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Tag: 2017 News

California Employers at High Risk for Employee Lawsuits

Businesses located in Washington, D.C., Nevada, Delaware, New Mexico and California face the highest risk of being sued by their employees when compared to the national average, according to a new study released by global insurer Hiscox. The study revealed that US-based companies have just over a 10 percent chance of having an employment charge filed against them.

The 2017 Hiscox Guide to Employee Lawsuits identifies the total impact of employee administrative charges and litigation, and exposes the markets where employee lawsuits are most prevalent. The report was compiled using the latest data on employment charge activity from the Equal Employment Opportunity Commission (EEOC) and its state counterparts across the US.

“Recent public accusations of discrimination and harassment are a stark reminder of the importance of creating an army of vigilant employees who can recognize the warning signs of unlawful behavior,” said Patrick Mitchell, Management Liability Product head at Hiscox USA. “It’s also critical to be acutely aware of your state’s laws. We found that many of the higher-risk states have laws in place that go beyond federal legislation. Varying state laws can impact the risk business owners face and play a role in the number of employee lawsuits in a given state. Business owners must stay aware as legislation evolves, and ensure that their businesses are compliant and that they have a plan in place should a lawsuit be filed.”

According to the study, businesses based in Washington, D.C., face the greatest risk of being sued by their employees, 81 percent higher than the national average. Other states where employers are at a high risk of facing employee charges when compared to the national average include Delaware and Nevada (+55%, respectively), New Mexico (+50%), California (+46%), Mississippi (+43%), Alabama (+39%), Illinois (+35%), and Connecticut and Georgia (+19%, respectively).

Claims against an employer can occur when an employee or job applicant feels they have been discriminated against in the workplace for reasons including, but not limited to, their age, disability, religion, race or color. Unlawful retaliation against job applicants or employees, who had alleged that they had been punished for asserting their rights to be free from employment discrimination, is the most common claim asserted in federal employment cases.

State laws can also have a significant impact on the risks businesses face from employee lawsuits and are drivers of increased employee charge activity. According to the study, this is because some state laws are more stringent than federal statutes. The following states, according to the report, allow employees the ability to go to court with filing a federal or state charge. These include: Alaska, Washington, D.C., Kentucky, Louisiana, Michigan, Maine, Nebraska, New Jersey, New York, Ohio, Oklahoma, Oregon, Vermont and Washington.

Discrimination can be perpetrated by management, another employee, or even someone outside the organization. Collectively, Hiscox claims data for small and mid-sized enterprises (under 500 employees) indicates that one in 10 businesses will face an employee charge. On average, it will take these businesses 318 days to resolve a claim. Without employment practices liability insurance, each of these companies would face an average $160,000 payment for defense and settlement charges. This payment can potentially be avoided by preventing the behavior that could cause a lawsuit through training or routine enforcement of employment policies, detecting discriminatory behavior even if it’s not reported, and mitigating the impact on your business in the event of a charge.

Patients Unhappy With Doctors Who Say “No!”

A new medical study published on November 27 in the JAMA Internal Medicine says that patients may become less satisfied with their care when doctors refuse their requests for things like prescriptions or lab tests.

Researchers examined data on 1,141 patients with a total of 1,319 doctor visits. Overall, about two-thirds of these visits included at least one patient request for the doctor to provide a particular specialist referral, lab test, pain drug or other prescription medication.

Doctors fulfilled these requests 85% of the time, the study found. When doctors didn’t acquiesce, however, patient satisfaction scores in surveys after the visits were dramatically lower than when requests were fulfilled. “This was a stronger effect than we expected, particularly given we had adjusted for all kinds of other things that could influence satisfaction,” said lead study author Dr. Anthony Jerant of the University of California Davis School of Medicine.

Part of the problem may be how often doctors are saying “yes” to patient requests, Jerant said by email. “This is strongly the norm in the patient’s mind – they ask for something, and a very strong majority of the time they get it,” Jerant said. “A request denial, therefore, is quite out of the ordinary and probably likely to invoke a negative reaction.”

