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Tag: 2018 News

Comp Rates Decrease in 2019 – Except at the Race Track!

The California Thoroughbred Business League (CTBL), responsible for overseeing funds utilized for providing workers’ compensation insurance relief to horsemen, has seen steadily increasing workers’ compensation rates in the state of California.

The cost of the 2019 program is expected to increase by 3% over 2018, or by more than $13.7 million for Thoroughbreds.

Per-start fees will be increased from $100 to $106 to cover the owners’ portion of funding. As before, the per-start fee will be automatically deducted from the owner’s paymaster account every time that owner starts a horse, effective Jan. 1.

The Thoroughbred Owners of California (TOC) board voted unanimously to increase Guaranteed Participation Purses by $6 per start to offset the costs.

In addition, starting Jan. 1, owners of horses who finish fifth or beyond – whenever their share of purse money is less than the Guaranteed Participation Purse – will be paid $300 per start at Golden Gate Fields and $351 per start at Southern California tracks to include increased costs for third party Lasix administration and jockey fees.

Three sources of revenue are utilized to cover workers’ compensation costs in California, according to Brad McKinzie of the Finish Line Self Insurance Group, which has managed workers’ compensation accounts for Thoroughbred horsemen in California since 2011.

Owners pay a fee per starter to cover jockeys, trainers pay a daily fee to cover exercise riders and stable staff, and one-half of 1 percent of the takeout on handle from exotic wagers on California races is dedicated to a fund to pay workers’ compensation costs.

Legislation passed in 2004 allowed for the increase in takeout to offset worker’s compensation costs.

The deduction from takeout amounts to approximately $6.5 million annually, McKinzie said. Owners and trainers pay the remaining costs. The fee paid by a trainer amounts to approximately $100 per month per horse in their stables.

The TOC is part of the California Thoroughbred Business League, a consortium of racetracks, horsemen’s groups, and fair organizations that oversees a program to provide workers’ compensation subsidies to owners. The Finish Line Group has handled workers’ compensation for Thoroughbred horsemen in California since 2011. McKinzie founded the Finish Line Group. He is also the general manager of the Los Alamitos Thoroughbred meetings.

Early Physical Therapy Reduces Opiate Use

Patients who underwent physical therapy soon after being diagnosed with pain in the shoulder, neck, low back or knee were approximately 7 to 16 percent less likely to use opioids in the subsequent months, according to a new study by researchers at the Stanford University School of Medicine and the Duke University School of Medicine.

For patients with shoulder, back or knee pain who did use opioids, early physical therapy was associated with a 5 to 10 percent reduction in how much of the drug they used, the study found.

The study, from an analysis of private health insurance claims for care and prescriptions between 2007 and 2015, was published in JAMA Network Open. Eric Sun, MD, PhD, assistant professor of anesthesiology, perioperative and pain medicine at Stanford is the lead author. Steven George, PhD, professor of orthopaedic surgery at Duke, is the senior author.

The findings, Sun said, could be helpful to clinicians in search of pain-management options that carry fewer health risks than opioids. Studies have shown exercise therapy, a component of physical therapy, reduces pain and improves function for some musculoskeletal conditions. Other studies have shown that patients with past prescriptions for opioid pain medication are at increased risk for overdose and misuse.

“This isn’t a world where there are magic bullets,” Sun said. “But many guidelines suggest that physical therapy is an important component of pain management, and there is little downside to trying it.”

The study also measured whether early physical therapy was associated with a decreased need for opioids in the long term among patient who filled prescriptions. The researchers measured the quantity of opioids by converting prescribed amounts to oral morphine milligram equivalents.

They found, after adjusting for confounding factors, that patients who had undergone early physical therapy used 10.3 percent less opioid medication for knee pain; 9.7 percent less for shoulder pain; and 5.1 percent less for back pain in the period three months to a year after their diagnosis. There was no significant reduction for neck pain.

Physical therapy within three months of diagnosis also was associated with a decreased likelihood that patients with two of the conditions would chronically use opioids in the long term, according to the study. After early physical therapy, patients with knee pain were 66 percent less likely in the period three months to a year after their diagnosis to either fill 10 or more prescriptions or acquire a supply of opioid medication for 120 days or more. Patients with low back pain were 34 percent less likely to be chronic users if they had early physical therapy. There was no association between physical therapy and chronic opioid use among patients with shoulder or neck pain.

“The general consensus is that for musculoskeletal pain, opioids generally aren’t a long-term solution,” Sun said. “Aside from all the other side effects, even if the medication is doing well for you, it will have less and less effect over time as your body builds up a tolerance.”

