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Tag: 2018 News

Proposed Law Expands Scope of Employment

Day laborers in California hired on a one-time basis would be covered by the state’s workers compensation laws under amendments to a year-old bill intended to extend coverage to more workers.

A.B. 206, introduced by Assemblywoman Lorena Gonzalez Fletcher, D-Chula Vista, in January 2017, was amended Thursday to include workers comp coverage mandates for a “person, including a day laborer, employed by the owner or occupant of a residential dwelling whose duties are incidental to the ownership, maintenance, or use of the dwelling, including the care and supervision of children, or whose duties are personal and not in the course of the trade, business, profession, or occupation of the owner or occupant,” according to the latest draft of the bill.

The draft defines a day laborer as “a person who is directly hired by the home owner or occupant on a one-time basis, to perform general maintenance, repairs, upgrades, gardening, or landscaping, and who does not have a valid business license or contractor’s license, or is not required to have those licenses for the work performed.”

This requirement would apply without regard to immigration status, according to the draft.

According to the Legislative Analysis, the proposed bill expands the definition of “employee” for workers’ compensation purposes thereby expanding the scope of standard homeowners’ insurance policies. Specifically, this bill deletes from the definition of “employee” the exclusion of workers who work for a homeowner for less than 52 hours in a 90 day period.

According to the author, “the 52 hour requirement is detrimental to day laborers because they are usually hired to work for short-term jobs. This outdated provision in the workers’ compensation system prevents legitimate day laborers who are injured on the job from obtaining workers’ compensation benefits because these workers are specifically defined as not ’employees.’ AB 206 is designed to remedy this anachronism in the law. “

There are a range of people who perform work in various contexts who are not eligible for workers’ compensation benefits because they are defined as “not employees.” One such group is excluded because the work they perform is covered by the “52-hour” rule in the Labor Code.In essence, this exclusion provides that certain workers are simply, as a matter of definitional law, “not employees” for workers’ compensation purposes..

By merely deleting the 52-hour rule, a fairly large actual list of workers, would now be “employees” eligible for workers’ compensation benefits. The Legislative Analysis points out that this would include the teenager you hire to mow your lawn; the high school girl who babysits twice a month for you and the man who congregates in the Home Depot parking lot who is hired on a 1 or 2 day basis by a roofing contractor; and the tax preparer who works in tax season out of her home, and who is hired from a Craigslist ad.

City of L.A. Files Misclassification Lawsuit in Port Trucking Dispute

The City of Los Angeles sued three port trucking companies Monday, alleging the firms exploit their drivers by misclassifying them as independent contractors.

The City alleged that CMI Transportation, K&R Transportation California and Cal Cartage Transportation Express have engaged in schemes to avoid paying minimum wage and employee benefits by classifying hundreds of workers as independent contractors even though the companies “exert near complete control” over the drivers’ schedule.

According to the report in the Los Angeles Times, all three companies are owned by NFI Industries, a New Jersey-based logistics firm. NFI purchased the businesses from Long Beach-based California Cartage in October.

The suits are the latest in a long-running dispute at the twin ports of Los Angeles and Long Beach, where many port truck drivers say they are improperly classified as independent contractors and must lease their rigs under unfair terms.

The terms, they say, are so onerous that for some pay periods they make nothing and actually end up owing the trucking company money.

A large part of the problem, the lawsuits say, are lease programs the companies established to comply with 2008 city rules mandating low-emission trucks be used to deliver goods to and from the ports of Los Angeles and Long Beach.

The city attorney alleged the leases place strict requirements on how many loads must be undertaken for the company, essentially chaining a so-called independent contractor to one firm.

At the end of the leases, the lawsuits allege drivers do not own their truck but are given an opportunity to purchase it for a “significant lump sum.” That leads many drivers to refinance the lease, once again binding the worker to one company.

Last decade, the Port of Los Angeles tried to mandate truckers be employees of companies, fearful that workers couldn’t afford the newer, cleaner rigs. But that mandate was struck down by federal courts, a decision that driver advocates blame for exacerbating an existing problem of abusive leases.

Though ongoing for years, the issue received renewed attention following a series of stories last year in USA Today.

In December, the Los Angeles City Council approved a plan to investigate claims of wage theft by port truck companies and look into whether the city could deny port access to companies in violation of labor laws.

Asked why the suit was filed against the three NFI companies when drivers allege misclassification among many operators, the City Attorney said his office is investigating “additional companies as well.”

