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Tag: 2016 News

DWC to File Provider Suspension Procedure Regulations

The Division of Workers’ Compensation issued its Notice of Emergency Regulatory Action to implement the provider suspension process required under Assembly Bill 1244.

AB 1244 adds Labor Code section 139.21 which requires the Administrative Director to promptly suspend any physician, practitioner, or provider from participating in the workers’ compensation system if that individual has been convicted of any felony or misdemeanor involving fraud or abuse of the Medi-Cal program, Medicare program, or workers’ compensation system, if that individual’s license, certificate, or approval to provide health care has been surrendered or revoked, or if that individual has been suspended for fraud or abuse from participation in the Medicare or Medicaid programs.

AB 1244 requires the Administrative Director to provide notice of the suspension, which becomes effective after thirty (30) days from the date the written notice is sent, unless the physician, practitioner, or provider stays the suspension by requesting a hearing within ten (10) days from the date the written notice is sent.

AB 1244 mandates the adoption of regulations for suspending a physician, practitioner, or provider from participating in the workers’ compensation system if that individual meets the criteria specified above.

The documentation filed by the DWC in support of their request for emergency regulations claims that “High-profile workers’ compensation fraud prosecutions have revealed that many of these physicians, practitioners, or providers who have been indicted or convicted of fraud are involved in questionable patient care that is harming California’s injured workers. Capping schemes, kickbacks, and illegal patient referrals have resulted in injured workers who have been received unneeded or harmful treatment, been maimed for life, needed additional surgeries to repair incompetent work, and sadly, death of an injured worker’s infant due to failure to provide proper patient care, all driven by these fraudulent schemes rather than their medical needs.”

The emergency regulations will be filed with the state’s Office of Administrative Law (OAL) on December 21, 2016. The regulations to be filed with OAL can be found on the DWC website.

OAL has up to 10 days to consider the rules, but may approve them before the 10 days have elapsed.

Upon OAL approval and filing with the Secretary of State, the regulations are effective for 180 days while the Division initiates formal rulemaking procedures to adopt permanent regulations.

For information on the OAL procedure, and to learn how you may comment on the emergency regulations, go to the OAL’s website.

A notice will be posted at the DWC website when the emergency regulations become effective.

Drug Pricing Inflation “Restrained” in 2017

Express Scripts Holding Co, the largest pharmacy benefit manager in the United States, said drug price inflation would likely be restrained going into 2017 and that scrutiny into pricing strategies was here to stay.

Express Scripts’ comments come at a time when drug pricing is a hot political topic in the United States.

Prescription benefit managers (PBMs) negotiate drug benefits for health plans and employers, and have in recent years taken an increasingly aggressive stance in price negotiations with drugmakers.

They often extract discounts as well as after-market rebates from drugmakers in exchange for including their medicines in their formularies with low co-payments.

Drug price inflation will unlikely represent a “significant headwind” in 2017, Chief Executive Tim Wentworth said on a call with analysts, noting that the company has not seen the value of rebates change recently.

“You’re probably going to see some restraint compared to what we have maybe seen in the last couple of years.”

“We don’t accept where drug prices are today. We believe they can and should be lower,” Wentworth told Reuters in an email on Wednesday.

Fitch Ratings’ outlook on the healthcare sector is stable, as the sector faces a low risk of deteriorating fundamentals but high levels of event risk due to regulatory and political uncertainty.

The rating agency also noted the issues involved in the drug pricing debate. Fitch said some drug manufacturers’ practice of taking advantage of supply dislocations to increase prices on established products is “not a defensible business model in the long term.” Fitch said companies that launch truly innovative new drugs will continue to command pricing power.

While most U.S. stocks rallied over the post election weeks, shares of biotechnology and pharmaceutical companies retreated after President-elect Donald Trump vowed in a magazine article to crack down on drug prices. Drug stocks fell after Mr. Trump was quoted in a Time Person of the Year article as saying: “I’m going to bring down drug prices.”

Last week, Allergan Chief Executive Brent Saunders touched on the delicate politics of drug-pricing a health-care industry conference in New York City.

“I worry today that the pharma industry has a very false sense of relief or security because of a Trump administration and a Republican-controlled Congress,” Mr. Saunders said. “I think we should recognize the drug-pricing issue is a populist issue. – To think President Trump isn’t a populist, that he won’t jump on the next EpiPen scandal and won’t Tweet against any company that does something like that, you’re fooling yourself.”

