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Tag: 2016 News

Insurance Agent Faces Embezzlement Charges

Suren Hovhannisyan, 27, a licensed insurance agent of North Hollywood,was arrested at his residence on multiple felony counts of burglary, grand theft, and unauthorized use of access cards after allegedly scheming to embezzle over $100,000 from his employer and clients for his personal use.

After receiving a complaint from Hovhannisyan’s employer who suspected the embezzlement, the California Department of Insurance Investigation Division launched an investigation that revealed Hovhannisyan offered fictitious discounts to policyholders if they paid him in cash for their automobile insurance. Rather than remitting the cash payments to his employer, Hovhannisyan allegedly deposited the money into his mother’s bank account for his personal use.

A search warrant of Hovhannisyan’s residence also uncovered a notebook containing the names, Social Security numbers, and credit card numbers of dozens of other potential victims. Department investigators are working to identify and contact those victims.

Investigators found evidence that Hovhannisyan used the credit cards of some clients, without their permission, to pay the automobile insurance premiums of those who paid him with cash. One victim’s credit card was charged 145 times to pay a total of $45,545 in insurance premiums for 80 other policyholders.

The department is requesting that anyone who purchased insurance from Hovannisyan and provided cash payment, credit card or Social Security numbers to contact the department’s Investigation Division at (661) 253-7500.

Hovhannisyan was booked into Los Angeles County Jail. The Los Angeles District Attorney’s office is prosecuting this case. Hovhannisyan faces up to six years in prison, if convicted on all charges. The department has taken administrative action to suspend Hovhannisyan’s insurance license.

Filmmaker Sentenced for Manslaughter – Then Awarded Psyche Benefits?

Midnight Rider is an uncompleted American biographical drama film. Director Randall Miller co-wrote the screenplay with Jody Savin, based on the autobiography My Cross to Bear by the singer Gregg Allman. Miller and Savin were the producers.The film was to star William Hurt, Tyson Ritter, Zoey Deutch, Eliza Dushku, and Wyatt Russell.

On February 20, 2014, the first day of filming, the crew was on an active railroad trestle bridge, high over the Altamaha River in Wayne County, Georgia. Due to criminal negligence by the producers of the film, second camera assistant Sarah Jones was killed when she was struck by a CSX freight train that arrived on the trestle. Seven other crew members were also hurt, one seriously. Production was suspended the following week, and multiple investigations into the incident were undertaken. Miller, Savin, executive producer Jay Sedrish, and first assistant director Hillary Schwartz were charged with involuntary manslaughter and criminal trespass, as well as being cited by OSHA for “serious” and “willful” safety violations.

Miller and Sedrish entered guilty pleas to felony involuntary manslaughter and criminal trespassing, while charges were dropped against Savin as part of Miller’s plea. Miller received a sentence of ten years, of which he was expected to serve two years in jail followed by probation  On March 10, 2015 Schwartz pleaded guilty to felony involuntary manslaughter and criminal trespass, and was also sentenced to 10 years probation.

Hillary Schwartz also filed a workers’ compensation claim and alleged a psychiatric industrial injury as a result of this incident. Last December a Finding and Award found that she sustained an industrial injury to her psyche on February 20, 2014, while employed as a first assistant director, finding against defendant’s affirmative defense under Labor Code section 3600(a)(8) which precludes awarding benefits where injuries were caused by the commission of a felony. Schwartz was awarded temporary disability and further medical treatment, and all other issues were deferred.

The Defendant’s petition for reconsideration was denied in the split panel decision of Schwartz v Ease Entertainment. A Petition for Writ of Review has been filed with the Court of Appeal case number B271708. The Court has not yet acted on the Petition filed last April.

Evidence at the workers’ compensation trial showed that Schwartz accepted a plea agreement under the Georgia First Offender Act whereby she would be found guilty of the charges and would be placed on probation for ten years. Upon the successful completion of her probation, there would be no entry of judgment and no adjudication of guilt.

Pursuant to this agreement, a Bench Trial in the criminal case was held on March 10, 2015, in the Superior Court of Wayne County, State of Georgia. After reviewing the evidence the trial Judge said I “find you guilty in Count of criminal trespass and guilty in Count 5 of involuntary manslaughter.” The Judge approved applicant’s “First Offender Petition,” which states that the Court entered a verdict of guilty to the offenses and that “no judgment has been entered and no adjudication of guilt has been made.” The Petition further states: “Defendant hereby consents to the Court’s withholding the entry of a judgment of guilt, deferring adjudication, and deferring further proceedings, placing her on probation as provided by O.C.G.A. §42-8-60.”

