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Tag: 2019 News

Privette Doctrine Precludes Security Guard’s Suit

ABC contracted with the landowners to use a gas station/food mart and car wash for two days to film an episode of a television show. The contract gave ABC “the right to use both the real and personal property . . . together with access to and egress from the Property with its personnel and equipment.”

The property sits on the corner of Foothill Boulevard and Terra Bella Street in Sylmar, California and is surrounded by an eight-foot high metal fence. ABC planned to close the property to the public during filming and needed access through three gates to the interior food mart and the parking areas.

On the side of the property along Terra Bella Street was a parking lot, a wall, and a metal rolling gate weighing approximately 900 pounds. The gate slid along a track that ran through containment towers to keep it upright. Cal-OSHA standards require that “[a]ll horizontal sliding gates . . . be equipped with positive stops or devices that limit the gate travel to the designed fully open and closed positions.” Without stops, the gates are unsafe. The Terra Bella gate lacked stops.

ABC’s location scout, Gary Watt, visited the premises multiple times but did not inspect the gates. During his visits, Watt looked for clearly observable problems, “what they call bear traps, anything that could be a safety hazard or anything that might present a danger to cast, crew, [or] the public.” Watt did not note that the gate was in any particular state of disrepair.

ABC hired Executive Assurance to provide security for the property during filming. On the day of filming, Reina Castro, a licensed security guard employed by Executive Assurance attempted to stop the Terra Bella gate from striking a truck that was backing out. The gate fell on her causing a broken leg, multiple fractures to her left shoulder, and torn ligaments and degenerative arthritis in her knee.

Castro sued ABC Studios, Inc. to recover for for her personal injuries.The trial court granted ABC’s motion for nonsuit under Privette v. Superior Court (1993) 5 Cal.4th 689 and its progeny, ruling that Castro had presented no evidence that ABC controlled the manner or mode by which its independent contractor’s employees, such as Castro, performed their work.

The Court of Appeal agreed that the Privette doctrine applies to this case and that Castro failed to adduce evidence of an exception in the unpublished case of Castro v. ABC Studios.

Subject to certain exceptions, the Privette doctrine bars employees of independent contractors from recovering damages from the hirer of the contractor for workplace injuries.

The rationale is twofold. First, because workers’ compensation insurance generally provides the exclusive remedy for employees who are injured on the job, allowing the employee to recover from the contractor’s hirer, who did not cause the injury, would unfairly subject the hirer to greater liability than that faced by the contractor who was negligent.

Secondly, by hiring an independent contractor, the hirer implicitly delegates to the contractor any tort law duty it owes to the contractor’s employees to ensure the safety of the specific workplace that is the subject of the contract.

DWC Updates MTUS Drug List

The Division of Workers’ Compensation has issued an order updating the Medical Treatment Utilization Schedule (MTUS) Drug List effective January 15, 2020 pursuant to Labor Code section 5307.29.

The Administrative Director’s update order adopts changes to the MTUS Drug List, based on the American College of Occupational and Environmental Medicine (ACOEM) Practice Guidelines, including the new drug recommendations addressed in the Hip and Groin Disorder Guideline.

The MT US Drug List must be used in conjunction with 1) the MTUS Guidelines, which contain specific treatment recommendations based on condition and phase of treatment and 2) the drug formulary rules. (See 8 CCR §9792.20 – §9792.27.23.)

Exempt” indicates drug may be prescribed/dispensed without seeking authorization through Prospective Review if in accordance with MTUS.

Non-Exempt” or “Unlisted” drug requires authorization through Prospective Review prior to prescribing or dispensing. (See 8 CCR §9792.27.1 through §9792.27.23 for complete rules.)

Special Fill – Indicates the Non-Exempt drug may be prescribed/dispensed without Prospective Review: 1) Rx at initial visit within 7 days of injury, and 2) Supply not to exceed #days indicated, and 3) is a generic or single source brand, or brand where the physician substantiates medical necessity, and 4) if in accord with MTUS. (See 8 CCR § 9792.27.12.)

