Tag: 2019 News

American Labor Alliance (ALA) and CompOne USA are subsidiaries of Agricultural Contracting Services Association, which is a Nevada not-for-profit corporation headquartered in Clovis, Calif.,

The ALA attracted customers by marketing low workers’ compensation premium rates. Its membership surged after it introduced its workers’ comp benefit. It had more than 400 employers with 30,000 members as of February 2017. Two-thirds of those employees are seasonal agricultural workers employed by roughly 50 farm labor contractors.

A number of other business entities were affiliates or subsidiaries of ALA, including CompOne USA, ALA Trust, California Analytics, Farmworkers Enterprise Foundation, Recruiters of America, CompassPilot, ALTA, and Life Abundantly/”LiBu.”

The California Insurance Commissioner issued a Decision and Order imposing a $4,345,000 penalty on American Labor Alliance and CompOne USA for selling workers’ compensation and liability policies to employers of farmworkers without being properly licensed with the Department of Insurance.

FBI agents on behalf of the U.S. Department of Labor served warrants for workplace injury benefit program records in July 2017 at the headquarters office of American Labor Alliance.

Prosecutors have now filed a Grand Jury indictment against American Labor Alliance, Marcus Asay the Co-Founder, chairman, and controlling individual behind ALA. And Antonio Gastelum who served a variety of supervisory roles regarding ALA, including at various times serving as ALA’s chief operations officer, overseeing legal compliance matters for ALA, and controlling a number of ALA’s financial affairs, working directly under defendant Asay.

In addition to selling workers’ compensation insurance, the Indictment claims that from at least 2011 onward, defendant ALA offered what it purported to be a retirement pension plan to its clients, known by a variety of names including the “ALA Trust,” the “ALA Retirement Plan Trust,” or the “ALA Retirement Plan & Trust.” (ALA Trust).

The defendants caused ALA to issue Certificates of Liability to the clients that purported to provide “Workers Compensation and Employers’ Liability” coverage. The defendants further caused the Certificates to list one or more of the National Insurance Companies as “insurers.” The Certificates were signed by defendant Asay.

Prosecutors allege that “Defendants caused the Certificates to contain materially false and fraudulent statements. The National Insurance Companies did not provide Workers’ Compensation insurance to ALA’s clients as the defendants purported in the Certificates. In some cases, the National Insurance Companies had issued liability policies or bonds to ALA itself, but would not have paid Worker’s Compensation benefits to any ALA client whose employee was injured or died.“

“In many of these cases, ALA-issued Certificates of Liability that contained a false policy number, not the real policy or bond number that pertained to ALA’s corporate coverage.”

The Division of Workers’ Compensation (DWC) has issued a notice of public hearing for proposed evidence-based updates to the Medical Treatment Utilization Schedule (MTUS), which can be found at California Code of Regulations, title 8, section 9792.23.

The public hearing is scheduled for Friday, February 15 at 10 a.m. in the auditorium of the Elihu Harris Building, 1515 Clay Street, Oakland. Members of the public may review and comment on the proposed updates no later than February 15.

The proposed evidence-based updates to the MTUS incorporate by reference the latest published guidelines from American College of Occupational and Environmental Medicine (ACOEM) for the following:

– Cervical and Thoracic Spine Disorders Guideline (ACOEM October 17, 2018)
– Elbow Disorders Guideline (ACOEM August 23, 2018)
– Hand, Wrist, and Forearm Guideline (ACOEM January 7, 2019)
– Ankle and Foot Disorders Guideline (ACOEM July 16, 2018)
– Workplace Mental Health: Posttraumatic Stress Disorder and Acute Stress Disorder Guideline (ACOEM December 18, 2018)

The proposed evidence-based updates to the MTUS regulations are exempt from Labor Code sections 5307.3 and 5307.4 and the rulemaking provisions of the Administrative Procedure Act.

However, DWC is required under Labor Code section 5307.27 to have a 30-day public comment period, hold a public hearing, respond to all the comments received during the public comment period and publish the order adopting the updates online.

Walgreens Boots Alliance Inc. and Microsoft Corp. have joined forces to develop new health care delivery models, technology and retail innovations to advance and improve the future of health care.

Current health care systems are a complex combination of public- and private-sector organizations, providers, payors, pharmaceutical companies and other adjacent players. While there has been innovation in pockets of health care, there is both a need and an opportunity to fully integrate the system, ultimately making health care more convenient to people through data-driven insights.

The companies have committed to a multiyear research and development investment to build health care solutions, improve health outcomes and lower the cost of care. This investment will include funding, subject-matter experts, technology and tools. The companies will also explore the potential to establish joint innovation centers in key markets.

The companies will focus on connecting WBA stores and health information systems to people wherever they are through their digital devices. This will allow people to access health care services, such as virtual care – when, where and how they need it.

Working with patients’ health care providers, the companies will proactively engage their patients to improve medication adherence, reduce emergency room visits and decrease hospital readmissions. Core to this model is data privacy, security and consent, which will be fundamental design principles, underscored by Microsoft’s investments in building a trusted cloud platform.

WBA and Microsoft will also focus on enabling more personalized health care experiences from preventative self-care to chronic disease management. WBA will pursue lifestyle management solutions in areas such as nutrition and wellness via customers’ delivery method of choice, including digital devices and digital applications or in-store expert advice.

Through a combination of dedicated R&D and external partnerships, a suite of chronic disease management and patient engagement applications are planned for development, alongside a portfolio of connected Internet of Things (IoT) devices for nonacute chronic care management, delivered by Microsoft’s cloud, AI and IoT technologies.