Patients in the study were 46 years old, on average, and saw one of 56 family physicians for outpatient visits at an academic medical center in Northern California. The most common requests were for lab tests, followed by specialist referrals, pain medication or other prescription drugs, radiology tests, other lab work and antibiotics.

Satisfaction scores ranged from -30 (lowest) to +30 (highest), with zero representing an average, or neutral, level of satisfaction. Satisfaction was lowest for denials of requests involving referrals to another clinician (-20), non-pain prescription drugs (-20), pain medications (-11) and lab tests (-9). There wasn’t a meaningful difference in patient satisfaction based on whether or not doctors fulfilled requests for antibiotics, radiology or other tests.

The results suggest that doctors may need to do a better job in some cases of explaining their rationale for refusing a patient’s request.

The results underscore the fact that doctors often agree with patients about what referrals, prescriptions or tests might be best, said Dr. Joseph Ross, author of an accompanying editorial and a public health researcher Yale University in New Haven, Connecticut. When doctors disagree with patients’ requests, the study results suggest that it matters how doctors explain their decision, Ross said by email.

The reasons for patients’ requests matter, too. Sometimes patients have seen a treatment advertised on television, or heard about it from a friend or family member. Other times, patients aren’t happy with their care and think a specialist may be needed.

“I think physicians are often wary of denying care that has been requested by patients, both because it will impact satisfaction and because it takes longer to explain to a patient why a service is not needed than to simply agree and process the order,” Ross added. “To me, the key is that physicians and patients communicate clearly so that the care decisions are being shared and are in the best interest of patients.”

WCMSA Requires Funds for Opiates Exceeding Guidelines

Workers’ Compensation Medicare Set-Aside (WCMSA) plans are required to set up reserves to cover Medicare beneficiaries’ future medical care for injured workers who are or will soon be Medicare eligible.

And now a new California Workers’ Compensation Institute (CWCI) study examines data from 7,926 California WCMSA plans completed, submitted and approved by the Centers for Medicare and Medicaid Services (CMS) in 2015 and 2016

The study reports that nearly 70% of federally mandated and approved Medicare settlements for injured workers require funding for decades of opioid use, often at dangerously high levels and in conjunction with other high-risk drugs. Such a requirement exceeds federal and state clinical guidelines and places patients at high levels of risk.

This of course raises the question – why are employers paying in advance for the costs of opiate medications that are inappropriate by today’s standards? And more importantly, how can employers contest a CMS demand for such opiate funding?

Authors Alex Swedlow and Dr. David Deitz found that on average, insurers allocated $103,393 at the time of the injured workers’ settlements to cover the future medical expenses associated with their work injuries, with $48,986 (47%) of that amount set aside to pay for prescription drugs.  

Opioids were the number one type of drug included in WCMSAs, found in 69.4% of the approved plans, and overall, opioids accounted for 27.7% of all WCMSA prescriptions – more than twice the proportion of any other drug category.  In terms of costs, the study found that with an average allocation of $33,113, opioids accounted for almost 1/3 of the total dollars reserved for prescription drugs.  

The opioid combination drug Hydrocodone-Acetaminophen (generally known as Vicodin® or Norco®) was the most common opioid found in the WCMSAs (44% of the opioid prescriptions in the plans, 20.7% of the dollars allocated for opioids), followed by Tramadol HCI and Oxycodone HCI, though even more powerful Fentanyl, linked to more than 20,000 deaths in 2016, accounted for 2.2% of the opioids and 6.6% of the total amount allocated for opioids in the approved plans.  

Comparing opioids found in WCMSAs to a case-matched control group of closed workers’ comp permanent disability claims for similar injuries, the authors found that the WCMSAs called for much stronger opioids, as average cumulative morphine milligram equivalents (MMEs) allocated to WCMSAs with opioids were 45 times the level used in the control group during the life of the claim.  

Likewise, approved WCMSAs with opioids required funding for an average daily dose of 54.7 morphine equivalents (MEDs) for a period of 20.9 years, while 1 in 10 had allocations for a daily dose of 90 MEDs, a marker for elevated risk to the patient.  In addition to requiring funds for long-term opioid use, many of the WCMSA plans also included reserves for simultaneous, long-term use of other potentially risky medications.  