Since 2011, the California labor commissioner’s office has awarded port truck drivers more than $46 million in cases where they contended they were misclassified as contractors.

Drivers and the Teamsters union have also organized numerous strikes to put pressure on trucking companies, as well as politicians.

Allianz Invests $59M in Digital Telehealth Platform

Allianz has agreed to a $59.2 million investment and strategic partnership with leading telehealth platform American Well to develop digital solutions that will widen access, lower cost and improve quality of healthcare for millions of patients worldwide.

Allianz X, the digital investment unit of Allianz, led the investment and will join American Well’s Board of Directors.

Allianz and American Well will develop digital health solutions that build on American Well’s platform and leverage Allianz’s international expertise by combining wearable sensors, remote monitoring, and virtual visits. Working with local healthcare stakeholders, the partnership will deliver healthcare to both developed and emerging markets, addressing local regulations, clinical preferences and financing choices.

This global telehealth system will allow providers to treat patients more successfully in the transforming world of connected care.

Boston-headquartered American Well has developed a telehealth platform that connects patients live with doctors, specialists and other healthcare providers over secure video. It handles clinical, administration, and security requirements consistent with US healthcare regulations and best practices.

American Well serves millions of patients, working with national health plans, hospitals, employers and pharmacies in the United States.

Allianz X, led the investment and was supported by the Health Innovation Center of Allianz Partners, the B2B2C unit of the Allianz Group dedicated to developing protection and care solutions.

Allianz has local knowledge of healthcare financing, regulation and delivery, and a qualified network of more than 800,000 medical providers across the world.

The joint effort of Allianz X and Allianz Partners should enable Allianz to deliver the greatest value from Allianz to American Well and strengthens the Group’s ability to provide best-in-class healthcare in a mobile, digital world.

“Allianz X’s investment with American Well will result in better access, lower cost and more connected care for our customers through a leading-edge health platform. This collaboration emphasizes Allianz’s commitment to digitalization, our goal of investing in digital frontrunners and encourages advancements within the whole healthcare ecosystem,” said Solmaz Altin, the Chief Digital Officer of Allianz Group.

Insurance Broker Sentenced for Stealing Comp Premiums

Former licensed insurance agent Frederick Donald Rollins, 42, of Moreno Valley, was sentenced after pleading guilty to one felony count of grand theft, two counts of securities fraud and an aggravated white-collar crime enhancement for stealing more than $100,000 in insurance premiums and investment funds from 10 victims. Rollins has been sentenced to one year in custody and to pay $100,363 in restitution to his victims.

The California Department of Insurance launched an investigation after receiving multiple complaints, including one from an insurance carrier after a company attempted to file a claim for its injured employee under what turned out to be a non-existent policy number and the other from a business owner who discovered they had no legitimate workers’ compensation or liability coverage.

The investigation revealed that Rollins, while working as a licensed agent at an insurance agency, collected premium payments from several clients for workers’ compensation and commercial general liability coverage, but failed to place coverage with any insurance carrier.

After leaving that insurance agency, Rollins continued to sell fraudulent policies under a corporation he registered with the Nevada Secretary of State, but never licensed by the California Department of Insurance. The investigation revealed over $20,000 in premium payments Rollins collected from his victims, either made payable directly to him or to FDR Presidential Services, were spent on personal expenses and not forwarded to insurance carriers to obtain insurance coverage.

To conceal the scheme, Rollins issued false Certificates of Insurance, which listed the names of valid insurance carriers as the insurance providers of the fraudulent policies.

In addition to collecting premium payments for policies that were never placed, Rollins also allegedly presented himself as a registered stockbroker and accepted funds for investments from several victims. Rollins collected nearly $80,000 from various individuals, including insurance clients, under the guise that he was investing their money in stocks.

The Financial Industry Regulatory Authority, a non-governmental organization that regulates stockbrokers and brokerage firms, verified that Rollins has never been licensed in any capacity to act as a stockbroker.

Rollins is no longer licensed as he failed to renew his license after it expired in March 2014. The Department of Insurance is taking appropriate administrative action against Rollins’ license. The case was prosecuted by the Riverside County District Attorney’s Office.

So. Cal. DME Suppliers Arrested in $24M Fraud

The operator of two now-defunct medical supply companies in Hawthorne and Ventura, as well as two former employees, have been arrested on federal healthcare fraud charges for allegedly billing Medicare well over $24 million for medically unnecessary power wheelchairs (PWC) and the repair of medical equipment.