Supreme Court Clears Way for $1 Billion NFL Settlement

The U.S. Supreme Court on Monday cleared the way for the National Football League’s estimated $1 billion settlement of concussion-related lawsuits with thousands of retired players to take effect, rejecting a challenge brought by a small group of dissenters.

Reuters reports that the eight justices refused to hear an appeal of a lower court ruling in April upholding the settlement, which resolved litigation brought by players who accused the NFL of covering up information that tied head trauma like that suffered playing football to permanent brain damage.

The settlement enables the NFL, the most popular U.S. sports league with billions of dollars in annual revenue, to avoid litigation that could have led to huge sums in damages and provided embarrassing details about how it has dealt with the dangers posed by head trauma in the violent sport.

League officials also have taken steps to outlaw some of the game’s most brutal hits and changed how they deal with players who suffer concussions during games amid growing evidence linking such brain trauma to lasting neurocognitive damage.

The settlement calls for payments of up to $5 million each to former players diagnosed with certain neurological disorders, but it does not address chronic traumatic encephalopathy (CTE), a condition that has been linked to concussions.

Christopher Seeger, a lawyer who helped negotiate the settlement for the retired players, said they will now receive “much-needed care and support for the serious neurocognitive injuries they are facing” under the terms of the settlement.

Brian McCarthy, an NFL spokesman, said the league is “pleased that the Supreme Court has decided not to review the unanimous and well-reasoned decisions” of the lower courts that approved the deal.

The NFL will now work with lawyers for the players and the judge overseeing the settlement to “provide the important benefits that our retired players and their families have been waiting to receive,” McCarthy added.

“This settlement will leave most NFL players on the sidelines, even those most affected by the long-term effects of concussions. Under the terms of the deal, many players diagnosed with CTE will get nothing,” said Deepak Gupta, one of the lawyers representing the dozens of retired players challenging a deal they considered flawed.

In upholding the settlement in April, the 3rd U.S. Circuit Court of Appeals in Philadelphia wrote that those challenging it “risk making the perfect the enemy of the good.” Under the settlement, the NFL does not admit guilt.

A smaller group of retired players objected to the agreement, saying it did not account for CTE. They also argued the deal unfairly favored currently injured retirees and left thousands of former players who have not yet been diagnosed with neurological diseases without a remedy.

The objectors included Scott Gilchrist, the son of retired player Carlton Chester “Cookie” Gilchrist, a Buffalo Bills running back in the 1960s whose lawyers say died from CTE at age 75 in 2011.

Quest Diagnostics Database Hacked

Quest Diagnostics announced yesterday that it is investigating an unauthorized third-party intrusion into an internet application on its network. The company provided notice to individuals whose accounts have been affected.

Quest annually serves one in three adult Americans and half the physicians and hospitals in the United States, and has 43,000 employees

On November 26, 2016 an unauthorized third party accessed the MyQuest by Care360® internet application and obtained Protected Health Information (PHI) of approximately 34,000 individuals.

The accessed data included name, date of birth, lab results, and in some instances, telephone numbers. The information did not include Social Security numbers, credit card information, insurance or other financial information. There is no indication that individuals’ information has been misused in any way.

When Quest Diagnostics discovered the intrusion, it immediately addressed the vulnerability. Quest is taking steps to prevent similar incidents from happening in the future, and is working with a leading cybersecurity firm to assist in investigating and further evaluating the company’s systems. The investigation is ongoing and the unauthorized intrusion has been reported to law enforcement.

Quest Diagnostics has notified affected individuals via mail and established a dedicated toll-free number to call with questions regarding this incident. The number is (888) 320-9970, and can be reached Monday through Friday between 9:00 a.m. and 7:00 p.m. Eastern Time.

In February 2015, Anthem made history when 78.8 million of its customers were hacked. It was the largest health care breach ever, and it opened the floodgates on a landmark year. More than 113 million medical records were compromised last year, according to the Office of Civil Rights (OCR) under Health and Human Services.

And this year will be a record breaker for hacking.

