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Tag: 2015 News

RAND Publishes Report on Home Health Care Fee Schedule

The Division of Workers’ Compensation (DWC) today posted the 2015 RAND study Home Health Care for California’s Injured Workers – Options for Implementing a Fee Schedule. California

The Medicare fee schedule for home health services covers only home health services provided when a homebound individual needs intermittent or part-time skilled care. To date, DWC has not implemented a Medicare-based fee schedule for home health services. Section 74 of Senate Bill 863 added Labor Code §5307.8, which requires that DWC adopt a fee schedule for home health services not covered by Medicare. This fee schedule must establish fees and service provider requirements based on the rules used by the In-Home Supportive Services (IHSS) program, a MediCal-funded program that provides supportive services necessary to enable elderly and disabled individuals to remain safely within their homes. The DWC asked RAND to provide technical assistance in developing the fee schedule and related coverage policies for home health services.

The 130 page RAND study found that neither the Medicare fee schedule nor the IHSS fee schedule would be sufficient to cover the full range of potential home care services provided to injured workers. Nonetheless the DWC, the fee schedule should build on existing fee schedules policies, coding system and payment amounts. This is the approach that has been taken with respect to other components of the OMFS. Given the SB 863 requirements, priority should be given to adapting the IHSS fee schedules as needed for the WC patient population. There should be standardized codes describing the type and volume of services provided to the injured worker. To the extent feasible, the codes should draw on existing code sets. The payment rates should be adequate to cover the estimated costs (including a fair return on investment) of providing the services efficiently, and the payment incentives should be structured to safeguard against the under- or over provision of care.  One of the more controversial RAND recommendations might be their suggestion that “To balance worker choice with safety and cost considerations, family members should be allowed to provide attendant care services when they have the training to do so and there is appropriate financial accountability and oversight.”

The DWC will hold a public meeting to discuss issues related to the home health services fee schedule on Tuesday, March 3, from 10:00 a.m. to Noon at the Elihu Harris State Office Building Auditorium located at 1515 Clay Street in Oakland. The purpose of the meeting is to hear input from the public regarding issues including assessing the need for home health services, service provider requirements, fee amounts, and billing codes.

Additions to Saline Solution Reduce Risk of Osteoarthritis

Research scientists in Edinburgh have come up with a new ‘solution’ that could reduce the risk of osteoarthritis developing in tens of thousands of people who undergo orthopaedic surgery every year – sugar. According to the summary in Reuters Health, people who have surgery for joint problems are at increased risk of developing osteoarthritis because the operation can damage cartilage cells. But a team at the University of Edinburgh have found that by simply adding sugar to the saline solution used to wash out joints during orthopaedic surgery protects the cartilage from being damaged and may even improve cartilage repair.

Osteoarthritis, which affects more than eight million people in the UK, occurs when cartilage at the ends of bones wears away, leading to stiff, painful joints. There is no cure and treatment is limited to pain relief and joint replacement in severe cases.

The main risk factors for developing for the condition are ageing, obesity, and joint damage. People who undergo surgery or arthroscopic procedures to treat joint problems – often because of a sports injury or unexplained joint pain – are at an increased risk of developing osteoarthritis because surgery can damage the joint and tissue by destroying cartilage cells called chondrocytes.

But in experiments on rats, the team at Edinburgh University’s Centre for Integrative Physiology found that by adding sugar to the saline solution used during surgery to wash out the joint they could protect the joints from this increased risk. Sugar raises the osmotic pressure of the saline, which protects the cells against injury during surgery. The researchers describe the solution as ‘chondroprotective’ because it protects the cartilage cells against injury.

The team have also shown that as well as protecting against cartilage damage there is better cartilage repair when the chondroprotective solution is used, compared to the usual saline currently used in orthopaedic surgery. Their research was funded by Arthritis Research UK and published in the journal Osteoarthritis and Cartilage.

Dr Andrew Hall, principal investigator and reader in cell physiology said: “Our findings could have major implications for tens of thousands of people who undergo arthroscopic surgery, such as footballers or other sportspeople who’ve damaged their cartilage. Or in fact anyone who’s had exploratory surgery for a sore or painful knee. “There is a worry that all these people are at risk of developing osteoarthritis from their surgery. But if surgeons can be persuaded to use this chondroprotective solution as standard that risk could be substantially reduced. It’s a cheap, simple solution that can protect the cartilage in the joint during arthroscopy and surgery.”