The scheme is outlined in a 29-count indictment that was returned by a federal grand jury on December 14. According to the indictment, Tamara Yvonne Motley operated Action Medical Equipment and Supplies, which was based in Hawthorne until 2014, and Kaja Medical Equipment & Supply, which was based in Ventura until late 2016. Motley allegedly orchestrated a scheme in which corrupt physicians prescribed medically unnecessary durable medical equipment (DME), such as PWCs, and Motley oversaw the submission of fraudulent bills to Medicare.

In January 2011, when Medicare changed the reimbursement rules for PWCs, Action largely stopped Medicare billing for PWCs and, instead, started billing Medicare for PWC repairs. Action and Kaja allegedly submitted bills for PWC repair or replacement services that were not medically necessary, were not needed to make the PWCs serviceable, and often simply were not performed. The majority of bills submitted in this case allegedly involve fraudulent repair work.

According to the indictment, over a nearly eight-year period, Action billed Medicare more than $18.2 million for DME – most for PWCs, but also for PWC accessories, knee braces and back braces – and the repair or replacement of PWCs. Medicare paid Action nearly $10.3 million.

Between July 2013 and November 2016, Kaja billed Medicare $6.3 million for PWCs, PWC-related accessories, and the repair or replacement of PWCs. Medicare paid Kaja approximately $2.8 million for those claims, the indictment alleges.

The indictment charges all three defendants with 20 counts of healthcare fraud and one count of conspiring to launder money.

Motley and Marquez are further charged with two counts of aggravated identity theft in relation to the use of other persons’ names to operate the medical supply companies. Motley is additionally charged with six counts of structuring cash transactions to avoid federal reporting requirements for transactions of more than $10,000.

If convicted, each of the three defendants would potentially face decades in federal prison. Each count of healthcare fraud carries a statutory maximum sentence of 10 years in federal prison.

All three defendants entered not guilty pleas to the charges in the indictment and a trial was scheduled for February 13. A United States Magistrate Judge set bond for Motley and Murillo, and Marquez was ordered detained.

Cal/OSHA Fines Employer $31K for Bee Sting Fatality

Cal/OSHA has issued citations to Hadley Date Gardens Inc. of Thermal for serious workplace safety and health violations following a bee swarm that stung and killed a tree worker.

On July 3, 2017, a tree worker, Gerardo Balbuena, 49,  was spraying water on date palm fruit from the elevated bucket of a spraying rig when a beehive was disturbed. The bees repeatedly stung the worker, who suffered anaphylactic shock and died at the site.

After he was attacked, Balbuena went into cardiac arrest, said Tawny Cabral, a spokeswoman for the Riverside County Fire Department. He was pronounced dead at the scene.

Balbuena, a native of Morelos, Mexico, worked at Hadley Date Gardens for 27 years, said Albert P. Keck, the company’s president. He said Balbuena was a talented and hardworking employee with a loving family. “He is an immigrant that we should be very proud of as Americans,” Keck said.

Keck said he has been working alongside Balbuena since his family acquired the gardens. He recently told Balbuena they were “going to grow old together.”

“Recognized workplace hazards for tree workers include bee and other harmful insect exposure,” said Cal/OSHA Chief Juliann Sum. “Employers must identify and evaluate workplace hazards, and provide appropriate personal protective equipment and effective training to their workers.”

Cal/OSHA issued four citations totaling $41,310 in proposed penalties for workplace safety and health violations, two of which were classified as serious accident-related.

Hadley Date Gardens, Inc. failed to evaluate the worksite for hazardous bee and insect exposure, and failed to establish appropriate safety protocols, which include providing appropriate personal protective equipment and training that could have prevented this incident.

Cal/OSHA’s Tree Work Safety guidelines specifically cite bee stings as a potentially fatal hazard of which employers must be aware.

“Legal” Medical and Recreational Marijuana – or Maybe Not

The U.S. Justice Department on Thursday will rescind a marijuana policy begun under Democratic former President Barack Obama that eased enforcement of federal laws as a growing number of states and localities legalized the drug, a source familiar with the matter said.

The Obama-era policy, outlined in 2013 by then-Deputy Attorney General James Cole, recognized marijuana as a “dangerous drug,” but said the department expected states and localities that authorized various uses of the drug to effectively regulate and police it.

Going forward, federal prosecutors around the country will have deference to enforce U.S. laws on marijuana as they see fit in their own districts, added the source, speaking on condition of anonymity.

The upcoming policy change comes just days after California formally launched the world’s largest regulated commercial market for recreational marijuana.

