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Tag: 2018 News

IMR Physicians Upheld 91% of UR Treatment Denials

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New data on the Independent Medical Review (IMR) process used to resolve California workers’ comp medical disputes show that IMR volume dipped for the first time ever in 2017, but the outcomes were unchanged as IMR physicians again upheld 91.2% of modified or denied medical service requests that they reviewed.

The California Workers’ Compensation Institute (CWCI) analysis is based on a review of 648,450 IMR decision letters issued from 2014 through 2017 in response to applications submitted to the state after a UR physician modified or denied a requested medical service. In adopting IMR in 2012 state lawmakers anticipated that once doctors, attorneys and others came to know which services could be approved as meeting evidence-based medicine standards the process would reduce treatment disputes, but 2017 marks the first time in the five years since its inception that IMR volume has declined, as the Division of Workers’ Compensation data show 3,808 fewer cases in 2017 than in 2016, which translates to a relatively modest 2.2% decline.

A review of the 2017 IMR results shows that IMR physicians upheld the Utilization Review (UR) doctors’ modifications or denials of requested services 91.2% of the time, which was exactly the same uphold rate as in 2014 and in 2016.

The mix of service requests reviewed by IMR physicians in 2017 showed only minor changes from 2016, as prescription drug requests (29.1% of which were for opioids) again accounted for the largest share of the IMRs (46.0% vs. 47.9% in 2016), with UR determinations on pharmaceutical requests upheld 92.0% of the time. Aside from the opioid requests, requests for musculoskeletal drugs, dermatologicals, and anti-inflammatory drugs topped the list of pharmaceutical IMRs, while compound drug requests fell from 6.5% of the prescription drug IMRs in 2016 to 4.2% in 2017, the biggest decline of any prescription drug category, which may be linked to the fact that IMR physicians have consistently deemed them not medically necessary in 99% of the cases.

Similar results were noted for most of the dermatological requests, with IMR physicians upholding modifications or denials of requests for topical local anesthetics, manufactured topicals, and topical corticosteroids 97% to 98% of the time. Among other medical service categories, physical therapy, injections, and durable medical equipment once again combined for about a quarter of the IMRs in 2017, but no other medical service category represented more than 5% of the disputed requests. Among all medical service categories, requests for evaluation and management services (primarily referrals for consultations) again had the best chance of being overturned by IMR, (an IMR uphold rate of 79.2%), while modifications or denials of physical therapy and acupuncture were the least likely to be overturned, with IMR upheld 94.0% of the time for both categories.

As in prior years, most of the disputed requests that went through IMR in 2017 came from a small number of physicians, with the top 10% of physicians who were named in decision letters (1,150 physicians) accounting for 85% of the disputed requests, while the top 1% (115 providers) accounting for 45%. Los Angeles and Bay Area continue to represent a disproportionately high share of the IMR cases relative to their share of paid medical services, while the more rural areas have a disproportionately low share of the IMR cases.

CWCI has released a more detailed analysis of the 2017 IMR results in a Research Update, “Independent Medical Review Decisions: January 2014 Through December 2017.”

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Ventura Hospital Worker Sentenced in Fraud Case

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A former Ventura hospital worker was ordered to pay more than $26,000 in restitution and sentenced to 60 days in jail for workers’ compensation insurance fraud.

Michelle Cordero, 50, formerly of Ventura but now living in Nocona, Texas, pleaded guilty to one felony count of insurance fraud in January, according to court records. She was also sentenced to five years of supervised probation.

Prosecutors said Cordero filed a workers’ compensation claim in July 2015 for a right shoulder injury she said happened while moving a shelf while working at Community Memorial Hospital. In her report, Cordero also denied having prior shoulder injuries and went to only one doctor.

A subsequent investigation revealed that not only had she been seeing multiple doctors, but also that she had reported that she had just injured her right shoulder while moving boxes at her residence.