As required by section 13402(e)(4) of the HITECH Act, the HHS Secretary must post a list of breaches of unsecured protected health information affecting 500 or more individuals. These breaches are now posted in a new, more accessible format that allows users to search and sort the posted breaches. By clicking the “Breach Submission Date” button on the top of the list, the breaches will be listed in reverse date order with the most recent shown at the top.

This HHS list shows 297 health information data breaches in 2016 as of December 7. Both large and small providers are listed.

Noteworthy California hacks include Kaiser Permanente Health Plan Inc, of both Northern and Southern California. It reports being hacked on November 11, 2016 as a result of unauthorized access of a network server. The USC Keck and Norris Hospitals reported a network server hack on September 21, 2016.

WCAB Panel Affirms “Untimely” IMR Decision

The WCAB has issued a number of panel level decisions since SB 863 eroding the jurisdiction of the UR and IMR process for technical mistakes that were claimed to have “invalidated” the process. These cases favored handing the issue of appropriate medical treatment over to the WCJ to decide. As a result UR/IMR seemed to be subjected to a slow death by a thousand such cuts.

However, the trend of erosion of UR/IMR jurisdiction may have suffered a setback at the hands of a June 2016 Court of Appeal published decision that has now been followed in at least one subsequent panel decision.

In the precedent setting case, Dorothy Margaris appealed the IMR determination to the appeals board. She argued argued that the IMR determination was invalid because Maximus failed to issue it within the 30-day time period . The judge agreed the IMR determination was issued 13 days late, but nevertheless found the determination was valid and binding on the parties, concluding that an untimely IMR determination “does not confer jurisdiction on the [workers’ compensation judge] to decide any medical treatment issues.”

A majority of the three-member panel agreed with applicant and went on to find, contrary to the IMR determination, that the proposed treatment was supported by substantial medical evidence and was consistent with the treatment schedule promulgated by the director. One member of the panel dissented, and would have found that the IMR determination, though untimely, was valid and binding on the parties.

But the Court of Appeal intervened, disagreed with the WCAB and reversed in the published case of California Highway Patrol and SCIF v WCAB (Margaris).

The Court of Appeal ruled that the 30-day time limit in section 4610.6, subdivision (d), is directory and, accordingly, an untimely IMR determination is valid and binding upon the parties as the final determination of the director. The Court of Appeal interpretation of the statute in this manner is consistent with long-standing case law regarding the mandatory-directory dichotomy, and implements the Legislature’s stated policy that decisions regarding the necessity and appropriateness of medical treatment should be made by doctors, not judges.

Shortly after Magaris was decided, the WCAB reviewed the case of Christopher Tyni v City of Montebello. Tyni sustained industrial injury to his right knee while employed by the City as a Police Officer.

He sought reconsideration of the Findings And Order of the WCJ, who found that the Independent Medical Review (IMR) in this case was “untimely,” but that the untimely IMR determination “does not confer jurisdiction on the WCJ to decide any medical treatment issues.”

The panel affirmed that the “WCAB has no authority to determine the treatment dispute because the time periods for completion of IMR contained in Labor Code section 4610.6(d) are directory not mandatory, and the IMR determination in this case is valid and binding upon applicant even though it issued outside the time described in the statute.1 (California Highway Patrol v. Workers’ Comp. Appeals Board (Margaris) (June 22, 2016, No. B269038) _Cal.App.4th_ [2016 Cal. App. LEXIS 491] (Margaris).”

California Settles With Bristol-Myers Squibb

California Attorney General Kamala D. Harris announced that California, along with 42 other states and the District of Columbia, has reached a $19.5 million agreement with biopharmaceutical company Bristol-Myers Squibb over allegations that the company illegally marketed the popular atypical antipsychotic drug Abilify. Harris secured $1.3 million of the overall settlement for California.

In 2009, California and other states launched a multistate consumer protection investigation of Otsuka America Pharmaceutical, Inc., which manufactures Abilify, and Bristol-Myers Squibb, which is largely responsible for promoting Abilify.

Abilify is approved to treat schizophrenia, bipolar disorder, major depressive disorder and Tourette’s disorder in adults and children, but Bristol-Myers Squibb (BMS) allegedly prescribed its block-buster drug to treat elderly patients with dementia and for unapproved uses on children.

