Tag: 2015 News

Governor Jerry Brown signed a bill that provides employers with a limited window to correct technical violations in itemized wage statements before being subject to costly litigation. AB 1506 is a bi-partisan effort to strike a balance between protecting the integrity of wage statements and providing relief to employers from potential litigation over minor paperwork violations. The bill, which received unanimous support in both the Assembly and Senate, includes an urgency clause that allowed it to immediately become law after signed by the governor .

In recent years, there have been a number of cases in which employers were sued under the Private Attorneys General Act (PAGA) over minor, hyper-technical violations of existing law. PAGA requires employers to provide accurate itemized wage statements – and allows employees, through an attorney, to file what is called a “representative action” against an employer for any violation of the California Labor Code related to paystubs.

Because PAGA penalties can be high, and the cost of defending them substantial, some employers have opted to settle employee claims rather than contest them in court. And a handful of legal firms around the state have made a lot of money convincing clients to go after their employers for PAGA-related claims.

But AB 1506 now allows employers up to 33 days to cure any alleged technical violation on wage statements. The bill states that if the alleged violation involves the wage statement’s inclusion of the name and address of the employer, or the inclusive dates of the pay period, then the employer shall have an opportunity to “cure” the violation before any PAGA claim may be filed.

AB 1506 was supported by the California Chamber of Commerce, which applauded Gov. Brown’s “fiscal prudence” in limiting “frivolous and potentially devastating” litigation against Golden State employers. “By allowing the employer a limited time period to fix technical violations on an itemized wage statement that does not create any injury to an employee before civil litigation is pursued, AB 1506 will enable an employer to devote its financial resources to expanding its workforce,” said a CalChamber report.

In a new study, WCIRB researchers have documented significant differences in the costs of claims among California regions. The Study found that the Los Angeles region experiences significantly higher claim frequency relative to the rest of California, while the Silicon Valley and San Francisco Bay Area regions experience lower claim frequencies. The Santa Monica – San Fernando Valley region is second, and San Gabriel Valley – Pasadena region is third highest. No opinion was provided to explain these differences.

WCIRB researchers also found that claim severities tend to be higher in the Central Valley and many of the urban coastal areas, but lower in the more remote, rural areas of the state.

The Study involved linking several diverse datasets which allowed the WCIRB to conduct a more refined analysis of geographical differences across California than has previously been possible. The Study examines geographical differences in:

– Indemnity frequency
– Total frequency
– Incurred indemnity on indemnity claims
– Median injured workers’ average weekly wages
– Incurred medical on indemnity claims
– Cumulative injury and occupation disease claims

The Study of Geographical Differences in California Workers’ Compensations Claim Costs and a mapping of nine-digit zip codes to the Study’s regions are available on the WCIRB website in the Research and Analysis section.

The Office of Self Insurance Plans (OSIP) is a program within the director’s office of the Department of Industrial Relations that is responsible for the oversight and regulation of workers’ compensation self-insurance within California. OSIP is also responsible for establishing and insuring that required security deposits are posted by self-insurers in amounts sufficient to collateralize against potential defaults by self-insured employers and groups.

This week OSIP posted proposed regulations to streamline self-insurance procedures and eliminate some existing requirements. A public hearing on the proposed regulations has been scheduled at 10 a.m., Monday, December 21, 2015, in the conference room at the Office of Self Insurance Plans, 11050 Olson Drive, Suite 230, Rancho Cordova, CA 95670. Members of the public may also submit written comments on the regulations until 5 p.m. that day.

The proposed regulation amendments function primarily to update and clarify existing regulations. Several proposed amendments make substantive changes to clarify and simplify the documentation and evaluation of the financial qualifications of self-insureds and to simplify and streamline procedural requirements. Existing requirements pertaining to claims loss history and evaluation of illness prevention program are eliminated as no longer necessary. The rulemaking also updates existing forms, implements new forms in some cases and provides for an online platform for submission of annual forms by self-insureds. The proposed rulemaking does not implement any new reporting requirements and claims not to have an adverse financial impact on California businesses.

The notice and text of the regulations can be found on the proposed regulations page.

