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Tag: 2017 News

DWC Sets QME Examination Next April

The Division of Workers’ Compensation will administer the next Qualified Medical Evaluator (QME) Competency Examination on Saturday, April 29, 2017.

Physicians who wish to take the exam on that date must submit a completed original Application for Appointment as Qualified Medical Evaluator (QME Form 100). Send all documentation/fees required and complete the Registration for the QME Competency Examination (QME Form 102).

The application and all required documentation must be reviewed and approved by the DWC before a physician can be registered for the exam (Title 8, California Code of Regulations §§10, 11). The application must be postmarked by March 16, 2017 in order to qualify for this exam. Qualified registrants will receive a confirmation letter along with a Candidate Information Booklet by email/mail. The DWC is not responsible for late or lost applications.

All physicians are required to pay a non-refundable/non-rollover $125.00 fee to sit for any upcoming QME examination (Title 8, California Code of Regulations § 11(f)(2)). Before appointment as a QME, the physician shall complete a 12 hour course in disability evaluation report writing approved by the Administrative Director (Labor Code § 139.2). The DWC will assess the annual QME fee after the candidate has successfully passed the QME Competency Exam in order to activate the QME status.

The primary purpose of this examination is to demonstrate the competence of a physician in evaluating medical issues in the workers’ compensation system and to evaluate competency with respect to current California Workers’ Compensation System terminology, laws, rules, regulations, and medical-legal procedures. The examination is designed to ensure that there is a commonly understood body of knowledge and common language for QMEs which will increase the probability of ratable and impartial medical/legal evaluations of injured workers in California.

The test questions are now organized into four categories:

1) Clinical Assessment/Evaluation and Medical Treatment
2) Disability Issues/QIW/Vouchers/P&S
3) Causation and Apportionment
4) .Basic Laws and Regulations and Report Writing Elements

Candidates will not be asked any questions that assess specific knowledge of medical treatment (e.g., psychology, orthopedics). However, candidates should be familiar with the existence of the DWC evaluation guidelines and AMA Guides.

Please call 1-800-794-6900 or (510) 286-3700 or email for further assistance. For additional information regarding the qualifications to become a QME, please visit the DWC website.

POTUS Meets with Drug Company CEOs

President Trump on Tuesday told a group of drug company executives gathered for a meeting at the White House that they need to “get prices down.”  Trump has been a critic of high drug prices, and has endorsed measures like allowing Medicare to negotiate prices.

But the president also called for reducing regulations to allow for faster approvals of new drugs and to allow drug companies to bring jobs back to the U.S.  “We’re going to be cutting regulation at a level nobody’s ever seen before,” Trump said in the meeting with executives.

“You can’t get approval for the plant and then you can’t get approval to make the drug, other than that you’re doing fantastic,” he said.  

Trump called drug prices “astronomical.”  “U.S. drug companies have produced extraordinary results for our country, but the pricing has been astronomical for our country,” he said.

Still, he also offered to make the Food and Drug Administration’s approval of new drugs “much faster.”

Executives from Merck, Johnson & Johnson, Celgene, Amgen, Eli Lilly, and the PhRMA trade group joined Trump at the meeting. House Energy and Commerce Chairman Greg Walden (R-Ore.) was also on hand.

The Pharmaceutical Research and Manufacturers of America (PhRMA), the main lobbying group for the drug industry,  described the White House meeting as positive and productive. “Our industry takes seriously the concerns raised about the affordability and accessibility of prescription medicines, and we have expressed our commitment to working with the administration to advance market-based reforms,” said Stephen Ubl, PhRMA’s president and CEO, in a statement.

“The current system needs to evolve to enable the private sector to lead the move to a value-driven health care system. To do this, we need to reform existing laws and regulations that are currently preventing private companies from negotiating better deals and paying for medicines based on the value they provide to patients and our health care system.”

Trump’s calls for government action to address drug prices could face resistance in a Republican-controlled Congress that is far less willing to take action on drug prices than he appears to be.

At the meeting on Tuesday, Trump also spoke out against what he called “price-fixing” in Medicare. “I’ll oppose anything that makes it harder for smaller, younger companies to take the risk of bringing their product to a vibrantly competitive market,” Trump said. “That includes price-fixing by the biggest dog in the market, Medicare, which is what’s happening. But we can increase competition and bidding wars, big time.”