Dr Stephen Simpson, director of research at Arthritis Research UK commented: “It’s extraordinary that something as simple as a sugar solution can have such a beneficial, protective effect on the joints during surgery and can actually help repair cartilage damage. It seems a simple yet potentially valuable step that surgeons around the country could be persuaded to include in their procedures.”

Traditional Insurance Distribution Networks Challenged

An article in Risk and Insurance speculates that as more insurance distribution channels are being created, the potential disruption of the ordinary course of business for underwriters and brokers increases. One of those channels, although details are hazy, involves Inc., a Utah-based e-commerce site that survived the dot-com bust by selling dying Internet companies’ inventories.

Since April 2014, has sold insurance, including auto, property, liability and workers’ comp for businesses, through an exchange where consumers receive live quotes, pick which the coverage they like, and then have a policy bound for them. But who is really doing the the underwriting? Apparently, the underwriters’ names had been confidential, but when asked Dave Nielsen,’s senior vice president, said shared some of them: 21st Century, Progressive, Safeco and American Strategic (ASI). is “seeing good traffic” on the site, Nielsen said, and he’s expecting to “see [sales] continually increasing month over month” as the company adds more products. The logistics of claims and other policy-servicing depends on the carrier, Nielsen added. Overstock services some accounts in-house; others it transfers directly to carriers. But no matter what, policyholders contact Overstock first.

Most of the insureds probably care little about the identify of the underwriters, said Denise Garth, partner and chief digital officer at consultancy Strategy Meets Action (SMA). As far as the insurance buyer goes, they’re a customer of “[Overstock is] definitely the channel where it’s been sold, and it’s the channel where the customer is going to go to for service,” Garth said.

And it’s just one channel of many it seems that are on the verge of disrupting well-tread insurance distribution networks. In particular, according to a report from London-based market risk and consulting firm Finaccord, as many as 281 retail brands around the world are selling insurance, up from 232 retailers in 2010. Global names like Walmart, Tesco, Marks and Spencer, and Carrefour are “leveraging” their brands and huge customer bases to sell mainstream insurance products, said Finaccord Director Alan Leach. “They can supplement the thin profit margin that they can earn from their core business by selling financial services,” Leach said. They wield data they already collect on their customers to empower cross-selling. If they know which of their customers buy pet food, they know which of their customers to market pet insurance to.

At this point, however, this trend of retailers selling insurance is “not so much” in the United States, Leach said, and in many cases, they’re selling personal lines products to consumers. But retailers are just one group the traditional insurance world must confront. Some observers, like Garth, argue that this trend doesn’t just put the insurance distribution process at stake, but affects the industry’s business model as a whole. Some of the savviest, brawniest, data-driven companies in the world are coming. Alibaba, of the recent record-breaking IPO, launched an online insurance platform in 2013 called Leyebao, aimed at Alibaba’s online store owners and their employees. Google forayed into the insurance space in the U.K. in 2012, with a car insurance comparison tool. They’re coming because consumers apparently want them to.

“Competition in the insurance industry could quickly intensify as consumers become open to buying insurance not only from traditional competitors such as banks but also from Internet giants,” said Michael Lyman, global managing director for management consulting within Accenture’s insurance industry practice, when he announced the Feb. 2014 research. The disruption will not be as black and white as an Alibaba launching an insurance company or Walmart taking jobs away from Main Street agents. The invaders seem to care less about the means than the end result. “They want to own a customer for a lifetime,” Garth said.

Their success at that could leave insurers as mere “manufacturers” of insurance products, and agents and brokers as mere customer service representatives, for the companies that will own consumer loyalty and lifetime customer value.

