Tag: 2017 News

Daniel Ramirez sustained an injury to his lower leg and ankle in the course of his job as an office assistant for the State Department of Health Care Services. The claims were administered by the State Compensation Insurance Fund.

Ramirez settled his case by stipulations providing him with further medical treatment for the injury. The treatment included a gym/swim membership, and, over the course of about one and a half years.

His physician prescribed another 12 sessions of acupuncture. The utilization review recommended that the requested treatment be denied. Ramirez appealed the utilization review denial under the independent medical review process. IMR upheld the UR decision.

Ramirez appealed the decision of the independent medical review to the Board. The grounds for the appeal were that the independent medical reviewer “may have been subject to a material conflict of interest that is in violation of Section 139.5,” and the “determination may have been the result of bias on the basis of race, national origin, ethnic group identification, religion, age, sex, sexual orientation, color, or disability.”

Ramirez wanted discovery to determine whether the doctor performing the independent medical review was biased or had a conflict of interest. He also raised constitutional violations regarding the UR/IMR process which were beyond the jurisdiction of the WCAB. The appeal was taken off calendar pending resolution of the constitutional issues.

Ramirez filed a petition for writ of review with the Court of Appeal. His constitutional challenges were rejected in the published case of Ramirez v WCAB.

The Court concluded that the Board had no jurisdiction to review a utilization review that was alleged to be defective for failure to follow the medical treatment utilization schedule. Whether the utilization review followed the medical treatment utilization schedule is directly related to a determination of medical necessity. By statute, a review of a determination of medical necessity is limited to the medical professionals performing the independent medical review.

On the constitutional challenges, the Court affirmed the prior decision of Stevens v. Workers’ Comp. Appeals Bd. (2015) 241 Cal.App.4th 1074 on these issues.

Safety violations citations issued to staffing firm Barrett Business Services following a September 28, 2011 carbon monoxide warehouse incident in Anaheim that sent eight temporary workers to the hospital were upheld by the Occupational Safety and Health Appeals Board (OSHAB).

For months prior to the incident, the workers contracted by Barrett Business Services to package fruits and nuts in L&L Foods’ warehouse in Anaheim had complained to their supervisor that they were experiencing headaches, nausea and other health issues caused by forklifts operating in an enclosed area with poor ventilation. Neither the Ontario-based staffing company nor host employer L&L Foods took any action.

On the day of the incident, a forklift driver became ill and was hospitalized for carbon monoxide (CO) poisoning, while seven other workers were taken to the hospital for treatment.

Cal/OSHA tested the facility and found the workers were exposed to CO levels of 250-350 parts per million, which exceeded the ceiling limit of 200 parts per million. Following an investigation, Cal/OSHA issued citations in 2012 to both Barrett Business Services and L&L Foods for numerous safety violations, including willful violations for failing to take action on known hazards.

Both employers filed appeals protesting the citations; L&L Foods settled its case on April 22, 2013. Following a lengthy appeal process that started in 2013, an administrative law judge last April denied Barrett’s appeal and imposed total civil penalties of $80,050.

Barrett objected to the appeal decision and on August 29, 2016, filed a petition for reconsideration with the Appeals Board.

The Board rendered its decision last December, citing evidence gained from Cal/OSHA’s investigation that the employer did not properly train its employees, disregarded workers’ reports of health hazards and failed to monitor the worksite.

The evidence revealed that L&L Foods had sealed all of the vents at the facility to prevent vermin from entering the establishment. Barrett did not assess the safety conditions for the enclosed environment, failed to control the increased carbon monoxide levels in the workplace and continually disregarded worker’s reports of headaches and nausea from the fumes.

The citations issued included three violations for one general, one willful general and one willful serious category violation. A willful violation is cited when the employer is aware of the law and violates it nevertheless, or when the employer is aware of the hazardous condition and takes no reasonable steps to address it.

A serious violation is cited when there is a realistic possibility that death or serious harm could result from the actual hazard created by the violation.

A general violation is cited when an accident or occupational illness resulting from violation of a standard would probably not cause death or serious physical harm, but would have a direct or immediate relationship to the safety or health of employees.

Peter Sylves was employed by the County as a deputy sheriff. He took a service retirement and then worked for the Pauma Police Department on a reservation belonging to the Pauma Band of Luiseno Indians.

