aimee Sunmyung Kwon, Daniel Kwon and Hyun Bung Chae for their involvement in the scheme. They face sentences between six and eight years in prison.

For nearly a decade, Good Neighbor Services allegedly concealed their real payroll information in order to fraudulently obtain workers’ compensation insurance from multiple companies including Travelers, Norguard, AIG, Southern Insurance, Everest National, Preferred Employers, State Compensation Insurance Fund and Employers Compensation Insurance. In doing this, the company avoided paying more than $3.6 million in insurance premiums and evaded paying over $3.3 million in payroll taxes.

Employees who were interviewed said they were paid with checks bearing the name of businesses other than Good Neighbor Services throughout the course of their employment,even though they wore uniforms with the Good Neighbor Services’ logo and identified the Kwons as the owners. The employees also said they did not receive overtime pay or workers’ compensation benefits when they were injured on the job, and they feared retaliation if they reported their injuries. One employee said she had to repeatedly ask for medical attention for her injury. When she was finally sent to a doctor, she found out later the Kwons sent her to a dentist rather than a physician.

Pharmaceutical Company Settles California and Federal Kickback Case

A $23.2 million settlement has been reached by the California Department of Insurance and whistleblowers with pharmaceutical company Warner Chilcott to resolve a lawsuit alleging drug marketing fraud in violation of state law. (In 2013, Actavis announced the acquisition of Warner Chilcott creating an $11 billion leading specialty pharmaceutical company with over $3 billion in pro forma sales.) The settlement resolves allegations filed by three former Warner Chilcott employees. The lawsuit alleged that Warner Chilcott executives violated the California Insurance Code False Claims Act, which prohibits anyone from defrauding private insurance companies by using kickbacks or other inducements to procure or steer clients or patients.

The former Warner Chilcott employees alleged the company knowingly used illegal inducements to influence physician decisions, including paying kickbacks and falsifying prior authorization forms to increase the number of prescriptions written for several Warner Chilcott medications. Whistleblowers alleged Warner Chilcott management funneled kickbacks and inducements to physicians under the guise of physician education, often hosting events with little or no education content at high-end hotels and spas-all in an effort to encourage physicians to increase the number of prescriptions written for Warner Chilcott medications.

Of the $23.2 million state settlement, California will receive $11.8 million, which is to be used for enhanced insurance fraud investigation and prevention efforts.

In addition to the allegations of violating California law, a separate lawsuit was filed in federal court in Massachusetts alleging Warner Chilcott violated the Federal False Claims Act. The U.S. Department of Justice announced a settlement of the federal allegations on October 29, in which Warner Chilcott pleaded guilty to healthcare fraud and agreed to pay $125 million to resolve both federal civil and criminal liability for alleged activities that violated the federal anti-kickback and HIPAA statutes, and for false claims submitted to Medicare and Medicaid.

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