Trump slammed drug companies at a press conference earlier this month, declaring they are “getting away with murder.”

“Pharma has a lot of lobbies, a lot of lobbyists, a lot of power. And there’s very little bidding on drugs,” he said.

“We’re the largest buyer of drugs in the world, and yet we don’t bid properly and we’re going to start bidding and save billions of dollars over a period of time.”

2016 Claim Audit Penalties Were Nearly $1.5 Million

The Division of Workers’ Compensation has posted the 2016 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 2015.

The annual report details the results of audits conducted in 2015 and provides the name and location of each insurer, self-insured employer and third-party administrator audited during that time.

As a result of PAR/FCA audits conducted during calendar year 2015, the Audit and Enforcement Unit found and cited 5,255 violations against claims administrators, with administrative penalties totaling $1,476,147.00. Not all administrative penalties are subject to collection. Under the Labor Code, no penalties are assessed on those “cited” violations unless the audit subject fails the audit at a specific level.

This report to the Legislature summarizes audits conducted in accordance with Labor Code §§129 and 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.

The DWC Administrative Director’s 2016 Audit Ranking Report lists, in ascending order by performance rating, the administrators audited in calendar year 2015. 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 Audit and Enforcement Unit completed a total of 43 profile audit reviews (PAR audits). Compliance officers audited 2729 claim files.Thirty-five audit subjects (81%) met or exceeded the performance standard and therefore had no penalty citations assessed.

Congratulations to all who passed the audit. The following were the top 10 who easily exceeded the PAR Standard set for the year.

1) Schools Insurance Authority \ Sacramento
2) Keenan & Associates \ Pleasanton
3) Warner Bros. Studio Facilities \ Burbank
4) RICA and RICC \ Encino
5) Zenith Insurance Company \ San Diego
6) TriStar Risk Management \ Fresno
7) U.S. Concrete \ San Jose
8) Intercare Holding Insurance Services, Inc. \ Orange
9) Solar Turbines, Inc. \ San Diego
10) Tokio Marine & Nichido Fire Insurance Company \ Pasadena

At the other end of the list, eight audit subjects (19%) failed to meet or exceed the PAR standard, and their audits expanded into a full compliance audit of indemnity claims. Six of the eight audit subjects failed to meet or exceed the FCA 2015 performance standard. These audit subjects were assessed administrative penalties for all penalty citations.

Campus Monitor Gets 30 Days in Fraud Case

The Stanislaus County District Attorney’s Office announced the conviction of a Stanislaus Union School District employee for workers’ compensation insurance fraud.

John Heaton was employed as a campus monitor for the district and reported an on the job injury in November 2015. Heaton filed a workers’ compensation claim and as a result, received medical treatment and workers’ compensation benefits.

During a subsequent investigation, it was alleged Heaton presented false statements and material misrepresentations during a meeting with the school district’s Return to Work Specialist. Heaton misrepresented facts as it related to his physical abilities and limitations associated with his injury.

On January 23, 2017, Heaton pleaded no contest to Insurance Fraud, in violation of Insurance Code section 1871.4(a)(2), as a felony, in that he unlawfully and knowingly made a false and fraudulent material statement in support of obtaining workers’ compensation insurance benefits.

He was sentenced to 30 days jail, three years formal probation and ordered to pay restitution in the amount of $8,341.66 for reimbursement of workers’ compensation benefits and investigation costs.

This case was a joint investigation by Probe Information Services, the California Department of Insurance, Fraud Division and the Amador County District Attorney’s Workers’ Compensation Fraud Unit.

The Fraud Unit investigates insurance fraud cases in Amador, Stanislaus and Calaveras Counties through a grant provided by the California Department of Insurance.

FDA Expedites Drug Approvals – Hey, Not So Fast!

In one of his last acts of 2016, President Obama signed into law the largest piece of healthcare legislation since the Affordable Care Act. The law – known as the 21st Century Cures Act – has the potential to invigorate medical research, promote innovation and speed the development and FDA approval of new treatments for cancer and other chronic diseases.

It also has the potential for increasing the risk of taking medications – including death. Not long ago, the risks were put into perspective in a controversial article.

The Journal of the American Medical Association published a landmark review by Dr. Barbara Starfield (Johns Hopkins School of Public Health), “Is US health really the best in the world?” In it, Starfield revealed what many people inside the medical establishment already knew: every year, like clockwork, the medical system was killing huge numbers of people.