The Abilify complaint claims BMS promoted the drug off-label (not FDA approved) starting in 2002 for use in the elderly with symptoms consistent with dementia and Alzheimer’s disease. The drug had no clinical trials to establish its safety and efficacy for those uses. In 2006 a black box warning was added to the label, stating that that elderly patients with dementia-related psychosis who are treated with antipsychotic drugs have an increased risk of death.

Since its FDA approval in 2002, Abilify was given to more than 24 million patients. It brought in more than $6.4 billion in revenues for Bristol Myers and the manufacturers – Otsuka America Pharmaceutical Inc., and Otsuka Pharmaceutical Co. Ltd. (In April 2015 the FDA approved the first generic versions of Abilify, generic aripiprazole).

The complaint alleges Bristol-Myers Squibb promoted Abilify for use in elderly patients with symptoms consistent with dementia and Alzheimer’s disease despite the lack of FDA approval for these uses, and without first establishing the drug’s safety and efficacy for those uses.

In 2006, Abilify received a “black box” warning stating that elderly patients with dementia-related psychosis who are treated with antipsychotic drugs have an increased risk of death.

The complaint also alleges the company promoted Abilify for use by children, which was not approved by the FDA.

The complaint also alleges Bristol-Myers Squibb minimized and misrepresented risks, thereby making false and misleading representations about Abilify’s risks.

The complaint alleges the company overstated the findings of scientific studies by not revealing limitations that would affect the interpretation of study results.

Bristol-Myers Squibb’s marketing of any formulation containing the active ingredient aripiprazole will be restricted by the terms of the settlement.

The company will be prohibited from making false or misleading claims about Abilify, about its safety or efficacy in comparison with other drugs, and about the implications of clinical studies relating to the drug.

The company also will be subject to limitations on financial incentives to sales representatives and health care providers, dissemination of information that may promote off-label use of Abilify, and other practices affecting off-label promotion.

How to Hold a PTP Accountable for a Result

The workers’ compensation industry is always interested in better medical outcomes for injured workers. What is difficult is to set standards for what measures and quantifies a better outcome.

Holding a treating physician accountable for a treatment outcome starts and ends with a competent outcome measure used throughout the treatment process. In scientific terms, this is know as the “pre-test” and “post-test” assessment model. Simply stated, measure the attributes to be treated before anything is done. Then perform the medical or surgical intervention. Then measure the outcome to see if it worked. In this way you can circumvent vague generalized sweeping medical chart entries like “the patient came in today much improved” and replace that with competently measured data.

Orthopaedic surgeons traditionally rely on X-rays, MRI, CT scans, physical measurements, and functional tests for patient outcomes assessments, but this is changing thanks to new technology that communicates ongoing, real-time outcomes feedback from patients, according to research published in the Journal of the American Academy of Orthopaedic Surgeons (JAAOS).

Two studies described the benefits of the National Institutes of Health (NIH) Patient-Reported Outcomes Measurement Information System (PROMIS) to objectively and quantifiably assess and track patient symptoms over time. PROMIS also evaluates the impact of surgical and nonsurgical interventions using the same system to compare and contrast treatment options.

“Orthopaedic surgeons are interested in accurately measuring the outcomes of our treatments,” said Alpesh A Patel, professor of orthopaedic surgery at Northwestern University School of Medicine, in a companion editorial. “Of all the advances in our profession in the last 20 years, one of the most important has been the renewed focus on our patients and their own interpretations of their care.”

New PROMIS approaches apply principles of item-response theory, which allows for reliable and efficient estimation of underlying health traits to assess physical function in the upper and lower extremities. The system fosters shared physician-patient decision making and is proving superior to legacy measures. It has been validated in patient populations with orthopaedic disorders of the foot and ankle, upper extremity, and spine.

Until now, patient outcomes scores were evaluated almost exclusively for research purposes, but the data are becoming more valuable in helping doctors and patients assess clinical progress and recovery from surgery. Typically, patients answer surveys in the doctor’s office on iPads and their responses go to a data warehouse for scoring and near-immediate transmission to the physician.

“The data we receive from patients reporting on their pain, level of disability, daily function, and overall quality of life can be compared with hundreds of other patients with the same disease or injury,” said Darrell Brodke, coauthor of one of the studies and professor and vice chair of the Department of Orthopaedics at University of Utah School of Medicine. “So the conversation with patients would be: ‘This is where you’re at now and here is where we expect you to be.'”