Encino Physician Gets Jail Time

The Los Angeles County District Attorney’s Office announced that a 69-year-old Encino physician was sentenced to two years in jail for prescribing various narcotic drugs without a legitimate medical need. Los Angeles Superior Court Judge Dennis Landin sentenced Dr. Yahya Hedvat to a total of seven years, but suspended five. He ordered the Encino physician, who operated a medical clinic called “Urgent Care,” located at 18055 Ventura Blvd to surrender on Feb. 18 to begin serving his sentence.

In November, Hedvat pleaded no contest to all 11 counts contained in two cases, BA428107 and BA414896. He also admitted the allegation that he was out on bail when he continued criminal activity and a second case was filed in August. Hedvat was first charged in October 2013 with unlawfully prescribing controlled substances, including hydrocodone, suboxone and clonazepam, without a legitimate medical need in a 10-count Grand Jury indictment. After voluntarily surrendering his DEA license to prescribe controlled substances, Hedvat agreed to sell additional drugs, including Norco and Ativan, to an undercover agent with the California Medical Board on Aug. 8.

Deputy District Attorneys John Niedermann and Emily Street with the Major Narcotics Division prosecuted both cases.

Hedvat however continues to hold a California Physicians and Surgeons license although it is suspended by order of the Superior Court in the criminal cases pending against him. He is a 1972 graduate of Tabriz University located in Tabriz, East Azarbaijan Province, Iran. He was issued a license to practice in California in 2004. The only current disciplinary charges pending against him are unrelated to his convictions. The Accusation alleges “gross negligence” in the practice of medicine. Two patients are the subject of the Accusation which claims he was “was grossly negligent and incompetent in the care and treatment of a patient.” The two cases allege that he misdiagnosed both of them after failing to perform a competent physical examination, failed to keep proper chart entries of symptoms and physical complaints, and failed to properly refer them to competent care.

WCAB Warns Against Arbitrary Cycle of UR Review

Jesus Cordova was awarded 100% disability and future medical care as a result of his injury while employed by Graventa Enterprises who was insured by the State Fund. The current dispute involved the future medical care, and the UR process. The WCJ found that the defendant issued utilization review non-certification notices on June 28 and July 19,2013 and that neither denial was communicated timely to the applicant’s primary treating physician or accompanied by the required Independent Medical Review form, thereby rendering the denials inadmissible. The WCJ awarded the contested medical treatment, penalties, and attorney’s fees.

In a Petition for Reconsideration, the State Fund claimed in essence, that the WCJ erred in awarding the contested medical treatment, penalties, and attorneys fees, arguing that the Appeals Board lacks jurisdiction to decide a dispute over a utilization review decision which was communicated to the primary treating physician on or after July l, 2013 and in refusing to apply Labor Code section 4610(9)(6) to a request for treatment which issued within 12 months of a utilization review decision denying the same treatment. Defendant also contends that the WCJ is without power to award an attorney fee for enforcement of a medical award.

The WCAB panel in the case of Cordova v Graventa Enterprises that Labor Code section 4610.5, which provides for independent medical review of utilization review decisions, applies to “any dispute over a utilization review decision if the decision is communicated to the requesting physician on or after July  l, 2013, regardless of the date of injury. However none of the disputed denials of treatment were communicated to a requesting physician on or after July 1.2013, thus none of the disputed utilization review decisions are subject to independent medical review.

Labor code section 4610(9)(6) provides that “A utilization review decision to modify, delay, or deny a treatment recommendation shall remain effective for 12 months from the date of the decision without further action by the employer with regard to any further recommendation by the same physician for the same treatment unless the further recommendation is supported by a documented change in the facts material to the basis of the utilization review decision.” The record had insufficient evidence to determine whether the utilization review decision or decisions were timely made and whether defendant relied on section 4610(e)(6) or submitted additional requests for that prescription to utilization review. Thus this issue was deferred with jurisdiction reserved at the trial level.

On the issue of penalties, defendant’s delay of treatment that was authorized by a utilization review physician was unreasonable. However, with respect to the denied prescription for Nucynta, defendant could reasonably rely on the utilization review denial. Accordingly,the Findings and Award was amended to award a penalty and an attorneys fee on the delayed provision of Neurontin. Applicant’s attorney is entitled to a fee pursuant to Labor Code section 5814.5 for successfully enforcing an award.