Besides California, other states that permit the regulated sale of marijuana for recreational use include Colorado, Washington, Oregon, Alaska and Nevada. Massachusetts and Maine are on track to follow suit later this year.

The policy being reversed had sought to provide more clarity on how prosecutors would enforce federal laws that ban marijuana in states that have legalized it for medicinal or recreational use. Its rescission could sow confusion and potentially hamper efforts to cultivate local marijuana businesses.

U.S. Attorney General Jeff Sessions has made no secret about his disdain for marijuana. He has said the drug is harmful and should not be legalized. He also described marijuana as a gateway drug for opioid addicts.

A task force created under a February 2017 executive order by Trump and comprised of prosecutors and other law enforcement officials was supposed to study marijuana enforcement, along with many other policy areas, and issue recommendations.

Its recommendations were due in July 2017, but the Justice Department has not made public what the task force determined was appropriate for marijuana.

Sessions and some law enforcement officials in states such as Colorado blame legalization for a number of problems, including drug traffickers who have taken advantage of lax marijuana laws to illegally grow and ship the drug across state lines, where it can sell for much more. The decision was a win for marijuana opponents who had been urging Sessions to take action.

“There is no more safe haven with regard to the federal government and marijuana, but it’s also the beginning of the story and not the end,” said Kevin Sabet, president and CEO of Smart Approaches to Marijuana, who was among several anti-marijuana advocates who met with Sessions last month. “This is a victory. It’s going to dry up a lot of the institutional investment that has gone toward marijuana in the last five years.”

Kmart Pharmacies Settle Overbilling Case for $32 Million

James Garbe, an experienced pharmacist, began working at Kmart pharmacy in Ohio in 2007. One day, Garbe picked up a personal prescription at a competitor pharmacy. When he reviewed his receipt, Garbe got a surprise: the competitor pharmacy had charged his Medicare Part D insurer far less than Kmart ordinarily charged it for the same prescription.

Curious to see whether his discovery was a one-off, he started inspecting Kmart’s pharmacy reimburse-ment claims. His amateur detective work revealed that Kmart routinely charged customers with insurance – whether public or private – higher prices than customers who paid out of pocket.

Not all cash customers were charged the same price: people in Kmart’s “discount programs” paid much less. But the ensuing investigation revealed that nearly all cash customers received the lower “discount program” prices. Meanwhile, those “discount program sales were ignored when Kmart calculated its “usual and customary” prices for its generic drugs for purposes of Medicare reimbursement.

Garbe shared his discovery with the government and filed a qui tam suit against Kmart Corporation on July 12, 2008 in the federal district in Los Angeles and later transferred to the Southern District of Illinois. He claimed that Kmart knowingly failed to disclose those discount  prices when reporting to federal health programs its usual and customary prices, which are typically used by those programs to establish reimbursement rates.

Now Kmart Corporation has agreed to pay $32.3 million to the United States to settle allegations that in-store pharmacies in Kmart stores failed to report discounted prescription drug prices to Medicare Part D, Medicaid, and TRICARE, the health program for uniformed service members and their families, the Justice Department announced today.

The agreement resolves allegations arising from a lawsuit brought under the qui tam, or whistleblower, provisions of the False Claims Act, which permit private citizens with knowledge of fraud against the government to bring an action on behalf of the United States and to share in any recovery.

The settlement agreement with the United States is a part of a global $59 million settlement that includes a resolution of state Medicaid and insurance claims against Kmart. Garbe, who litigated the case after the government declined to intervene in the action, will receive $9.3 million.

The case was handled by the Justice Department’s Civil Division and the U.S. Attorney’s Offices for the Southern District of Illinois and Central District of California. Auditing assistance for the government’s investigation was provided by the U.S. Attorney’s Office for the Central District of California and the National Association of Medicaid Fraud Control Units. Investigative assistance was provided by the U.S. Department of Health and Human Services, Office of Inspector General.

The lawsuit is captioned U.S. ex rel. Garbe v. Kmart Corp., Case No. 12-CV-881-NJR-PMF (S.D. Ill.). The claims settled by this agreement are allegations only, and there has been no determination of liability.m

DWC Suspends 28 More Medical Providers

The Division of Workers’ Compensation last month suspended 28 more medical providers from participating in California’s workers’ compensation system, bringing the total number of providers suspended to 159. The providers were suspended for fraud or other criminal actions, or the loss of their license.