An Orange County Social Services Agency (SSA) group counselor has been charged for defrauding over $30,000 from the County of Orange by making fraudulent statements relating to his workers’ compensation claim. Maluelue Tafua, 40, Orange, is charged with two felony counts of insurance fraud and two felony counts of making fraudulent statements. If convicted, Tafua faces a maximum sentence of eight years in state prison. He is out of custody on $20,000 bail.

At the time of the crime, Tafua worked as a group counselor for SSA.

On Jan. 8, 2014, Tafua is accused of claiming that he injured his right shoulder and elbow restraining someone while working at Orangewood Children’s Home. SSA attempted to accommodate his injury by assigning him to modified duties within the work restrictions prescribed by the treating physician. Tafua is accused of going to his doctor and claiming to be unable to use his right arm. SSA could not accommodate that restriction and placed Tafua on temporary total disability.

On June 3, 2014, Tafua is accused of bench pressing 315 pounds in a gym. During a medical appointment with his doctor the following day, Tafua is accused of claiming that his pain had not improved and that he had been complying with his treatment. He is accused of failing to report that he exercised using weights at the gym.

On July 14, 2014, the County began investigating this case after observing inconsistencies in the defendant’s statements, what was observed at the gym, and what activities he told the doctor he was capable of performing. Deputy District Attorney Pam Leitao of the Insurance Fraud Unit is prosecuting this case.

The Department of Justice has reached 70 settlements involving 457 hospitals in 43 states for more than $250 million related to cardiac devices that were implanted in Medicare patients in violation of Medicare coverage requirements. Twenty-seven California hospitals were included in the settlement: Irvine-based St. Joseph Health System agreed to pay $2.7 million on behalf of 10 affiliated hospitals; Sacramento-based Sutter Health agreed to pay $3 million on behalf of 12 affiliated hospitals; and San Diego-based Scripps Health agreed to pay $5.6 million on behalf of five affiliated hospitals.

An implantable cardioverter defibrillator, or ICD, is an electronic device that is implanted near and connected to the heart. It detects and treats chaotic, extremely fast, life-threatening heart rhythms, called fibrillations, by delivering a shock to the heart, restoring the heart’s normal rhythm.  It is similar in function to an external defibrillator (often found in offices and other buildings) except that it is small enough to be implanted in a patient’s chest. Only patients with certain clinical characteristics and risk factors qualify for an ICD covered by Medicare.

Medicare coverage for the device, which costs approximately $25,000, is governed by a National Coverage Determination (NCD). The Centers for Medicare and Medicaid Services implemented the NCD based on clinical trials and the guidance and testimony of cardiologists and other health care providers, professional cardiology societies, cardiac device manufacturers and patient advocates. The NCD provides that ICDs generally should not be implanted in patients who have recently suffered a heart attack or recently had heart bypass surgery or angioplasty. The medical purpose of a waiting period -40 days for a heart attack and 90 days for bypass/angioplasty – is to give the heart an opportunity to improve function on its own to the point that an ICD may not be necessary. The NCD expressly prohibits implantation of ICDs during these waiting periods, with certain exceptions.The Department of Justice alleged that from 2003 to 2010, each of the settling hospitals implanted ICDs during the periods prohibited by the NCD.

“The settlements announced today demonstrate the Department of Justice’s commitment to protect Medicare dollars and federal health benefits,” said U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida. “Guided by a panel of leading cardiologists and the review of thousands of patients’ charts, the extensive investigation behind the settlements was heavily influenced by evidence-based medicine. In terms of the number of defendants, this is one of the largest whistleblower lawsuits in the United States and represents one of this office’s most significant recoveries to date. Our office will continue to vigilantly protect the Medicare program from potential false billing claims.”

Most of the settling defendants were named in a qui tam, or whistleblower, lawsuit brought under the False Claims Act, which permits private citizens to bring lawsuits on behalf of the United States and receive a portion of the proceeds of any settlement or judgment awarded against a defendant. The lawsuit was filed in federal district court in the Southern District of Florida by Leatrice Ford Richards, a cardiac nurse, and Thomas Schuhmann, a health care reimbursement consultant. The whistleblowers have received more than $38 million from the settlements. The Department of Justice is continuing to investigate additional hospitals and health systems.