Each year in the U.S., as Dr. Starfield reported, there are:

1) 12,000 deaths from unnecessary surgeries;
2) 7,000 deaths from medication errors in hospitals;
3) 20,000 deaths from other errors in hospitals;
4) 80,000 deaths from infections acquired in hospitals;
5) 106,000 deaths from FDA-approved correctly prescribed medicines.

The total of medically-caused deaths in the U.S. every year is 225,000. (a conservative estimate)

This makes the medical system the third leading cause of death in America, behind heart disease and cancer.

In the wake of Starfield’s devastating report, other facts came to light: 2.1 million people in America, every year, are hospitalized as a result of reactions to FDA-approved medicines. Annually, 36 million serious adverse reactions to those drugs occur.

Since the FDA approves every medical drug given to the American people, and certifies it as safe and effective, how can that agency remain calm about the fact that these medicines are causing 106,000 deaths per year? Dr. Starfield answered this question in an email interview.

“Even though there will always be adverse events that cannot be anticipated, the fact is that more and more unsafe drugs are being approved for use. Many people attribute that to the fact that the pharmaceutical industry is (for the past ten years or so) required to pay the FDA for reviews [of its new drugs]—which puts the FDA into an untenable position of working for the industry it is regulating. There is a large literature on this.”

Can you offer an opinion about how the FDA can be so mortally wrong about so many drugs? “Yes, it cannot divest itself from vested interests. (Again, [there is] a large literature about this, mostly unrecognized by the people because the industry-supported media give it no attention.)”

Perhaps the public and claims administrators should approach the use of newly expedited FDA approved medications with an abundance of caution.

Fibromyalgia in Men: Symptoms and Treatment

Fibromyalgia affects roughly 2 to 8 percent of the United States population. Although 80 to 90 percent of people with fibromyalgia are women, men of all ages may have fibromyalgia as well. In fact, up to 1.5 million men in the U.S. may currently have fibromyalgia, and many more will experience it in their lifetime. And some of these cases may end up part of a worker’s compensation claim.

Some people are at higher risk of developing fibromyalgia than others. And under current law, apportionment of permanent disability may be based upon causation. According to the article in Medical News Today, as well as gender, other risk factors for developing fibromyalgia include the following:

A personal history of other rheumatic diseases including lupus
A history of mood or depressive disorders
A family history of fibromyalgia

A man’s fibromyalgia symptoms may be very different from the symptoms experienced by a woman. Symptoms of fibromyalgia in men may be as widespread as they are in women, but they are often milder and last for less time.

Although they may be milder in men, fibromyalgia symptoms can still range from mild to severe and debilitating. Symptoms will vary from person to person and can include:

Pain and tenderness
Morning stiffness
Irritable bowel syndrome symptoms
Brain fog

In order to be diagnosed with fibromyalgia, a man must experience widespread pain for more than 3 months. This pain must have no known medical cause. A doctor may do blood tests and imaging to rule out other causes. Fibromyalgia symptoms occur in a number of diseases and disorders that doctors will need to rule out.

But, some doctors may think of fibromyalgia as a woman’s condition and not consider fibromyalgia in a man as a viable diagnosis.

FDA Stonewalls Congressional Criminal Investigation

A top U.S. lawmaker accused the Food and Drug Administration of failing to hand over documents that would show whether its criminal office is fulfilling the critical mission of protecting public health.

House of Representatives Energy and Commerce Committee Chairman Greg Walden told Reuters in a statement, that “The FDA’s long-overdue response leaves key questions unanswered about the performance and effectiveness of the FDA’s Office of Criminal Investigations.”

An FDA spokeswoman did not have an immediate comment.

Walden’s comments come about four months after the congressional panel launched an examination into the FDA criminal office and how it was managing cases involving food, drugs and devices.

The review came after Reuters reported that FDA agents were concerned that managers, including former OCI Director George Karavetsos, were forcing them to pursue often toothless cases involving mislabeled foreign-imported injectable drugs, at the expense of cases with more potential to protect the public health.

The agents said they had become the “Botox Police” and were spending hours chasing down doctors who purchased authentic versions of Allergan’s popular anti-wrinkle drug that were labeled for use in other countries.