Perioperative Fill – Indicates the Non-Exempt drug may be prescribed/dispensed without Prospective Review: 1) Rx issued during the perioperative period (4 days before through 4 days after surgery), and 2) Supply not to exceed #days indicated, and 3) is a generic or single source brand, or brand where physician substantiates medical necessity, and 4) is in accord with MTUS. (See 8 CCR § 9792.27.13.)

The updated MTUS Drug List v.6 and the order can be accessed on the DWC MTUS drug formulary webpage.

10 NFL Players Charged with Health Care Fraud

Ten former National Football League (NFL) players have been charged in the Eastern District of Kentucky for their alleged roles in a nationwide fraud on a health care benefit program for retired NFL players.

The alleged fraud targeted the Gene Upshaw NFL Player Health Reimbursement Account Plan (the Plan), which was established pursuant to the 2006 collective bargaining agreement and provided for tax-free reimbursement of out-of-pocket medical care expenses that were not covered by insurance and that were incurred by former players, their wives and their dependents – up to a maximum of $350,000 per player.  According to the charging documents, over $3.9 million in false and fraudulent claims were submitted to the Plan, and the Plan paid out over $3.4 million on those claims between June 2017 and December 2018.

Two separate indictments filed in the Eastern District of Kentucky outline two alleged conspiracies involving different players related to the same scheme to defraud the Plan. Those charged in the indictments are the following:

Robert McCune, 40, of Riverdale, Georgia, is charged with one count of conspiracy to commit wire fraud and health care fraud, nine counts of wire fraud and nine counts of health care fraud.

John Eubanks, 36, of Cleveland, Mississippi; Tamarick Vanover, 45, of Tallahassee, Florida; and Carlos Rogers, 38, of Alpharetta, Georgia, are each charged with one count of conspiracy to commit wire fraud and health care fraud, two counts of wire fraud and two counts of health care fraud.

Clinton Portis, 38, of McLean, Virginia; Ceandris Brown, 36, of Fresno, Texas; James Butler, 37, of Atlanta, Georgia; and Fredrick Bennett, 35, of Port Wentworth, Georgia, are each charged with one count of conspiracy to commit wire fraud and health care fraud, one count of wire fraud and one count of health care fraud.

Correll Buckhalter, 41, of Colleyville, Texas, and Etric Pruitt, 38, of Theodore, Alabama, are charged with one count of conspiracy to commit wire fraud and health care fraud.

In addition, the government has filed notice that it intends to file criminal informations charging Joseph Horn, 47, of Columbia, South Carolina, and Donald “Reche” Caldwell, 40, of Tampa, Florida, with conspiracy to commit health care fraud in the Eastern District of Kentucky.

The indictments charge that the scheme to defraud involved the submission of false and fraudulent claims to the Plan for expensive medical equipment – typically between $40,000 and $50,000 for each claim – that was never purchased or received.  

The expensive medical equipment described on the false and fraudulent claims included hyperbaric oxygen chambers, cryotherapy machines, ultrasound machines designed for use by a doctor’s office to conduct women’s health examinations and electromagnetic therapy devices designed for use on horses.

According to allegations in the indictments, McCune, Eubanks, Vanover, Buckhalter, Rogers and others recruited other players into the scheme by offering to submit or cause the submission of these false and fraudulent claims in exchange for kickbacks and bribes that ranged from a few thousand dollars to $10,000 or more per claim submitted.  As part of the scheme, the defendants allegedly fabricated supporting documentation for the claims, including invoices, prescriptions and letters of medical necessity.  After the claims were submitted, McCune and Buckhalter allegedly called the telephone number provided by the Plan and impersonated certain other players in order to check on the status of the false and fraudulent claims.

East Bay Men Arrested for Fake Oxycodone Sales

Jose Ricardo Loza and Randy Lee Walker were charged in a criminal complaint with distributing fentanyl and heroin.

An affidavit filed in the case alleges that Loza sold blue counterfeit oxycodone pills that were laced with Fentanyl. According to the affidavit, Loza sold to a third party 50 Fentanyl-laced pills on August 22, 2019, when at the auto body shop where he works in Pittsburg, California.

Loza allegedly did not initially have enough pills to sell, so he texted Walker, who arrived with more Fentanyl-laced pills.