For example, 14.5% of the WCMSAs with opioids also had reserves for sedative-hypnotics, and nearly 5% had allocations for sedative-hypnotics, muscle relaxants, and opioids.

Scripps Hospital Employees Involved in Kickback Scheme

Four San Diego-area nursing homes owned by Los Angeles-based Brius Management Co. have agreed to pay as much as $6.9 million to resolve civil allegations that their employees paid kickbacks for patient referrals and submitted fraudulent bills to government health care programs.

The settlement with the four nursing homes resolves an investigation into allegations that their employees paid kickbacks to discharge planners at Scripps Mercy Hospital San Diego to induce patient referrals to the nursing homes in violation of the federal Anti-Kickback Statute.

The investigation examined additional allegations made in a “whistleblower” lawsuit that the nursing homes submitted false claims to Medicare and Medi-Cal for services provided to patients referred from Scripps Mercy Hospital. Bills submitted for patients referred as a result of illegal kickbacks would constitute fraud against the United States and the State of California.

The four nursing homes involved in the settlement are: Point Loma Convalescent Hospital, Brighton Place – San Diego, Brighton Place – Spring Valley, and Amaya Springs Health Care Center in Spring Valley.

These same four nursing homes entered into Deferred Prosecution Agreements (DPAs) with the United States Attorney’s Office in San Diego in 2016. In the DPAs, the four entities admitted that nursing home employees conspired to pay kickbacks without the knowledge of Brius Management Co. The nursing homes admitted that their employees used corporate credit cards to pay for gift cards, massages, tickets to sporting events, and a cruise on the Inspiration Hornblower that were given to planners at Scripps Mercy Hospital as kickbacks.

The settlement calls for guaranteed payments of $1,785,967 to the United States, to be paid in three annual installments, and a $240,950 lump sum payment to the State of California. The nursing homes paid the first installment to the United States on November 6, and California received its payment on November 10.

The hospitals also agreed to pay up to $4.9 million to the United States if certain operational contingencies are met, making the total settlement worth up to $6,926,917.

The four nursing homes have also entered into Corporate Integrity Agreements with the Department of Health and Human Services.

The settlement resolves a lawsuit brought by a former employee of one of the nursing homes under the qui tam – or whistleblower – provisions of the federal and state False Claims Acts, which allow private citizens to file lawsuits on behalf of the United States and California and share in any recovery. The whistleblower, Viki Bell-Manako, will receive 20 percent of each settlement payment. Pursuant to the settlement, United States District Judge John F. Walter today dismissed the lawsuit, United States of America, State of California ex rel. Bell-Manako v. Brius Management Co., et al., CV11-2036-JFW.

The settlement with the four nursing homes was negotiated by the Civil Fraud Section of the United States Attorney’s Office following an investigation by the Department of Health and Human Services, Office of Inspector General, and the Federal Bureau of Investigation.

DWC Suspends Nine More Medical Providers

The Division of Workers’ Compensation has suspended nine more medical providers from participating in California’s workers’ compensation system, bringing the total number of providers suspended this year to 94. The providers were suspended for fraud or other criminal actions.

DWC Administrative Director George Parisotto issued suspension orders against the following providers:

– Sathish Narayanappa Babu of Bolingbrook, Illinois, physician, was convicted on federal charges of Medicare fraud and of fraudulently obtaining controlled substances in February 2015. The Medical Board of California has revoked his medical license.

– Uche Chukwudi of Gardena, physician, was indicted in 2013 in federal court on felony conspiracy and health care fraud charges for defrauding Medicare in a scheme involving durable medical equipment (DME) provider Adeline Ekwebelem, Uche Chukwudi, Charles Okoye and others. He failed to appear at pre-trial proceedings and was declared a fugitive. The Medical Board of California revoked his license in 2017.

– Charles Ikechukwu Okoye of Carson, physician, was convicted in federal court for conspiracy to commit health care fraud for defrauding Medicare in a scheme involving DME provider Adeline Ekwebelem, Uche Chukwudi and others in 2014. Okoye surrendered his physician’s and surgeon’s certificate in 2015.

