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Tag: 2019 News

California Jury Stunning $2B Cancer Verdict

A California jury has awarded a couple more than $2 billion in a verdict against Monsanto, a subsidiary of Bayer. This is the third recent court decision involving claims that the company’s Roundup weed killer caused cancer.

The jury in Alameda County, just east of San Francisco, ruled that the couple, Alva and Alberta Pilliod of Livermore, Calif., contracted non-Hodgkin’s lymphoma because of their use of the glyphosate-based herbicide. They were each awarded $1 billion in punitive damages and an additional $55 million in collective compensatory damages.

Many legal experts believe the damages will be drastically reduced on appeal.

The verdict represents the third such legal setback for the company in California since mid-2018. In March, a San Francisco jury awarded $80 million to a man who blamed his cancer on his extensive use of Roundup. In August 2018, another San Francisco jury awarded $289 million to a fourth plaintiff. On appeal a judge later slashed that payout to $78 million. Bayer is appealing each of these verdicts. The company insists there is no link between Roundup and non-Hodgkin’s lymphoma.

The outcome of these cases may be incentive for applicant attorneys to file workers’ compensation cases for agricultural workers who have been exposed to the product, and who have been diagnosed with cancer.

“Bayer is disappointed with the jury’s decision and will appeal the verdict in this case, which conflicts directly with the U.S. Environmental Protection Agency’s interim registration review decision released just last month, the consensus among leading health regulators worldwide that glyphosate-based products can be used safely and that glyphosate is not carcinogenic, and the 40 years of extensive scientific research on which their favorable conclusions are based,” the company said in a statement.

At least one environmental group praised the verdict.

Ken Cook, president of the Environmental Working Group, said: “The cloud hanging over Bayer will only grow bigger and darker, as more juries hear how Monsanto manipulated its own research, colluded with regulators and intimidated scientists to keep secret the cancer risks from glyphosate.”

Four years ago, a United Nations-sponsored scientific agency declared that Roundup probably causes cancer. As NPR’s Dan Charles reported, the finding from the International Agency for Research on Cancer caused Monsanto to launch a fierce campaign to discredit the IARC’s conclusions.

“Internal company emails, released as part of a lawsuit against the company, show how Monsanto recruited outside scientists to co-author reports defending the safety of glyphosate, sold under the brand name Roundup. Monsanto executive William Heydens proposed that the company ‘ghost-write’ one paper. In an email, Heydens wrote that ‘we would be keeping the cost down by us doing the writing and they would just edit & sign their names so to speak.’ Heydens wrote that this is how Monsanto had ‘handled’ an earlier paper on glyphosate’s safety.”

More than 13,000 other lawsuits have been filed against its subsidiary, Monsanto, the maker of Roundup.

After three jury verdicts in California, a trial is scheduled for August in St. Louis County in Missouri, the site of Monsanto’s former headquarters.

En Banc WCAB Defines “Catastrophic Injury”

Kris Wilson was employed as a firefighter by the Department of Forestry when he reported to a wildfire in Lompoc. He was assigned to the drainage area where he inhaled fumes and smoke from the fire as he was not wearing a breathing apparatus. Applicant performed this work for several hours until approximately 8:00 a.m. the next day.

The next day he went to Sierra Vista Hospital in San Luis Obispo and went through the emergency department, and was later taken to Kaiser, and then to the Antelope Valley Hospital where he was admitted to the ICU and remained hospitalized for two weeks. He developed ulcerations of the tongue, mouth and lips. He vomited with high fevers and developed a rash all over his entire body. He had renal failure, transaminitis with interstitial infiltrates and respiratory failure requiring intubation. He was ultimately extubated approximately two weeks after his admission to the hospital.

He returned to work a year later but was unable to keep pace with his coworkers and became concerned about his ability to work as a firefighter. He was taken off work by his PTP and last worked in July 2015.

Wilson claimed injury to his lungs, psyche, left eye, head, brain, heart and circulatory system. A psychiatric PQME said that Wilson “described feeling emotionally traumatized following his symptoms resulting from the fire and by his near death experience in the hospital following his injury. As reported above, he believes that he has a serious physical injury that may kill him, shorten his life or send him back to the hospital. He has a vivid memory of waking up while he was intubated at the hospital and this is re-experienced in a recurring nightmare approximately 2 to 3 times each week”.