Cordero, a phlebotomist, filed a second claim alleging that she had contracted meningitis from a patient at Community Memorial Hospital. Under oath, she denied she had been in contact with anyone who had meningitis.

An investigation would later reveal that her live-in boyfriend had recently been sick with meningitis and that she intentionally concealed the information from the insurer.

As part of her sentence, Cordero must pay $26,089.76 in restitution to Sedgewick Claims Management Services Inc.,

This case was the result of an investigation by the California Department oflnsurance’s Valencia Fraud Division and the District Attorney’s Workers’ Compensation Insurance Fraud Unit.

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Researchers Say a Third of CT and MRI Scans Unnecessary

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A new study published in the JAMA and summarized by Reuters claims the U.S. spends about twice what other high-income nations do on health care but has the lowest life expectancy and the highest infant mortality rates.

For the study, researchers examined international data from 2013 to 2016 comparing the U.S. with 10 other high-income countries: the U.K., Canada, Germany, Australia, Japan, Sweden, France, Denmark, the Netherlands, and Switzerland.

In 2016, the U.S. spent 17.8 percent of its gross domestic product (GDP) on healthcare. Other countries’ spending ranged from a low of 9.6 percent of GDP in Australia to a high of 12.4 percent of GDP in Switzerland. A large part of this was administrative costs, which accounted for 8 percent of GDP in the U.S., more than double the average of 3 percent of GDP.

At the same time, the U.S. spent an average of $1,443 per person on drugs, compared with an average of $749 per person across all of the countries in the study. U.S. spending was also higher for imaging and for many of the most common medical procedures like knee replacements, surgical cesarean births, and surgeries to repair or unclog blood vessels.

If the U.S. did less imaging and fewer of 25 common procedures, and lowered prices and the number of procedures to levels in the Netherlands, it would translate into a savings of $137 billion, Dr. Ezekiel Emanuel of the Perelman School of Medicine at the University of Pennsylvania writes in an accompanying editorial.

“Regardless of what is done with the money, it would be more valuable than paying high prices for a large number of CT and MRI scans, up to a third of which may be deemed unnecessary and carry radiation risks, and many expensive but not necessary surgical procedures,” Emanuel writes.

Life expectancy in the U.S. was the lowest, at 78.8 years, the study also found. In the other countries, life expectancy ranged from 80.7 to 83.9 years. Infant mortality rates were highest in the U.S., with 5.8 fatalities out of every 1,000 live births. For other countries, the average infant mortality rate was 3.6 fatalities for every 1,000 live births.

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Employer’s Obligation to Provide Interactive Process is Continuous

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Priority Business Services, a staffing agency, provides industrial staffing to hundreds of companies in a variety of industries, including distribution, light manufacturing, food service, maintenance, and clerical positions. Priority has approximately 3,500 employees placed in jobs on any given week, with a database of approximately 360,000 employees.

Rene Bolanos began work for Priority in mid-2013. He suffered an injury in January 2014 while working for one of Priority’s customers.  He was released to work with restrictions, which Priority initially accommodated by assigning him to the staffing office.

However, Bolanos asserted that in February 2014, he was diagnosed with a hernia. Priority refused to place him back in the staffing office, informed him that it could no longer accommodate him with his restrictions, and removed him from work. Bolanos further alleged that he was released to work with no restrictions, in November 2014, but Priority never gave him another job. Moreover, Priority told him in December 2014 that he would have to reapply to be returned to work. Bolanos did so in February 2015, but Priority then told him he “did not qualify to go back to work.”

Bolanos sued and asserted the following causes of action: (1) disability discrimination in violation of FEHA; (2) retaliation in violation of FEHA; (3) retaliation in violation of the California Family Rights Act (CFRA) (§ 12945.2 et seq.); (4) failure to prevent discrimination and retaliation in violation of FEHA; (5) failure to provide reasonable accommodation in violation of FEHA; (6) failure to engage in a good faith interactive process in violation of FEHA; (7) declaratory judgment; and (8) wrongful termination in violation of public policy. He sought economic damages, damages for emotional distress, and punitive damages, in total estimated to exceed $1,000,000. Bolanos separately filed a statement of damages seeking $5,000,000 in punitive damages.

