Tag: 2019 News

Christopher Devereux was employed as an attorney by State Compensation Insurance Fund. He sustained an admitted industrial injury in the form of hypertension, diabetes, heart, circulatory, and cognitive impairment, as a result of continuous trauma ending in 2015.

The cardiology QME reported that the cardiac impairment was separate and distinct from the cognitive impairment reported by the neuropsychology QME. Thus he said that the most accurate rating in this case would be to add the impairment ratings, and do not require the Combined Values Chart.

The QME went on to say “frankly, when we are dealing with mental impairments and physical impairments, in terms of the ultimate disability there often is not much the way of overlap. It is my perspective that these two impairments that are discrete and. in very different areas are best combined through a strict adding procedure than anything else. I do not hrave a basis to argue that they are synergistic to..any. significant-degree. That is, I would not argue that the actual disability is greater than the simple additive combining of the impairments.

The WCJ found applicant sustained 90% permanent disability by adding rather than combining the disabilities. The WCJ determined that applicant’s combined permanent disability rating, from the WPI ratings of the two QMEs should be based upon adding the impairments rather than using the CVC, in view of the physicians’ opinions that this was most appropriate in the absence of overlapping impairments.

The petition for reconsideration of this finding by the State Fund was denied in the panel decision of Devereux v. SCIF.

“The rating schedule provides that the CVC is “generally” used to combine multiple disabilities, but that other methodology may be used depending upon the relevant circumstances. It is the role of the medical expert to make a medical determination as to how to combine the separate impairments. One reason for using the CVC is to avoid combining impairments that lead to a rating greater than 100% permanent disability. However, this concern is not justified here, since applicant cannot receive a permanent disability award for a single injury greater than 100%”.

“Multiple cases have held that this determination is best based upon the extent to which the impairments affect applicant’s ability to perform activities of daily living. It is the opinions of the medical evaluators and not a rigid application of the CVC in the rating schedule that should prevail. (Athens Administrators v. Workers’ Comp, Appeals Bd. (Kite) (2013) 78 Cal.Comp.Cases 213.”

“It has been recognized that a disability rating, ‘should reflect as accurately as possible an injured employee’s diminished ability to compete in the open labor market.’ (LeBoeuf. v. Workers’ Comp. Appeals Bd, (1983) 34 Cal.3d 234,245-246 [48 Cal.Comp.Cases 587].) In this case, the WCJ reasonably concluded that the medical evaluators properly determined that adding the hypertension and cognitive impairment disabilities more accurately reflects applicant’s entire permanent disability than results from using the CVC.”

Reuters reports that Berkshire Hathaway Inc. is in advanced discussions to sell its Applied Underwriters workers compensation unit to a consortium of insurance firms, people familiar with the matter said Friday.

The deal would be a rare divestment by Warren Buffett, who has built a corporate empire of more than 90 businesses in sectors spanning insurance, chemicals, energy, railroads, food and retail. Unlike private equity firms, the 88-year-old billionaire investor does not seek to cash out once he takes over a company.

However, San Francisco-based Applied Underwriters now sits outside Berkshire Hathaway’s insurance focus, making it a noncore asset Mr. Buffett wishes to shed, the sources said.

Berkshire Hathaway’s insurance businesses include the auto insurer Geico, reinsurer General Re, and a unit that protects against major catastrophes or unusual risks.

Applied Underwriters, on the other hand, provides bundled workers compensation and other employment-related insurance products targeted to small and medium-sized businesses.

A grouping of insurance firms and a hedge fund-backed reinsurance firm are in talks to buy Applied Underwriters at around the value of its book of business, the sources said, declining to disclose the price and the identity of the buyers.

The sources cautioned there is always a possibility that deal negotiations end unsuccessfully and asked not to be identified because the matter is confidential.

Berkshire Hathaway did not immediately respond to a request for comment.

Applied Underwriters has also been in the crosshairs of California’s insurance regulator, reaching a settlement agreement in June 2017 over “bait and switch marketing tactics,” according to a statement from the state’s insurance commissioner at the time. Berkshire Hathaway acquired Applied Underwriters in May 2006.

Mr. Buffett is scheduled to publish his annual letter to Berkshire Hathaway shareholders this weekend, alongside the company’s annual report. Berkshire Hathaway’s cash pile reached $103.6 billion as of the end of September, as Mr. Buffett has struggled to find attractive acquisition opportunities to put money to work.

Mr. Buffett’s efforts to divest Applied Underwriters come as one of his biggest investments, Kraft Heinz Co., has soured. On Thursday, the food giant announced a multibillion-dollar write-down on its marquee brands, raising concerns that years of rigorous cost cuts had eroded the value of its Kraft and Oscar Mayer products.

Over the past week, DEA agents arrested six doctors, physician assistants and suspected drug traffickers on federal narcotics charges. Operation Hypocritical Oath also resulted in criminal cases against three other defendants – two of them doctors – and a series of administrative actions by the DEA that led to four medical practitioners losing their licenses.