Hospital Prices Go Public January 1

Prices hospitals charge for their services will all go online Jan. 1 under a new federal requirement, but patient advocates say the realities of medical-industry pricing will make it difficult for consumers to get much out of the new data.

A new federal rule requires all hospitals to post online a master list of prices for the services they provide so consumers can review them starting Jan. 1.

The health care industry nationally has a reputation for having little price transparency, which can make it difficult for consumers to price compare. But the hospital’s master list prices, sometimes called a chargemaster, is also not a complete look, consumer advocates say.

That’s because the final bill a patient receives is almost never the same as the sticker price for the services they received. Insurance companies negotiate discounts on the sticker prices. Co-pays, co-insurance, deductibles also add other layers of complexity that bring discounts or increased costs before a final charge is determined.

“The list prices are so high that the vast majority of hospitals don’t even try to collect list prices from uninsured patients,” said Benedic Ippolito, with the American Enterprise Institute, who has researched hospital list prices.

The federal rule is being brought out as a measure to improve competition and help educate consumers.

We are just beginning on price transparency,” Seema Verma, head of U.S. Centers for Medicare & Medicaid told the Associated Press. “We know that hospitals have this information and we’re asking them to post what they have online.”

But real transparency comes when consumers can easily see what they will pay to a provider based on their insurance benefits, said Thomas Campanella, Baldwin Wallace University health care MBA program director. He said some insurance companies are providing that information through price comparison tools. “I almost see it being more of a political ‘look at what we did,’” Campanella said of the requirement to post list prices.

A benefit of having health insurance is that the insurance companies negotiate with hospitals on a discount from what is listed on the chargemaster. If a hospital is “in network” it means the insurer and hospital have an agreement on discounted rates and the insurance company typically covers a higher portion of those prices. If a patient goes to a medical provider that is out-of-network, they could be billed the difference between what the chargemaster lists as the price and what their insurance writes a check for. The practice is called balance billing or sometimes called “surprise billing.”

Miranda Creviston Motter, president and CEO of Ohio Association of Health Plans, which represents insurance companies, said as health care costs continue to rise, provider cost information is important and the association supports federal policies requiring providers to provide easy to understand cost information directly to health care consumers.

“This information supplements the cost information health plans currently offer their members. ,” she said in a statement.

Price comparison tools are becoming increasingly available through insurance companies, but they have limits in usefulness. Not all health care costs can be shopped for ahead of time, such as emergency visits, and consumers can prioritize other things besides cost, such as a doctor they trust or a hospital close to home. Only a small number of employees at two large companies with a price transparency tool used the tool and it was not associated with lower health care spending, according to 2016 study in the Journal of the American Medical Association.

Scott McGohan, CEO of McGohan Brabender, a benefits broker, said while many of the major insurance carriers have price shopping tools, it’s not always easy to know enough about medicine to know how to price shop.

Sheriff’s Lieutenant Arrested for Comp Fraud

A Santa Clara County sheriff’s lieutenant was arrested on Wednesday in Las Vegas for allegedly faking the extent of an injury and receiving workers’ compensation.

Lt. Mandy Henderson was arrested by Las Vegas police after sheriff’s investigators saw her engaging in “strenuous workouts” despite her claim of injury, according to the sheriff’s office.

Henderson was arrested on a felony warrant and is awaiting transportation from Las Vegas to Santa Clara County.

The sheriff’s office is conducting an internal affairs investigation in addition to its criminal investigation of Henderson.

The public pay database Transparent California says Henderson last year received $33,736 in pay and $27,550 in benefits. In 2016, she received $155,206 in pay and $78,873 in benefits.

Patients Need Better Post Surgical Advice

Patients undergoing surgery don’t often receive practical advice about what to do and what to expect during the recovery process, says a surgeon who has been on the giving and receiving end of post-op instructions.

These directions need a more commonsense approach to rest, diet and pain, Dr. J. David Richardson of the University of Louisville School of Medicine in Kentucky writes in the Journal of the American College of Surgeons.

“We give patients these catchphrases about how they’ll feel better, but that’s not always true,” Richardson told Reuters Health.

“For a long time, surgeons have been happy with surgical outcomes as long as a big issue didn’t come up, such as an infection,” he said in a phone interview. “Patients are concerned about the small aspects of recovery, and we should be attuned to that.”

