Tag: 2019 News

The owner of a Campbell vocational training school has been charged with a kickback scheme where he illegally diverted more than $650,000 in workers’ compensation insurance money without training injured students trying to get back into the workplace.

Officials estimate that out of about 100 cases, two students of Rashad Said’s Advanced Vocational Institute (AVi) had taken some classes – and they were online with no live interaction.

Said, 62, of San Jose, who stands charged of 11 felony counts of workman’s comp fraud and kickbacks, is a former board member of the San Jose Regional Workforce Development Board. The Board’s duties include approval of local vocational schools eligible to receive government funding for job training to assist displaced workers, including workers’ comp claimants. Said, who faces incarceration if convicted, was arraigned on October 23, 2019. His plea hearing is scheduled for November 11, 2019 in Department 38 in the Hall of Justice in San Jose.

Under state rules, some workers whose injury makes them unqualified to continue with their present job can get re-trained for another kind of job. They receive vouchers which can be as high as $10,00 which can be used for tuition, books, tools/equipment, supplies and vocational counseling.

In this case, Said is accused of giving kickbacks to counselors who referred workers to his school. The state allows disabled workers to use up to 10 percent of their voucher for vocational counseling services. Said is accused of giving unwitting workers – many of them who spoke little English and didn’t understand the arrangement – cash amounts instead of any training. In fact, when an investigator searched the AVi offices on a weekday, it was closed and the computers were covered in dust.

The investigation began in the summer of 2018 after a student complained that another Santa Clara vocational school had refused to refund the remainder of her voucher after doctors advised her computer class was aggravating her wrist injury. The state launched an inquiry that lead to that school’s owner being charged. The inquiry also revealed transgressions by other schools leading to the discovery of AVi’s criminal offenses.

Other SJDB fraud cases have been reported recently.

Between 2015 and 2017, Salvador Franco, Jr., 42, of Downey and Mirella Flores, 45, of Paramount participated in an alleged Supplemental Job Displacement Voucher Fraud scheme involving the Technical School, Inc., doing business as Technical College, Inc., and Graduates Do Succeed Institute, doing business as GDS Institute, operating in Southern California.

Those two defendants entered no contest pleas to attempting to defraud multiple insurers of approximately $120,000 by having students sign over their Supplement Job Displacement vouchers and collecting the money without providing required vocational training.

Two Home Depot warehouse workers had an accident while driving vehicles called electric pallet jacks at Home Depot’s Mira Loma distribution warehouse.

After a workplace accident and inspection, the Division of Occupational Safety and Health cited Home Depot for several violations of workplace safety standards. The investigator found that the industrial truck operators wore tennis-type shoes while they were operating industrial trucks.

The Division determined Home Depot had violated regulations which requires “appropriate foot protection” for employees exposed to foot injuries, and which sets standards for the safe operation of industrial trucks and requires employers to make sure their employees comply. The Division said that in this case “appropriate” would be steel toed shoes.

Home Depot challenged the citations. Ultimately, the respondent, California Occupational Safety and Health Appeals Board, affirmed the footwear citation because Home Depot employees were exposed to foot injuries when they manually lift heavy loads and when they worked on foot or walked in close proximity to industrial trucks. They found Home Depot’s safety policies and prohibition on open-toed or open-heeled shoes didn’t adequately protect those employees.

The Board affirmed the truck-operation citation because Home Depot did not establish the employee caused the infraction despite knowing her conduct was contrary to the employer’s safety requirements.

Home Depot filed a petition for writ of mandate, asking the trial court to relieve them of the footwear citation on the ground the findings weren’t supported. The trial court declined, and Home Depot asked the court of appeal to make the same determination. However, the court of appeal affirmed in the unpublished case of Home Depot USA v California Occupational Safety and Health Appeals Board.

Home Depot did not require their employees to wear protective shoes when they worked in the warehouse. Their policy required only that they wear “closed-toed and closed-heeled shoes.” Home Depot’s policy said “Flip-Flops, sandals, open-toed shoes, or open heeled shoes” are unacceptable.

Home Depot says they don’t require their warehouse employees to wear steel-toed boots or similar footwear because such footwear can cause ergonomic problems, tripping hazards, and fatigue, and they can be “cumbersome,” “uncomfortable” and “bulky.”

Amicus curiae, Retail Litigation Center, Inc. and National Federation of Independent Business, who support Home Depot, object that the Board’s opinion articulates an “uncertain standard [that] will have far-reaching consequences for employees in a wide range of businesses, including large retailers and small independent businesses that may have industrial trucks or pallet jacks in the facility even though the majority of employees encounter them only rarely.”

However, the court of appeal concluded that there was substantial evidence supporting the Board’s determination that Home Depot employees were both actually exposed and realistically likely to be exposed to foot injuries. A violation of the safety order is not based on previous history of accidents or injuries resulting from the exposure but rather on the existence of the danger which may cause injury.

The court did however “agree the language in the Board’s opinion can be read to sweep too broadly, so we emphasize our holding is limited to the facts and evidence of the case.”

According to the Occupational Safety and Health Administration, musculoskeletal conditions are among the top expenses for employee healthcare benefits, accounting for about a third of all worker injury and illness cases.

With healthcare costs projected to rise 4.9% in 2020, many large companies are ready to try something new. They plan to spend more upfront to try to prevent higher costs later on. For conditions like chronic back pain, that means trying to prevent injuries or treat them with innovative physical therapy to avoid surgery and potentially, opioid additions.

Some companies take a traditional proactive approach, like Rosen Hotels & Resorts, an Orlando-based chain, which has morning stretches for hotel staff, a free gym, plus a full-scale primary care health clinic with a physical therapist and chiropractor.