The WCAB also decided to “admonish defendant that applicant has an award of medical treatment and the utilization review cycle of denials and authorizations for applicant’s prescription medications appears arbitrary. While defendant is entitled to submit every prescription request to utilization review, we suggest that defendant should consider whether doing so is cost effective and fulfills its obligation to provide applicant with medical treatment to cure or relieve him from the effects of his industrial injury.”

US Supreme Court Rules on Drug Patent Cases

The U.S. Supreme Court on Tuesday vacated a lower court’s ruling that had ended patent protection for Teva Pharmaceuticals’ multiple sclerosis drug Copaxone. The decision could have broader implications for how courts decide future pharmaceutical patent disputes.

According to the summary in Modern Healthcare, the justices decided 7-2 to vacate a lower court’s ruling that the Jerusalem-based pharmaceutical company’s key patent on the drug was invalid. They ruled that the U.S. Court of Appeals for the Federal Circuit was wrong to evaluate the facts of the case independently rather than rely on the district court’s previous finding of the facts.

The justices decided to send the case back to the U.S. Court of Appeals for the Federal Circuit, which handles patent issues, for further review in light of their ruling. The federal circuit court had ruled against Teva on a technical question having to do with whether Teva had adequately described the molecular weight of an active ingredient in Copaxone known as Copolymer 1 in its drug patents. More broadly, the justices’ decision Tuesday will likely make it more difficult for the U.S. Court of Appeals for the Federal Circuit to overturn district court decisions in certain pharmaceutical patent cases moving forward, said Daryl Wiesen, an attorney for Teva with Goodwin Proctor.

Arti Rai, a professor at Duke University School of Law, also said that the ruling Tuesday might make appeals in certain patent cases less frequent. It might also make trial courts more willing to “engage in time-consuming” analysis when it comes to looking into claim construction, or what specific patents cover and prevent others from doing. “In the past, because trial courts knew they would be reviewed de novo in any event, they didn’t want to do inquiries that were time consuming,” Rai said. Rai co-authored a brief filed in the Teva case arguing for a result similar to the one reached by the Supreme Court. The brief was not in support of either side, however.

“We are encouraged by the U.S. Supreme Court’s decision and look forward to the Federal Circuit’s review,” Erez Vigodman, Teva president and CEO, said in a statement. “We will continue to explore all available avenues to protect our intellectual property for COPAXONE 20mg/mL.” In 2013, Teva sold $4.3 billion worth of the drug, according to a company financial statement.

Mylan Inc. CEO Heather Bresch said in a statement Tuesday that, “We continue to believe that the ‘808 patent is invalid as indefinite and we will address that issue with the Federal Circuit Court of Appeals.” The pharmaceutical company, along with Sandoz, Momenta Pharmaceuticals and Natco Pharma were respondents in the Supreme Court case.

Portable X-ray More Common But Quality Questions Remain

Portable X-ray services are becoming more popular as patients seek medical care in familiar surroundings.

According to the Report in Reuters Health, proponents say-home X-ray services help frail patients avoid difficult and potentially hazardous trips to hospitals. Other patients seek in-home providers out of convenience, as an ankle or chest X-ray can take less than 20 minutes. “We go to the patient and take the X-ray, rather than having the patient go to the doctor’s office,” said Paul Fowler, founder of Specialty Portable X-Ray, Inc. in New York. “Usually, in about an hour after we take an X-ray we give these results directly to the doctor,” he told Reuters Health. “With the digital X-rays, we are using probably less exposure than you would at the hospital.”

Patients must have a doctor’s prescription for an x-ray, or for an ultrasound exam, which can also be done at home. Fowler’s company charges about $300 for a visit for patients without health insurance, he said. Some celebrities seek his services to avoid paparazzi and unwanted attention.

Jacob R. Wuerstle, president of Diagnostic X-ray Service, Inc. in Pennsylvania, said portable X-rays are also used in assisted living facilities and prisons. “We keep the patients in a setting that they’re familiar with, that they’re comfortable with,” he told Reuters Health. The option for home X-rays is especially helpful for elderly patients in snowy parts of the country. His technicians scan more than 30,000 patients per year. Sessions cost about $200. “We use state-of-the-art equipment and we transmit right from the patient’s bedside to the radiologist,” he said.