– Adeline Ekwebelem of Gardena, DME provider who worked with Uche Chukwudi, Charles Okoye and others, was convicted in federal court on multiple counts of health care fraud, conspiracy and illegal kickbacks for patient referrals in 2014.

– Victoria Kim of Los Angeles, physician, pled guilty in federal court on a felony charge of receiving illegal kickbacks for home health care referrals. The Medical Board of California revoked her medical license in 2016.

– Daria Renee Million of Corona, registered nurse, pled guilty in Riverside County in May 2015 to DUI and in December 2015 to misdemeanor child endangerment. The California Board of Registered Nursing revoked her license in 2016.

The following providers participated in an illegal kickback scheme to issue medically-unnecessary DME prescriptions to Medicare patients:

– Victoria Onyeabor of Ontario, DME provider and former owner of Fendih Medical Supplies Inc., was convicted in federal court for conspiracy to commit health care fraud in 2012 for submitting false and fraudulent claims to Medicare.

– Godwin Onyeabor of Ontario, DME provider and corporate officer of Fendih Medical Supplies Inc., was convicted in federal court in 2013 for conspiracy to commit health care fraud, health care fraud, and conspiracy to pay and receive health care kickbacks.

– Sri Jayantha Wijegunaratne of Anaheim Hills, physician, was convicted in federal court in 2013 for conspiracy to commit health care fraud, health care fraud, and conspiracy to pay and receive health care kickbacks. His medical license was revoked in 2016.

AB 1244, which went into effect January 1, requires DWC’s Administrative Director to suspend any medical provider, physician or practitioner from participating in the workers’ compensation system in cases such as these.

Drugmaker Pays $625M to Resolve Federal Probe

Reuters reports that a unit of AmerisourceBergen Corp, one of the largest U.S. drug wholesalers, has agreed to pay $625 million to resolve a U.S. government probe involving pre-filled syringes, the company said in a filing with U.S. securities regulators on Tuesday.

The agreement, whose final terms are still being negotiated and which must be approved by a court, comes on top of a $260 million criminal penalty that the subsidiary, AmerisourceBergen Specialty Group, agreed to pay in September as part of a criminal guilty plea.

The company previously disclosed a $575 million reserve for a possible civil settlement in the case.

Keri Mattox, a spokeswoman for AmerisourceBergen, declined to comment beyond Tuesday’s public filing with the U.S. Securities and Exchange Commission.

The federal probe involved the pre-filled syringe program of AmerisourceBergen Specialty Group’s now-defunct Medical Initiatives Inc subsidiary, as well as certain oncology products, according to the company’s filing.

In a court document filed in September, AmerisourceBergen admitted that Medical Initiatives packaged syringes of cancer drugs at an Alabama facility that was not registered with the U.S. Food and Drug Administration, as required by federal law, pleading guilty to a misdemeanor charge.

The company also admitted in the September filing that Medical Initiatives illegally dispensed syringes based on order forms that were not prescriptions signed by medical practitioners. It added that it submitted syringes on behalf of single patients in excess of safe doses.

AmerisourceBergen said the violations occurred from 2005 until 2014.

In a criminal information unsealed in September, U.S. prosecutors also charged that Medical Initiatives prepared syringes by pooling drugs sold in glass vials that were meant for a single use, and did not maintain a sterile environment in its facility, resulting in contamination in some syringes.

AmerisourceBergen did not plead guilty to those charges or admit any wrongdoing related to them.

Father, Son Farm Labor Contractors to Serve 250 Days

Jaime Rosario Del Real, 61, and son Israel Del Real, 37,both pleaded guilty to four felony counts for their role in a $400,000 insurance fraud scheme denying workers’ compensation insurance and medical care for injured workers.

The father and son duo were sentenced to 250 days in jail, 10 years felony probation, and ordered to pay $382,951 in restitution. This case was prosecuted by the Monterey County District Attorney’s Office.