The WCJ issued a Findings and Award which found that applicant is entitled to a permanent disability award of 66%. The permanent disability award excluded an impairment rating for applicant’s psychiatric injury pursuant to section 4660.1(c) finding that he had not suffered a catastrophic injury. Reconsideration was granted, and it was found that Wilson suffered a catastrophic injury and was entitled to the psychiatric component of his injury in the En Banc decision of Wilson v State of California, Cal-Fire.

Since the phrase “catastrophic injury” is ambiguous as used in section 4660.1(c)(2)(B), the WCAB considered extrinsic sources to “select the construction that comports most closely with the apparent intent of the Legislature.”  It concluded that the “Legislature did not intend to permit an increased impairment rating for a psychiatric injury only in cases where the employee suffers a specific impact to his or her earning capacity as a result of the injury.”

However, determination of whether an injury is catastrophic will be a fact-driven inquiry. These factors include, but are not limited to, the following, as relevant::

1. The intensity and seriousness of treatment received by the employee that was reasonably required to cure or relieve from the effects of the injury.
2. The ultimate outcome when the employee’s physical injury is permanent and stationary.
3. The severity of the physical injury and its impact on the employee’s ability to perform activities of daily living (ADLs).
4. Whether the physical injury is closely analogous to one of the injuries specified in the statute: loss of a limb, paralysis, severe burn, or severe head injury.
5. If the physical injury is an incurable and progressive disease.

Not all of these factors may be relevant in every case and the employee need not prove all of these factors apply in order to prove a “catastrophic injury.” This list is also not exhaustive and the trier of fact may consider other relevant factors regarding the physical injury. In determining whether an injury is catastrophic, the trier of fact should be mindful of the legislative intent behind section 4660.1(c).

The evidence in this case “therefore supports that the intensive treatment and the lasting impact of the injury on applicant have resulted in a catastrophic injury.”

44 States Claim 20 Drugmakers Fixed Prices

44 states, led by Connecticut Attorney General William Tong, filed a 524 page lawsuit accusing Teva Pharmaceuticals USA Inc of orchestrating a sweeping scheme with 19 other drug companies to inflate drug prices – sometimes by more than 1,000% – and stifle competition for generic drugs, state prosecutors said on Saturday.  California was not listed as a plaintiff in this new case.

The lawsuit accuses the generic drug industry, which mainly sells medicines that are off patent and should be less expensive, of a long history of discreet agreements to ensure that companies that are supposedly competitors each get a “fair share.” The situation worsened in 2012, the complaint said.

“Apparently unsatisfied with the status quo of ‘fair share’ and the mere avoidance of price erosion, Teva and its co-conspirators embarked on one of the most egregious and damaging price-fixing conspiracies in the history of the United States,: the complaint said.

With Teva at the center of the conspiracy, the drug companies colluded to significantly raise prices on 86 medicines between July 2013 and January 2015, the complaint said.

The drugs included everything from tablets and capsules to creams and ointments to treat conditions including diabetes, high cholesterol, high blood pressure, cancer, epilepsy and more, they said. In some instances, the coordinated price increases were more than 1,000 percent, the lawsuit said.

The lawsuit also names 15 individuals as defendants who it said carried out the schemes on a day-to-day basis.

“The level of corporate greed alleged in this multistate lawsuit is heartless and unconscionable,” Nevada Governor Steve Sisolak said in a statement.

According to New Jersey Attorney General Gurbir Grewal, more than half of the corporate defendants are based in New Jersey, and five of the individual defendants live in the state.

The lawsuit seeks damages, civil penalties and actions by the court to restore competition to the generic drug market.

Generic drugs can save drug buyers and taxpayers tens of billions of dollars a year because they are a lower-priced alternative to brand-name drugs.

The lawsuit filed on Friday is parallel to an action brought in December 2016 by the attorneys general of 45 states and the District of Columbia. That case was later expanded to include more than a dozen drugmakers.