Brodke added that use of patient-reported outcomes data is expanding rapidly in orthopaedic practices for tracking and assessing patient progress following surgery and also for determining whether surgery is the most appropriate option.

“PROMIS is our best path forward for capturing high-quality, meaningful information for our patients,” noted Dr. Patel. “PROMIS will be the new standard of patient-reported outcome measures and should be incorporated into orthopaedic research moving forward. How we define success and value will continue to evolve, but patients’ perspectives on their care should remain at the centre of our discussions.”

Study Confirms SB 863 Medical Cost Savings

California Senate Bill (SB) 863, signed into law in 2012, may have contributed to decreases in medical payments per workers’ compensation claim in 2013 and 2014, according to CompScope – Medical Benchmarks for California, 17th Edition, a study by the Workers Compensation Research Institute (WCRI).

According to the study, medical payments per claim in California decreased 4 percent in 2013 and then 3 percent in 2014 for claims with more than seven days of lost time at 12 months of experience, mainly driven by decreases in payments per claim for nonhospital services.

“California’s experience differed from most of the other 17 states WCRI studied since in many states, medical payments per claim grew from 2012 to 2014,” said Ramona Tanabe, WCRI’s executive vice president and counsel. “The decrease in medical payments per claim in California likely reflects the impact of SB 863 provisions.”

Effective January 2013, SB 863 reduced the fee schedule rates for services at ambulatory surgery centers (ASCs). Following this policy change, the average ASC facility payment per claim decreased 27 percent from 2012 to 2014, according to the study. Future WCRI studies will continue to monitor the full impact of SB 863.

Starting in 2014, the law began phasing in the use of a fee schedule based on Medicare’s resource-based relative value scale (RBRVS) for professional services over a four-year period. WCRI reported that prices paid for primary care services increased while prices paid for specialty care decreased in 2014 and 2015. These changes are consistent with the policy goal.

Other reform provisions that may have contributed to decreases in medical payments per claim include eliminating separate reimbursement for implantable medical devices, hardware, and instruments for spinal surgeries; requiring a $150 fee to file liens against an employee’s workers’ compensation benefits and a $100 activation fee for liens already filed; and establishing an independent medical review (IMR) process.

Among other study findings:

1) California had higher medical payments per claim compared with many other study states.

2) Payments per claim for hospital services remained stable from 2009 to 2014 in California.

WCRI studied medical payments, prices, and utilization in 18 states, including California, looking at claim experience through 2015 on injuries that occurred mainly in 2009 to 2014. WCRI’s CompScope Medical Benchmark studies compare payments from state to state and across time. Copies of this report can be ordered from the WCRI web site.

The Cambridge-based WCRI is recognized as a leader in providing high-quality, objective information about public policy issues involving workers’ compensation systems.

Congress Overwhelmingly Passes New FDA Overhaul

The Senate voted overwhelmingly to support sweeping legislation that will reshape the way the Food and Drug Administration approves new medicines. It will also provide funding for cancer and Alzheimer’s research, help fight the opioid epidemic, expand access to mental health treatment and advance research into precision medicine.

According to Reuters Health, the 21st Century Cures Act was passed last week by the House of Representatives and will now go to President Barack Obama to sign into law. Supporters say it will speed access to new drugs and devices, in part by allowing clinical trials to be designed with fewer patients and cheaper, easier-to-achieve goals.

“For the second consecutive year, the Senate is sending the President another Christmas miracle for his signature,” Senator Lamar Alexander, a Republican from Tennessee said in a statement. “Last year, it was the Every Student Succeeds Act, and this time, it’s the 21st Century Cures Act – a bill that will hbelp virtually every American family.”

Critics of the legislation say it gives massive handouts to the pharmaceutical industry and will lower standards for drug and medical device approvals.

“This gift – which 1,300 lobbyists, mostly from pharmaceutical companies, helped sell – comes at the expense of patient safety by undermining requirements for ensuring safe and effective medications and medical devices,” consumer watchdog Public Citizen said in a statement.

Democratic Senator Elizabeth Warren was among the handful of senators who voted against the bill, as was independent senator and former Democratic presidential candidate Bernie Sanders. Each decried what they described as big handouts to the pharma industry. Even so the bill passed 94-5. The House passed it by a vote of 392-26.

