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Tag: 2015 News

WCIRB Report Says SB 863 Saved $770 Million

The WCIRB has released its Senate Bill No. 863 WCIRB Cost Monitoring Report – 2015 Retrospective Evaluation which is part of a multi-year cost monitoring plan developed by the WCIRB following the signing of SB 863 by the California Governor on September 18, 2012.

This Report includes an updated retrospective evaluation of the cost impact of a number of SB 863 provisions based on data emerging through the third quarter of 2015. Based on the most current information, the WCIRB estimates the impact of SB 863 is an annual net savings of $770 million, or 4.1%, of total system costs.

The measure sought to change the long-standing practice in workers’ compensation cases of charging unregulated medical fees for care by tying fees to other publicly financed health care programs. The medical care portions of the bill appear to be having the desired effect. SB 863’s elimination of the duplicate payment for spinal surgical implants was estimated to save approximately $20,000 per procedure, while WCIRB Medical Data Call (MDC) data shows an over $25,000, or 28%, reduction in the average cost of these procedures since 2013.

The changes to PD related to FEC were estimated to eliminate any increases to PD for the Ogilvie decision and included significant savings to frictional costs resulting from the elimination of Ogilvie. However, since the implementation of SB 863, average allocated loss adjustment expense (ALAE) costs per claim have not declined and, in fact, have increased significantly, suggesting no savings to ALAE from the elimination of Ogilvie are emerging.

Expedited hearings related to medical treatment disputes were expected to be substantially eliminated by the new IMR process, while approximately 5,500 more expedited hearings have been held per year since the implementation of SB 863.

The number of lien filings was projected to decrease by approximately 41% as a result of the SB 863 lien filing fee and statute of limitations. Although filings in 2013 and 2014 decreased by approximately 60% annually when compared to 2011 levels, the number of liens filed increased significantly in 2015 and are projected to be only 20% lower than 2011 levels. However, some of this increase may be a result of temporary increases in lien filings due to the transition of the statute of limitations on filing liens from three years to eighteen months for dates of service on or after July 1, 2013. As a result, at this time it is not clear whether the SB 863 lien provisions will produce saving more or less than originally projected.

WHO Warns Antibiotic Resistance Reached “Dangerous Levels”

Antibiotic resistance, which can turn common ailments into killers, has reached dangerous levels globally, the World Health Organization warned Monday, saying widespread misunderstandings about the problem was fuelling the risk.

Antibiotic resistance happens when bugs become immune to existing drugs, allowing minor injuries and common infections to become deadly. This happens naturally, but overuse and misuse of the drugs dramatically speeds up resistance, WHO said, voicing alarm at the results of a worldwide study showing that misconceptions about the threat are widespread, prompting dangerous behaviors.

“The rise of antibiotic resistance is a global health crisis. More and more governments recognize (it is) one of the greatest threats to health today,” WHO chief Margaret Chan told reporters, stressing that worldwide, resistance was “reaching dangerously high levels.” Chan pointed out that “super bugs haunt hospitals and intensive care units all around the world,” warning that the world is heading into “a post-antibiotic era, in which common infections will once again kill.”

WHO’s 12-country survey published Monday found that nearly two thirds of all those questioned (64 percent) believe wrongly that antibiotics can be used to treat colds and flu, despite the fact that the drugs have no impact on viruses.The survey, conducted in Barbados, China, Egypt, India, Indonesia, Mexico, Nigeria, Russia, Serbia, South Africa, Sudan and Vietnam, also showed that 66 percent believe there is no risk of antibiotic resistance for people who take their antibiotics as prescribed. And nearly half thought antibiotic resistance was only a problem for people who take the drugs regularly, when in fact, anyone, of any age and anywhere, can get an antibiotic-resistant infection. Around a third meanwhile believed it was best to stop an antibiotic treatment as soon as they felt better, rather than completing the prescribed course of treatment, the survey showed.

The survey results indicate that “one of the biggest health challenges of the 21st century will require global behavior change by individuals and societies,” said Keiji Fukuda, the UN chief’s special representative on antimicrobial resistance. “Antibiotics are really one of the miracles of the time that we live in. They are a global good … that we cannot take for granted,” he said.