As a result the WCJ concluded that under a strict interpretation of the language of section 3600(a)(8), a conviction is required to bar a claim for workers’ compensation benefits. In view of the deferral of applicant’s prosecution after a finding of guilt by the Court, the WCJ concluded that the requirement that applicant’s injury be caused by the commission of a felony for which she was “convicted” has not been met. The WCAB agreed with this reasoning and denied reconsideration of the Award. Essentially both reasoned that technically there was no “judgment” of a felony as required by the Labor Code should she successfully complete the terms of her probation under the First Offender Law.

Commissioner Razo dissented. He reasoned that “as a consequence of applicant’s conduct, she was determined by a Superior Court Judge to have committed acts which constitute a felony. The Judge found applicant guilty of criminal trespass and involuntary manslaughter in the death of Sarah Jones. This finding constitutes applicant’s conviction of a felony, which under Labor Code section 3600(a)(8), bars her claim for workers’ compensation benefits for an injury to her psyche arising out of her felonious conduct. That applicant was subsequently accorded leniency in her sentencing does not obviate the fact that she was found guilty of involuntary manslaughter. I would therefore grant defendant’s Petition for Reconsideration and find applicant’s claim is barred.”

Declining Major Disease Rates May Complicate Reserving Estimates

Something strange is going on in medicine. Major diseases, like colon cancer, dementia and heart disease, are waning in wealthy countries, and improved diagnosis and treatment cannot fully explain it. And this news will certainly complicate the process of reserving for a lifetime medical award.

According to the report in the New York Times, scientists marvel at this good news, a medical mystery of the best sort and one that is often overlooked as advocacy groups emphasize the toll of diseases and the need for more funds. Still, many are puzzled.

Of course, these diseases are far from gone. They still cause enormous suffering and kill millions each year. But it looks as if people in the United States and some other wealthy countries are, unexpectedly, starting to beat back the diseases of aging. The leading killers are still the leading killers – cancer, heart disease, stroke – but they are occurring later in life, and people in general are living longer in good health.

Colon cancer is the latest conundrum. While the overall cancer death rate has been declining since the early 1990s, the plunge in colon cancer deaths is especially perplexing: The rate has fallen by nearly 50 percent since its peak in the 1980s, noted Dr. H. Gilbert Welch and Dr. Douglas J. Robertson of the Geisel School of Medicine at Dartmouth and the Veterans Affairs Medical Center in White River Junction, Vt., in a recent paper.

Screening, they say, is only part of the story. “The magnitude of the changes alone suggests that other factors must be involved,” they wrote. None of the studies showing the effect of increased screening for colon cancer have indicated a 50 percent reduction in mortality, they wrote, ‘nor have trials for screening for any type of cancer.’

Then there are hip fractures, whose rates have been dropping by 15 to 20 percent a decade over the past 30 years. Although the change occurred when there were drugs to slow bone loss in people with osteoporosis, too few patients took them to account for the effect – for instance, fewer than 10 percent of women over 65 take the drugs.

Dementia rates, too, have been plunging. It took a few reports and more than a decade before many people believed it, but data from the United States and Europe are becoming hard to wave off. The latest report finds a 20 percent decline in dementia incidence per decade, starting in 1977.

A recent American study, for example, reports that the incidence among people over age 60 was 3.6 per 100 in the years 1986-1991, but in the years 2004-2008 it had fallen to 2.0 per 100 over age 60. With more older people in the population every year, there may be more cases in total, but an individual’s chance of getting dementia has gotten lower and lower.

The exemplar for declining rates is heart disease. Its death rate has been falling for so long – more than half a century – that it’s no longer news. The news now is that the rate of decline seems to have slowed recently, although it is still falling. While heart disease is still the leading cause of death in the United States, killing more than 300,000 people a year, deaths have fallen 60 percent from their peak. The usual suspects: Better treatment, better prevention with drugs like statins and drugs for blood pressure, and less smoking, are, of course, helping drive the trend. But they are not enough, heart researchers say, to account fully for the decades-long decline.

Purdue Pharma Silent as Oxycontin Rings Explode in LA

The Los Angeles Times reported on its stunning investigation of L.A. Oxycontin rings that distributed millions of dollars of opiates, all with the knowledge and apparent silent approval of drugmakers such as Purdue Pharma.