Doing business as Del Real Produce and Packing and Del Real Packing, LLC, the Del Reals worked as farm labor contractors providing laborers for picking and packing lettuce for growers in Monterey County and Yuma Arizona. After receiving information from an insurer, Department of Insurance detectives found the Del Reals had concealed injuries their workers sustained and refused to pay for medical treatment or provide other benefits the injured workers were entitled to.

The investigation also revealed that over a five year period, the Del Reals lied more than 20 times in order to obtain reduced insurance premiums. As part of their premium theft the Del Reals kept two sets of Employment Development Division (EDD) forms, with different employees and a different number of employees listed, which allowed the Del Reals to evade paying payroll taxes.

“Business owners are responsible for the safety and care of their employees,” said Insurance Commissioner Dave Jones. “Employers who fail to carry workers’ compensation insurance or pay for the medical care for injured workers violate the law and put their employees at risk. Our detectives and the Monterey County District Attorney’s team succeeded in taking another dishonest employer out of the underground marketplace.”

Federal Judge Rejects Drugmaker Plea Deal

A judge on Monday rejected a plea deal that was part of Aegerion Pharmaceuticals Inc’s recent agreement to pay $40.1 million to resolve U.S. probes of its marketing of a cholesterol drug, saying it was “not in the public interest.”

Reuters reports that U.S. District Judge William Young in Boston ruled the U.S. Justice Department’s deal with the Novelion Therapeutics Inc unit “unduly hobbles” his duties as a judge by restricting his ability to impose a sentence.

Young said the agreement showed “the shocking disparity between the treatment of corporations and individuals in our criminal justice system.”

While people who plead guilty face judges with discretion on sentencing, corporations like Aegerion can obtain deals that restrict what punishment the judge can impose, giving them the “most effective damage control,” Young wrote.

He commended Aegerion’s new management for cooperating in the probe. But Young criticized the plea deal’s lack of any payment to victims and said the agreement failed to justify fully why its financial terms were acceptable.

“What is left unexplained is why the government does not simply let Aegerion collapse in disgrace,” Young wrote. “Surely Aegerion is not too big to fail.”

The judge, who at least twice before rejected similar corporate plea deals, ordered the case ready for trial.

A spokeswoman for Cambridge, Massachusetts-based Aegerion had no immediate comment. Representatives for Acting U.S. Attorney William Weinreb, whose office was pursuing the case, did not immediately respond to requests for comment.

The plea deal came as part of a set of settlements with the Justice Department and the U.S. Securities and Exchange Commission announced on Sept. 22 aimed at resolving a long-running probe centered on its Juxtapid cholesterol drug.

Prosecutors said that after the U.S. Food and Drug Administration in 2012 approved Juxtapid for treating high cholesterol in people with a rare genetic disease, Aegerion promoted it for patients who did not have the condition.

As part of a deal with the Justice Department, Aegerion agreed to plead guilty to two misdemeanor drug misbranding violations of the Food, Drug and Cosmetic Act and pay $36 million to resolve criminal and civil claims.

Aegerion, which in 2016 merged with QLT Inc and became a subsidiary of the newly named Novelion, also entered a deferred prosecution agreement to resolve a charge that it conspired to violate the Health Insurance Portability and Accountability Act.

The case is U.S. v. Aegerion Pharmaceuticals Inc, U.S. District Court, District of Massachusetts, No. 17-cr-10288.

Comp Attorney Suspended – Union Official Sentenced

Daniel Rush was sentenced to 37 months in prison for breaching his fiduciary duties to the United Food and Commercial Workers Union (UFCW) and participating in a money laundering scheme. The sentence was handed down by the Honorable Haywood S. Gilliam, Jr., U.S. District Judge, following Rush’s guilty pleas on June 22, 2017.

Rush pleaded guilty to one count of receiving an illegal payment as a union employee, in violation of 29 U.S.C. § 186(b)(1); one count of honest services wire fraud, in violation of 18 U.S.C. §§ 1343, 1346; and one count of conspiracy to commit structuring and money laundering, in violation of 18 U.S.C. § 371.