Dr. Michael Anthony Simental, 47, of Corona, who practices at the Kaiser Permanente facility in Riverside, was arrested on charges of illegally distributing hydrocodone, an opioid found in drugs such as Vicodin.

The investigation into Simental began after one of his patients died of a drug overdose last June. Records from the California Medical Board and Kaiser showed a string of disciplinary actions, complaints about his prescribing practices, and questions about his sobriety while working. A criminal complaint outlines numerous communications between Simental and the overdose victim, some of which indicate that Simental “was aware he was prescribing excessive volumes of opiate drugs” to the woman and her husband.

Gabriel Hernandez, 58, of Anaheim, a physician assistant who works at a Long Beach pain management clinic known as Vortex Wellness & Aesthetics, was arrested on Wednesday pursuant to a criminal complaint that charges him with distributing oxycodone without a legitimate medical purpose. Over a two-year period that ended in November, Hernandez prescribed nearly 6,000 controlled substances – more than half of which were for maximum-strength oxycodone, which means he was responsible for approximately 446,000 oxycodone pills being dispensed, according to court documents.

Hernandez often wrote prescriptions for drug cocktails known as the “holy trinity” – a narcotic, a tranquilizer and/or a muscle relaxant – which are sought out by drug addicts and are particularly dangerous because of the threat of fatal overdose, according to the affidavit in support of the complaint. .

Dr. Reza Ray Ehsan, 60, of Bel-Air, was arrested on charges that allege he unlawfully sold controlled drugs to an agent posing as a patient during undercover meetings in December 2018 and January 2019. As documented in an affidavit in support of a search warrant for Ehsan’s medical files, he sold more than 700,000 pills – mostly opioid painkillers.

An 18-count indictment also alleges that Ehsan structured cash deposits to prevent banks from submitting mandatory reports for currency transactions exceeding $10,000.

Saloumeh Rahbarvafaei, 40, of Northridge, a nurse practitioner employed at several locations, including the Good Neighbor Clinic in Leimert Park, was arrested on charges of unlawfully distributing hydrocodone.

According to the criminal complaint filed in this case, undercover agents purchased prescriptions from Rahbarvafaei during five separate transactions last year. Rahbarvafaei allegedly did not examine either of the two undercover federal agents, and her meetings with them lasted a few minutes each. In each of the five meetings, the agents paid Rahbarvafaei in cash and in return she provided them prescriptions for several narcotics, including hydrocodone, court documents state.

Monica Ann Berlin, 41, of Del Mar, a former employee at a doctor’s office in Beverly Hills and who is presently with a Del Mar-based company that offers perioperative care services, was arrested last Thursday pursuant to a criminal complaint charging her with distribution and possession of a controlled substance. Berlin allegedly stole a signature stamp and prescription pads belonging to the doctor who employed her, and she used them to write fraudulent prescriptions and distribute controlled substances to others.

Berlin allegedly forged at least 44 prescriptions for controlled substances that another person filled at pharmacies in Beverly Hills and Rancho Santa Fe. In exchange for the drugs, Berlin’s buyer treated her to lavish dinners and bought her gifts. According to the complaint, Berlin sent text messages to her buyer using coded language by describing the drugs as “candies” and “Tic Tacs.”

Ana Leblanc, 33, of Chino Hills, who worked at a Santa Ana clinic for two weeks last year, was arrested this morning on charges of fraudulently obtaining prescription drugs.

Leblanc, who has no authority to handle or prescribe controlled substances, used a prescription pad from her employer to write prescriptions for controlled substances, including oxycodone, to herself and others without the knowledge or approval of the doctor listed on the prescription script. In addition, she created a patient chart for herself at her place of employment, “diagnosed” herself with anxiety, and ordered Xanax from the clinic’s medication supply.

A new California Workers’ Compensation Institute (CWCI) study finds that non-steroidal anti-inflammatories (NSAIDs) have supplanted opioids as the most common therapeutic drug group prescribed to injured workers in California, while payment data show that both dermatological medications and anticonvulsants now rank ahead of opioids in terms of total reimbursements.

Using data from 5.75 million prescriptions dispensed to California injured workers from 2009 to June 2018, CWCI analysts examined changes in the prescription and payment distributions among therapeutic drug groups, identified trends in the use of generics, and determined average amounts paid for drugs within each drug group over the past decade.

The results show that efforts to curb inappropriate use of opioids – tighter scrutiny via utilization review and independent medical review; restrictions by payers, medical provider networks, pharmacy benefit managers and in the Medical Treatment Utilization Schedule (MTUS) formulary; and growing awareness of opioid risks – are continuing to have an effect, as opioids fell to 18.0% of the prescriptions filled in the first half of 2018, down from 20.2% in 2017, and down from 30.5% a decade ago.

