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Tag: 2016 News

DWC Distributes Audit and Enforcement Unit Annual Report

The Division of Workers’ Compensation has posted the 2015 DWC Audit and Enforcement Unit annual report on its website. The annual report provides information on how claims administrators audited by the DWC performed and includes the Administrative Director’s ranking report for audits conducted in calendar year 2014.

The 2015 Audit and Enforcement Unit annual report details the results of audits conducted in 2014 and provides the name and location of each insurer, self-insured employer and third-party administrator audited during that time. This report to the Legislature summarizes audits conducted in accordance with Labor Code §§129 & 129.5 to assure that injured workers, and their dependents in the event of their death, are provided with all benefits due them in an expeditious manner. The audit findings, by law, must detail the number of files audited, the number and type of violations cited and the amount of an undisputed compensation found due and unpaid to the injured worker.

Performance of insurers, self-insured employers, and third party administrators subject to profile audit review and full compliance audit is rated in accordance with the performance standards set annually by the Administrative Director. The DWC Administrative Director’s 2015 Audit Ranking Report lists, in ascending order by performance rating, the administrators audited in calendar year 2014.

The DWC Audit Unit completed a total of 47 profile audit reviews (PAR audits). Of the PAR audits, 46 were routinely selected, and 1 was a target audit, which was conducted based upon failure of a prior audit. Forty audit subjects (85%) met or exceeded the PAR 2014 performance standard and therefore had no penalty citations assessed. Seven audit subjects (15%) failed to meet or exceed the PAR standard, and their audits expanded into a full compliance audit of indemnity claims (FCA stage 1). Three of these audit subjects (43% of those failing to meet or exceed the PAR standard) met or exceeded the FCA 2014 performance standard. The remaining four of the seven audit subjects (57% of those failing to meet or exceed the PAR standard) failed to meet or exceed the FCA 2014 performance standard, and their audits expanded into a full compliance audit of indemnity claims (FCA stage 2) and added a sample of denied claims to be audited.

The DWC Administrative Director’s 2014 Audit Ranking Report (Statewide Exhibit 4) is part of this annual report. The Ranking Report provides the performance ratings for the 47 audit subjects listed in order, from the best to worst performer.

Memorial Service for Barry F. Evans on Friday – Hillside Memorial Park Cemetery

Barry Frank Evans of Hancock Park, CA, passed away peacefully on January 25, 2016 at the young age of 90 years. As a “giant” in the workers compensation legal community, he practiced as a defense attorney representing industry, employers and insurance companies in the defense of industrial injury claims before the Workers Compensation Appeals Board for over 60 years. During his many years of legal practice, he represented large self-insured employers [like Bethlehem Steel, Northrup Corporation and Bank of America], national insurance companies [such as Liberty Mutual , Home Insurance , Homeland Insurance, Fireman’s Fund, Industrial Indemnity; Republic Insurance Company , Tokio Marine and many more] in the California state workers compensation system; shipping and marine-based companies in the defense of Longshore & Harbor Workers’ claims; and esoteric claims under the Defense Base Act arising out of civil activities on military installations throughout the world, especially in the Middle East. For the last ten years of practice, Barry switched sides of the practice, with the urging of his partner, Mark Malter, and represented injured workers in California, for whom he had great compassion.

With respect to advanced educational training, Barry attended Harvard University from 1944 to 1947 as an undergraduate, receiving an Associate Bachelor’s degree. As an involved student, he was a member of Hasty Pudding [the theatrical group at Harvard], and participated in numerous productions. His class and peer group at Harvard included Jack Lemmon, Charlie Chaplin, and Robert Kennedy. At the same time, he enlisted in the U.S. Navy in 1944 as an officer [Lieutenant JG] and served during World War II, remaining in the US Naval Reserves from 1946 through 1959. He attended Boston University School of Law from 1947 to 1949, graduating with an LLB in an accelerated law program. He was admitted to the Massachusetts Bar Association in 1949 and the California Bar in 1953.

His first major employment was with Employers’ Group Insurance Company in 1951 handling insurance claims, and then he commenced the practice of law in January 1953 with the firm of Herlihy & Herlihy in Los Angeles practicing Workers’ Compensation Defense. He later joined Willian T. Hays and John F. McLaughlin establishing a Workers’ Compensation Defense Firm.