The $6.3 billion act, sponsored by Republican Representative Fred Upton, authorizes $4.8 billion for the National Institutes of Health and $500 million to the Food and Drug Administration.

It also calls for $1 billion over two years to battle the opioid epidemic. On Tuesday the Drug Enforcement Administration issued a report showing that in 2014 about 129 people died every day as a result of drug poisoning. Of those, 61 percent are opioid or heroin related.

“Opioids such as heroin and fentanyl – and diverted prescription pain pills – are killing people in this country at a horrifying rate,” Acting Administrator Chuck Rosenberg said. “We face a public health crisis of historic proportions.”

The bill also calls for $1.8 billion in funding for Vice President Joseph Biden’s Cancer Moonshot initiative designed to bolster cancer research by reducing bureaucracy and promoting research collaboration.

Critics note that the money described in the bill must be appropriated by separate funding bills and that the money may ultimately never materialize. Yet the changes to the clinical trial process, something long sought by the drug industry, will be set in stone regardless of whether money for the research projects is forthcoming.

Among those changes: Greater prominence will be given to “real world” evidence gathered outside the framework of a randomized, controlled clinical trial, the gold standard for determining whether a drug is safe and effective. Such evidence could be much easier for drug companies to collect.

“The passing of 21st Century Cures Act is a show of extraordinary bipartisan unity after a divisive election that should be celebrated,” said Ellen Sigal, chair of the patient advocacy group Friends of Cancer Research.

Under the Act patient input will be formally incorporated into the FDA’s drug review process.

Funding for the Act will be offset by reductions in some Medicaid payments and through the sale of oil from the Strategic Petroleum Reserve. The White House supports the bill but said earlier it was concerned that draining the Petroleum Reserve “continues a bad precedent of selling off longer term energy security assets to satisfy near term budget scoring needs.”

U.S. Life Expectancy Declines for First Time in 23 Years

Reserving estimates for claims with lifetime awards have been a complex task, and for years the assumption has been that the life expectancy of cliamants will continue to increase, thus requiring higher reserves and ultimately higher claim costs. Similarly, the price for annuities, and Medicare Set Aside trusts have been based upon an assumed life expectancy.

In most of the years since World War II, life expectancy in the U.S. has inched up, thanks to medical advances, public health campaigns and better nutrition and education.

But, according to a study just released by the Centers for Disease Control, last year it slipped, an exceedingly rare event in a year that did not include a major disease outbreak. Other one-year declines occurred in 1993, when the nation was in the throes of the AIDS epidemic, and 1980, the result of an especially nasty flu season. In 2015, rates for 8 of the 10 leading causes of death rose. Even more troubling to health experts: the U.S. seems to be settling into a trend of no improvement at all.

Gender matters: For males, life expectancy fell to 76.3 years from 76.5 years. For women, life expectancy decreased to 81.2, about 0.1 year from 2014.

The culprits for our declining years were increases in mortality from heart disease, chronic lower respiratory diseases, unintentional injuries, stroke, Alzheimer’s disease, diabetes, kidney disease, and suicide. Not surprisingly, that group plus cancer and Alzehimer’s disease make up the top 10 causes of U.S. deaths.

Heart disease and cancer are the runaway top killers. The death rate from heart disease increased almost 1%. The death rate from cancer actually fell 2.7%.

Heart disease rates are probably a function of the U.S. obesity epidemic,  say the obesity epidemic, Donald Lloyd-Jones, head of preventive medicine at Northwestern University’s Feinberg School of Medicine, told the Wall Street Journal. Obesity is blamed for increases in rates of hypertension, diabetes and other heart-related problems.

“We’re reaping what we’ve sown,” Lloyd-Jone said. “It’s a clear causal chain.”

But some researchers are also pointing to upticks in suicides and drug use – particularly among poorer white Americans – as potentially contributing factors. “Clearly, that could be related to the economic circumstances that many Americans have experienced in the last eight years, or so, since the recession,” University of Pennsylvania sociologist Irma Elo told NPR.

The United States ranks below dozens of other high-income countries in life expectancy, according to the World Bank. It is highest in Japan, at nearly 84 years.

It is yet too early to determine if this is a trend, or an anomaly. In either case, claims administrators continue to be caught in the middle in terms of justifying reserve estimates for lifetime awards.