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Tag: 2020 News

Ventura Farm Labor Contractor Faces Comp Fraud Charges

39 year old Robert Zermeno Delara, of Fillmore, was arrested and charged with insurance fraud for allegedly denying his injured employees health and disability benefits to which they were entitled, and failing to notify his insurance carriers of industrial injuries sustained by his employees.

Delara is the owner-operator of two farm-labor contracting businesses located in Ventura County, Pacific Coast Farm Labor and B&R Farm Labor.

Through these businesses, Delara provides farm-labor and harvesting services to local agricultural producers who rely upon him to provide a skilled workforce while adhering to the safety and workplace injury reporting requirements of California law.

Delara is charged with three felony counts of violating Insurance Code section1871.4 for making false or fraudulent statements to discourage injured employees from seeking medical care.

He is charged with four additional felony counts of violating Penal Code section550(b)(3) for concealing or failing to disclose information that would impact his injured employees’ entitlement to benefits.

It is alleged that Delara’s failure to report workplace injuries resulted in premium losses to his workers’ compensation carriers of approximately $555,326, as well as additional costs related to the denial of benefits.

Delara faces a maximum possible sentence of 11years.

His arraignment is scheduled on November 30, 2020,at 9:00 a.m. in courtroom 12 of the Ventura County Superior Court.

Lack of Surgical Implant Price Transparency Doubles Costs

Paradigm Catastrophic Care Management announced the findings from an independent study commissioned with Boston Strategic Partners, Inc. (BSP), which determined Paradigm Specialty Networks’ cost reduction performance on implants exceeds the industry standard.

Boston Strategic Partners affirmed that “Fusion by Paradigm, reduces implant costs by 25 percentage points more than the typical industry outcomes.

Boston Strategic Partners, Inc. is a global health care analytics firm focused on health economics and outcomes research. The BSP study sourced 137 million lines of claim data from industry sources, including the Fusion by Paradigm reference price database, concluding that Paradigm Specialty Networks achieves the highest cost savings across the industry.

According to BSP, the lack of manufacturer implant pricing transparency often leads to insurer overpayment, potentially up to two times the cost to the hospital. In BSP’s independent analysis of industry practices and outcomes, Fusion by Paradigm outperformed the industry in delivering cost savings across key procedural categories, including the following:

Orthopedic procedures represent a significant number of surgeries paid for by workers’ compensation payers. The study revealed Fusion by Paradigm reduces fixation procedure costs by an average of 25 percentage points over the industry standard.
Spinal procedures, including cervical fusions and neurostimulator implantations, are often associated with high implant costs. Fusion by Paradigm generates cost reductions that are on average 18 percentage points higher than typical industry savings across these procedures.
Neurological and cranial procedures achieve significant cost savings with Fusion by Paradigm, with implant cost reductions surpassing the industry average by an additional 16 and 14 percentage points, respectively.

Paradigm added Fusion to its suite of services in 2017 through its acquisition of ForeSight Medical, a surgical management pioneer in the workers’ compensation industry. Fusion reports a 10-year track record of success.

Fusion uses a four-phase adjudication process that generates consistent, data-driven allowances for workers’ compensation payers. In addition to forensic assessment and the determination of objective allowances, Fusion incorporates real-time data to ensure the most up-to-date implant costs are factored into the review process. Paradigm Specialty Networks provides a thorough explanation of review to the provider with each adjudicated case and stands by its allowances with full defense.

Sheriff’s Failure of Fitness-for-Duty Test Not a Psychological “Injury”

Edward Marquez worked for the County of Los Angeles for approximately 20 years as an officer for the Los Angeles County Office of Public Safety. When that agency merged into the Los Angeles County Sheriff’s Department, Marquez was conditionally offered the position of deputy sheriff, provided he could establish that he was qualified for the position by passing a background check, medical examination, psychological examination, and polygraph examination.

Marquez failed the psychological examination and the Sheriff’s Department subsequently demoted him to the position of custody assistant. He was placed in a temporary assignment. He only worked in that position for a few months before he took a medical leave, and applied to the Los Angeles County Employees Retirement Association for a service-connected disability retirement under Government Code section 31720.

The Association granted Marquez’s application for a disability retirement, it found that his disability was not service connected because it related to a personnel decision, not the performance of his job duties.

Marquez challenged that decision by filing a petition for a writ of administrative mandamus. The trial court found that Marquez’s psychological incapacity was service connected because the psychological examination was required by the Sheriff’s Department as a condition of Marquez’s employment.

The Court of Appeal concluded that the court erred in its legal analysis. It reversed the judgment and remand for further the unpublished case of Marquez v. Los Angeles County Employees.

The only questions are whether Marquez’s psychological disability arose “out of” and “in the course of” employment, and whether his employment “substantially contributed” to his disability, as required under section 31270.