During the transaction, Loza warned the customer to be careful when taking these pills because he (Loza) gave the same pills to a mutual friend who overdosed and died. According to the affidavit, a laboratory test verified that a sample of the pills Loza sold contained fentanyl.

In addition, the affidavit alleges that on November 22, 2019, Loza sold 500 more counterfeit pills to an undercover officer and then told the officer that he had 10,000 more of the same pills for sale. Further, the affidavit alleges Loza sold two ounces of heroin on September 10, 2019.

Loza and Walker are charged with distribution of controlled substances, in violation of 21 U.S.C. §§ 841(a)(1) and (b)(1)(C).

Loza and Walker were arrested on December 12, 2019. At the time of Loza’s arrest, law enforcement agents found more than 2,000 counterfeit oxycodone pills hidden in hallowed out compartments of his furniture.

Both defendants currently are in custody. Walker’s next court appearance is scheduled for Monday, December 16, 2019, for appointment of counsel. Loza’s next court appearance is scheduled for Wednesday, December 18, 2019, for a hearing to address detention issues.

If convicted, the defendants face a maximum statutory penalty of up to 20 years in prison. A term of supervised release, fines, forfeitures, and restitution also may be ordered, however, any sentence following conviction would be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.

Tramadol – The Other Opioid Crisis

The world has been told that the drug Tramadol, is safer than the OxyContins, the Vicodins, the fentanyls that have wreaked so much devastation. But now they are the root of what the United Nations named “the other opioid crisis” – an epidemic featured in fewer headlines than the American one, as it rages through the planet’s most vulnerable countries.

Mass abuse of the opioid tramadol spans continents, from India to Africa to the Middle East, creating international havoc some experts blame on a loophole in narcotics regulation and a miscalculation of the drug’s danger. The man-made opioid was touted as a way to relieve pain with little risk of abuse. Unlike other opioids, tramadol flowed freely around the world, unburdened by international controls that track most dangerous drugs.

But abuse is now so rampant that some countries are asking international authorities to intervene.

Grunenthal, the German company that originally made the drug, is campaigning for the status quo, arguing that it’s largely illicit counterfeit pills causing problems. International regulations make narcotics difficult to get in countries with disorganized health systems, the company says, and adding tramadol to the list would deprive suffering patients access to any opioid at all.

Tramadol has not been as deadly as other opioids, and the crisis isn’t killing with the ferocity of America’s struggle with the drugs. Still, individual governments from the U.S. to Egypt to Ukraine have realized the drug’s dangers are greater than was believed and have worked to rein in the tramadol trade. The north Indian state of Punjab, the center of India’s opioid epidemic, was the latest to crack down. The pills were everywhere, as legitimate medication sold in pharmacies, but also illicit counterfeits hawked by street vendors.

This year, authorities seized hundreds of thousands of tablets, banned most pharmacy sales and shut down pill factories, pushing the price from 35 cents for a 10-pack to $14. The government opened a network of treatment centers, fearing those who had become opioid addicted would resort to heroin out of desperation. Hordes of people rushed in, seeking help in managing excruciating withdrawal.

Jeffery Bawa, an officer with the United Nations Office on Drugs and Crime, realized what was happening in 2016, when he traveled to Mali in western Africa, one of the world’s poorest countries, gripped by civil war and terrorism. They asked people for their most pressing concerns. Most did not say hunger or violence. They said tramadol.

Most of it was coming from India. The country’s sprawling pharmaceutical industry is fueled by cheap generics. Pill factories produce knock-offs and ship them in bulk around the world, in doses far exceeding medical limits.

In 2017, law enforcement reported that $75 million worth of tramadol from India was confiscated en route to the Islamic State terror group. Authorities intercepted 600,000 tablets headed for Boko Haram. Another 3 million were found in a pickup truck in Niger, in boxes disguised with U.N. logos. The agency warned that tramadol was playing “a direct role in the destabilization of the region.”

The United Kingdom and United States both regulated it in 2014. Tramadol was uncontrolled in Denmark until 2017, when journalists asked doctors to review studies submitted to regulators to support the claim that it has a low risk for addiction, said Dr. Karsten Juhl Jorgensen, acting director of the Nordic Cochrane Centre and one of the physicians who analyzed the materials. They all agreed that the documents did not prove it’s safer.