One of the most important tenets of recovery, he writes in his commentary, is that it’s not a progressive linear process. The advice that ‘You will feel better every day’ is not true, for example, and it often makes patients uneasy when they don’t recover as they believe they should.

Instead, patients tend to have a ‘stuttering progression to wellness,‘ Richardson writes, which means three steps forward and two steps back. When patients are aware of this, they’re less apprehensive and less discouraged when they have a “bad day.” Rather than measuring progress daily, he advises tracking progress from one Friday to the next.

‘Some days just don’t go that well, which is the way the body functions,’ he told Reuters Health. ‘Patients need to know that what they’re going through is normal.’

Richardson also disagrees with the advice to recovering patients about activities, “You can do what you feel like doing.” Although it sounds practical, this often backfires or discourages patients as they go through the healing process. Some feel great after waking up but then have fatigue or adverse reactions later in the day. Those who try to drive, shop or return to work too quickly may “hit a wall,” he notes.

The body needs a physical recovery as much as a mental recovery, he notes, so he often tells patients to be cautious about performing mental tasks after a significant operation. Avoid “trying to work in a fog” or making important decisions in early post-operative stages, Richardson said.

Diet is another aspect that is often misrepresented, and the advice to “Eat what you feel like eating” can be too vague. Instead, a slower progression to a full normal diet could prevent nausea, vomiting, bloating, constipation and other gastrointestinal issues that occur during the early recovery phase. This is particularly true when patients are taking new pain medications, Richardson added.

On a related note, pain management can also be misleading, he said. The opioid crisis speaks to the dangers of over-prescribing pain drugs, and points to the fact that pain is an individual response. Some patients require fewer doses, and others need heavy doses, but prescriptions are often given “by the book” where one size fits all. A more nuanced, individualized approach would help, taking into account previous pain medication use, psychotropic medication use and previous operation recovery experience.

A.B. 5 Seeks to Codify New “ABC” Employment Criteria

California Assemblywoman Lorena Gonzalez (D-San Diego) has introduced legislation intended to strengthen employee rights and define the role of an independent contractor.

The bill (A.B. 5), introduced this month, would add to state law the “ABC test” regarding independent contractors. The test was adopted unanimously by California’s Supreme Court in the case of Dynamex Operations West, Inc. v. Superior Court of Los Angeles (2018) 4 Cal.5th 903 (Dynamex) in an April decision.

The court ruled in favor of workers when Dynamex, a package and documents delivery company, converted all of its drivers to independent contractors to save money.

In its decision, the court sided with the drivers and established the three part “A-B-C” test, which requires workers to be classified as independent contractors if:

A) The worker is “free from control and direction” of the employer as it relates to performance of the work.
B) The work is performed “outside the usual course” of the hiring entity’s business.
C) The worker engages in an independently established trade, occupation or business of the same nature as the work performed for the hiring entity.

In its decision, the Court cited the harm to misclassified workers who lose significant workplace protections, the unfairness to employers who must compete with companies that misclassify, and the loss to the state of needed revenue from companies that use misclassification to avoid obligations such as payment of payroll taxes, payment of premiums for workers compensation, Social Security, unemployment, and disability insurance.

Independent contractors are not guaranteed the protection of workplace health and safety rights, including a minimum wage, paid sick leave, workers’ compensation benefits if injured on the job or unemployment benefits if laid off.

The proposed law will be heard in committee on January 3rd.

Misclassifying workers as independent contractors has been “a significant factor in the – rise in income inequality” in California, according to the bill.

“In a state with one of the country’s highest poverty rates, this court decision is crucial to helping Californians maintain solid employment in an economy that’s left millions struggling,” Gonzalez said in a Dec. 5 press release. “Individuals are not able to make it on three side hustles. That shouldn’t be the norm. That shouldn’t be accepted.”

Conviction of Postal Worker for State Comp Fraud Reversed

Robert L. Hamilton was working as a letter carrier for the United States Postal Service when he was injured on the job on November 28, 2014, due to slipping and falling while delivering packages. On January 13, 2015, Hamilton began receiving wage replacement based on his claim of temporary total disability

After a co-worker saw Hamilton at a casino in March 2015, a federal agent was assigned to conduct surveillance of Hamilton. The surveillance revealed that Hamilton was able to perform certain physical acts that he told his doctor were impossible. Specifically, the doctor was shown surveillance videos of Hamilton and concluded that Hamilton had exaggerated or misrepresented some aspects of his medical condition.