In a bid to correct misconceptions about the problem, WHO launched a campaign Monday called “Antibiotics: Handle with care”. It aims to help alter a range of dangerous behaviors brought to light in the survey, including the ease of acquiring antibiotics without a prescription in some countries.

The survey showed for instance that five percent of Chinese respondents who had taken antibiotics in the past six months had purchased them on the Internet, while the same percentage in Nigeria had bought them from a stall or hawker. In Russia, only 56 percent of those who had taken antibiotics in the past year had them prescribed by a doctor or nurse.

Hearing Rep and Interpreter Arrested for Comp Fraud

Department of Insurance detectives arrested Ramon Humerto Otero, 37, of Adelanto, and Efrain Heredia Ojeda, 43, of Corona, last week on multiple felony counts of insurance fraud and grand theft. The duo allegedly conspired to steal an $18,946 settlement check intended for a client whose workers’ compensation case Otero was presiding over and who passed away before the settlement with the insurer was achieved.

The Department of Insurance alleges that Otero, a hearing representative for the law offices of Ramon Otero Jr., negotiated a workers’ compensation settlement agreement for his client. During the course of the negotiation, his client passed away. Otero still proceeded with negotiations despite the passing of his client and reported to the insurer that his client’s address changed. Suspecting fraud, the State Compensation Insurance Fund referred the claim to the Department of Insurance for investigation. Detectives found evidence that Otero instructed the insurer to mail the settlement check to the residence of Ojeda, an interpreter and close associate of Otero. Ojeda allegedly forged the deceased’s signature to endorse the settlement check and deposited it into his personal bank account.

A search for the law office of Ramon Otero Jr. shows an office located at 522 W Holt Ave. in Pomona. Yet a search of California State Bar records for an attorney with the name of Ramon Otero Jr. shows only one individual with that name in Pomona, and he is reported to be “deceased.”

Otero was booked into the Inmate Reception Center in Los Angeles. Ojeda was booked into the Robert Presley Detention Center in Riverside. Both face a maximum five-year prison sentence if convicted on all counts. This case is being prosecuted by the Los Angeles County District Attorney’s Office.

Owners of Moving Companies Convicted in $2 Million Fraud Case

An Orange County couple was sentenced last week for owing nearly $2 million from a tax evasion and insurance fraud scheme. Rand Paul Gordon 61, Laguna Hills, and Michele Louise Gordon, 62, Laguna Hills owned and operated moving service companies under the business names Gordon Moving Services Inc., Gordon Moving and Storage Inc., GMS Solutions, and various other names.

in 2006, Rand Gordon obtained an insurance policy for his company with SCIF which was subsequently canceled in 2009 for failure to pay premiums. When he renewed his insurance policy with SCIF he knowingly made false and fraudulent statements by underreporting his payroll to SCIF and failed to pay taxes to the Employment Development Department (EDD).

He also instructed his workers to lie about claims, On Jan. 9, 2008, Rand Gordon told one of his workers to lie about how an injury occurred during a work assignment, while the defendant was driving the victim to a hospital. On Sept. 3, 2009, Rand Gordon dissuaded another worker from filing a workers compensation claim for an injury sustained at work with the intent of keeping his loss history at a minimum to keep the premium on his insurance low. John Doe 2 filed a workers compensation claim.

Rand Robert Gordon pleaded guilty last February to five felony counts of misrepresenting facts to the State Compensation Insurance Fund (SCIF), one felony count of filing a false tax return, 10 felony counts of willful failure to file or make fraudulent tax return, two felony counts of making false statements, two felony counts of making false statements to discourage injured worker from claiming benefits, 20 felony counts of failing to file a return with intent to evade tax, 20 felony counts of willful failure to pay tax, and a sentencing enhancement for aggravated white collar crime over $500,000. He was sentenced to one year and four months in state prison. Rand Gordon paid $385,000 in restitution and was ordered to the remaining $2 million dollars by civil judgment.

Michele Louise Gordon, 62, Laguna Hills, pleaded guilty to four felony counts of willful failure to file or make fraudulent tax returns and one felony count of filing a false tax return. She was sentenced to three years formal probation, pay a $5,000 fine, and $464,560 restitution. The defendants paid the Franchise Tax Board (FTB) $123,189.12 toward the restitution and ordered to pay the remaining restitution of $341,370.88 by civil judgment.