Those concerns came at a time when the office was seeing more than half its opened cases ultimately get closed without action, Reuters found.

Reuters also reported on how the FDA permitted Karavetsos to relocate back to Florida in mid-2016 and run the OCI from its Miami office, even after the FDA had already paid more than $25,000 to move him to Maryland in 2015.

The FDA did not meet the committee’s October deadline to provide written answers to questions until Jan. 19. The next day, Karavetsos departed to work for DLA Piper where he will represent drug and device industry clients.

In its letter reviewed by Reuters, the FDA listed its investigative priorities and said that traditional metrics used to gauge success, such as arrests and convictions, cannot capture the impact of its public health mission.

It also provided annual data on arrests, convictions, and the number of opened cases. However, it omitted preliminary-stage investigative numbers from the total number of cases opened each year, which makes the conviction rate appear higher, according to a side-by-side comparison.

Walden said the FDA did not provide a performance plan, among other things.

He also complained of redactions on a separate record, which according to a committee aide contained salary and compensation information for Karavetsos.

DWC Adjusts Services Section of OMFS

The Division of Workers’ Compensation has posted an order adjusting the Physician Services/Non-Physician Practitioner Services section of the Official Medical Fee Schedule (OMFS) to conform to relevant 2017 changes in the Medicare payment system as required by Labor Code section 5307.1.

The Physician and Non-Physician Practitioner Fee Schedule based on the federal Resource Based Relative Value Scale (RBRVS) was adopted pursuant to the requirements of Senate Bill 863 (SB 863) and became effective for services rendered on or after January 1, 2014. The Physician Fee Schedule uses the Medicare 2014 relative value units and 2014 CPT codes.

Relative Value Units (RVUs) for each medical service measure the relative resources associated with the physician’s work (the time and skill required for the procedure), practice expenses (the staff time and costs of maintaining an office), and malpractice expenses. The RVUs compare the resources required for one service to those required for other services. Relative to the pre-2014 OMFS, the RBRVS tends to provide lower relative values for surgical and other technical procedures and higher relative values for E&M services. Most RVUs will be based on Medicare’s RVUs. If Medicare has not established RVUs for a reimbursable procedure code the services will be priced By Report.

A conversion factor (CF) is a dollar amount that is used in a formula to convert the RVUs into a payment amount for a service. The CF determines overall fee schedule payment levels. The fee schedule starts with separate conversion factors for surgery, radiology, and “all other services” in 2014 and transitions to a single CF beginning 2017, for all services except anesthesia. Anesthesia is priced under a different scale (using base units and time units) and will continue to have a separate conversion factor. The Anesthesia conversion factor also transitions during the period 2014 through 2017.

A geographic adjustment factor (GAF) adjusts for geographic differences in the costs of maintaining a physician practice. Medicare uses adjustment factors for nine geographic areas or localities in California, but for California workers’ compensation the regulations adopt statewide average GAFs. For services other than Anesthesia, the RBRVS-based regulation reduces administrative complexity by using statewide average geographic adjustment factors for each RVU component, instead of Medicare’s nine locality adjustments. For Anesthesia, there is one statewide GAF for all anesthesia procedures since anesthesia “base units” are not broken down into work, practice expense and malpractice components.

As mandated by SB 863, the fee schedule started with separate conversion factors for surgery, radiology, and “all other services” in 2014 and transitions to a single conversion factor (CF) in 2017, for all services except anesthesia, which has its own CF. The 2017 CFs were adjusted for the cumulative change in the Medicare Economic Index and the relative value scale adjustment factors.

The acting administrative director update order adopting the OMFS adjustments effective for services rendered on or after March 1, 2017, can be found at the DWC OMFS page. An explanation of changes is attached to the order.

Supreme Court Affirms Broad CDI Rulemaking Authority

The California Supreme Court, in a 7-0 decision, affirmed the authority of the California Insurance Commissioner against a major insurance industry legal challenge to his regulatory authority. The case involves regulations pertaining to homeowner insurance policies, but will have application to his regulatory authority in all areas of insurance, including Workers’ Compensation policies.

The back story to this case involves wildfires, which are a fact of life in California. After the 1991 Oakland Hills fire and 2003 Southern California wildfires, legislators discovered an additional aspect of the danger wildfires pose to homeowners – underinsurance. Homeowners discovered that their coverage fell well short of what they needed – sometimes by hundreds of thousands of dollars – to rebuild their homes.