The companies will work to build a seamless ecosystem of participating organizations to better connect consumers, providers – including Walgreens and Boots pharmacists – pharmaceutical manufacturers and payors. Microsoft and WBA will leverage each other’s market research and identify the right partners to develop solutions.

Early last year, Amazon.com Inc, Berkshire Hathaway Inc and JPMorgan Chase & Co had said they will form a company that could eventually negotiate directly with drugmakers and healthcare providers and use their vast databases to get a better handle on costs.

The Chairman of the Committee on Oversight and Reform, launched one of the most wide-ranging investigations in decades into the prescription drug industry’s pricing practices.

“The Committee on Oversight and Reform is investigating the actions of drug companies in raising prescription drug prices in the United States, as well as the effects of these actions on federal and state budgets and on American families,” Cummings wrote.

“For years, drug companies have been aggressively increasing prices on existing drugs and setting higher launch prices for new drugs while recording windfall profits. The goals of this investigation are to determine why drug companies are increasing prices so dramatically, how drug companies are using the proceeds, and what steps can be taken to reduce prescription drug prices.”

Cummings sent letters to 12 drug companies seeking detailed information and documents about the companies’ pricing practices. The letters seek information and communications on price increases, investments in research and development, and corporate strategies to preserve market share and pricing power. The letters are the first step in the Committee’s comprehensive review of pricing practices. The Committee will hold its first of several hearings in the coming weeks to hear from experts, as well as patients affected by rising drug prices.

The Centers for Medicare and Medicaid Services projects that spending on prescription drugs will increase more rapidly than spending on any other health care sector over the next ten years. The federal government bears much of the financial burden of escalating drug prices through Medicare Part D, which provides drug coverage to approximately 43 million people. The government is projected to spend $99 billion on Medicare Part D in 2019. In 2016, the 20 most expensive drugs to Medicare Part D accounted for roughly $37.7 billion in spending.

A review by the Inspector General of the Department of Health and Human Services found that ten of the most expensive brand-name drugs accounted for $15.6 billion of spending in the catastrophic coverage phase of the Medicare Part D benefit in 2015. The Inspector General has also found that Part D payments for brand-name drugs increased by 62% from 2011 to 2015—after taking into account manufacturer rebates—even though the number of prescriptions fell by 17%.

Approximately 94% of widely-used brand-name drugs on the market between 2005 and 2017 more than doubled in price during that time, and the average price increase in 2017 was 8.4% – four times the rate of inflation – according to an analysis conducted by AARP. A recent Associated Press analysis found that more than 4,400 brand-name drugs increased in price in the first seven months of 2018 alone, compared to 46 price decreases.

In today’s letters, Cummings is focusing on drugs that are among the costliest to Medicare Part D, among the costliest per beneficiary, or had the largest price increases over a five-year period.

Prosecutors alleged that Michael D. Drobot, the former owner of the Pacific Hospital of Long Beach,orchestrated a massive kickback scheme where he paid $50 million dollars in kickbacks to dozens of physicians in order to steer surgeries to his hospital, Pacific Hospital of Long Beach. The kickback scheme was effective and resulted in over $500 million in kickback induced surgeries being performed at Pacific Hospital.

In 2014, Drobot entered into a pre-indictment cooperation plea agreement with the government where he agreed to plead guilty to conspiracy to commit wire/mail fraud (18 U.S.C. § 371) and a violation of the anti- kickback statute (42 U.S.C. § 1320a-7b(b)(2)(A)).

The plea agreement provided that the government would forgo any additional charges against Drobot that could have been filed based on the kickback scheme. The plea agreement required him to cooperate with authorities as well as to obey all Court orders. His “cooperation” lead to the prosecution and conviction of many of his cohorts, including well known physicians in the California workers’ Compensation industry.

On January 10, 2018, pursuant to the plea agreement the Court sentenced him to 63 months in prison, and ordered him to forfeit $10 million to the United States and to partially satisfy the forfeiture order as follows: (1) by a date agreed to with the government, paying $300,000 to the government; (2) by a date agreed to with the government, selling properties in Oregon and providing the proceeds to the government, and (3) by a date agreed to with the government, selling defendant’s 1965 Aston Martin, 1958 Porsche, and 1971 Mercedes Benz, and paying the proceeds to the government. Drobot and the government agreed the cars – with an estimated value of nearly $2 million – would be sold by July 5, 2018.

In June 2018, Drobot told the government that he was trying to sell the cars but needed an extension through the end of August 2018 so that he could sell them at maximum value at the Pebble Beach car auction. The government granted him an extension and provided Drobot written wiring instructions for the proceeds. The parties also made arrangements for the sale proceeds to be transferred directly from the auction house to the government in order to ensure that the proceeds would go to the government.

The auction house records reveal that Drobot diverted the car sales proceeds on June 22, 2018 by taking a $1 million dollar advance on the sale of the cars And, on September 14, 2018 diverted the remaining $675,795.89 proceeds..

As a result, last October, prosecutors filed a motion asking the Court to find Drobot in breach of his plea agreement.

On January 14, 2019 Federal Judge Josephine Staton found that Drobot “ntentionally violated the Court’s order when he diverted the proceeds from the sale of 1965 Aston Martin and 1971 Mercedes Benz to bank accounts that he controlled and ultimately used the funds for personal purposes. In addition, Defendant has failed to abide by the Court’s order that he sell the 1958 Porsche and provided the proceeds to the Government.”