Deputy District Attorney Debbie Jackson of the Insurance Fraud Unit prosecuted this case.

Comp Psychosocial Risk Factors – “Elephant in the Room”

Catastrophic thinking, perceived injustice, entrenched beliefs and fear avoidance. You can call these combined psychosocial risk factors the elephant in the room when it comes to their negative impact on claims outcomes.

At a presentation Thursday at the National Workers’ Compensation and Disability Conference® and Expo in Las Vegas, Darrell Bruga, the founder and CEO of LifeTEAM Health, laid out a game plan for mitigating these factors.

Known as a progressive goal attainment program, Bruga outlined the ways that injured workers, who might have a defeatist mind-set, can be re-engaged and brought back to a more fulfilling life, one that includes a working income.

LifeTEAM is conducting a pilot program with Southern California Permanente Medical Group. Dr. John Harbaugh, an occupational medicine physician director at Permanente was Bruga’s co-presenter.

That path back involves activity coaching, so that someone who has been off work for months can be aided in finding activities to create more structure in their life and build confidence. Such a “disability intervention” Bruga said, can be started in a matter of weeks.

“Ideally, you are engaging this person early on,” Bruga said.

The obstacles to a healthy mind-set in an injured worker can be formidable and deep-rooted however, Dr. Harbaugh said.

Abuse in childhood, whether it be physical violence, sexual abuse, or the psychic chaos created by an alcoholic or drug-addicted parent, greatly increase the possibility of work performance problems and a delayed recovery after an injury, Harbaugh said.

A permanent disability settlement, Harbaugh said, is nothing more than a veiled “pathway to poverty.”

Nurse Case Managers Help Home Depot Claims

Nurse case managers can vastly improve outcomes for injured workers and save a bundle for payers. The trick is to understand which claims will benefit from intervention and to use nurses with the right skill set. “If an injury occurs from lifting equipment or falling from a height, the claim needs a nurse,” said Stephanie Perilli, senior director of medical and health management for The Home Depot, during a session at the National Workers’ Compensation and Disability Conference® and Expo on Thursday.

For non-catastrophic cases, the company uses a model to determine whether to involve a nurse. “Our results have significantly improved over the last three years,” she said.

In a comparison of claims more than 24 months old, the company saw a 12 percent savings on paid medical dollars and a 28 percent reduction on paid loss dollars for claims with nurse involvement.

But not every claim is appropriate for nurse intervention. A recent study determined that 25 variables, especially when some are in combination, can serve as triggers.

“If you’ve got an injured worker who is over 35, has no college degree, has injured a certain body part and undergone certain medical treatment, get a nurse as soon as possible,” said Mary O’Donoghue, VP of medical services for Helmsman Management Services.

In addition to the complexity of a claim, the nurse’s skill set can determine the value of involvement. Those nurses who are trustworthy can make the most difference.

“They can identify problems, educate folks, and redirect where needed,” O’Donoghue said.

Helmsman has found the most effective soft skills needed to move claims forward are communication with all parties involved, including family members; empathy, to establish trust with the injured worker; and collaboration, to make sure there is a plan in place and everyone involved is on the same page.

Insurers Face “Sticker Shock” For Costs of New Gene Therapies

Gene therapy – a risky approach aimed at fixing the malfunctioning genes at the root of some diseases – is finally emerging from its own darkness after weathering high-profile tragedies, including the death of a teenage patient. And, according to the story in the Washington Post, as it evolves from experimental to applied medicine, gene therapy might soon find itself steeped in a new controversy: soaring drug prices. No therapy is approved yet in the United States. But industry leaders are already talking about massive one-time price tags that could make insurers and patients balk. A gene therapy approved in Europe in 2012 costs close to $1 million, and prices are expected to follow suit in the United States. And the industry anticipates the potential backlash against a seven-figure price tag.