Conversely, NSAIDs, often prescribed as non-opioid alternatives to treat pain, surpassed opioids as the top drug group in California workers’ compensation in 2016, and since then, their share of the prescriptions has continued to grow, climbing to a record 31.7% of the drugs dispensed to injured workers in the first half of 2018. Anticonvulsants’ share of the prescriptions also has increased, more than doubling from 4.1% in 2009 to 9.7% in the first half of 2018, likely due to their growing use as a non-opioid alternative to treat neuropathic pain.

The 2018 data show anticonvulsants were the third most prescribed drug group, moving ahead of muscle relaxants, which under the MTUS formulary that took effect on January 1, 2018, are not exempt from utilization review, with the exception of limited special fill or perioperative allowances that restrict the quantity of the drug that can be dispensed.

Until a few years ago, growth in dermatological payments was largely driven by high-cost “custom” pharmacy compounded drugs, but with legislative changes that took effect in 2012 (AB 378), high-profile indictments involving compounded drug kickbacks, and more public awareness, custom compounds have become less prevalent, though the study notes two other factors now underlie the continued growth in dermatologlical payments:

– – the increased prevalence of high-cost, mass-produced private label topicals containing one or more active ingredients (e.g., capsaicin, lidocaine, menthol, or methyl salicylate) commonly found in over-the-counter topical analgesics, which are marketed to physicians for in-office or mail order dispensing; and
– – increased payments for topicals containing a prescription NSAID (e.g., diclofenac) which are available in a number of formulations and strengths, some of which are exempt from utilization review under the formulary.

In addition to the increasing share of the workers’ compensation prescription dollars going toward dermatologicals, the study also found that anticonvulsants’ share of the drug spend tripled from 4.8% in 2009 to 15.2% in the first half of 2018, so anticonvulsants now rank ahead of opioids as the second most costly drug group.

The data show that most of the growth in anticonvulsant’s share of the payments occurred over the past four years, coinciding with the decline in opioid use, suggesting the use of certain anticonvulsants in place of opioids. Notably, anticonvulsant prescriptions used in California workers’ comp are heavily concentrated in just two drugs, one of which is only available as a brand drug, and that drug accounted for nearly three quarters of the anticonvulsant dollars paid in the first half of 2018.

As Medicaid officials investigate whether pharmacy middlemen are ripping off taxpayers by manipulating drug prices in the insurance program covering 3 million poor Ohioans, the Ohio Dispatch reports that another state agency recently found it overpaid millions under a similar arrangement.

“We thought we had a solid contract that kept us from being taken advantage of (but) discovered we were being hosed,” said John Hanna, former pharmacy program manager for the Ohio Bureau of Workers’ Compensation.

“I’ve been a pharmacist since 1977 and I was stunned when I saw the level of manipulation that went on that I didn’t know about,” said Hanna, who retired last September after eight years.

After nearly a year of investigating, Ohio is taking its first steps to recover money from pharmacy middlemen who do billions of dollars worth of business with state agencies. The bureau spent about $86 million last year on pharmacy claims for about 41,000 injured workers.

Attorney General Dave Yost announced Tuesday that he is seeking repayment of nearly $16 million paid to pharmacy-benefit manager OptumRx by the Bureau of Workers’ Compensation. Yost intends to take OptumRx to nonbinding mediation, saying the company has overcharged the bureau since 2015. Such mediation is required under the contract between the bureau and OptumRx. If it fails, the dispute presumably will be taken to court.

“The state of Ohio and the BWC consider these matters of public significance and have calculated the following overcharges attributable to OptumRx’s failure to adhere to agreed discounts on generic drugs. …” says a copy of Yost’s Feb. 11 letter to OptumRx that was obtained by The Dispatch.

The firm that conducted the analysis, Healthplan Data Solutions, determined that OptumRx overcharged BWC by $5.7 million in 2017. That’s 6.5 percent of the $86 million in total agency spending on prescription drugs that year. The bureau fired OptumRx as a consequence of the analysis.

The bureau’s analysis, conducted by the Columbus-based Healthplan Data Solutions, found the private company hired by the bureau to run its pharmacy program overcharged the agency $5.6 million in 2017.

As described by Hanna, workers’ comp was paying pharmacists less to fill prescriptions than they were charging the state, allowing them to pocket millions.

In industry jargon, the practice is known as “spread pricing.” Serious questions about are being raised about it in Iowa, Kentucky, Arkansas and nationally

Hanna said “PBMs started in ’80s to process prescriptions and they slowly grew in the marketplace and realized they had the ability to control pricing and reimbursements. That’s where the concept of the spread came in – you’re my client and I tell you I will process prescriptions for you for your prescription drug plan for X dollars, and then I go to the pharmacies and tell them I will pay you X minus $9 and that’s my spread.”

“The client has no idea what the pharmacy is being paid unless they have a transparent contract.”.