In 2008, a convicted felon and his business partner leased office space on a seedy block near MacArthur Park. They set up a waiting room, hired an elderly physician, Eleanor Santiago M.D., and gave the place a name that sounded like an ordinary clinic: Lake Medical. The doctor began prescribing the opioid painkiller OxyContin – in extraordinary quantities. In a single week in September 2008, Santiago issued orders for 1,500 pills, more than entire pharmacies sold in a month. In October, it was 11,000 pills. By December, she had prescribed more than 73,000, with a street value of nearly $6 million.

To keep the OxyContin flowing, Lake Medical needed people whose time was cheap. For that, there was no place better than skid row. For as little as $25, homeless people served as straw patients and collected prescriptions for “80s”, 80-milligram pills with the strength of 16 Vicodin tablets and very popular on the streets. It required just a few hours at the clinic, then they were driven, often in groups, to a pharmacy, where a capper acting as a chaperone paid the bill in cash. He then took the pills back to the Lake Medical ring leaders who packaged them in bulk for sale to drug dealers.

A physician writing a high volume of “80s” was a red flag for anyone trying to detect how OxyContin was getting into the black market. The number of prescriptions Santiago was writing wasn’t merely high. It was jaw-dropping. Many doctors would go their entire careers without writing a single “80s” prescription. Santiago doled out 26 in a day.

Purdue Pharma, the maker of OxyContin, tracked the surge in prescriptions. A sales manager went to check out the clinic and the company launched an investigation. It eventually concluded that Lake Medical was working with a corrupt pharmacy in Huntington Park to obtain large quantities of OxyContin. Yet Purdue did not shut off the supply of highly addictive OxyContin and did not tell authorities what it knew about Lake Medical until several years later when the clinic was out of business and its leaders indicted. By that time, 1.1 million pills had spilled into the hands of mobsters, the Crips gang and other criminals. The pills from Lake Medical coursed out of L.A. An informant would later tell an FBI agent that East Hollywood’s White Fence gang trafficked pills to Chicago.

Legitimate pharmacists from La Canada-Flintridge, Glendale, Moreno Valley and elsewhere complained to Purdue. Company executives and lawyers received at least 11 reports about Santiago in the four months after they first suspected her. For example, on June 10, an Encino pharmacist sent an email to her Purdue sales rep with the subject line “urgent question.” The pharmacist said she was being asked to fill prescriptions written by Santiago and other Lake Medical doctors for “lots of Oxy patients.” “I want to make sure Dr office is legit,” Tihana Skaricic wrote. “So wondering….if you know ‘behind the scenes.” No one at Purdue ever got back to Skaricic. Eventually she and some other pharmacists decided on their own to turn away business from Lake Medical.

And the Los Angeles Times investigation found that, for more than a decade, Purdue collected extensive evidence suggesting illegal trafficking of OxyContin and, in many cases, did not share it with law enforcement or cut off the flow of pills. A former Purdue executive, who monitored pharmacies for criminal activity, acknowledged that even when the company had evidence pharmacies were colluding with drug dealers, it did not stop supplying distributors selling to those stores. Purdue knew about many suspicious doctors and pharmacies from prescribing records, pharmacy orders, field reports from sales representatives and, in some instances, its own surveillance operations.

Purdue had access to a stream of data showing how individual doctors across the nation were prescribing OxyContin. The information came from IMS Health, a company that buys prescription data from pharmacies and resells it to drugmakers for marketing purposes. That information was vital to Purdue’s sales department. Representatives working on commission used it to identify doctors writing a small number of OxyContin prescriptions who might be persuaded to write more. By combing through the data, Purdue also could identify physicians writing large numbers of prescriptions – a potential sign of drug dealing.

And the data at its fingertips was astounding. At one San Marino store, Huntington Pharmacy, monthly orders for “80s” were up nearly 20-fold over the previous year. At another in East L.A., orders jumped 400% in two months. A small shop in Panorama City, Mission Pharmacy, became the top seller of OxyContin in the entire state of California. Mission was a top supplier to the Lake Medical ring In Southern California there was a troubling spike in sales at St. Paul’s Pharmacy in Huntington Park from filling prescriptions for Lake Medical. Purdue added those store names to a long list of problematic pharmacies across the country.