The Broken FDA Drug Recall System

In mid-September the U.S. Food and Drug Administration received a 19-page document with some startling claims about a popular medicine. The online pharmacy Valisure, which tests prescription drugs before dispensing them, said it had found extremely high levels of a probable human carcinogen in the antacid ranitidine, best known under the brand name Zantac.  As for the carcinogen, NDMA, the FDA knew it well: For more than a year the agency had been recalling batches of the blood pressure medication valsartan because they were contaminated with it.

The FDA issued an alert, one that seemed to downplay Valisure’s findings. The agency said it had learned that some ranitidine medicines contained low levels of NDMA, but it wasn’t advising people to stop taking the drug. In fact, Valisure had found high levels of NDMA in every version of ranitidine it tested and concluded the problem was inherent to the molecule itself. In other words, if Valisure is correct, there is no safe version of ranitidine.

The muted quality of the FDA’s statement didn’t stop concern from going global. By mid-October, a month after the FDA’s alert, at least two dozen countries had pulled ranitidine from stores or halted its distribution. Numerous companies had acted on their own to slow or stop the supply of the drug. The FDA continued to conduct tests.

Finally, on Nov. 1, the agency announced that it had found higher-than-acceptable levels of NDMA in some ranitidine- though not nearly as high as Valisure detected. The FDA then deployed the strongest weapon available to it: The agency asked manufacturers to voluntarily recall some of the Zantac on the market.

At a time when a poorly policed global supply chain and demand for ever-cheaper generics have exposed drugs to new safety risks, an effective recall system is crucial. Spotting problems earlier is getting harder: From 2016 to 2018 the number of FDA inspections of drug manufacturers declined 10% overseas and 13% for domestic facilities, according to a recent report from the Government Accountability Office.

But the agency’s authority over this system is limited. It can only request a pullback – manufacturers can and do say no. It can’t contact patients directly; it relies on pharmacies for that. It doesn’t control how the recall is conducted or how its effectiveness is assessed.

Rosa DeLauro, in her role on the House committee that oversees the agency, has tried to give it more authority over recalls. She sponsored a bill that gave the FDA the power to order food recalls; it was signed into law by President Barack Obama in 2011. The agency also has recall power over manufacturers of vaccines, medical devices, infant formula, and tobacco products. As of last year, it can order a recall of opioids deemed dangerous. It can do all of that, but it can’t order a recall of any other prescription drug.

DeLauro tried to push a bill two years ago to change that.  The bill went nowhere. At least one reason was opposition to it from the trade group representing drug manufacturers. Now, after two high-profile recalls of common drugs have exposed flaws in the system, DeLauro plans to try again to give the FDA more clout.

When the federal government couldn’t make progress, states tried. The first was California, which, because of its size, can establish de facto national standards for industries. In 2004, California passed a law requiring electronic tracking of drugs all the way to the patient by 2009. The drug industry pushed back, saying the changes were technologically impossible to make that quickly. The deadline was extended to 2014. Nothing happened.

Then, in 2013, the industry preempted the California statute and its deadline by winning passage of a federal drug tracking law. The law created a uniform national system for electronically tracing pharmaceuticals from the manufacturer to the pharmacy’s back door. The industry was given 10 years – until November 2023 – to fully comply. Other countries trying to create tracking systems aren’t moving any faster, says Eric Marshall, executive director of a new industry governance group for implementation of the law.

The legislation exempts pharmacies completely. Even after the law goes into full effect, pharmacies won’t have to track which lots they sell to which customers. Nor will they be required to put lot numbers on labels. Some pharmacies do that now, and others don’t. One concern is patient privacy. To further complicate matters, high-volume pharmacies, such as mail-­order companies, mix pills from different lots. Pharmacies can also subdivide packages.

ACOEM Concerned About Cannabis Legalization and Safety

The American College of Occupational and Environmental Medicine (ACOEM), an international society of more than 4,000 occupational physicians and associated professionals, provides leadership to promote optimal health and safety of workers, workplaces, and environments. Occupational and environmental medicine is the medicine specialty devoted to prevention and management of occupational and environmental injury, illness and disability, and promotion of health and productivity of workers, their families, and communities.