Most notable among them was Khristine Eroshevich M.D., a Beverly Hills physician, was convicted in federal court in 2010 of unlawfully prescribing controlled substances following the death of of patient, actress Anna Nicole Smith, by fraud, deceit, misrepresentation, or concealment of a material fact.

Eroshevich wrote numerous unnecessary prescriptions for controlled substances using false names and information for individuals who were not her patients. Eroshevich was also suspended by the California Department of Health Care Services from participating in the Medi-Cal program for an indefinite period of time.

On October 6, 2017 Eroshevich filed a federal lawsuit against officials of the DIR. She alleges that the remaining misdemeanor count “was ordered set aside, a plea of not guilty was entered, and it was also dismissed by the Superior Court.” Thus it could not be used as grounds for her suspension.

Her federal action was dismissed on December 21 based upon the “Younger” abstention doctrine. In Younger v. Harris, [401 U.S. 37 (1971)], the U.S. Supreme Court reaffirmed the longstanding principle that federal courts sitting in equity cannot, absent exceptional circumstances, enjoin pending state criminal proceedings and civil enforcement actions “akin to” criminal proceedings.

Also suspended was Gary Ordog M.D., a Newhall physician and operator of a mobile medical clinic, who was convicted in 2016 of health care fraud for submitting claims to Medicare totaling approximately $6.5 million. Ordog submitted false and fraudulent claims to Medicare for office visits or other outpatient visits that never occurred.

And Owusu Ananeh Firempong M.D., another Beverly Hills physician, who was convicted in 2012 in federal court of health care fraud for submitting false and fraudulent claims to Medicare. Firempong was also convicted in 2011 in federal court of conspiracy to distribute cocaine and conspiracy to launder money. Firempong was sentenced to 57 months in federal prison and ordered to pay nearly $800,000 in restitution. Firempong’s medical license was revoked in 2016.

The list of all of the 28 vendors who have been recently suspended is contained in the latest DWC notice, and on the DWC webpage that lists all suspended providers to date.

New Year Drug Price Increases “Limited” to 10%

Reuters Health reported that drugmakers opened the new year by raising U.S. prices on dozens of medicines, but early data showed the increases generally remained within a 10 percent self-imposed limit in response to a backlash from consumers and politicians.

Soaring U.S. prices for both branded and generic drugs have sparked public outrage and government investigations over the past few years.

“Drug price increases are somewhat more constrained in 2017 and 2018 than they have been previously,” Cowen and Co analyst Eric Schmidt said.

Allergan Inc raised prices on 18 different drugs, including dry eye treatment Restasis and irritable bowel syndrome drug Linzess, by 9.5 percent, according to a research note released by Jefferies on Tuesday.

Jefferies cited data collected by Medi-Span Price Rx and refers to list price increases, before potentially significant discounts and rebates that drugmakers provide to win preferred coverage by insurers. Medi-Span did not respond to requests to confirm the data.

Allergan’s chief executive, Brent Saunders, in late 2016 pledged to keep price increases below 10 percent as part of what he called the company’s “Social Contract with Patients.”

Allergan spokesman Mark Marmur said the increases will be the only ones taken on those brands in 2018, adding that discounts to various payers should bring the actual increases to consumers down to the low single digits.

Other drugmakers raising prices include Amgen Inc (AMGN.O), Teva Pharmaceutical Industries Inc (TEVA.TA) (TEVA.N) and Horizon Pharma (HZNP.O), according to Jefferies and Cowen. Amgen raised the price on its blockbuster rheumatoid arthritis and psoriasis drug Enbrel by 9.7 percent and Teva increased prices on its ProAir HFA and ProAir RespiClick asthma inhalers by 6 and 3 percent, respectively.

Drug price increases are coming under more scrutiny from states. California Governor Jerry Brown in October signed legislation requiring drug manufacturers to give 60-day notice if prices are raised more than 16 percent over a two-year period.

However, the trade group representing U.S. drugmakers filed a lawsuit to stop California from implementing a law aimed at reining in prescription drug prices.The Pharmaceutical Research and Manufacturers of America (PhRMA) initiated litigation in the United States District Court for the Eastern District of California challenging SB 17, which it alleges is an unprecedented and unconstitutional California law.

In its federal complaint, PhRMA argues that SB 17 attempts to dictate national health care policy related to drug prices in violation of the United States Constitution, singles out drug manufacturers as the sole determinant of drug costs despite the significant role many other entities play in the costs patients pay, and will cause market distortions such as drug stockpiling and reduced competition.