As basic research moved forward, excitement about gene therapy soared. But, that initial exuberance would die down as the powerful idea of replacing broken genes collided with the inherent complexity of human biology. In 1999, an Arizona teenager named Jesse Gelsinger died after he experienced an unexpected, severe immune reaction while participating in a clinical trial of gene therapy led by researcher James M. Wilson at the University of Pennsylvania.

Wilson became the subject of legal action and scathing media coverage. The government restricted his work on human subjects. Lawmakers on Capitol Hill held hearings to probe the lack of oversight and the ethical lapses that had marked some gene-therapy trials. Also in the early 2000s, a few patients in a French gene-therapy trial developed leukemia. Along with the Gelsinger case, it proved a tipping point. Private investment in the field rapidly dried up, and a “nuclear winter” followed. Regulators halted dozens of trials.

Gene therapy’s comeback started with a trickle. In 2008, researchers reported that a small number of patients with an inherited form of blindness gained modest improvements in vision with gene therapy. Not long after, gene therapy restored immune function in eight of 10 children with typically lethal “bubble boy” disease. Katherine High, a researcher at the Children’s Hospital of Philadelphia who worked on one of the early blindness trials, started getting cold calls from investors and from pharmaceutical companies, asking if they could partner with her. Then the team of experts she had assembled in Philadelphia began to get job offers.

Today, many companies have treatments in the pipeline. UniQure’s drug, Glybera, in 2012 became the first gene therapy approved in Europe, for a rare metabolic disease. Bluebird Bio, a biotechnology company that went public in 2013, is developing a variety of gene therapies, including a treatment for a genetic blood disease. Regenxbio, where Wilson serves as chief scientific adviser, went public in September.

But the potential sticker shock from a million-dollar drug – even if it’s for a previously incurable disease – is sure to raise some of the same questions from politicians and the public. Spark Therapeutics’ gene therapy is estimated to cost $500,000 per eye. Spending on hemophilia B a gene therapy could conceivably be priced as a one-time payment of $4 million to $6 million. Spark Therapeutics chief executive Jeffrey Marrazzo is reluctant to talk about a dollar figure.

Researchers Study “Customized Physical Therapy” for Low Back Pain

A new study reported in Reuters Health says that customized physical therapy may provide more relief for lower back pain than general advice on the best ways to remain active. Researchers offered 300 patients with lower back pain two advice sessions explaining the source of their discomfort and providing instruction on proper lifting techniques. Roughly half of them also got 10 treatment sessions of personalized physical therapy over 10 weeks.

The physical therapy group had significantly greater reductions in activity limitations at 10, 26 and 52 weeks than the advice group and they also had less back pain at 5, 10 and 26 weeks.
“Our findings suggest that advice works for many people but that individualized physical therapy achieves more rapid reduction in pain and in the long term superior improvements in function/disability,” lead study author Jon Ford of La Trobe University in Bundoora, Australia said by email.  The study was published in the British Journal of Sports Medicine.

To be included in the study, patients needed to have experienced pain for six weeks to six months and have one of five specific types of back pain: disc herniation, reducible disc pain, non-reducible disc pain, joint pain or multifactorial persistent pain.

Patients assigned to customized physical therapy in the study using specific exercise techniques tailored to the type of injury and individual barriers to recovery. Some, for example, focused on posture and lifting to ease disc pain, while others with disc herniation worked on motor control targeting specific muscle groups.

Participants in both the advice and the physical therapy groups improved over time, but the people who received the customized exercise sessions generally did better.

“There was an 8-session difference in treatment groups, so there was a notable difference in provider attention that could account for some of these group differences,” Steven George, a physical therapy researcher at the University of Florida who wasn’t involved in the study, said by email.

In addition, the differences in outcomes between the two groups aren’t that large, as is often the case in studies of back pain, noted Julie Fritz, associate dean for research at the College of Health at the University of Utah in Salt Lake City.

“Back pain is very common and many patients are advised to attend physical therapy at some point,” Fritz said by email. “The challenge for researchers is to continue to examine which particular physical therapy interventions work for specific types of patients with low back pain and determine the optimal timing for physical therapy intervention.”

Doctors Arrested in “First Wave” of $25 Million Comp Fraud Indictments

Eight medical professionals and associates are charged in federal grand jury indictments with buying and selling patients in a bribery scheme involving $25 million in improper claims for medical services and devices which were then billed to California Workers’ Compensation insurance companies.