Section 31720 requires that a disability applicant’s employment “must contribute substantially to, or be a real and measurable part of, the employee’s permanent disability,” in order to qualify the employee for a disability retirement.

Although he submitted to the fitness-for-duty test required for the position of deputy sheriff, he was not injured during the psychological examination. He was not injured by the examination. And he was not required to take any action as a consequence of the examination.

Marquez suffered psychological distress as a result of the Sheriff’s Department’s decision not to promote him to the position of deputy sheriff. That decision, and Marquez’s reaction to it, did not occur in connection with Marquez’s performance of his job duties.

CDI Decreases 2021 Advisory Pure Premium Rate by 19.4%

The California Insurance Commissioner has adopted and issued a revised average advisory pure premium rate, lowering the benchmark to $1.45 per $100 of payroll for workers’ compensation insurance, effective January 1, 2021.

This marks the tenth consecutive reduction to the average advisory pure premium rate benchmark since January 2015.

He did not order an additional adjustment for COVID-19 at this time, citing the need for additional data and review by the Department of Insurance and the Workers’ Compensation Insurance Rating Bureau.

Instead, he directed workers’ compensation insurance companies to clearly identify any COVID-19 adjustments in rate filings subsequently submitted to the Department of Insurance, and directed the WCIRB to collect data on aggregate premium charged for the COVID-19 adjustment on an ongoing basis.

“With the pandemic continuing to create uncertainty for the near future, we need to continue to review the data along with the impact of both vaccine distribution and additional and necessary public health measures to bend the curve,” said Commissioner Lara. “Now is not the time to put an extra burden on front-line employers in health care, agriculture and other industries who are keeping our fragile economy afloat. While insurance companies can set appropriate rates, I urge them to be cautious and driven by the data.”

The indicated average advisory pure premium rate level of $1.45 approved by the Commissioner is about 19.4 percent lower than the industry-filed average pure premium rate of $1.80 as of July 1, 2020.

Commissioner Lara’s decision results in an average advisory pure premium rate that is below the $1.56 average rate recommended by the WCIRB in its filing, which includes an add-on of $.06 for projected COVID-19 claims costs. The WCIRB’s recommended average pure premium rate would have been $1.50 without the projected COVID-19 claims costs, which compares to the Commissioner’s just-approved rate of $1.45. Commissioner Lara issued the advisory rate after a public hearing on October 5, 2020 and careful review of the testimony and evidence submitted by stakeholders.

The pure premium rate is only advisory, as the Legislature has not given the Commissioner rate authority over workers’ compensation rates.

14 Charged in So. Cal. $22M SJDB Fraud Scheme

The first of 14 defendants charged in three separate cases was arraigned on November 23, for their roles in a workers’ compensation re-training voucher fraud scheme that caused a loss to insurance carriers in excess of $22 million.

The 14 defendants are charged with a variety of counts including conspiracy, insurance fraud, capping, and receiving kickbacks.

An investigation started in January 2019 when the Riverside County DA’s Office, assisted by the California Department of Insurance and the California Bureau for Private Post-Secondary Education, started looking into suspected fraud at two for-profit vocational schools.

The fraud involved Supplemental Job Displacement Benefits (SJDB) provided by workers’ compensation insurance carriers, and was suspected at Ryon College in Riverside and Sutech School in Los Angeles.

The investigation revealed that two of the charged defendants, Oswaldo Forero, of Irvine; and Melbe Zepeda, of Bellflower, operated the two “sham” schools that were primarily funded by workers’ compensation vouchers.

These vouchers, with values ranging from $6,000 to $10,000, were intended for injured workers to be re-trained or to assist them in learning new skills to accommodate their disabilities enabling them to re-enter the workforce.

It is alleged that Forero and Zepeda employed numerous “cappers” to illegally recruit students to the two schools they operated.

These “cappers” were paid to sign up as many students as possible to attend the schools, even if the student didn’t have the requisite educational background – a high school diploma or equivalent.

The priority of the defendants was to make money using various tactics such as over-billing for laptops and tools, collecting lucrative vouchers for students that never or rarely attended the school, faking admission tests, and giving students cash for their vouchers.

Third COVID-19 Vaccine in Final Testing Stages

Drugmaker AstraZeneca says that late-stage trials show its COVID-19 vaccine is highly effective, buoying the prospects of a relatively cheap, easy-to-store product that may become the vaccine of choice for the developing world

The results are based on an interim analysis of trials in the U.K. and Brazil of a vaccine developed by Oxford University and manufactured by AstraZeneca. No hospitalizations or severe cases of COVID-19 were reported in those receiving the vaccine.

AstraZeneca is the third major drug company to report late-stage data for a potential COVID-19 vaccine as the world waits for scientific breakthroughs that will end a pandemic that has pummeled the world economy and led to 1.4 million deaths.