Barry was a leader amongst his peers, joining the ranks of historic law firms in the industry. From his original position as an associate with the old firm of Herlihy & Herlihy, he then created his own firms of Hays, Laughlin & Evans, which then morphed into Laughlin, Evans, Dalbey & Cumming and then Evans, Dalbey & Cumming. Barry Evans, Blair Dalbey and Ray Cumming were partners for over 25 years before they brought in some younger attorneys, at which point the law firm developed into Evans, Cumming & Malter, and eventually Evans & Malter. During the growth of Evans, Cumming & Malter, the firm had five offices statewide [from San Diego to San Jose], with 27 attorneys and 89 support staff. Barry Evans was president of the California Workers Compensation Defense Association, and was a frequent speaker for major industry groups, such as California Manufactures Association, California Self-Insureds Association, and the IAIABC [International Association of Industrials Accident Boards and Commissions]. From 1977 through 1986, he authored and recorded audio books for a lecture series on legal developments in workers compensation with Eugene Marias of Rose, Klein & Marias, Charles Lawrence Swezey, and Melvin Witt [founder of the California Worker’s Compensation Reporter (CWCR) for CEB [California’s Continuing Education of the Bar]. Throughout his career, he presented and argued numerous cases before the Workers Compensation Appeals Board, the California Court of Appeal, and the California Supreme Court. It was not uncommon for Barry to be invited by various industry leaders to author amicus [“friend of the court”] briefs on major issues presented to the Supreme Court including the cases of Wilkinson [which established the proper rating of disability for successive injuries]; Hegglin and the cases that challenged the constitutionality of Labor Code Section 5500.5.

However, the lasting impact that Barry Evans has left to this world and upon our memories is not the legal results of his litigation prowess, but rather the depth of human contact with such a loving and caring man. Barry was honored and revered by many, but he was deeply loved by a special few: his dedicated wife, his very special children and grandchildren that he adored; his partner to which he was like a father; his friends who will forever laugh at his jokes and remember his cherubic smile, and the many staff members for whom he cared and gave support. We know that Barry is in heaven looking down upon us all with a loving smile, and a chuckle under his breath.

He is survived by his loving wife of 67 years, Harriett Lillian Evans; children: Joan Mindy Fay and Neil C. Evans; his son David S. Evans predeceased him in 2001; and seven grandchildren: Elliott, Rachael, Andrew, Michael, Ashlyn, Brandon and Brooke. A memorial service will be held at 12:00 noon, Friday, January 29, 2016, at Hillside Memorial Park Cemetery located at 6001 West Centinela Avenue in Culver City, CA; and he shall be laid to rest next to his son, David Evans, and his daughter-in-law, Marsha Evans.

Big Pharma Jumps Into Cloud Based Drug Use Monitoring

Novartis wants every puff of its emphysema drug Onbrez to go into the cloud. The Swiss drugmaker has teamed up with U.S. technology firm Qualcomm to develop an internet-connected inhaler that can send information about how often it is used to remote computer servers known as the cloud.

According to the report in Reuters Health, this kind of new medical technology is designed to allow patients to keep track of their drug usage on their smartphones or tablets and for their doctors to instantly access the data over the web to monitor their condition.

It also creates a host of “Big Data” opportunities for the companies involved – with huge amounts of information about a medical condition and the efficacy of a drug or device being wirelessly transmitted to a database from potentially thousands, even millions, of patients. The potential scale of the so-called “Medical Internet of Things” has not been lost on pharmaceutical and tech firms around the world, both big companies hunting growth and smaller ones looking to provide bespoke products and services.

It has created unlikely alliances. Novartis’ domestic rival Roche has also teamed up with Qualcomm and Danish diabetes drugmaker Novo Nordisk has partnered with IBM on cloud-linked device projects, for example, while healthcare device maker Medtronic is working with a U.S. data-analytics firm Glooko. GlaxoSmithKline, meanwhile, is in talks with Qualcomm about a medical technology joint venture potentially worth up to $1 billion, according to people familiar with the matter.

However, with the opportunity comes risk. Security experts warn that hacked medical information can be worth more than credit card details on the black market as fraudsters can use it to fake IDs to buy medical equipment or drugs that can be resold, or file bogus insurance claims. The U.S. Centers for Disease Control and Prevention estimates there are 35 million U.S. hospital discharges a year, a billion doctor and hospital visits and even more prescriptions, much of which is stored in cloud databases.