A private, family-owned corporation, Purdue has earned more than $31 billion from OxyContin, the nation’s bestselling painkiller. A year before Lake Medical opened, Purdue and three of its executives pleaded guilty to federal charges of misbranding OxyContin in what the company acknowledged was an attempt to mislead doctors about the risk of addiction. It was ordered to pay $635 million in fines and fees.

In the end, the Lake Medical ring was brought down by a team of state, federal and local investigators who collected tips from citizens and spent hours staking out the clinic, interviewing witnesses and turning junior ring members into informants. When Lake Medical closed in 2010, after a year and a half in business, Purdue had still not shared its wealth of information on the clinic with the authorities, according to law enforcement sources.

Exclusive Remedy Protects Employer in Chair Injury Case

Paul Friend, a tow truck driver, was injured at work when he sat on a metal folding chair and the chair collapsed. Friend alleged his injury was caused by the negligence of William Kang and GBWY Investment Group, Inc. dba Stateline Service, Inc. Friend conceded in his complaint that he is an employee of GBWY. Kang owns GBWY, a corporation with the “dba” of Stateline Service, Inc. Friend claims the chair collapsed because it had been negligently repaired, at Kang’s request. In short, Friend alleged his workplace injury was caused by his employer’s negligence.

Friend alleged Kang had acquired the chair “in his personal name for use by [Friend] and other co-workers during the course and scope of their employment.” Sometime before Friend sat in the chair, Kang had the chair repaired. Kang should have known the chair was not properly repaired and was not safe for use in the workplace.

Defendants disputed Friend’s allegation that Kang personally owned the chair. They submitted evidence, in the form of Kang’s deposition testimony and sworn declaration, that the chair was GBWY’s property, acquired when Kang purchased Stateline Service, Inc. from its prior owner along with its equipment and furnishings.

Defendants moved for summary judgment on Friend’s negligence claim, arguing workers’ compensation was Friend’s exclusive remedy for his injury.

Friend opposed defendants’ motion, arguing that Stateline Service, Inc., not GBWY, was his employer, and that Kang “personally owned” the chair because he acquired it from the previous owner in his own name, as an individual.

The trial court granted summary judgment, and dismissed the claim. The Court of Appeal affirmed in the unpublished case of Friend v Kang.

The sole issue on appeal is whether the trial court erred in granting defendants’ motion for summary judgment on Friend’s negligence claim. The Court of Appeal concluded on the basis of Friend’s allegations and the undisputed evidence that Friend’s claim is barred by the exclusivity provision of the Workers’ Compensation Act (Lab. Code, § 3600 et seq.) and therefore the trial court properly granted summary judgment.

The Workers’ Compensation Act applies to any workplace injury caused by an employer’s negligence, and so by Friend’s own allegations, the Act applies to his injury. Friend makes much over the issue of who owns the folding chair that injured him. He claims Kang took “personal delivery” of the chair “in his own name” and therefore the chair belongs to Kang, not GBWY.

Because Kang is Friend’s employer, it does not matter whether he personally owns the chair or the chair is a GBWY asset. The material facts (as alleged) are Kang provided the chair at his workplace and the chair allegedly injured one of his employees. An employer’s “sole liability” for a workplace injury “is for benefits payable, regardless of fault, under the workers’ compensation law. (DaFonte v. Up-Right, Inc. (1992) 2 Cal.4th 593, 598)

SCIF Ordered to Pay $4.4M Fees After Losing “Operation Chicken” RICO Case

In July, 2012 the State Fund brought an action for violation of the federal Racketeer Influenced and Corrupt Organizations Act (RICO) statute against defendants Alexander Zaks, M.D., Sana Khan, M.D., David Holmes, D.C., and Daniel Reyes, D.C.; their various companies; and State Fund’s own former employee, attorney Bruce Roth. State Fund also asserted a claim for fraud against Dr. Zaks and the Zaks Entities.

In 2001, Dr. Zaks decided to form several businesses in California’s Central Valley that focused on providing medical treatment to the region’s agricultural workers.Dr. Zaks, along with Drs. Holmes and Reyes, formed Accident Help Line Medical Group (AHL) at that time.AHL was staffed with doctors, chiropractors, and other medical professionals, and focused on patients with chronic work-related injuries and associated pain. Zaks also established Millcreek Surgery Center and Alta Surgery Center, ambulatory surgery centers where doctors performed outpatient surgery procedures. Zaks and a partner also owned Reliable Medical Supply, which provided medical equipment to multiple medical providers, including AHL. In 2003 Zaks and partners also created Valley Interpreting, a translation service for patients who spoke limited or no English. Dr. Khan owned the Khan Entities, which conducted diagnostic testing for AHL.