The jury found in favor of Bolanos on his fifth cause of action for failure to provide reasonable accommodation and his sixth cause of action for failure to engage in an interactive process. The jury awarded Bolanos damages totaling $39,966.84, split evenly between past economic and non-economic loss. The jury found Bolanos was not entitled to punitive damages.The court granted Priority’s request to offset the judgment by $8,500, the amount paid to Bolanos in worker’s compensation benefits. The court found that Bolanos was the prevailing party and awarded attorney fees in the amount of $231,470.50.

Priority appealed, but the Court of Appeal affirmed in the unpublished case of Bolanos v. Priority Business Services.

Under FEHA it is an unlawful employment practice for an employer ‘to fail to make reasonable accommodation for the known physical or mental disability of an applicant or employee. It is the employee’s burden to initiate the process, no magic words are necessary, and the obligation arises once the employer becomes aware of the need to consider an accommodation. Once the interactive process is initiated, the employer’s obligation to engage in the process in good faith is continuous, and extends beyond the first attempt at accommodation and continues when the employee asks for a different accommodation or where the employer is aware that the initial accommodation is failing and further accommodation is needed.

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Temp Agency CEO Convicted of Premium Fraud

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The Stanislaus County District Attorney Birgit Fladager announced that Aileen Ramirez, age 31, of Denair, has been convicted of felony workers’ compensation insurance premium fraud.

In 2012, Ramirez was the owner and CEO of Quality Employment Services, LLC, in Modesto, a company that provided temporary workers to cover absences, skills shortages and seasonal workloads for client companies.

Ramirez obtained a workers’ compensation policy for her business from the California State Compensation Insurance Fund in February, 2012 and maintained that policy through August, 2014.

As an employer, Ramirez was required by state law to have workers’ compensation insurance for her employees and submit payroll records to the State Fund showing the number of employees and their income. This information helps the State Fund set workers’ compensation insurance premium rates for other employers throughout the state.

When State Fund performed an audit of the policy, it discovered that Ramirez had underreported her payroll and total number of employees in order to obtain a lower workers’ compensation insurance premium. In total, Ramirez underreported $2.8 million dollars in payroll that resulted in a loss to the State Fund of $525,253.58 in insurance premiums.

In April of 2016, Ramirez was charged with insurance fraud in Stanislaus County Superior Court.

On February 27, 2018, Ramirez pled no contest to violating Insurance Code §11880(a), as a felony, in that she knowingly made false and fraudulent material statements to State Fund for the purposes of determining and reducing the premium, cost or rate of her workers’ compensation insurance policy. She was immediately sentenced to 120 hours of community service, three years formal probation, and ordered to pay restitution of $525,253.58 to the State Compensation Insurance Fund.

This conviction resulted from a joint investigation by the California Department of Insurance, Fraud Division and the Amador County Workers’ Compensation Fraud Unit, which investigates and prosecutes insurance fraud cases in Amador, Stanislaus, Calaveras, and Tuolumne Counties through a grant provided by the California Department of Insurance.

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WCIRB Reports on Weaning Opioid Use

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The WCIRB has released its Study of Chronic Opioid Use and Weaning in California Workers’ Compensation. This Study uses data from the WCIRB databases of medical transaction records and unit statistical reports to help understand the cost implications of chronic opioid use and the process of weaning injured workers off of opioids in California workers’ compensation.

Until 2012, opioid use in California workers’ compensation, as in many other systems, was growing. Since 2012, claims with opioid prescriptions in the California workers’ compensation system have dropped sharply but opioid prescriptions still reflect a significant portion of all pharmaceutical costs.