But unlike the others, the Oxford-AstraZeneca vaccine doesn’t have to be stored at freezer temperatures, making it potentially easier to distribute, especially in developing countries.

The Oxford-AstraZeneca vaccine was 90% effective in preventing COVID-19 in one of the dosing regimens tested; it was less effective in another. Earlier this month, rival drugmakers Pfizer and Moderna reported preliminary results from late-stage trials showing their vaccines were almost 95% effective.

While the AstraZeneca vaccine can be stored at 2 degrees to 8 degrees Celsius (36 degrees to 46 degrees Fahrenheit), the Pfizer and Moderna products must be stored at freezer temperatures. In Pfizer’s case, it must be kept at the ultra-cold temperature of around minus-70 degrees Celsius (minus-94 Fahrenheit).

The AstraZeneca vaccine is also cheaper. It has pledged it won’t make a profit on the vaccine during the pandemic, and has reached agreements with governments and international health organizations that put its cost at about $2.50 a dose. Pfizer’s vaccine costs about $20, while Moderna’s is $15 to $25, based on agreements the companies have struck to supply their vaccines to the U.S. government.

All three vaccines must be approved by regulators before they can be widely distributed.

Oxford researchers and AstraZeneca stressed they weren’t competing with other projects and said multiple vaccines would be needed to reach enough of the world’s population to end the pandemic.

AstraZeneca said it will immediately apply for early approval of the vaccine where possible, and it will seek an emergency use listing from the World Health Organization, so it can make the vaccine available in low-income countries.

The results reported Monday come from trials in the U.K. and Brazil that involved 23,000 people. Of those, 11,636 people received the vaccine – while the rest got a placebo.

Late-stage trials of the vaccine are also underway in the U.S., Japan, Russia, South Africa, Kenya and Latin America, with further trials planned for other European and Asian countries.

The AstraZeneca trials were paused earlier this year after a participant in the U.K. study reported a rare neurological illness. While the trials were quickly restarted in most countries after investigators determined the condition wasn’t related to the vaccine, the FDA delayed the U.S. study for more than a month before it was allowed to resume.

AstraZeneca has been ramping up manufacturing capacity, so it can supply hundreds of millions of doses of the vaccine starting in January, Chief Executive Pascal Soriot said earlier this month.

DIR Occupational Safety Board Sets COVID Safety Standards

The Department of Industrial Relations’ (DIR) Occupational Safety and Health Standards Board unanimously adopted emergency temporary standards to protect workers from hazards related to COVID-19. The emergency standards will be in effect immediately if approved by the Office of Administrative Law in the next 10 calendar days.

The temporary standards apply to most workers in California not covered by Cal/OSHA’s Aerosol Transmissible Diseases standard. Under the new regulations, employers must have a written COVID-19 Prevention Plan that addresses the following:

System for communicating information to employees about COVID-19 prevention procedures, testing, symptoms and illnesses, including a system for employees to report exposures without fear of retaliation.
— Identification and evaluation of hazards – screening employees for symptoms, identifying workplace conditions and practices that could result in potential exposure.
— Investigating and responding to cases in the workplace – responding immediately to potential exposures by following steps to determine who may have been exposed, providing notice within one business day about potential exposures, and offering testing to workers who may have been exposed.
Correcting COVID-19 hazards – including correcting unsafe conditions and work practices as well as providing effective training and instruction.
— Physical distancing – implementing procedures to ensure workers stay at least six feet apart from other people if possible.
Face coverings – providing face coverings and ensuring they are worn.
— Adopting site-specific strategies such as changes to the workplace and work schedules and providing personal protective equipment to reduce exposure to the virus.
— Positive COVID-19 case and illness recording requirements and making the COVID-19 Prevention Plan accessible to employees and employee representatives.
Removal of COVID-19 exposed workers and COVID-19 positive workers from the workplace with measures to protect pay and benefits.
Criteria for employees to return to work after recovering from COVID-19.
Requirements for testing and notifying public health departments of workplace outbreaks (three or more cases in a workplace in a 14-day period) and major outbreaks (20 or more cases within a 30-day period).
— Specific requirements for infection prevention in employer-provided housing and transportation to and from work.

The Standards Board will file the rulemaking package today with the Office of Administrative Law, which has 10 calendar days to review and approve the temporary workplace safety standards enforced by Cal/OSHA.

Once approved and published, the full text of the adopted emergency standards will appear in the new Title 8 sections 3205 (COVID-19 Prevention), 3205.1 (Multiple COVID-19 Infections and COVID-19 Outbreaks), 3205.2 (Major COVID-19 Outbreaks) 3205.3 (COVID-19 Prevention in Employer-Provided Housing) and 3205.4 (COVID-19 Prevention in Employer-Provided Transportation to and from Work) of the California Code of Regulations. Pursuant to the state’s emergency rulemaking process, after an initial effective period the board will have two opportunities to readopt the temporary standards.

