Tag: 2017 News

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 QMETest@dir.ca.gov for further assistance. For additional information regarding the qualifications to become a QME, please visit the DWC website.

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.

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.

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.

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).”