“ABC” Dynamex Employment Test is Retroactive

In 2008, a putative class action was filed in the District of Massachusetts by a Massachusetts plaintiff, Giovani Depianti, and two Pennsylvania plaintiffs, against Jan-Pro Franchising International Inc. By the end of that year, there was an additional plaintiff from Massachusetts plus seven more from other states, including three who are California residents.

They all had a common cause to pursue: that Jan-Pro, a major international janitorial cleaning business, had developed a sophisticated “three-tier” franchising model to avoid paying its janitors minimum wages and overtime compensation by misclassifying them as independent contractors.

The Massachusetts district court severed the California plaintiffs’ claims and sent them to the Northern District of California, the plaintiffs’ place of residence. Over the years, the cases progressed in several jurisdictions, including California and Georgia, as well as the original case in Massachusetts. The First Circuit’s Depianti opinion, characterizing “the nearly decade long life-cycle” of the Depianti litigations as a “Whirlwind Procedural Tour,” 873 F.3d at 24, aptly traces that tour.

Ultimately all of them were dismissed including the one in California. The California case was appealed to the 9th Circuit Court of Appeals. Because the California Supreme Court decision in Dynamex Ops. W. Inc. v. Superior Court, 416 P.3d 1 (Cal. 2018), adopted the “ABC test” for determining whether workers are employees under California wage order laws.postdated the district court’s decision, the 9th Circuit Court of Appeals issued an order directing the parties to brief its effect of Dnyamex on the merits of this case.

The Ninth Circuit Court of Appeals held in the published case of Vazquez v Jan-Pro Franchising International Inc., that Dynamex applied retroactively, and that the case must be remanded to the district court to consider the merits in light of Dynamex.

As the Supreme Court of California has explained, it “is basic in our legal tradition” that “judicial decisions are given retroactive effect.” Newman v. Emerson Radio Corp., 772 P.2d 1059, 1062 (Cal. 1989). This is true even for decisions that overrule precedent. As in the federal system, appellate courts in California apply intervening state supreme court rules retroactively when reviewing cases, even if the judgment in the trial court was entered prior to the ruling from the California Supreme Court. See, e.g., Penn v. Prestige Stations, Inc., 83 Cal. App. 4th 336, 339 (2000).

The California Supreme Court has repeatedly quoted then-Justice Rehnquist in explaining that “[t]he principle that statutes operate only prospectively, while judicial decisions operate retrospectively, is familiar to every law student.” Evangelatos v. Superior Court, 753 P.2d 585, 596 (Cal. 1988) (emphasis omitted) (quoting United States v. Sec. Indus. Bank, 459 U.S. 70, 79 (1982)).

The opinion has major implications for California employers that rely on independent contractors, including gig economy companies like Uber Technologies and Postmates, and could even compel some businesses to simply reclassify contractors as employees and change pay and benefits.

15 Chiropractors Face Fraud Changes

The Los Angeles County District Attorney’s Office announced that 15 chiropractors have been charged in a $6 million insurance fraud and illegal kickback scheme involving automobile collision medical claims. The felony complaint in case BA477147 lists a total of 18 felony counts, including charges against all of the defendants of insurance fraud and participating in patient referral rebates when licensed in the healing arts or as a chiropractor.

The alleged ringleader of the operation, Yury Chernega (dob 7/1/71) of Studio City, faces four counts each of the aforementioned charges as well as four counts of failure to file income tax return and one count of money laundering. The charges include allegations of taking more than $500,000 from about 30 insurance companies through fraud and embezzlement.