Guaranteed replacement coverage was the norm as recently as the 1990s, but only a limited number of homeowners qualified for such a product – and only a small subset of insurers even offered it. The Legislature took several steps to address the divergence between homeowners’ expectations of insurance coverage and the actual scope of coverage.

Between 1992 and 2005, the Legislature took several steps to address the divergence between homeowners’ expectations of insurance coverage and the actual scope of coverage. The California Insurance Commissioner adopted regulations accordingly, resolving this problem which became effective on June 27, 2011.

The insurance industry, led by the Association of California Insurance Companies and the Personal Insurance Federation of California, filed its lawsuit a few weeks before the regulation took effect, challenging the Insurance commissioner’s authority to adopt these regulations. The trial court invalidated the Regulation on the ground that the Commissioner exceeded his authority. And the Court of Appeal affirmed. But the Supreme Court reversed and ruled the insurance commissioner has broad discretion to adopt rules and regulations as necessary to promote the public welfare in the case of the Association of California Insurance Companies vs Dave Jones as Commissioner of the CDI.

The replacement cost regulation reviewed by the Supreme Court is codified at California Code of Regulations, title 10, section 2695.183. The Regulation does not require an insurer to set or recommend a policy limit or to provide an estimate of the cost to rebuild or replace a home. But if the insurer does choose to opine on replacement costs, the Regulation specifies how that estimate is to be calculated and communicated.

It pointed out that in 1959, the Legislature enacted the Unfair Insurance Practices Act (UIPA) (Ins. Code, § 790 et seq.). Its purpose is to regulate trade practices in the business of insurance “by defining, or providing for the determination of, all such practices in this State which constitute unfair methods of competition or unfair or deceptive acts or practices and by prohibiting the trade practices so defined or determined.” Empowered by authority granted in the UIPA, the Commissioner may investigate those engaged in the business of insurance.

The UIPA also grants the Commissioner rulemaking power: “The commissioner shall, from time to time as conditions warrant, after notice and public hearing, promulgate reasonable rules and regulations, and amendments and additions thereto, as are necessary to administer this article.” With respect to this provision, the Court noted “What authority the Legislature conferred here appears to be quite broad.”

“In this instance, the Commissioner undertook an investigation into the widespread problem of underinsurance and, in particular, the disconnect between a homeowner’s expectation and the actual scope of insurance coverage purchased. Based on that investigation, he determined that an incomplete replacement cost estimate – i.e., an estimate that fails to account for all of the costs necessary to rebuild the structure – qualifies as ‘a specific kind of misleading statement,’ and that regulation of any misleading statement “is authorized by the broad statutory prohibition against false and misleading statements’ in section 790.03, subdivision (b).”

Angie Wei Reappointed as CHSWC Commissioner

The Department of Industrial Relations (DIR) and the Commission on Health and Safety and Workers’ Compensation (CHSWC) announced the appointment of Angie Wei to the Commission, where she has served since 2005.

The Senate Rules Committee reappointed Wei as a labor representative.

A total of eight (8) Commissioners are appointed by the Governor and the Legislature. Labor Code 75 establishes that two of the employer members and two of the labor members of the Commission shall be appointed by the Governor for a sub-total of four (4) members. The Senate Committee on Rules and the Speaker of the Assembly shall each appoint one employer and one labor representative for a sub-total of four (4) members.

Angie Wei is the chief of staff of the California Labor Federation, the state AFL-CIO. The state Federation represents 1,200 affiliated unions and over two million workers covered by collective bargaining agreements. Previously, Wei was a program associate for Policyline of Oakland, California, and advocated for the California Immigrant Welfare Collaborative, a coalition of four immigrant rights organizations who came together to respond to cuts in public benefits for immigrants as a result of the 1996 federal welfare reform law.

Ms. Wei holds a Bachelor of Art degree in Political Science and Asian American Studies from the University of California, Berkeley, and a Master of Arts degree in Public Policy from the Kennedy School of Government at Harvard University.

This position does not require Senate confirmation.

Information about CHSWCis available at Information may also be obtained by writing to CHSWC at 1515 Clay Street, 17th floor, Oakland, CA 94612; by calling (510) 622-3959; by faxing a request to 510-286-0499; or by sending an email to