About 22% of the claims with accidents in 2013 and 2014 with at least one paid medical service had an opioid prescription, with those claims accounting for about 60% of the total medical payments of all 2013 and 2014 claims within two years of the date of injury.

The recent decline in opioid use is attributable to both fewer newer claims for which opioids were prescribed and a reduction in opioid use on claims in which there was “chronic” opioid use. There is limited information available on workers’ compensation claimants who “weaned” off of opioids.

Approximately 60% of the chronic opioid claims involved permanent disability compared to 11% of all claims. Conversely, only 3% of the chronic opioid claims were medical only claims compared to 65% of all claims.

The median time from achieving chronic opioid status to wean off of opioids completely was 8 months. The median time from accident date to when the worker was weaned off completely was 19 months.

Claims involving chronic opioid use are considerably more expensive than the typical workers’ compensation claim. The average medical payments per claim for physician services over the 24-month period after the accident date for claims involving chronic opioid use was more than nine times the average of all claims.

During the first 6 months after weaning started, weaned claim opioid payments dropped 48% and total drug payments decreased by 42% compared to the payments during the 6 months before weaning. The percentage of payments per claim for non-opioid pain medications (i.e., NSAIDs) reduced significantly less than the decreases of both total drug payments and the opioid payments for the weaned claims during the 6 months after weaning began.

Injured workers who did not wean off of opioids were significantly more likely to have a major surgery than those who weaned off. However, injured workers who weaned off of opioids were more likely to have a major surgery within 30 days of the injury date.

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Pending Case Pivotal in Health Care Fraud Litigation

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Workers rode along on Meals on Wheels deliveries and went door-to-door in government-subsidized housing. Then they’d pitch what sounded like home care services paid for by the government. Instead, the elderly were being enrolled in Medicare-funded hospice based on what the government says were bogus determinations that they were close to death.

Those are allegations in a whistleblower lawsuit against hospice provider AseraCare. Federal prosecutors want the company to pay more than $200 million in reimbursement, fines and fees for running what they said was little more than a money-making scheme.

A federal jury agreed, finding that AseraCare had committed fraud by filing false claims for Medicare reimbursement. But the presiding U.S. district court judge threw out the jurors’ verdict. She ruled, in part, that the case boiled down to a battle of medical experts, and differences in professional medical judgment alone couldn’t prove the case.

Now, attorneys around the country are awaiting a decision from the 11th Circuit, which heard arguments a year ago on the government’s appeal of that ruling. The appeals court decision could tie the hands of prosecutors in a wide range of health care fraud cases. Or, it could spell continued trouble not only for hospices, but also for nursing homes, hospitals, dentists and other health care providers. The issue of medical necessity has been at the heart of many health care fraud cases.

To prove the cases, federal investigators would knock on the doors of hospice patients to ask if they were dying. “And they immediately laugh or get angry and say, ‘Who told you I’m dying?’ ” Loggins said.

Proving cases against corporate providers, though, is more complex. “The medical necessity issue is what’s killing us with some of these corporate hospices,” said Derrick Jacobson, special agent in charge with the inspector general’s office for the region.

In the AseraCare case, originally brought by former employees in Georgia, Alabama and Wisconsin, the government had a physician review medical records of hospice patients. He found that most were not within six months of dying – the criterion for enrolling in Medicare-funded hospice. In a two-month trial, jurors heard from both him and defense experts, then found that in the majority of cases presented, the patients were not terminally ill. Many AseraCare patients lived for years on hospice or were discharged from hospice alive.

In setting aside the jury’s verdict in March 2016, U.S. District Judge Karon Bowdre of the Northern District of Alabama said a mere difference of opinion among physicians is not enough to establish that the claims were false. “The government has presented no evidence of an objective falsehood for any of the patients at issue,” she wrote.