He filed an application for adjudication of claim on July 16, 2014. He claimed a continuous trauma for “hypertension, GERDS [gastroesophageal reflux disease], left shoulder, low back and both knees.”

After a hearing, the WCJ issued his findings of fact. Under the heading titled “Statute of Limitations,” he found: “Pursuant to Labor Code section 5500.5, applicant’s continuous trauma is limited to the last year of injurious exposure, even if it is with the Pauma Tribal Police.” The WCJ found that Sylves’s knee and left shoulder injuries, his GERDS, and his sleep disorder were not compensable injuries arising in and out of employment. However, he also found that Sylves’s hypertension and back injury were compensable and arose from employment with the County.

Both parties requested reconsideration. An opinion and decision after reconsideration found “substantial medical evidence support[ing] industrial injury to [Sylves’s] left shoulder, bilateral knees, GERD and sleep disorder.”

With respect to the statute of limitations, the WCAB explained that the time in which to file a claim did not begin to run until a doctor told him the symptoms for which he had been receiving treatment were industrially related; since medical confirmation did not occur until 2013, Sylves’s 2014 application was timely. The WCAB further found that section 5500.5 “is not a Statute of Limitations but provides for a supplemental proceeding in which multiple defendants have an opportunity to apportion liability.” Finally, it agreed with Sylves that section 5500.5 cannot limit liability to the Pauma Police Department in this case because the WCAB lacks jurisdiction over the tribe.

The Court of Appeal granted review  in the published case of County of Riverside v WCAB and Peter Sylves in order to provide better clarity regarding the application of section 5500.5. It affirmed the WCAB decision after reconsideration.

Limiting the liability of the defendants in a workers’ compensation case is not the same as prescribing the time in which that case can be filed. Since neither the language nor the history of section 5500.5 evidences a concern with the limitations period for filing an application for workers’ compensation benefits, the court rejected the County’s suggestion that the WCAB violated section 5500.5(a) when it found Sylves’s claims to be timely. Section 5500.5(a) does not relate to the statute of limitations for filing an application for adjudication of benefits.

Section 5500.5(a) provides that “In the event that none of the employers during [last year] of occupational disease or cumulative injury are insured for workers’ compensation coverage or an approved alternative thereof, liability shall be imposed upon the last year of employment exposing the employee to the hazards of the occupational disease or cumulative injury for which an employer is insured for workers’ compensation coverage or an approved alternative thereof.”

The WCAB lacks jurisdiction over federally recognized Indian tribes. The fact that the Pauma Police Department is not subject to the WCAB’s jurisdiction means the department was not “insured for workers’ compensation coverage or an approved alternative thereof.” Consequently, liability is imposed on the next employer in line that had workers’ compensation insurance. In this case, that employer is the County.

A legal battle has pitted a major national insurer and its pharmacy benefit manager (PBM) against each other in dueling legal actions in litigation that seeks class action status that could include tens of thousands of claimants.

Anthem is one of the nation’s largest health insurers with more than 38 million members. Express Scripts handled more than 175 million claims for Anthem in 2015 alone, according to the complaint.

The saga starts when Anthem sued Express Scripts last March, accusing it of excessive pricing and operational failures. It also sought the right to terminate its 10-year contract with Express Scripts, which began in 2009.

Express Scripts was contracted as Anthem’s exclusive provider of PBM services for Anthem-administered health insurance plans for a ten year period. Part of the agreement was a “periodic pricing review” to ensure that Anthem was receiving competitive benchmark pricing for drugs. However, when Anthem engaged Health Strategy, LLC. as a private consultant to conduct a comprehensive market analysis Anthem discovered that Express Scripts did not provide competitive benchmark pricing.

Based on the Health Strategy’s analysis, ESI’s current pricing to Anthem exceeded competitive benchmark pricing by more than $3 billion annually, and $13 billion over the remaining term of the Agreement. This was the basis of the March Anthem v Express Scripts litigation.

In its counterclaims against Anthem, Express Scripts said the insurer rejected several proposals to renegotiate prices. In addition, Express Scripts’ legal document says Anthem was offered a choice of “less money up front but lower pricing” or a bigger upfront payment “with higher pricing for Express Scripts’ services.”

It chose the higher prices over the course of the contract in exchange $4.6 billion more in upfront fees, according to the PBM’s counterclaim. That money, Express Scripts’ documents allege, was then used by Anthem to buy back its own stock, rather than passing it along to health plan members. The stock buyback “applied upward pressure to Anthem’s stock price, thereby enriching shareholders and management,” the filing alleges.