Other companies are trying to “appify” their care delivery. Brakebush Brothers Inc, a chicken processor headquartered in Wisconsin, turned to a third-party provider, Solveglobal, to crunch frequent worker surveys about their pains down to a line level on a specific shift, according to Matt VanderKooi, chief operating officer at Solveglobal.

One time they solved a rash of low back pain problems by figuring out that workers were reaching too much at a specific spot. Another time they could find no common source for random physical complaints from workers on a shift, but were able to identify that the problems were caused by work stress from a new supervisor.  Savings: $1 million this past year, said VanderKooi.

Post Holdings Inc. is using the service Hinge Health, which gives participants a tablet pre-loaded with exercises specific to their condition. So far 15% of the 1,200 employees eligible for the pilot are participating, out of about 8,000 on the U.S. medical plan, said Karen Little, vice president of payroll and benefits for Post.

Cost savings are not apparent yet, but Little said musculoskeletal disorders were running about 15% of Post’s total healthcare costs.

Typically, people in pain go to a doctor.  Physera clients receive email and postcards about medical services. The company also hosts pop-up clinics, said Dan Rubinstein, chief executive officer. Since launching fully in 2019, the free version of the Physera app has 25,000-plus users, along with 1,000 participants in the full corporate program.

Physera measures success based on actions and improvement. Users are asked what steps they are likely to take – like getting an MRI. Out of 100 patients, a handful consider surgery and ultimately decide they do not need it.

For Jenna Kreitinger, a 27-year-old veterinary technician from Mesa, Arizona, the difference has been nothing short of life-changing. After she used Hinge Health consistently, her chronic spinal pain dissipated after years of trying many other solutions.

“Physical therapy was costly, and it was hard to find the time,” said Kreitinger, who now has a baby and is back to work full-time. “Just those small changes I made, it has helped me so much.”

Brink News gathers timely perspectives from experts on risk and resilience around the world to inform business and policy decisions on critical challenges. It is the digital news service of Marsh & McLennan Insights, managed by Atlantic 57, the digital consultancy of The Atlantic.

This month, Brink News published a story about how “Workers’ Compensation Is About to Be Transformed.“

Workers’ compensation is the largest premium segment in the U.S. commercial insurance market. While some progress has been made in addressing expenses, the costs of administering the system are stubbornly high. Take California as an example, where it costs the system $0.54 to deliver $1 worth of benefits. In Medicare, the overhead costs to deliver the same benefits are $0.02.

A number of factors are now converging that will enable the insurance industry to reduce risk and transfer it more effectively. These factors will enable insurers to lessen earnings volatility and build deeper and more meaningful relationships with customers. Businesses will have a clearer picture of risks facing workers and the tools and capabilities to proactively take mitigating actions.

Several developments are driving these changes, which will impact how workers’ compensation is bought, sold and delivered.

Investments in technology and operational efficiency improvements have largely focused on treatment and back-to-work programs after an injury has occurred. The industry has been stymied in its desire to prevent worker injuries by a lack of data and technology that would enable preemptive action.

The market for workplace wearable technology is undergoing rapid growth, and startups are targeting high-loss areas, such as the more than 30% of injuries that are due to musculoskeletal disorders.

Traditionally, workers’ compensation insurance premiums are determined based on historical loss data. Emerging data sources will provide much deeper insight into predictors of risk and enable companies to proactively reduce risks with pinpoint accuracy.

The result will be better alignment of risk and price, rewarding companies that leverage these technologies to sustain and improve safety culture. We expect policies that provide premium credits to emerge first, similar to personal auto, where telematics-based information on driving behavior is most developed.

Moving toward a data-rich future is not without peril. A proliferation of vendors and standards, a vast number of new data sources, new artificial intelligence techniques and connectivity options begin to describe the technical complexities.

Herbert Allen Kelly III, 65, of Rancho Murieta, owner of Kelly Roofing Company, was arrested Friday on six felony counts of workers’ compensation fraud after allegedly underreporting his business’ payroll and number of employees resulting in a loss to his insurer of $50,000.

On January 12, 2015, while employed with Kelly Roofing Company, a worker slipped and fell from a roof at a jobsite, falling approximately 25 feet. As a result of the employee’s injuries, a workers’ compensation claim was opened with Kelly’s insurer, State Compensation Insurance Fund (SCIF), and to date SCIF has paid approximately $730,175 in medical and disability payments. Following the incident, Cal/OSHA conducted an inspection of the jobsite with Kelly who advised he had three employees.

SCIF conducted audits of Kelly Roofing Company on a yearly basis to verify premium and payroll. Kelly reported approximately $31,685 in payroll for the December 2012 to December 2013 policy period, yet reported $0 in payroll and no employees for the remainder of the policy period, 2014 through 2018.

During the SCIF audit for policy period 2015, when the accident occurred, Kelly reported he had no employees. However, SCIF noted Kelly Roofing Company had a workers’ compensation claim in January 2015. Kelly alleged he only paid the injured worker $500 for a single day of work and did not have any payroll records for him.

Department of Insurance detectives served search warrants on both Kelly and Kelly Roofing Company’s bank accounts and conducted an audit of bank records. Detectives discovered approximately $89,781 in total audited payroll with up to 15 possible employees. The department confirmed Kelly Roofing Company had employees during the period when Kelly claimed he had no employees and no payroll. The audited payroll was ultimately forwarded to SCIF who determined Kelly Roofing Company owed approximately $50,000 in unpaid past premiums.

This case is being prosecuted by the Sacramento County District Attorney’s Office.