He faces a possible maximum sentence of 18 years and nine months in state prison if convicted as charged. Prosecutors are requesting that his bail be set at $325,000.  Chernega’s alleged co-conspirators, their recommended bail and possible maximum prison sentence are:

– Michael Milman (dob 3/26/66) of Beverly Hills, $200,000 bail, 10 years and six months in prison
– John Sherf (dob 8/28/75) of Sherman Oaks, $200,000 bail, 18 years and six months in prison
– Jae Ho Park (dob 4/26/68) of Coto de Caza, $225,000 bail, 11 years and six months in prison
– Danush Haghani (dob 1/9/73) of Yorba Linda, $225,000 bail, 11 years and six months in prison
– Kamron Nourgostar (dob 7/15/83) of Irvine, $200,000 bail, 10 years and six months in prison
– David Wayne Ginoza (dob 5/15/64) of Torrance, $200,000 bail, 10 years and six months in prison
– Alan P. Grubstein (dob 2/27/50) of Rancho Cucamonga, $225,000 bail, 11 years and six months in prison
– Kamiar Riahi (dob 8/8/74) of Woodland Hills, $200,000 bail, 10 years and six months in prison
– Sam Amirmoazzami (dob 12/11/73) of Encino, $225,000 bail, 11 years and six months in prison
– Robin Stacy Long (dob 5/19/68) of Newhall, $200,000 bail, 10 years and six months in prison
– Ramin Lavi (dob 7/21/63) of Chatsworth, $225,000 bail, 11 years and six months in prison
– Gustavo Adolfo Nino (dob 3/17/64) of Pasadena, $200,000 bail, 10 years and six months in prison
– Nahid Haji Acs (dob 2/23/57) of Rancho Cucamonga, $200,000 bail, 10 years and six months in prison
– Victoria Davidovsky Lucas (dob 9/1/68) of Pacific Palisades, $200,000 bail, 10 years and six months in prison

From 2015 through 2018, Chernega allegedly offered to refer new patients to other chiropractors in return for an illegal referral fee, through which he collected about $6 million, prosecutors said. The patients allegedly had been involved in automobile collisions.

The defendants also are accused of filing false claims for medical services they never provided. Additionally, Chernega allegedly didn’t report the income from the illegal kickbacks on his taxes, prosecutors said.

Deputy District Attorneys Heba Matta and LaChandra Wilkerson of the Auto Insurance Fraud Division are prosecuting the case.

Reserving Lifetime Awards – It’s Complicated!

Bank of America Merrill Lynch analysts Felix Tran and Haim Israel, believe that genome sequencers such as Illumina, high-tech players such as Alphabet and biotech companies such as Novartis are on the cusp of “bringing unprecedented increases to the quality and length of human lifespans.”  If true, this certainly will be a factor in the equation of reserving lifetime workers’ compensation awards.

Innovation in genome science, big data and “ammortality,” which includes wearable technology and products in the so-called wellness space, could soon prolong healthy human life well beyond 100 years, according to BofA analysts.

“Medical knowledge will double every 73 days by 2020 vs. every 3.5 (years) in 2010, and genomic sequencing costs have fallen 99.999% since 2003,” Israel and Tran wrote. “This has enabled a new frontier in precision medicine to further extend life expectancy, heralding a ‘techmanity’ (technology meets humanity) revolution.”

Genomics, or the study of the human genome, will provide the “next generation of gene editing technology offering potentially revolutionary advances in prevention and disease treatments,” Bank of America said. Companies such as $46 billion genome sequencer Illumina, $27 billion lab instrument manufacturer Agilent and $89 billion life science equipment maker Danaher all have exposure to the space.

The growth of artificial intelligence combined with an ever-growing body of health-care data should help researchers analyze pathology, or the study of the causes and effects of diseases, in the years to come. Improvements in the technology have the potential to bring down health-related costs and enable precision medicine, the BofA analysts said.

Names in this space include Google parent Alphabet, Amazon (including its joint venture with Berkshire Hathaway and J.P. Morgan Chase) and Apple.

The “ammortality” theme “will help to improve health spans and [lifespans] to the betterment of human vitality, enabling the world population to live freer of disease rather than forever.”  Companies that represent “ammortality” plays as described by BofA include health-care technology firms such as Intuitive Surgical and Zimmer, which worked with Apple Watch to start a clinical study for 10,000 knee and hip replacement patients.

“Moonshot medicine” companies – or those that offer revolutionary solutions for health care – include the aforementioned Illumina and genomics companies as well as therapy makers such as Sangamo, Vertex Pharma and Neurocrine. These companies are working on cures or treatments for some of humanity’s toughest diseases, ranging from cystic fibrosis to Parkinson’s and Alzheimer’s.