Two months later, two health plan participants sued both companies under the Employee Retirement Income Security Act challenging Express Scripts’ alleged overbilling.

Express Scripts Inc. and Anthem Inc. are accused in a proposed class action of breaching their ERISA fiduciary duties by entering into the 10-year, multibillion-dollar prescription-drug agreement that caused plan participants to overpay for benefits ( Burnett v. Express Scripts, Inc. , S.D.N.Y., No. 1:16-cv-04948, complaint filed 6/24/16 ). “This action seeks to recover losses suffered by the plaintiffs…who overpaid and continue to overpay for the portions of the costs of prescription drugs…they are responsible for paying as plan participants,” says the lawsuit.

Express Scripts spokesman David Whitrap said the firm denies “the allegations and will defend ourselves vigorously.” Anthem, too, denied the allegations and said it would fight the charges. However, the “denied” allegations echo those in Anthem’s March lawsuit against Express Scripts, and counterclaims filed shortly thereafter by Express Scripts against Anthem.

The court has not yet decided if the suit will have class action status.

The federal judge has dismissed two of the six counterclaims that Express Scripts raised in Anthem $15 billion lawsuit. In a decision recently made public, U.S. District Judge Edgardo Ramos in Manhattan dismissed Express Scripts’ claim that Anthem breached an implied covenant of good faith and fair dealing, saying it duplicated a breach of contract claim. He also dismissed an unjust enrichment claim filed by Express Scripts.

Express Scripts has contracts with insurers and other administrators of workers’ compensation benefits in California. It is unclear if any of Anthem’s allegations apply to any of the California workers’ compensation pharmacy benefit contracts.

A Maine woman has filed suit in federal court against a California security services firm, saying the company retaliated against her when she complained about allegedly illegal acts being committed by one of its executives, Ousama Karawia.

Karawia was convicted in Los Angeles in 2012 for grand theft, insurance fraud and possession of an assault weapon for offenses committed at a security service he co-owned at the time that had provided security for sites in California and the Statue of Liberty in New York.

He was found guilty in 2012 of setting up a shell company to hide the true number of his employees as a way to avoid paying higher workers’ compensation premiums.

The trial court sentenced Karawia to five years in state prison on the fraud by misrepresentation count, suspended execution of that sentence, and placed him on probation for a period of five years on the condition that he serve 240 days in custody, which could be served by electronic monitoring.

According to the report in the Portland Press Herald, Pamela Treadwell, who worked for Vescom from 1988 until she resigned in March 2014, said in court documents that many of the problems began when Vescom, her employer, hired a man named Ousama Karawia to help with management of the firm.

Vescom is a part of Worldwide Sourcing Group, or WWSG, which also owns the security firms Vets Securing America, American Guard Service and Professional Building Maintenance, a property management company. The company says it is one of the largest privately owned security firms in the country.

Vescom had an office in Hampden Maine that has since been closed, and the company is now based in California. Treadwell’s lawsuit was filed in Maine state court and subsequently moved to the U.S. District Court in Portland because Vescom is located out of state.

According to the 2017 lawsuit, Karawia allegedly committed insurance fraud while at Vescom by getting a policy that covered employees of WWSG’s other companies at a low rate, but using Vescom’s claims history rather than the higher claims rate of the other companies.

Treadwell said in the lawsuit that she told the company’s owners that Karawia was getting kickbacks from the insurer and that having him involved in the company ran afoul of state licensing regulations that bar felons from having management positions in a security firm. Karawia had of course been convicted in the above California criminal case before he was hired at Vescom, and his appeal of his sentence was turned down by the California Court of Appeal in 2014.

After forwarding those concerns to the company’s owners, the lawsuit claims, Treadwell was shunned by the top management in the company and told she had to pay for insurance coverage for her husband on her employer-provided health care policy at a cost of $7,800 a year.

Finally, Karawia moved money out of the company’s payroll account, meaning that employees’ checks would bounce, according to the lawsuit. Treadwell said Karawia reminded her that as the company vice president, her name was on the checks, suggesting she might be liable if they bounced.

At that point, Treadwell said she resigned so as not to be implicated in the check-bouncing and accused of submitting false documents to state regulators.