ACOEM has taken the position that marijuana is an impairing substance and its legalization has huge public and workplace health implications.  Before passing any legislation legalizing this substance, the U.S. Congress should proceed deliberately and consider workplace safety when dealing with this complex issue.

To date, 33 states and the District of Columbia have legalized the medical and/or recreational use of marijuana. With most Americans living and working in states that allow some form of legal marijuana use, it is critical that safety be at the forefront of any policy discussions regarding the use of cannabinoids outside of the standard Food and Drug Administration approval process.

The current patchwork of laws to address marijuana use and workplace safety is detrimental to employees, employers, and the general public, notes ACOEM in its statement on the Legalization of Marijuana – Implications for Workplace Safety which was sent to all members of Congress late last week.

ACOEM urges legislators to carefully consider the impact of any federal marijuana legislation on workplace safety. “While there is much not known about marijuana, what is known is that marijuana can cause impairment which will interfere with safe and acceptable performance in the workplace,” said ACOEM president Stephen Frangos, MD. “Furthermore, this is particularly concerning for those individuals working in safety-sensitive positions where impairment can affect the health and safety of other workers, customers, the general public, or others.”

ACOEM notes that employers have a legal responsibility under the Occupational Safety and Health Administration’s general duty clause to protect employees from workplace illness or injury, and an ethical responsibility to prevent impaired workers from exposing themselves, their co-workers, and/or the general public to risk of harm.

Therefore, regardless of marijuana’s legal status in a jurisdiction, ACOEM strongly supports legislative proposals that allow employers to prohibit those employed in safety-sensitive positions from working while under the influence of marijuana.

Apple, Amazon and Google to Take Over Healthcare by 2030

“Healthcare is the biggest business in the world, and it is phenomenally broken,” says Peter Diamandis, cofounder of the X-Prize, Singularity University, and Health Longevity Inc. “So, do I think Apple and Google and Amazon can do a better job? A thousandfold.”

In his upcoming book, The Future Is Faster Than You Think, which will hit bookshelves in late January 2020, Diamandis makes the case for why he believes big tech companies are going to be running healthcare by 2030.

“We’re going to see Apple and Amazon and Google and all the data-driven companies that are in our homes right now become our healthcare providers,” he says, referring to smart speakers such as Google’s Assistant, Amazon’s Alexa, and Apple’s HomePod. While many of these home voice assistants started with simple tasks like restocking home pantries and surfacing cooking tutorials, they’re already starting to move into the business of managing family well-being.

Amazon has put significant effort into making Alexa a health resource. In the United Kingdom, it has partnered with the National Health Service to answer basic health questions such as “What are the symptoms for shingles?” or “What do you do if you have a cold?” It has also made Alexa compliant with U.S. HIPAA laws and signed partnerships with major healthcare insurers and providers so patients can access or remit health information through the device. To date, there are nearly 2,000 health wellness skills on its platform.

Similarly, the Google Assistant uses search to serve up information about medications, symptoms, and diseases, as well as physicians and medical services. Both the Google Home and the Echo have a Mayo Clinic-developed skill called First Aid that helps people navigate minor injuries. Meanwhile, Apple’s HealthKit takes a slightly different approach to tackling personal health. The kit connects to Apple’s own products such as the HomePod, iPhone, and Apple Watch as well as a bevy of devices from other companies, such as scales and blood pressure cuffs. The HealthKit can also tap into electronic medical records and other apps connected to hospitals and doctors. Essentially, it becomes a single repository for all your precious health data.

Diamandis believes the involvement of home health devices has the potential to lower costs by shifting care away from hospitals, where expenses can be much higher. This is the general idea behind telemedicine, but Diamandis thinks that big consumer tech companies will play a big role in driving that vision. He also thinks that these companies, which have mastered using personal data to anticipate user behavior, can use personal health data to make predictions about a person’s long-term health prospects and advise them accordingly.