If her ruling stands, Justin Linder, a New Jersey attorney who concentrates on hospice and home health care and the federal False Claims Act said, the government would have to look for other evidence to show there was an intent to defraud the government, such as kickbacks to physicians to certify that patients were dying.

If the 11th Circuit overturns the judge’s ruling, it may not signal an immediate change for health care providers, said attorney Jay Mitchell with King & Spalding in Atlanta. But, he said, “it certainly could embolden the government to go after more medical necessity cases.”

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32 Year LAPD Veteran Arrested for Comp Fraud

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Felony charges were filed against a retired LAPD officer in an alleged workers’ compensation fraud case. Former Officer Terry Johns, 56, was arrested Thursday morning by detectives with the Department’s internal affairs division, officials said. A criminal complaint accused Johns of eight counts, including workers compensations insurance fraud, insurance fraud, and attempted perjury under oath.

The arrest was made after an undercover surveillance investigation in which detectives were sent to see if the ex-officer was really injured, as he had claimed in official documents.

The Los Angeles Times reports that Johns was enrolled in a controversial program that pays veteran cops and firefighters their salary and pension simultaneously for up to five years. Johns joined the Deferred Retirement Option Plan, or DROP, in July 2014. The next month he filed a workers’ compensation claim for a bad back, public records show.

He then took a long injury leave, collecting nearly $250,000 in pension and salary for the time off, according to city payroll data. He retired in 2016.

At a news conference Thursday, Police Chief Charlie Beck said internal affairs investigators had observed Johns engaged in activity “inconsistent” with his claimed injuries but refused to offer further details.

The DROP program was approved by voters in 2001 with a promise that it would keep veteran officers on the job a few years longer with no additional cost to the city. A Times investigation published last month found more than 1,200 public safety officers had joined DROP and then gone out with injuries — typically bad backs, sore knees and other ailments of aging bodies — turning the program into an extended leave at nearly twice the pay. The program has paid out more than $1.6 billion in extra pension checks since its inception in 2002, The Times found.

Nearly half of participants who entered DROP from July 2008 to July 2017 subsequently took injury leaves. Their average absence was 10 months, but hundreds stayed out for more than a year.

Two married LAPD officers joined DROP, then went out with carpal tunnel syndrome and other cumulative injuries. They missed more than two years, and spent some of that time starting a family business and vacationing at their condo in Cabo, The Times found. They collected nearly $2 million in salary and pension while in the program.

A firefighter in DROP who filed a claim for a bad back and a sore knee worked part time as a longshoreman at L.A. Harbor while on injury leave from the department, according to one of the doctors who examined him in the course of his workers’ compensation case.

Mayor Eric Garcetti and key members of the City Council called for a thorough review of the program last month following The Times’ investigation. But Garcetti and the council ignored a report from the city administrative officer in 2016 warning the program was not, and never had been, “cost neutral” as promised to voters and was no longer necessary to retain veteran officers.

Johns, 56, spent 32 years on the LAPD, according to a department news release. He was arrested and booked into the Riverside County jail where he was being held on $160,000 bond, Beck said. Johns is the first DROP participant arrested on suspicion of workers’ compensation fraud, Beck said, adding that he isn’t aware of any other ongoing investigations of program participants.

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Camp Bootcamp, Inc., Cited for $8.3M Wage Theft Violations

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The Labor Commissioner’s Office has cited Chino-based weight loss and fitness chain the Camp Bootcamp, Inc., doing business as the Camp Transformation Center, more than $8.3 million for multiple wage theft and labor law violations. Unpaid wages and damages are owed to 551 workers who worked in 15 locations throughout Southern California, including trainers, trainer assistants, facility managers and receptionists.

The Labor Commissioner launched an investigation last May after receiving a complaint. The investigation found that from August 2014 to August 2017, trainers and assistants at all locations were only paid for each class taught when they should have been paid per hour. They were shorted on wages due for travel between the class sites, as well as prep and clean up before and after each class.