Defendant Bruce Roth, then a senior attorney with State Fund, was assigned to defend State Fund against the Zaks Entities’ WCAB liens. Suspecting possible fraud, Roth led an investigation of the Zaks Entities by no later than 2004. With State Fund’s authorization, Roth made a criminal referral of the case to California’s Department of Insurance. Based on Roth’s referral and other insurance companies’ reports, CDI initiated a fraud investigation of AHL that it dubbed “Operation Chicken.” CDI’s investigation led to indictments of some AHL employees (none of whom are defendants in this case), but the indictments were eventually dismissed.

In January 2006, Roth filed a petition with the WCAB to consolidate the Khan Entities’ and Zaks Entities’ 1,200+ liens against State Fund. From 2006 to 2009, Roth represented State Fund against the Zaks Entities in the WCAB matter. In 2007, the parties stipulated to resolve the WCAB matter in binding arbitration. In October 2009, after losing on several issues before the arbitrator, Roth settled the consolidated case with the Zaks Defendants without first gaining the approval of his manager at State Fund or State Fund’s claims department. Once Roth’s superiors at State Fund learned of the settlement they removed Roth from the case, contacted the Zaks Entities, and disavowed the settlement on the basis that Roth lacked authority to enter into it. State Fund compelled Roth to resign in March 2010.

In April 2010, with the help of outside counsel and without Roth’s involvement, State Fund entered into superseding settlement agreements with the Zaks Entities for substantially the same amount of money as provided for in the 2009 Settlement Memorandum. The centerpiece of the 2012 RICO case was the effect of the 2010 settlement agreements that purportedly released the parties from all claims. SCIF sought to avoid the 2010 agreement based upon various fraud and conspiracy theories.

After three years of litigation and extensive discovery, the Zaks Defendants, the Khan Defendants, and Roth filed three separate motions for summary judgment which was granted. The court stated “The 2010 Settlement Agreements remain binding on the Zaks Entities and State Fund. State Fund has failed to prove the extrinsic fraud or connivance necessary to warrant rescission of those agreements, which were freely entered into by the parties with no involvement from Roth and while State Fund had in its possession all of the evidence about the Zaks Defendants’ allegedly fraudulent lien claims.”

Following the successful summary judgment, the Zachs defendants filed a motion for attorney fees. On July 6, the federal judge awarded them $4,391,277.94 in attorneys’ fees.

Santa Barbara Cop/Strongman Contestant Faces Fraud Charges

The Santa Barbara Independent reports that a Santa Barbara police officer charged with insurance fraud was competing in “strongman” contests for at least two years while on paid injury leave.

27 year old Jacob Finerty, an officer since September 2011, began claiming workers’ compensation benefits sometime after June 2013, when he reported he hurt himself while on duty. The nature of the physical injury has not been disclosed. Last year, Finerty collected a base salary of $85,182.78, or $133,619.05 with benefits. He collected a similar amount the year prior.

Finerty was placed on unpaid leave as soon as the District Attorney’s Office filed its May 24 complaint, Police Chief John Crombach said. In an arraignment on June 24, Finerty stood beside his defense attorney Samantha Swanson as he pleaded not guilty to four felony counts. Of the four charges Finerty faces, two allege he made false written statements related to a workers’ compensation injury; two allege false oral statements.His next hearing date is scheduled for August 8.

A former offensive lineman at Nebraska’s Chadron State College, Finerty was recruited in 2006 out of Hesperia’s Sultana High School by then-head coach Bill O’Boyle. In a phone interview, O’Boyle described Finerty as a “great teammate, [a] great player for us, a guy everyone looked up to.” Chadron is known for its criminal justice and business programs. According to O’Boyle, Finerty succeeded inside and outside the classroom. “He always wanted to be a police officer.”

The Ventura County Star reported that as of January 2016 Finerty was training for the Odd Haugen Strength Classic and American MAS Wrestling Championship in Los Angeles, whose men’s heavyweight division he won. Finerty’s competition records date back to March 2014, when he took home the bronze medal at the North American MAS Wrestling Absolute Championship in Columbus, Ohio. In November 2014, he traveled to Yakutsk in Russia to compete with Team U.S.A. in the World MAS Wrestling Championships. Most recently, Finerty won the March 26 California’s Strongest Man Contest in Huntington Beach, in which he placed third the year before.