Antidepressants Increase Case Closure Time

Concurrent treatment of chronic pain, depression, anxiety and occupational injuries is associated with large increases in total workers compensation claim cost and delayed return to work, according to a study authored by the chief medical officer for AF Group.

Published in the latest Journal of Occupational and Environmental Medicine, the study examined the impact of anti-anxiety benzodiazepines and antidepressants in combination with opioids on workers comp claim cost and closure rates, according to a statement from AF Group.

To gather data, researchers with Lansing, Michigan-based AF Group and the Johns Hopkins University School of Medicine in Baltimore analyzed 22,383 work-related indemnity claims from 2008-2013 that had three years maturity in Michigan from AF Group brands, the company said.

Results showed that the slowest claim closure rate – 58.3% in that time period – occurred among claimants with prescriptions for all three types of medications. Claims with both opioid and antidepressant prescriptions closed at a rate of 64.8%. The group without any medications had the highest closure rate at 91.8%, followed by the group with only opioid prescriptions at 89.1%.

Even when controlling for age, chronic pain, medical complexity and claim development in terms of years, antidepressant claims were more likely to remain open at the end of the five-year study period, according to AF Group.

“The overall direction of our findings was expected – injured workers who are experiencing a significant amount of pain or suffering from depression or anxiety will require more medical services than injured workers not experiencing such symptoms or psychosocial disorders,” said Dr. Dan Hunt, medical director at AF Group, in the statement. “What did surprise us is the increased recovery time and medical costs associated with antidepressant medications.”

Med-Legal Evaluators Face Fraud Charges

Psychologist Danita Stewart, 51, of Chatsworth, and Dr. Catalino Dureza, 54, of La Quinta, have been charged for allegedly submitting fraudulent insurance claims for Medical Legal Evaluations in an attempt to steal tens of thousands of dollars from multiple insurers.

Stewart, a licensed psychologist, allegedly submitted 36 fraudulent insurance claims between April 2015 and June 2015 to five different insurers for Medical Legal Evaluations for a total of $90,714. A Medical Legal Evaluation is conducted to evaluate an employee’s work-related injury.

Even though Stewart was a licensed psychologist she has never been certified as a Qualified Medical Examiner as required by law to conduct and bill for Medical Legal Evaluations. Stewart allegedly conducted these fraudulent evaluations at clinics in Fresno, Tulare, and Kern Counties.

Dureza, a licensed medical doctor, had obtained the proper certification to conduct and bill for Medical Legal Evaluations, but his certification lapsed.

Dureza allegedly continued to conduct and bill for Medical Legal Evaluations, and once he was recertified he conducted and billed for unauthorized Medical Legal Evaluations. Between January 2014 and May 2015, Dureza allegedly submitted 17 fraudulent insurance claims for Medical Legal Evaluations conducted in Fresno County to five different insurers for a total of $16,292.

Stewart and Dureza posted bond. Stewart will be arraigned on May 10, 2019. Dureza will be arraigned on May 20, 2019. The Fresno County District Attorney’s Office is prosecuting the cases.

These cases were investigated by the Central Valley Workers’ Compensation Task Force, an anti-fraud partnership which includes the California Department of Insurance, the Fresno County District Attorney’s Office, the Tulare County District Attorney’s Office, the Kern County District Attorney’s Office, the Kings County District Attorney’s Office, the Madera County District Attorney’s Office, the Merced County District Attorney’s Office, the Employment Development Department, and the Franchise Tax Board.

HHS Finalizes TV Ads – Drug Price Rule

Health and Human Services announced a final rule from the Centers for Medicare and Medicaid Services (CMS) that will require direct-to-consumer television advertisements for prescription pharmaceuticals covered by Medicare or Medicaid to include the list price if that price is equal to or greater than $35 for a month’s supply or the usual course of therapy.

In May 2018, the Trump administration introduced the American Patients First blueprint to bring down prescription drug prices. The blueprint laid out four strategies for solving the problems patients face: boosting competition, enhancing negotiation, creating incentives for lower list prices, and bringing down out-of-pocket costs.

Less than a year later, this final rule has been published to implement the vision laid out in the blueprint. Up until now, drug companies were required to disclose the major side effects a drug can have.