“Employees must be paid for all hours worked, including travel between worksites,” said Labor Commissioner Julie A. Su. “Employers should not expect to pass the cost of doing business to their workers – this is wage theft.”

Investigators found that trainers were required to teach classes in different locations, which resulted in driving time of more than an hour between worksites in some cases.

The Camp Bootcamp issued separate paychecks to trainers or assistants who worked at multiple locations, with workers receiving up to six paychecks for a single pay period. As a result, the employer did not pay the workers overtime. Managers and other employees were not paid for mandatory staff meetings, and receptionists were not provided required rest or meal breaks.

The Camp Bootcamp was ordered to pay $1,188,536 in unpaid minimum wages, $421,979 for unpaid overtime, $5,882 for unpaid split shift premium pay, $1,388,847 in liquidated damages, $392,106 for meal and rest period violations, $522,166 for waiting time penalties and $190,600 for failure to provide itemized wage statements, totaling $4,110,116 payable to the workers.

The citations also include $1,250,200 in civil penalties. The Camp Bootcamp was further ordered to pay the workers $2.95 million in contract wages owed. The Labor Commissioner has the authority to issue citations for unpaid minimum wages, but contract wages above the minimum are usually sought through a civil action.

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No Evidence of Equitable Estoppel in Volunteer’s Injury Claim

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Diane Minish sustained serious personal injuries after she fell off a forklift on premises owned by Hanuman Fellowship. Minish initially reported that her injuries occurred while she was working as a volunteer, doing construction work for the Fellowship. Both Minish and the Fellowship reported the injury to the Fellowship’s workers’ compensation carrier and Minish received more than $270,000 in workers’ compensation benefits.

Minish also filed a civil action seeking damages for personal injuries. Minish alleged that she volunteered to assist at the Center and that the defendants acted negligently in requesting her to stand on a raised forklift while it was moving. The Fellowship answered and asserted that workers’ compensation was Minish’s exclusive remedy.

Minish argued the exclusive remedy rule did not apply because the Fellowship failed to comply with the requirements of Labor Code section 3363.6 for extending employment status to its volunteers. She also argued that her injuries did not arise out of and in the course of her employment because she was visiting a friend and was not volunteering at the time of the accident.

The trial court granted the Fellowship summary judgment on its exclusive remedy defense, reasoning that Minish was judicially estopped from denying she was subject to the workers’ compensation remedy.

The court of appeal reversed the summary judgment in a prior appeal in Minish v. Hanuman Fellowship (2013) 214 Cal.App.4th 437, 443 (Minish I). The court held judicial estoppel did not apply because the Fellowship had not shown that the WCAB made any findings in favor of Minish. The court rejected the Fellowship’s arguments based on equitable estoppel, since the Fellowship had not pleaded equitable estoppel as a defense and there were triable issues concerning the elements of the defense.

On remand, the trial court construed Labor Code section 3363.6 and found the Fellowship had complied with its requirements. The court found that based on her prior representations that she was injured while doing volunteer construction work and her acceptance of workers’ compensation benefits, Minish was equitably estopped from asserting in the civil action that her injuries did not arise out of and in the course of her employment. In light of its findings, the trial court found it unnecessary to adjudicate the question of Minish’s volunteer status.

On this her second appeal, Minish challenges the court’s ruling on the equitable estoppel defense, arguing that the evidence was insufficient to satisfy three elements of the defense.

The court of appeal again reversed the trial court in the unpublished case of Minish v. Hanuman Fellowship.

Equitable estoppel provides that Minish may not deny the existence of a state of facts (her injuries arose out of and in the course of her employment) if she intentionally led the Fellowship to believe those facts to be true and to rely upon such belief to its detriment.

For estoppel to apply, the trial court was required to find that Minish was apprised of the facts (that she knew her injuries did not arise out of and in the course of her employment) and that the Fellowship was ignorant of the true state of those facts. Since the knowledge element is missing, there can be no estoppel.

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