Dr. James C. Carr, a professor of radiology at Northwestern University’s Feinberg School of Medicine in Chicago, believes trained technicians using portable machines can provide quality scans for patients in rural areas or unable to move. “As long as the equipment is being regulated and the technologists are satisfactorily trained, concerns can be mitigated,” he told Reuters Health.

But portable X-ray machines, while convenient, may be less accurate. Dr. David Levin, professor and chairman emeritus of the Department of Radiology at Thomas Jefferson University Hospital in Philadelphia said he would not recommend in-home X-rays for mobile patients. “The quality of those images is usually not very good. If you compare the quality of those kinds of studies with the quality of a study that was performed in a hospital in a radiology department or in a private radiology office, there is going to be no comparison,” he told Reuters Health. “If a portable X-ray is absolutely necessary because of the patient’s clinical condition, then it’s justifiable.”

As the portable X-ray market grows, state and federal regulations for radiation protection must be followed, said Dr. William Thorwarth, Jr., chief executive officer of the American College of Radiology in Virginia. “You want to be very certain that the technologist who’s acquiring the images is appropriately trained and qualified,” he told Reuters Health. “There needs to be appropriate precautions so that other people in the house are not exposed.”

Calderon Corruption Trial Postponed to August

The Press Telegram reports that Lawyers have agreed to delay the public corruption trial of former state Sen. Ron Calderon and his brother until August,.

Prosecutors and defense lawyers filed a stipulation Wednesday in Los Angeles federal court to postpone the trial from May 19 to Aug. 11 because they need to review about 280,000 pages of evidence, including about 2,000 recorded phone calls.

The Montebello Democrat has pleaded not guilty to accepting $100,000 in cash bribes, trips and dinners in exchange for pushing workers’ compensation legislation and a film industry tax credit scheme that was actually an FBI sting. His term expired at the end of the year.

Thomas Calderon, 60, a former lawmaker-turned-lobbyist, has pleaded not guilty to laundering bribes through a tax-exempt group and consulting company he operates.

Ron Calderon, 57, was one of three Senate Democrats suspended last year because of felony charges, due in part to bribes he is accused of receiving from the former owner of Pacific Hospital in Long Beach. Michael Drobot, head of the now-defunct hospital, pleaded guilty last year to federal charges related to his role in a medical fraud scheme that authorities have said may be the largest of its kind in California history. Drobot has told federal officials that he also bribed Ron Calderon in order to keep on the books the labor code provisions that made it possible to seek inflated reimbursements for spinal hardware.

Feds Say Los Angeles Major Source of Diverted Illegal Drugs

The California Department of Justice was one of five law enforcement agencies investigating a Los Angeles “Pill Mill” medical clinic that lead to the arrest of five suspects after a federal grand jury issued a 33-count indictment, Authorities allege this was a narcotics trafficking ring in which illegal prescriptions were sold for a flat rate of $500 at the now-closed Southfork Medical Clinic in Los Angeles and the drugs obtained with those prescriptions were shipped to Texas for sale on the black market. Prescriptions were allegedly sold for drugs that included oxycodone, hydrocodone, alprazolam (best known by the brand name Xanax), carisoprodol (a muscle relaxant) and promethazine with codeine (a cough syrup sold on the street as “purple drank” and “sizzurp”).

Those arrested include Jagehauel Gillespie, 39, of Houston, the operator of Southfork, and alleged ringleader. Investigators seized nearly 10,000 pills from his home in January 2013 and 48 bottles of promethazine with codeine from a car driven across Texas by Gillespie and another suspect in July 2010. Gillespie is also charged with using fake identities and fraudulent driver’s licenses to fill prescriptions at Los Angeles-area pharmacies. Gillespie faces up to 149 years in federal prison if convicted.

Also arrested was Dr. Madhu Garg, 63, of Glendora, the medical doctor who wrote prescriptions at Southfork, allegedly without any medical necessity, before the Medical Board of California revoked her license in late 2013. Garg, issued more than 10,000 prescriptions – with nearly 80 percent of those for hydrocodone or alprazolam, most of which were at the maximum dosage – over a 15-month period, according to records maintained by the State of California. In addition to drug counts, Garg is charged with money laundering for allegedly wiring money obtained from the drug conspiracy to an account in Kuala Lumpur.