The new rule takes effect in 60 days, The information should appear in text large enough for most people to read and include a statement that patients with health insurance may pay a different sum.

The rule allows companies to include list prices of competitor products, and says HHS will publicize companies that create false or misleading ads. But primary enforcement will be left to industry. If a drug company fails to include required information, a competitor can file suit under the deceptive and unfair trade practice provisions of the Lanham Act.

HHS Secretary Alex Azar told reporters he could not provide an estimate of whether or how much the rule would change drug prices because “the behavioral aspects of this are too unpredictable” to quantify. But when combined with other steps the administration is taking on drug costs, the rule will lower medication prices, he said.

He dismissed statements from drug companies that the ads could cause some insured patients to stop filling their prescriptions out of the mistaken belief the drugs would cost them too much.

“If a drug company is afraid that their prices are so excessive and abhorrent that they will scare patients away from using their drugs, well they ought to look inside themselves and think about whether they should be lowering their prices,” Azar said.

“If you are ashamed of your drug prices, change your drug prices, it’s that simple,” he said.

The drug lobby PhRMA has been pushing a different plan that would not put prices directly in ads, but direct patients to more nuanced information, such as a website that includes the drug’s list price, an expected range of patient out-of-pocket costs and financial support available to patients.

PhRMA has as indicated it may mount a First Amendment challenge to the administration’s plan – but HHS says it believes the rule is consistent with Supreme Court precedent.

The drug industry spent more than $5.5 billion on advertising in 2017, including nearly $4.2 billion on television ads, according to HHS.

WCRI Panelists Predict Paradigm Shift to Telemedicine

The Insurance Journal reports that the use of telemedicine may be in its nascent stages within the workers’ compensation system, but the starting line has definitely been crossed with employers and workers’ comp insurers embracing the ability to provide remote medical care to injured employees using the video technology embedded in smart phones, tablets and computers.

Dr. David, a managed care consultant, made those comments as moderator of a forum on telemedicine during the Workers’ Compensation Research Institute’s (WCRI) 35th Annual Issues and Research Conference held earlier this year.

There is a “paradigm shift” occurring in workers’ comp when it comes to telemedicine, according to Dr. Stephen Dawkins, medical director at Cadaceus USA, an Atlanta, Georgia-based provider of medical management services in occupational health, and a member of the WCRI telemedicine panel. That paradigm shift is a “huge thing that we’re all going through whether you are the patient, the employer, whatever the case may be.”

AF Group, the parent organization of a group of workers’ comp carriers that together provide coverage in all 50 U.S. states, took the plunge several years ago and began offering telemedicine services to its policyholders. The program has been well received, according to Dr. Dan Hunt, medical director for AF Group, who told Insurance Journal he expects the use of telemedicine will become “very standard within the workers’ compensation industry” in the coming years.

Similarly, Dr. Dinesh Govindarao, medical director at State Compensation Insurance Fund (SCIF) in California, which also offers policyholders a telemedicine option, said it’s likely the industry will see a surge within the next three to five years.

Kurt Leisure, vice president of Risk Services for California-based The Cheesecake Factory, said his company began experimenting with telemedicine for addressing workplace injuries in February 2018.

Speaking as a member of the WCRI panel on telemedicine, Leisure explained that his company, which has more than 40,000 staff members and 214 full-service restaurants in 41 states and Puerto Rico, as well as 18 restaurants licensed internationally, is still in the process of determining the effectiveness of its telemedicine program.

However, benefits for both the staff and the company are apparent, he said. For the injured employee, “there’s no waiting room, there’s no four-hour emergency waiting room; they have the option. They can either go to the emergency room or they [can take advantage] of the telemedicine program. They are the ones that decide.

Kim Haugaard, senior vice president of Policyholder Services at workers’ comp carrier, Texas Mutual Insurance Co., said some of his company’s concerns with telemedicine center on the practicality of how it is being “delivered to injured workers, such as: does the provider have the technical capabilities to effectively offer telemedicine? At what stage of an injury is telemedicine no longer appropriate and conventional evaluation and treatment being appropriate?”