In that strongman competition, Finerty performed a series of lifting feats reminiscent of the Highland Games. He lifted a concrete Atlas stone as many times as he could and beat out competitors in an event titled Farmer’s Walk/Tire Flip/Sled-Anchor Chain Drag Death Medley. In an event called Conan’s Wheel, Finerty lifted a weight attached to a pole and pivoted it around a centerpiece.

Norwegian strength athlete Odd Haugen owns The Training Hall in Newbury Park, where Finerty works as head sports trainer, according to the gym’s website. An athlete sponsored by Dymatize Nutrition, Finerty’s brief biography on the bodybuilding supplement’s webpage states the following:

“After football he went into the police academy, so he had to learn to train differently and get into more ‘fighter’ shape. His hobbies other than lifting include Jiu Jitsu and kickboxing which helped for the academy. He needed competition in his life again so he began training strongman and MAS wrestling. In two years he has climbed the amateur ranks and finished 6th in a very elite Pro/Am show in California.”

Claimants File Class Action Challenging AMA Guides Ratings

In a case that could have ramifications around the country, a lawsuit filed Wednesday alleges that many disabled California workers get less than their due simply because they are women.

“This discrimination exacerbates and expands the pay gap,” Kathryn Eidmann, one of the attorneys who filed the lawsuit in Los Angeles Superior Court, told reporters. “We cannot have true equality between the sexes until the fact of being a woman is no longer a reason to compensate women workers even a penny less for injuries on the job.’’

According to the report in USA Today, the lawsuit alleges that injured female workers in California are denied equal disability benefits because of systemic gender bias. The case was brought against California state agencies that oversee the dispensing of workers’ compensation benefits on behalf of several women injured on their jobs, as well as the 700,000-member Service Employees International Union in California. The plaintiffs are seeking class-action status.

Permanent disability benefits are often reduced, the suit claims, because an injury or condition is linked in part to gender-based “risk factors” like menopause. And the ramifications of some illnesses mostly associated with women, such as breast cancer, are considered less disabling than those that affect men, which can result in a denial of compensation .

One plaintiff, Janice Page, was diagnosed with breast cancer in February 2012 and ultimately underwent a mastectomy. Workers’ comp officials determined that Page, a corrections officer with nearly 30 years in law enforcement, contracted cancer after being exposed to toxins in the course of her work. However, a medical evaluator, adhering to American Medical Association guidelines, said that she had no permanent impairment, and so her insurance company denied her permanent-disability compensation.

Those guidelines give no impairment rating to women who undergo a mastectomy past childbearing age even if they were found to have breast cancer because of work conditions. The impairment rating for a woman who can still bear children is up to 5%. Yet a man whose prostate is removed because of cancer is usually assigned an impairment rating between 6% and 20%, according to the complaint.

“I should not be discriminated against, and have my disability compensation reduced, because of a bias against women,” Page said at the news conference. “It’s not fair for me or my fellow female officers to be penalized because of our gender.'”

In an emailed statement, Christine Baker, director of the Department of Industrial Relations which monitors workers’ compensation claims, called the charges in the lawsuit “misleading and superficial.”

“The Department of Industrial Relations and its Division of Workers’ Compensation take allegations of gender discrimination in the workers’ compensation system seriously,” Baker said. “When the plaintiffs’ counsel sent a demand letter to the department dated April 20, 2016, we investigated the examples they cited. The examples did not support the inflammatory accusations of systemic gender bias in California’s workers’ compensation system, and we requested more information from plaintiffs’ counsel to substantiate their claims.”

Instead of providing more evidence, Baker says, the plaintiffs filed suit. “The department will vigorously defend the workers’ compensation system against these unfounded accusations.”

The suit asks the court to find that such actions violate both federal and state law and to order California’s workers’ comp system to root out gender bias, implementing staff training, monitoring and taking punitive action when discrimination is discovered.

Law Proposes to Ban Rogue Doctors

In a recent letter to the Commission on Health and Safety and Workers’ Compensation, the Chair of the California Senate Committee on Labor and Industrial Relations identified fraud as a specter haunting the workers’ compensation system and presenting a fundamental challenge to the operation of system for all stakeholders.