After Hamilton became aware that he was being investigated, he returned to work on August 26, 2015, and then retired on September 1, 2015. Thus, Hamilton received wage replacement compensation from the Department of Labor pursuant to FECA from January 13 to August 25, 2015.

The District Attorney in San Diego County filed a criminal complaint against Hamilton on April 13, 2016, which charged Hamilton with eight counts of violating Insurance Code section 1871.4, subdivision (a)(1)

A jury convicted him on three counts of making a false or fraudulent statement for the purpose of obtaining compensation under the California workers’ compensation law in violation of Insurance Code section 1871.4, subdivision (a)(1).

The trial court placed Hamilton on formal probation for a period of three years and ordered that he serve 180 days in custody, with the intention that Hamilton serve the term of custody in home detention with electronic monitoring, if he was eligible. Among other things, the trial court also ordered that Hamilton pay $11,972 in victim restitution to the United States Department of Labor.

Hamilton appealed claiming that Insurance Code section 1871.4, subdivision (a)(1) applies only to false or fraudulent statements made for the purpose of obtaining compensation afforded under the California workers’ compensation law, which was not applicable to him as a federal employee. The Court of Appeal agreed, and reversed the conviction and dismissed the case in the published decision of People v Hamilton.

The Insurance Code makes it a crime to “[m]ake or cause to be made a knowingly false or fraudulent material statement or material representation for the purpose of obtaining or denying any compensation, as defined in Section 3207 of the Labor Code.” Labor Code section 3207 defines compensation as “compensation under this division…” The division of the Labor Code referred to in section 3207 is Division 4 of the Labor Code, which covers California workers’ compensation laws, and is titled “Workers’ Compensation and Insurance.”

The provisions in Division 4 of the Labor Code, when read together, make clear that its provisions do not cover a federal employee of the United States Postal Service.

Aggressive Opioid Tapering Has High Risk

International medical experts warn in an open letter to health authorities that forcing patients off opioid painkillers could sometimes do more harm than good. The letter, published in the journal Pain Medicine, outlines risks associated with forced tapering of the addictive drugs and petitions U.S. policymakers to develop guidelines that are not “aggressive and unrealistic.”

The U.S. Centers for Disease Control and Prevention advocates tapering and, in some cases, discontinuing opioids in patients using them as long-term therapy for chronic pain.

However, in their letter, Beth Darnall of Stanford University in California and coauthors say mandated opioid tapers requiring “aggressive” dose reductions over a defined period, even when that period is an extended one, could be problematic.

“Opioid tapering guidelines were created, in part, to decrease harm to patients resulting from high-dose opioid therapy for chronic pain. However, countless “legacy patients” with chronic pain who were progressively escalated to high opioid doses, often over many years, now face additional and very serious risks resulting from rapid tapering or related policies that mandate extreme dose reductions that are aggressive and unrealistic.”

Rapid forced tapering can destabilize these patients, precipitating severe opioid withdrawal accompanied by worsening pain and profound loss of function.”

The authors call for “compassionate systems for opioid tapering” in carefully selected patients, with close monitoring and realistic goals. They also call for “patient advisory boards . . . to ensure that patient-centered systems are developed and patient rights are protected.”

The assumption that forced opioid taper is reliably beneficial is not supported by evidence, and clinical experience suggests significant harm,” said Ajay Manhapra of Yale University, who co-authored the letter.

For example, the letter notes, rapid forced tapering can destabilize patients, lead to a worsening of pain, precipitate severe opioid withdrawal symptoms and cause a profound loss of function. Some patients may seek relief by sourcing illicit, and more dangerous, opioids, while others risk becoming “acutely suicidal”, the paper adds.

Patients on legacy opioid prescriptions require different considerations and careful attention to the methods by which opioid tapers might be considered and implemented.

Currently, no data exist to support forced, community-based opioid tapering to drastically low levels without exposing patients to potentially life-threatening harms.

Existing data that support rapid reductions of opioid doses – often to zero – were conducted in highly structured, supportive, interdisciplinary, inpatient settings or “detox” programs in which medications and other approaches were used to minimize the symptoms of withdrawal. These data do not inform community-based opioid tapering. Currently, nonconsensual tapering policies are being enacted throughout the country without careful systems that attend to patient safety. The methods by which a taper is conducted matter greatly.

The letter petitions the U.S. Department of Health and Human Services to consider patient data and include pain specialists when developing opioid tapering guidelines.

Manhapra believes the onus remains on policymakers. “It appears that the storm blew one way from 1980’s to 2016 and now it is blowing hard the other way, while we (doctors) stand staggering at the same spot trying to take care of our patients who are suffering,” he said.