Now the “Medical Internet of Things” is introducing more and more web-connected devices into the equation and pushing even more confidential patient data on to the cloud. This is creating potential new opportunities for thieves seeking to penetrate medical companies’ security where they may target names, birth dates, policy numbers, billing data and the diagnosis codes needed to obtain drugs, say experts.

Novartis aims to have its inhaler for chronic lung disease, to be on the market by 2019. Other pharma-tech alliances include Aerocrine and Microsoft, which are working together on a cloud project to analyze data from allergy and asthma patients. Google is, meanwhile, working with French drugmaker Sanofi to collect and analyze information from diabetes sufferers. The U.S. tech giant also has a partnership with Novartis to develop a smart contact lens that can monitor diabetics’ glucose levels.

All the companies involved in such projects say they are going to extreme lengths to protect patients’ data from hackers.

DWC Publishes Reminder to Use New QME Form 105

The Division of Workers’ Compensation sent a reminder email message urging parties to use the revised version of the QME Form 105 that became effective October 1, 2015.

The QME Form 105 is used to request a panel Qualified Medical Evaluator (QME) examination for an unrepresented injured worker. Claims administrators are required to send the current form to injured workers when the claim is disputed or when there is a dispute to the Primary Treating Physician’s report.

The QME Form 105 and instructions for its completion are posted on the DWC website. A Spanish-language version of the form and instructions are also available. The old forms have been removed from the website.

The approved regulations simplified the QME Form 105 for unrepresented injured workers, which must still be mailed to the DWC Medical Unit for processing.

Long-Acting Surgical Opioid Implant May Become Long-Term Comp Cost

An article published in Business Insurance says that a U.S. Food and Drug Administration committee’s vote in favor of approving a long-acting, rod-shaped drug implant to combat opioid addiction could mean added costs for workers compensation payers.

In a 12-5 vote last week, the FDA’s Psychopharmacologic Drugs Advisory Committee approved Probuphine. The implant, by South San Francisco, California-based Titan Pharmaceuticals Inc. and Princeton, New Jersey-based Braeburn Pharmaceuticals, which is surgically inserted under the skin of the arm, can help reduce opioid dependence by delivering a daily dose of buprenorphine for up to six months.

Probuphine is a version of buprenorphine, which federal law classifies as a Schedule III controlled substance. Buprenorphine is a “widely accepted tool to help people taper from opioids” that already is available in tablet and film formulations, Mark Pew, senior vice president at Duluth, Georgia-based medical management company PRIUM, said in an email. “In a perfect world, the buprenorphine is added to discontinue the opioids, and then the buprenorphine is itself discontinued,” Mr. Pew said. “However, since we don’t live in a perfect world, often the buprenorphine stays long-term.”

Titan Pharmaceuticals submitted a new drug application for Probuphine to the FDA in 2012, but the agency decided against approving the treatment since the dose provided was too low to be effective for patients new to buprenorphine treatment. This time around, the advisory committee expressed concerns about whether physicians would be sufficiently trained on surgically inserting the rod, saying “provider qualification and training should be better defined.”

Mr. Pew said the implant could become a “long-term cost consideration” for workers comp payers. “If Probuphine becomes a long-term strategy for pain management, it could be a very expensive addition,” Mr. Pew added. “If all other drugs were tapered appropriately, then the payer may be swapping one cost for another, and that may or may not be a cost-efficient swap.”

The FDA, which is scheduled to make a decision by Feb. 27, isn’t obligated to follow the committee’s recommendation.

Kia Dancing Hamster Convicted of Disability Fraud

The Los Angeles County District Attorney’s Office announced that a 29-year-old man who portrayed a dancing hamster in car commercials pleaded no contest to insurance fraud.

Leroy Barnes, who was arrested in 2014, entered his no contest plea to one count each of insurance fraud and false statements regarding aid. Los Angeles County Superior Court Judge Norm Shapiro immediately sentenced Barnes to 90 days of electronic monitoring. Barnes also was ordered to perform 400 hours of community service and pay more than $24,000 in restitution.