FBI agents along with investigators from the California Department of Insurance and the San Diego County District Attorney’s Office served five search warrants and three seizure warrants at locations in San Diego, Chula Vista, National City, Murietta and Los Angeles. Five people plus six corporations, are charged in three federal grand jury indictments with conspiracy and honest services mail fraud. The indictments allege that these players either paid or received tens of thousands of dollars to buy or sell hundreds of patients, without the patients’ knowledge – therefore depriving those patients of their right to their doctors’ honest services.

“Today’s indictments are only the first wave of charges in what we believe is rampant corruption on the part of some physicians and chiropractors in their dealings with the health care system in general, and California’s Workers’ Compensation System in particular,” said U.S. Attorney Laura Duffy. “This criminal network bought and sold patients like cattle,” said District Attorney Bonnie Dumanis.

One of the indictments alleges that Los Angeles radiologist Ronald Grusd paid bribes to a San Diego chiropractor in exchange for patient referrals. The bribes were funneled to the chiropractor via Grusd’s corporation, Willows Consulting, a shell company. The checks were labeled “professional services,” but this was a sham. In order to further hide the illegal kickbacks, checks were allegedly issued to intermediaries – defendants Alexander Martinez and his father, Ruben – through their front companies, “Line of Sight” and “Desert Blue Moon.” The Martinezes allegedly took their “cut” and then, in turn, paid off the chiropractor.

Grusd’s practice, California Imaging Network Medical Group, has clinics in San Diego, Los Angeles, Beverly Hills, Fresno, Rialto, Santa Ana, Studio City, Bakersfield, Calexico, East Los Angeles, Lancaster, Victorville and Visalia.

In another indictment, allegations say a second San Diego chiropractor, Dr. George Reese, with offices on El Cajon Boulevard, referred patients to a Los Angeles area medical service provider (controlled by attorney Lee Mathis, 70, of San Clemente, and Fernando Valdes, 50, of Westminster, president of Foremost Shockwave Solutions ) in return for bribes. The bribes were set by the conspirators at $100 per patient and paid through an intermediary. After taking a cut amounting to $25 per patient, the intermediary would pay the remaining $75 per patient to Reese. Mathis and Valdes were not arrested, but were ordered to appear in court.

Although disguised as “office rent” payments, the illegal bribes were paid in cash during clandestine exchanges in restaurants and parking lots. For example, $6,000 in cash was allegedly delivered to Reese in the parking lot of the Jolly Roger in Oceanside, hidden in a gift bag. Other times, it was passed in envelopes or stashed inside newspapers. According to the indictment, Reese and his codefendants generated and submitted bills to insurers totaling in the tens of millions of dollars. Most of these treatments involved the providing of “Shockwave therapy,” which uses low energy sound waves to initiate tissue repair. Proceeds from the insurance claims generated through this scheme were allegedly paid to Mathis and Valdes.

In the final indictment, a San Diego chiropractor referred patients to a licensed provider of durable medical equipment, Julian Garcia. In return Garcia paid the chiropractor $50 for each patient – in cash, to disguise the kickbacks. Garcia then improperly billed Workers Comp insurers millions for hot and cold packs for patients who had been secured by bribes.

San Quentin Counselor Gets 6 Months for Comp Fraud

A longtime counselor with the California Department of Corrections and Rehabilitation was sentenced Tuesday to six months in jail for workers’ compensation fraud and related criminal charges.

Hosea Morgan, 55, of Vacaville, worked at San Quentin State Prison. He told doctors starting in 2009 of pain in several parts of his body that kept him from walking, sitting and sleeping. Morgan told doctors that 24 years of altercations and fights with inmates had left him disabled. He received more than $50,000 for his workers’ compensation and medical claims, according to testimony during his September jury trial.

Jurors in the trial watched hours of video surveillance footage of Morgan playing basketball, moving appliances, working out at a local health club and coaching basketball. Morgan was also shown performing in the play “Misery Loves Company” at the Fairfield Center for Creative Arts.

Morgan is set to be back in court in January to determine how much he will be ordered to repay the state during his five years of formal probation that follow his jail time.