Congress Removes Cannabis from Controlled Substances Act

The Agriculture Improvement Act of 2018 was signed into law this week. Among other things, this new law changes certain federal authorities relating to the production and marketing of hemp, defined as cannabis (Cannabis sativa L.). These changes include removing hemp from the Controlled Substances Act, which means that it will no longer be an illegal substance under federal law.

Hemp is a type of cannabis plant with no or extremely low concentrations of the psychoactive compound known as THC, the ingredient in marijuana associated with “high” feelings. The Farm Bill removed hemp from the Controlled Substances Act, allowing for its commercial production in the United States, as long as those plants contain no more than 0.3 percent of THC.

Congress explicitly preserved the FDAs current authority to regulate products containing cannabis or cannabis-derived compounds under the Federal Food, Drug, and Cosmetic Act. In doing so, Congress recognized the agency’s important public health role with respect to all the products it regulates.

This allows the FDA to continue enforcing the law to protect patients and the public while also providing potential regulatory pathways for products containing cannabis and cannabis-derived compounds.

To help members of the public understand how the FDA’s requirements apply to these products, the FDA has maintained a webpage with answers to frequently asked questions, which we intend to update moving forward to address questions regarding the Agriculture Improvement Act and regulation of these products generally.

In view of the proliferation of products containing cannabis or cannabis-derived substances, the FDA will advance new steps to better define its public health obligations in this area. It will also continue to closely scrutinize products that could pose risks to consumers. Where we believe consumers are being put at risk, the FDA will warn consumers and take enforcement actions.

While products containing cannabis and cannabis-derived compounds remain subject to the FDA’s authorities and requirements, there are pathways available for those who seek to lawfully introduce these products into interstate commerce. The FDA will continue to take steps to make the pathways for the lawful marketing of these products more efficient.

These pathways include ways for companies to seek approval from the FDA to market with therapeutic claims a human or animal drug that is derived from cannabis.

The FDA intends to hold a public meeting in the near future for stakeholders to share their experiences and challenges with these products, including information and views related to the safety of such products.

A number of small companies are already selling CBD in oils, beverages, topical creams and other products, and in some instances shipping them across state lines. The market for CBD derived from hemp could reach $22 billion by 2022, according to a report issued earlier this year by the cannabis industry analysis firm the Brightfield Group, which assumed passage of the farm bill in its forecast.

Coca-Cola Co in September became one of the largest U.S. companies to express interest in CBD, saying in a statement that it was “closely watching the growth of non-psychoactive CBD as an ingredient in functional wellness beverages around the world.”

Jury Convicts Uninsured Restaurant Owner

A Contra Costa County jury found defendant David Michael Bufano guilty of violating California Labor Code for failing to provide workers’ compensation insurance for his employees. Bufano is the owner and operator of Grant Street Pub & Pizzeria in Concord and has at least 18 employees.

Additionally, the jury found Bufano violated state law when he violated a stop work order issued by the Department of Industrial Relations.

Bufano was sentenced to two years of court probation and fined $10,000. Under the Labor Code, the fine is paid to the California State Treasury to the credit of the Uninsured Employers Fund.

In July 2018, the District Attorney’s Office filed a criminal complaint against Bufano. The criminal filing stemmed from a joint enforcement strike force operation with the District Attorney’s Office, Department of Industrial Relations’ Labor Commissioner’s Office and Employment Development Department.

Inspectors from these agencies conducted surprise inspections at Contra Costa County restaurants during the summer of 2018. These restaurants were suspected of deliberately evading the obligation to provide workers’ compensation insurance to employees.

Bufano’s restaurant was cited on June 25 and a stop work order was issued by the Labor Commissioner until he could provide proof of workers’ compensation insurance. The very next day, Bufano’s employees were back at work at his direction in violation of the stop work order.

On June 27, a follow-up inspection revealed that the restaurant remained open for business and employees were present working. Bufano still had not obtained workers’ compensation insurance at the point of the follow-up inspection. He was cited by the Labor Commissioner and fined $6,000.

Willful failure to provide the insurance is punishable by substantial fines and misdemeanor criminal prosecution. Employees that do not know whether they are covered can check their employer’s notices board or ask a manager. Labor Code section 3550 requires an employer to post a notice identifying the current insurance at a conspicuous location.

The misdemeanor counts against Bufano are: Count 1, Failure to Obtain Workers’ Compensation Insurance Coverage and Count 2, Failure to Observe Stop Order.

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