Barnes, best known for playing one of the hip-hop hamsters in the popular Kia car commercials, received disability benefits between September 2010 and September 2011. During that time, Barnes claimed he was not employed but was actually working on the Kia commercials. He is also professionally known by the alternate names: Leroy ‘Hypnosis’ Barnes Jr.; Leroy Barnes Jr.; Leroy ‘Hypnosis’ Barnes; MoWii and the Rej3ctz

Barnes said he was struck and injured by a falling piece of ceiling in June 2010 while dancing for a theatrical production company, He then began receiving disability benefits from the Employment Development Department after seeing a doctor in July 2010. The doctor diagnosed Barnes with a sprain, strain and joint dysfunction of the thoracic spine and irritation to the eye. His disability claim was extended every few months because Barnes continued to say that he was hurt.

However Barnes began dancing intermittently in September 2010 and continued to dance until benefits ended in September 2011. In addition to the Kia commercial, he also worked as a backup dancer for pop stars Madonna, Kelly Rowland and Chris Brown, and a rap group called The Rej3ctz and assisted in recording the song Cat Daddy. During this same timeframe he collected $51,000 in workers’ compensation benefits.

Study Finds Surgeries Under Workers Compensation Have More Than Double Time Off

Receiving Workers’ Compensation benefits has been associated with inferior outcomes after lumbar fusion. The purpose of this new study was to compare the outcomes of cervical disc arthroplasty between patients receiving and those not receiving Workers’ Compensation. The results were published in the Journal of Bone and Joint Surgery.

The researchers examined data on 189 patients who underwent cervical disc arthroplasty; 144 patients received workers’ compensation while 45 did not. The researchers found:

1. The average patient-reported measures were significantly improved one year after surgery for both groups. Workers’ compensation and non-workers compensation groups reported similar outcomes.
2. The rate of operations was similar between the two groups – 7.6 percent received workers’ compensation compared with 13.3 percent of those who didn’t receive workers compensation.
3. The complication rates were similar between the two groups – 2.8 percent for the workers compensation patients compared with 4.4 percent of the non-workers compensation patients.
4. The return to work rate was 77.7 percent for the workers compensation group and 79.4 percent for the non-workers compensation patients.
5. However, the patients receiving workers compensation reported significantly more days off – 145.2 days off – compared with the non-workers compensation patients who took off 61.9 days.

The researchers concluded that after cervical disc arthroplasty, patients receiving Workers’ Compensation had outcomes that were similar to those of patients not receiving Workers’ Compensation in terms of patient-reported outcomes, surgery-related complications, reoperations, and return-to-work status. But, patients receiving Workers’ Compensation remained off work for a longer interval than did patients not receiving Workers’ Compensation.

Court of Appeal Rejects “Daubert” Evidentiary Standard in Comp Death Case

Armando Tavares had been employed by Luis Scattini & Sons for three to four years before his death. He worked as a tractor driver on a seasonal basis and drove a tractor approximately 10 hours a day. Tavares sometimes worked as many as 12 hours a day, and he was a dedicated and conscientious employee.

In 2011 while he was pressure washing the mud off the tractor and disc one morning while at work he told his foreman that he was having chest pain. He asked to use the restroom before he went to the doctor. He went into the portable toilet, but he did not come out. Co workers called 911 and first responders pronounced his death after resuscitation efforts failed. A pathology report indicated he died as a result of ischemic heart disease due to coronary artery atherosclerosis (heart attack due to hardening and narrowing of arteries which supply the heart muscle).

His widow and dependent children were awarded $320,000 in death benefits after a hearing that determined the death was AOE-COE. The WCJ based the finding on the opinion of two doctors who “agree that Mr. Tavares’[s] heart attack was caused by the physical strain he exerted while using the restroom facilities at work.” Reconsideration was denied, and the award was affirmed by the court of appeal in the unpublished case of Star Insurance Company v WCAB and Maria Rosa Tavares.

Star Insurance asserted that this case presents an opportunity for the court to clarify whether workers’ compensation cases are exempt from the higher evidentiary standards set forth in the federal case of Daubert v. Merrell Dow Pharmaceuticals, Inc. (1993) 509 U.S. 579 (Daubert). Petitioner argues that the Daubert standard should be applied generally to workers’ compensation matters and particularly to the medical evidence in this case. The Daubert standard provides a rule of evidence regarding the admissibility of expert witnesses’ testimony during United States federal legal proceedings. The Daubert standard is now the law in federal court and over half of the states. However the much lower Frye standard remains the law in some jurisdictions including California, Illinois, Maryland, New Jersey, Pennsylvania, and Washington.

