Tag: 2018 News

The Office of Self-Insurance Plans is a program within the director’s office of the Department of Industrial Relations responsible for the oversight and regulation of workers’ compensation self-insurance in California.

OSIP is also responsible for establishing and insuring that required security deposits are posted by self-insurers in amounts sufficient to collateralize against potential defaults by self-insured employers and groups.

OSIP has posted proposed regulations that will require self-insured public entities to file annual reports providing demographic, claim and financial data regarding their workers’ compensation programs. The reports will be due by October 1 of each year and shall cover liabilities for the preceding July 1 – June 30 fiscal year.

The proposed regulations, mandated by Governor Edmund G. Brown Jr.’s 2012 workers’ compensation reforms, will allow for greater transparency of the solvency and viability of self-insured workers’ compensation programs and the true liabilities of public entities.

As specified by Labor Code section 3702.2(a), the changes would require public entities to report portions of their financial statements pertaining to workers’ compensation liabilities.

Public entities would also be required to provide aggregate information as a point of reference for other public entities.

The proposed regulations were developed in accordance with the recommendations of a 2014 report conducted by the Commission on Health and Safety and Workers’ Compensation, Examination of California Public Sector Self-Insurance Workers’ Compensation Program.

The notice and text of the regulations can be found on the proposed regulations web page.

A public hearing on the proposed regulations has been scheduled for 10 a.m. January 23, 2019, in Room 11 at the Elihu M. Harris State Building, 1515 Clay Street, Oakland, 94612. Members of the public may also submit written comments on the regulations until 5 p.m. that day.

Section 111 of the Medicare/Medicaid SCHIP Extension Act (MMSEA) of 2007, at its most basic level, requires insurers and self-insureds to both identify Medicare beneficiaries with whom they pay benefits or settlements associated with workers’ comp, no fault or liability claims and – once identified – report data to Medicare as directed by the Secretary of Health & Human Services.

The reporting act originally mandated that failure to comply with the reporting requirements “shall be subject to a civil money penalty of $1,000 for each day of noncompliance” for each individual for which the information should have been submitted. With the threat of severe penalties, the insurance industry quickly responded, obtaining Responsible Reporting Entity (RRE) IDs and implementing claims system updates and section 111 compliance programs as quickly as possible.

Enter the SMART Act. On January 10, 2013, President Obama signed into law the Medicare IVIG Access and Strengthening Medicare and Repaying Taxpayers Act of 2012. The SMART Act, among other things, softened the language relative provide CMS with discretion not only to the imposition of the penalty but also into the amount of the penalty.

Now, civil money penalties “may be subject to a civil money penalty of up to $1,000 for each day of noncompliance with respect to each claimant.” The SMART Act also required the Secretary to quickly solicit proposals determining “specified practices for which such sanctions will and will not be imposed” via the regulatory process.

About a year after the SMART Act was signed into law, CMS kicked off the rulemaking process with an advance notice of proposed rulemaking (ANPRM). The ANPRM sought comment on: what types of practices “would or would not” result in the imposition of civil money penalties; methods to determine the dollar amount of civil money penalties; and ways in which CMS may define what constitutes “good faith efforts” to identify a Medicare beneficiary. CMS received thirty four written comments to the ANPRM, but has done little since issuing the ANPRM.

In the ten years following the introduction of mandatory insurer reporting, the industry has yet to see any evidence of enforcement in the form of the imposition of dreaded civil money penalties.

However, CMS has issued yet another abundantly clear signal that Medicare Secondary Payer (MSP) enforcement will be a priority in 2019.

Now, an additional notice on the Office of Management and Budget (OMB) website has been posted which indicates that CMS will move forward with a Notice of Proposed Rulemaking (NPRM) on “Civil Monetary Penalties (CMPs) and Medicare Secondary Payer Requirements.”

Aaron Lindh, was employed as a law enforcement officer when he sustained injury arising out of and in the course of employment to his left eye. More specifically, Lindh took three to six blows to the left side of his head while engaged in a canine training course.

Afterwards, he “suffered severe headaches lasting between several hours to one or two days.” Over a month later, while off-duty, Lindh suddenly lost most of the vision in his left eye.

Dr. David Kaye, a neuro-ophthalmologist and the QME, concluded, as had the other physicians, that Lindh’s “blood circulation to his left eye was defective.” He stated Lindh “did not have any disability prior to receiving the blows to the head.” And “[a]bsent the injury,” he thought Lindh “most likely would have retained a lot of his vision in that eye,” although he could not “guess” how much. Dr. Kaye agreed “it [was] possible that [Lindh] could have gone his entire life without losing vision.” He also agreed, however, that even had Lindh not suffered the blows to his head, he still could have lost his vision “due to this underlying condition.”

As to apportionment, it was Dr. Kaye’s “opinion that [Lindh’s] underlying vasospastic personality and vasculature placed him at high risk for damage to different parts of his body.” In discussing his initial apportionment of 90 percent (which he adjusted to 85 percent), Dr. Kaye stated, “90 percent [is] due to the underlying condition and 10 percent due to the stress of the injuries,” He subsequently repeated it was “unlikely” Lindh would have suffered a vision loss if he had not had the “underlying condition” of “vascular spasticity,” a condition that is “rare.”