Diamandis posits that the more information is available about you – your genetic makeup, your health history, what you ate for breakfast, the bacteria in your bowel movement, how you slept last night, what kind of sound you’re exposed to every day – the better artificial intelligence will be at spotting your potential for illness and suggesting care before the problem becomes intractable. This approach might shift the medical establishment from a structure that treats disease once it’s wreaking havoc in your body to one that prevents the disease from striking in the first place. “It is literally hundreds if not thousands of times cheaper to do that,” he says.

It is this cost savings that he believes will allow for new models of healthcare. Diamandis predicts Apple and Amazon will come up with a service where a person pays a company to keep them healthy, rather than to cover the cost of illness, based on their health history and daily activities.

Sedgwick Institute Book Ponders Future for Work Comp Systems

Sedgwick may have been established as a regional claims administrator in 1969, but it has since grown into a global provider of technology-enabled risk, benefits, and integrated business solutions, with 21,000 employees spread across 65 countries. The company’s solutions span from casualty risk to benefits, and property and loss adjusting to marine claims, alongside offering innovative technology platforms and global expertise in areas such as workers’ compensation, liability, property, disability, and absence management.

The Sedgwick Institute serves as an incubator for some of the best and brightest minds to advance the conversations that affect all the players in our industry, including injured and ill members of the workforce, insurance carriers, employers, property owners, third party claims administrators, brokers, lawmakers and medical providers.

The Sedgwick Institute has released a new book that takes a critical look at the workers’ compensation market and what the future holds for the industry.

Authored by Dr. Richard A. Victor of the Sedgwick Institute, “SCENARIOS FOR THE 2030s: Threats and Opportunities for Workers’ Compensation Systems” discusses the workers’ compensation-related challenges faced by US employers, as well as injured workers, lawmakers, and practitioners of occupational medicine. The book highlights the importance of workers’ comp and how such systems have remained despite social and economic changes.

Dr. Victor was appointed to the senior fellow position at Sedgwick Institute in 2016. He is the former founder and CEO of the Worker’s Compensation Research Institute.

One of the key topics discussed in Victor’s book is that workers’ compensation insurance costs could triple from 2016’s levels, while injured workers see no real change to their benefits. Victor observed in his studies that both employers and worker advocates have agreed that the systems could be “out of balance,” despite attempts to file through legislation and regulatory reforms.

This book also explores some of today’s most perplexing questions:

— Is there a plausible scenario where many state workers’ compensation systems remain in a dangerously unbalanced state?
— And where the workers’ compensation reform process is unable to restore a reasonable balance: What might cause that imbalance? What are the threats? Where are the opportunities?
— Why will the workers’ compensation reform process be unlikely to deliver effective solutions?
— What might replace state workers’ compensation systems?

“I am very fortunate that the Sedgwick Institute supported this work. It provides an opportunity to provoke system stakeholders to think outside the box about upcoming challenges to be faced by a critical part of our nation’s social safety net,” commented Victor.

“With more than 30 years of experience in insurance and large global corporate risk management, I am pleased to have the Sedgwick Institute stand behind a book that truly shines a light on the complexity and importance of the industry and the challenges that it faces,” said Sedgwick Institute director and Sedgwick senior vice-president of strategic solutions Christopher E. Mandel.

Amador County Staffing Company Owner Sentenced for Premium Fraud

The owner of a temporary staffing company was sentenced to 180 hours of community service, three years formal probation and ordered to pay $944,718 in restitution after pleading no contest to insurance fraud for underreporting payroll by approximately $4.9 million that resulted in a $944,718 loss to his insurer.

Michael Zendejas, 47, of Turlock, as the owner and president of Trinity Personnel Inc., an employment agency that provides temporary workers, obtained a workers’ compensation policy from State Compensation Insurance Fund (SCIF) in September 2014 through December 2016.

SCIF performed an audit of the policy and found that Zendejas significantly underreported the company’s payroll by $4.9 million and number of employees in order to receive a lower workers’ compensation insurance premium.

The joint investigation with the California Department of Insurance and the Amador County Workers’ Compensation Fraud Unit found Zendejas provided SCIF with fraudulent Employment Development Department and payroll documents resulting in the $944,718 loss in insurance premiums to his insurer.

On November 22, 2019, Zendejas pleaded no contest to insurance fraud. The case was prosecuted by the Amador County District Attorney’s Office.