After noting that the petitioner did not raise this evidentiary issue in its petition for reconsideration, and that Section 5904 provides: “The petitioner for reconsideration shall be deemed to have finally waived all objections, irregularities, and illegalities concerning the matter upon which the reconsideration is sought other than those set forth in the petition for reconsideration.” Accordingly, petitioner may not raise the issue for the first time on in its petition for writ of review. (See Nicky Blair’s Restaurant v. Workers’ Comp. Appeals Bd. (1980) 109 Cal.App.3d 941, 959.)” The court went on to reject this contention on the merits.

“All hearings and investigations before the appeals board or a workers’ compensation judge are governed by [Division 4 of the Labor Code] and by the rules of practice and procedures adopted by the appeals board.” (§ 5708.) The Board and workers’ compensation judges are not “bound by the common law or statutory rules of evidence and procedure . . . .” (Ibid.) Section 5709 provides: “No informality in any proceeding or in the manner of taking testimony shall invalidate any order, decision, award, or rule made and filed as specified in this division. No order, decision, award, or rule shall be invalidated because of the admission into the record, and use as proof of any fact in dispute, of any evidence not admissible under the common law or statutory rules of evidence and procedure.” It is simply not the province of this court to establish evidentiary rules for workers’ compensation proceedings. (Cf. South Coast Framing, supra, 61 Cal.4th at p. 307.)

Owner Operator of Three LA Medical Clinics Goes to Prison

The former owner and operator of three medical clinics located in Los Angeles was sentenced to 78 months in prison for his role in a scheme that submitted more than $4.5 million in fraudulent claims to Medicare.

Hovik Simitian, 48, of Los Angeles, pleaded guilty to one count of conspiracy to commit health care fraud on Aug. 18, 2015, and was sentenced this month by U.S. District Court Judge Beverly Reid O’Connell of the Central District of California, who also ordered Simitian to pay $1,668,559 in restitution to Medicare.

Simitian owned and operated Columbia Medical Group Inc., Life Care Medical Clinic and Safe Health Medical Clinic, three medical clinics in Los Angeles. In connection with his guilty plea, Simitian admitted that from approximately February 2010 through June 2014, he and his co-conspirators paid illegal cash kickbacks to patient recruiters who brought Medicare beneficiaries to the clinics. Simitian also admitted that he and his co-conspirators then billed Medicare for lab tests and other services that were not medically necessary or were not actually provided to the Medicare beneficiaries, which they supported with false documentation they created. Simitian admitted that he submitted a total of $4,526,791 in false and fraudulent claims to Medicare and Medicare paid $1,668,559 on those claims.

The FBI and HHS-OIG investigated the case, which was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office of the Central District of California. Trial Attorneys Blanca Quintero and Alexander F. Porter of the Criminal Division’s Fraud Section are prosecuting the case.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Eileen M. Decker of the Central District of California, Assistant Director in Charge David Bowdich of the FBI’s Los Angeles Division and Special Agent in Charge Chris Schrank of the U.S. Department of Health and Human Services Office of the Inspector General (HHS-OIG) Los Angeles Region made the announcement.

DWC Adjusts OMFS (Physician/Non-Physician Practitioner Services)

The Division of Workers’ Compensation has posted an order adjusting the Official Medical Fee Schedule (OMFS) to conform to changes in the Medicare payment system as required by Labor Code section 5307.1.

The CMS Medicare National Physician Fee Schedule Relative Value File that was initially released for the January 2016 update, and which was adopted by the Administrative Director’s order of November 30, 2015, has been revised by CMS to correct technical errors. The Administrative Director has adopted the revised RVU file for services rendered on or after January 1, 2016.

The Administrative Director has also adopted and posted the monthly Medi-Cal rates file update for physician-administered drugs, biologicals, vaccines or blood products, effective for services rendered on or after January 15, 2016.

The order adopting the updates, the text of regulations, and the Medi-Cal rates file can be found on the DWC website.