According to his plea agreement, between 2010 and 2015, Rush engaged in a series of schemes to enrich himself in violation of federal law and his fiduciary duties:

In 2010, he conspired with attorney Marc L. TerBeek and others to structure approximately $420,000 in illegal drug proceeds into the banking system. Although the money was a loan from someone in the cannabis industry, Rush deliberately mischaracterized monthly interest payments as consulting fees.

While serving as the Organizing Coordinator for the unofficial cannabis division at UFCW, Rush gave an employer a corrupted neutrality agreement in exchange for personal loan forgiveness. He also accepted kickbacks from TerBeek in exchange for referring cannabis businesses he encountered in his union role to TerBeek’s law practice.

Rush abused his position as Executive Treasurer and Board Member at the Instituto de la Raza Laboral (Instituto) in similar fashion by demanding and accepting remuneration from TerBeek in exchange for establishing TerBeek as an approved legal provider for workers’ compensation cases at the Insituto.

Finally, Rush engaged in corrupt conduct as a Commissioner on the Berkeley Medical Cannabis Commission when he attempted to extort a business that had applied for a dispensary permit. Using TerBeek as an intermediary, Rush communicated that if the applicant did not offer him a salaried job, with benefits, he would take adverse action against its application.

In addition to the prison term, the Court also sentenced the Rush to a three-year term of supervised release and ordered him to pay a fine of $7500.

Rush’s coconspirator, East Bay attorney Marc L. TerBeek pleaded guilty on February 16, 2017, to one count of making an illegal payment to a union employee, in violation of 29 U.S.C. § 186(a) and one count of willfully violating an anti-structuring regulation, in violation of 12 U.S.C. § 1956. Judge Gilliam scheduled TerBeek’s sentencing hearing for November 27, 2017.

Last August, the California State Bar issued the following Order regarding attorney Marc TerBeek. “Since respondent Marc Lawrence Terbeek, State Bar Number 166098, has been convicted of violating title 29 United States Code section 186(a) (making payment to an employee of union organization), a felony which may or may not involve moral turpitude, and title 12 United States Code section 1956 (willful Violation of anti-structuring regulation), a misdemeanor which may or may not involve moral turpitude, it is ordered pursuant to Business and Professions Code section 6102 that respondent be suspended from the practice of law effective September 5, 2017, pending final disposition of this proceeding.”

The prosecution is the result of an investigation by the FBI and the Internal Revenue Service-Criminal Investigation Division.

Is Artificial Intelligence Better than a Radiologist?

Add diagnosing dangerous lung diseases to the growing list of things artificial intelligence can do better than humans. A new arXiv paper by researchers from Stanford explains how CheXNet, the convolutional neural network they developed, achieved the feat.

CheXNet was trained on a publicly available data set of more than 100,000 chest x-rays that were annotated with information on 14 different diseases that turn up in the images.

The researchers had four radiologists go through a test set of x-rays and make diagnoses, which were compared with diagnoses performed by CheXNet.

Not only did CheXNet beat radiologists at spotting pneumonia, but once the algorithm was expanded, it proved better at identifying the other 13 diseases as well.

Early detection of pneumonia could help prevent some of the 50,000 deaths the disease causes in the U.S. each year. Pneumonia is also the single largest infectious cause of death for children worldwide, killing almost a million children under the age of five in 2015.

Andrew Ng, a coauthor of the paper and the former head of AI research at Baidu, thinks AI is going to be relied upon in medicine more and more. He previously worked on an algorithm that can, after being trained on electrocardiogram (ECG) data, identify heart arrhythmias better than a human expert.

Another deep-learning algorithm recently published in Nature was able to spot cancerous skin lesions just as well as a board-certified dermatologist.

Radiologists in particular have been on notice for a while. Previous research has shown that AI is as good as or better than doctors at spotting problems in CT scans.

Geoffrey Hinton, one of the pioneers of deep learning, told the New Yorker that because of the advances in AI, medical schools “should stop training radiologists now.” Analyzing image-based data sets like x-rays, CT scans, and medical photos is what deep-learning algorithms excel at. And they could very well save lives.

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