The parties stipulated “the medical record, not including apportionment, rates 40 percent permanent disability, and with apportionment, rates six percent permanent disability.” The ALJ rejected Dr. Kaye’s apportionment analysis, and found Lindh had 40 percent permanent disability, and the WCAB affirmed the ALJ’s decision. The Court of Appeal reversed and ordered 85% apportionment in the published case of City of Petaluma v WCAB and Aaron Lindh.

The Court of Appeal rejected the arguments presented by the Board, and the California Applicant’s Attorneys Association acting as amicus,”that there must be medical evidence that an asymptomatic preexisting condition will, in and of itself, naturally progress to disable the claimant..” pointing out that the argument “reflects the law prior to 2004.”

The 2004 enactment of Senate Bill No. 899 overhauled the statutes governing apportionment. The Legislature intended to reverse a number of the features of the worker’s compensation law, including eliminating the bar against apportionment based on pathology and asymptomatic causes.

“Lindh’s suggestion that apportionment is required only where there is medical evidence the asymptomatic preexisting condition would invariably have become symptomatic, even without the workplace injury, reflects the state of the law prior to the 2004 amendments.”

“Under the current law, the salient question is whether the disability resulted from both nonindustrial and industrial causes, and if so, apportionment is required.“

“Whether or not an asymptomatic preexisting condition that contributed to the disability would, alone, have inevitably become manifest and resulted in disability, is immaterial.“

The post-amendment cases uniformly focus on whether there is substantial medical evidence the disability was caused, in part, by nonindustrial factors, which can include pathology and asymptomatic prior conditions for which the worker has an inherited predisposition.

A doctor and patient were charged with insurance fraud for billing over $850,000 to an insurance provider for medically unnecessary prescriptions.

Between May 2014 and September 2014, Sabina Maciel Acevedo, 48, who lives in Anaheim, is accused of completing four compound cream prescription forms for herself and three immediate family members without receiving medical examinations.

Dr. David Todd Asher, 50, who lives in Fullerton, is accused of signing all of the forms without examining any of the family members or customizing each prescription. He was a graduate of the Dartmouth Medical School in 1997.

The completed prescription forms were sent to San Dimas Pharmacy in Bakersfield to be fulfilled, and the pharmacy billed $855,210 to Acevedo’s prescription insurance, Express Scripts, which is provided through the Santa Ana Unified School District.

Acevedo is accused of receiving $19,504.57 in kickbacks for fulfilling these prescriptions through San Dimas Pharmacy.

Express Scripts and SAUSD noticed the unusual charges and contacted the Orange County District Attorney’s Office, Bureau of Investigation, who investigated this case.

Dr. Asher has been charged with Insurance fraud with sentencing enhancement allegations for over $100,000 loss and an aggravated white collar crime over $500,000. He faces 13 years and eight months in state prison.

His patient, Sabina Aceedo has been charged with insurance fraud and grand theft with a sentencing enhancement allegations of a crime resulting in over$100,000 loss.

Asher was previously prosecuted in the United States District Court, Central District of California in February 2007. He was charged with conspiracy and illegal kickbacks for patient referrals. He plead guilty to the conspiracy charge in October, 2007 and placed on probation. He stipulated to discipline with the Medical Board for that offense.

Asher now faces new disciplinary charges by the California Medical Board for his conduct while a medical director of Reflections Recovery Center in Costa Mesa. The second charge appears to be related to his signing prescriptions for compounded medications for several patients who had filled out the prescription.

A 56-year-old chiropractor has pleaded guilty for his role in a massive workers’ compensation insurance fraud and conspiracy scheme.

Paul Turley (dob 11/12/62) of Granada Hills made a factual basis plea on Monday to one count each of conspiracy to commit insurance fraud, mayhem, insurance fraud and unlawful patient referral. As part of the written plea agreement filed with the court, Turley detailed his involvement in the scheme.

He faces up to eight years in state prison. Sentencing is set for June 14.

Turley is among a dozen defendants who were indicted by a grand jury in 2015 for fraudulently billing tens of millions of dollars to insurance companies for fraudulent surgeries, prescription medications, fake MRIs, falsifying medical reports and office visits.

Prosecutors later divided the larger case into three smaller ones in an effort to streamline the complex litigation and re-filed several counts that previously had been dismissed. However, indictments remain against orthopedic surgeon, Dr. Munir Uwaydah, and his office manager, Wendee Luke, both of whom are fugitives.

The conspiracy allegedly included paying lawyers and marketers as much as $10,000 a month for illegal patient referrals, known as “capping.”

Nearly two dozen patients allegedly were deceived into having surgeries they thought would be performed by Uwaydah. Instead, a physician’s assistant who never attended medical school, carried out invasive and sometimes unnecessary surgeries. Uwaydah was not present in the operating room for all surgeries, prosecutors said.

In addition, nearly two dozen patients have lasting physical scars and many needed additional surgeries to repair the original injury. Last year, co-defendant Marissa Nelson (dob 11/29/76) pleaded guilty to one felony count of conspiracy to commit insurance fraud and admitted a special allegation of taking property of a value exceeding $3.2 million. She faces up to nine years in state prison when she is scheduled to be sentenced on Jan. 25.

The other 10 defendants are awaiting trial. Among the charges they each face are conspiracy, money laundering and unlawful patient referral. Some of the defendants also face aggravated mayhem charges.

The cases were investigated by the Los Angeles County District Attorney’s Bureau of Investigation and the Organized Crime Division. Deputy District Attorneys Dayan Mathai, Catherine Chon, Karen Nishita and Kennes Ma are prosecuting the case.