According to records at the California Medical Board, in 2011 Garg “was a partner with Southern California Permanente Medical Group and worked at Kaiser Baldwin Park Medical Center-West Covina Medical Offices, practicing family medicine. On or about October 24, 2011, she reported for work and was asked to undergo drug testing as she appeared to be “out of it.” The results of that drug test were received on or about October 31, 2011, and were noted to be positive for amphetamines, methamphetamines, and hydrocodone. Respondent was placed off-work.” Medical Board Records also reflect that she claims to have practiced “occupational medicine.” These and other allegations led to the revocation of her medical license.

Diane Nunez, 24, of Long Beach who oversaw day-to-day operations at Southfork was also arrested along with Daniel Clay, 45, of Houston, who allegedly shipped controlled substances from Southern California to Texas. Ray Steven Benton, 56, of Baldwin Hills, was arrested and is allegedly, a “capper” who allegedly recruited patients to obtain prescriptions at Southfork. Benton is also charged with firearms offenses and with using fake identities and fraudulent driver’s licenses to fill prescriptions at Los Angeles-area pharmacies.

“Los Angeles is a major source of the deadly and addictive prescription drugs that are diverted to street sales across the Western United States,” said Acting United States Attorney Stephanie Yonekura. “This case is the latest in a series of prosecutions clearly demonstrating that law enforcement is committed to stemming the tide of drugs being diverted to the black market, as well as putting an end to medical professionals who abuse their prescription pads and their ethical obligations.”

The indictment describes multiple undercover operations conducted during the investigation. During an October 2013 meeting at Southfork, Gillespie allegedly agreed that Garg would prescribe oxycodone and promethazine with codeine for an undercover cooperator in exchange for the person returning to the clinic with bottles of the prescribed cough syrup. Later that day, Garg allegedly gave the undercover witness prescriptions for those drugs and agreed to issue more prescriptions later that week under a different patient name. Six days later, during another meeting at Southfork, Gillespie allegedly gave the undercover witness forged prescriptions for oxycodone and promethazine with codeine using another doctor’s name and medical license number.

Two other suspects named in the indictment are currently being sought by authorities. Those two fugitives are: Jessica Poe, 32, of Inglewood, California, Gillespie’s girlfriend, who allegedly forged a doctor’s signature on prescriptions; and Joseph Tyree Boyance, 35, whose whereabouts are presently unknown, an alleged “capper” who recruited patients to obtain prescriptions at Southfork.

This case is the product of an investigation by the Drug Enforcement Administration’s Los Angeles and Houston field divisions, Internal Revenue Service-Criminal Investigation, the Los Angeles Police Department, the California Department of Justice, and the Texas Department of Public Safety.

Insurance Agent Sentenced to Three Years

Isidro Santillan, 54, of Pacoima, was sentenced to three years in state prison and agreed to pay more than $133,000 in restitution to multiple victims. For more than two years Santillan embezzled over $100,000 from clients, pocketed premium money and created phony documents leaving his clients at great financial risk Santillan pleaded no contest to two felony counts of grand theft and multiple acts of embezzlement.

The Department of Insurance launched an investigation in late 2012 after receiving complaints about Santillan’s business practices regarding the sale of commercial auto, general liability, and worker’s compensation insurance and bonds. Some of his victims discovered canceled checks that exceeded the cost of the insurance policy they had agreed to purchase.

Investigators said that Santillan, aka Art Sanchez, issued premium checks that did not require the payer’s signature, and then instead of sending these premiums to his clients’ insurers, he cashed the checks for his own personal use. Santillan did not forward premium payments to purchase policies for his clients, which left his victims at risk for uninsured losses. Santillan attempted to cover up his theft by providing both falsified and legitimate certificates of insurance and premium finance agreements. In some instances, he allegedly made partial premium payments but the policies were later canceled by insurers due to lack of full payment.

This case was prosecuted by the Los Angeles County District Attorney’s Office-Consumer Protection Unit.