Specifically, the letter cited the recent press coverage by the Center of Investigative Reporting which detailed more than $1 billion in fraudulent activity by a variety of medical providers including the Pacific Hospital of Long Beach, Peyman Heidary, Cary Abramowitz, Ronald Grusd and George Reese.

The analysis of the proposed law continues by point out that “despite the charges, medical bills and workers’ compensation liens from doctors convicted of medical fraud are still being pursued. For example, Dr. Philip Sobol, who pled guilty in connection with his involvement with the Pacific Hospital kickback scheme and is facing up to 10 years in prison, is still filing workers’ compensation liens and seeking payment for treatment that is likely fraudulent. In theory, these workers’ compensation liens could go towards paying his $5.2 million in restitution due to his fraudulent activities. Additionally, Dr. Sobol’s medical license remains active – the Medical Board has yet to take adverse action. “

An now AB 1244 has been proposed to help combat workers’ compensation fraud by changing the incentives facing medical providers in the California workers’ compensation system.

Specifically, AB 1244 seeks to create a suspension process for medical providers who commit serious crimes or are involved in fraudulent activity that is modeled after the suspension process for Medi-Cal.

Currently, there is no suspension process for medical providers in the workers’ compensation system beyond removal from the Qualified Medical Examiner (QME) list.

In a nutshell, AB 1244 would follow the lead of Medi-Cal and require the suspension of a medical provider if the medical provider is convicted of a felony, a misdemeanor connected to fraud, a misdemeanor connected to patient or privilege abuse, or the medical provider’s license is suspended or revoked.

AB 1244 then provides a hearing process where the medical provider can contest the applicability of suspension – such mistaken identity or a later plea deal that reduces a felony to a non-eligible misdemeanor. If the medical provider does not request a hearing, the suspension would take effect within 30 days of notice.

Researchers Say FMRI Software Has Produced “False Positives” for 15 Years

Worker’s Compensation claim administration centers on decisions based upon scientific evidence. Injury AOE-COE opinions are supported by test findings that in turn are purportedly based upon the rigors of medical science. Treatment requests are filtered through the UR and IMR process which is also based upon evidence based medicine. All of this is based upon the assumption that physicians rely on rock solid tried and true science.

Regrettably, this assumption may not always be the case.

Since its beginning more than 20 years ago, functional magnetic resonance imaging (fMRI) has become a popular tool for understanding the human brain, with some 40,000 published papers according to PubMed. Despite the popularity of fMRI as a tool for studying brain function, the statistical methods used have rarely been validated using real data. Validations have instead mainly been performed using simulated data, but it is obviously very hard to simulate the complex spatiotemporal noise that arises from a living human subject in an MR scanner.

To validate the statistical methods commonly in use, researchers in a new study published in the Proceedings of the National Academy of Sciences (PNAS) used real resting-state data and a total of 3 million random task group analyses to compute empirical familywise error rates for the fMRI software packages SPM, FSL, and AFNI, as well as a nonparametric permutation method.

At the end of the study, researchers found that the parametric statistical methods used for group fMRI analysis with the commonly used software packages SPM, FSL, and AFNI can produce FWE-corrected cluster P values that are erroneous, being spuriously low and inflating statistical significance.

So what does this mean in lay terms?

Researchers conclude that this “calls into question the validity of countless published fMRI studies based on parametric clusterwise inference. It is important to stress that we have focused on inferences corrected for multiple comparisons in each group analysis, yet some 40% of a sample of 241 recent fMRI papers did not report correcting for multiple comparisons , meaning that many group results in the fMRI literature suffer even worse false-positive rates than found here.”

With regard to the software, researchers concluded that “a 15-year-old bug was found in 3dClustSim while testing the three software packages (the bug was fixed by the AFNI group as of May 2015, during preparation of this manuscript). The bug essentially reduced the size of the image searched for clusters, underestimating the severity of the multiplicity correction and overestimating significance (i.e., 3dClustSim FWE P values were too low).”

And what about the 40,000 published papers based upon the old software with the “15-year old bug?”

Sadly the authors say that it “is not feasible to redo 40,000 fMRI studies, and lamentable archiving and data-sharing practices mean most most could not be reanalyzed either.” So the results of scientific research in 40,000 published studies that draw conclusions upon fMRI studies are now questionable. That is a considerable amount of “evidence based medicine” that may not be such good evidence after all.