Cal/OSHA will expeditiously convene a stakeholder meeting that will include industry and labor representatives to review the requirements of the emergency regulation and solicit feedback and recommend updates.

The Occupational Safety and Health Standards Board, a seven-member body appointed by the Governor, is the standards-setting agency within the Cal/OSHA program. The Standards Board’s objective is to adopt reasonable and enforceable standards at least as effective as federal standards. The Standards Board also has the responsibility to grant or deny applications for variances from adopted standards and respond to petitions for new or revised standards.

So. Cal. Edison Electrician Charged with 63K Comp Fraud

Mark Redheffer, 48, of Fontana, was arraigned on felony counts of insurance fraud and attempted perjury after allegedly lying and concealing information in a workers’ compensation claim in order to receive over $63,000 in undeserved temporary disability benefits from his employer, Southern California Edison.

After receiving a referral from Redheffer’s employer, SCE, the Department of Insurance launched an investigation into Redheffer’s claim that he suffered injuries while working as a linesman apprentice in 2015.

The extensive investigation, which included surveillance of Redheffer to confirm the legitimacy of his claimed physical limitations and injury, exposed his workers’ compensation claim to be fraudulent.

The felony complaint alleges that Redheffer concealed material information relating to his medical history during an evaluation by a Qualified Medical Examiner, who determined that Redheffer suffered significant physical limitations and was no longer able to perform his job duties.

Additionally, Redheffer is charged with lying in a deposition in pursuit of the workers’ compensation claim.

Redheffer was charged with three felony counts of insurance fraud and attempted perjury. Prior to Redheffer’s arraignment on November 19, 2020, an arrest warrant had been issued in the amount of $50,000.

Redheffer is scheduled to return to court on January 29, 2021.

The case is being prosecuted by the San Bernardino County District Attorney’s Office.

California Leads the Nation in COVID-19 Civil Lawsuits Filed

As employers continue to grapple with the fallout from the pandemic, the immediate threat of COVID-19 litigation looms large. To help stay one step ahead, the Jackson Lewis COVID-19 Employment LitWatch tracks complaints filed in federal and state courts nationwide that allege labor and employment law violations related to COVID-19.

The Jackson Lewis COVID-19 Employment LitWatch tracks civil complaints filed in federal and state courts across the country that both are related to the COVID-19 epidemic and raise labor and/or employment law issues. Cases that merely referenced COVID-19 are not included. The COVID-19 Employment LitWatch is meant to provide trends and should not be considered an exhaustive dataset.

Jackson Lewis has a dedicated team tracking and responding to the developing issues facing employers as a result of COVID-19, which includes members from:

Class Actions and Complex Litigation
— Corporate Diversity Counseling
Disability, Leave and Health Management
— Employee Benefits
— General Employment Litigation
— Labor and Preventative Practices
— Wage and Hour
— Workplace Safety and Health

The LitWatch data is based on a feed of thousands of civil complaints filed per day that is provided by Courthouse News Service (CNS).

A review of COVID-19-related labor and employment complaints filed between January – August 2020, determined that an overwhelming majority (approximately two-thirds) of complaints involve an allegation of wrongful termination. Typically, each of these complaints contains an underlying claim that led to the employee’s termination, such as, for example, an employee requesting an accommodation.

The database reflects a total of 1,107 civil complaints nationwide as of today. Not unexpectedly, 214 of these cases have been filed in California, of which 199 are in state and 15 are in federal courts.

The healthcare industry has generated 263 total complaints, followed by manufacturing with 89, and retail and consumer goods 76.

CMS Reports Aggressive Efforts Reduce Fraud by $15 Billion

Aggressive corrective actions aimed at reducing Medicare fee-for-service (FFS) improper payments have resulted in less healthcare fraud, waste, and abuse, as well as $15 billion in savings, according to the latest data from CMS.

The data released earlier today also revealed that the Medicare FFS improper payment rate declined to 6.27 percent in fiscal year (FY) 2020 from 7.25 percent in FY 2019. It was the fourth consecutive year that the Medicare FFS improper payment rate was below 10 percent, CMS reported.

Medicare FFS improper payments decreased the most in home healthcare. CMS reported $5.9 billion in savings attributed to fewer improper payments to home health agencies between FY 2016 and 2019.

The agency also saw a $1 billion reduction in estimated improper payments made to skilled nursing facilities in the last year.

Reductions in both the home health and skilled nursing facility improper payment rates can be attributed to CMS efforts to educate providers through the Targeted Probe and Educate program, as well as changes to the policy related to supporting information for physician certification and recertification for skilled nursing facility services, CMS stated.

Improper payments occur when reimbursements do not meet statutory, regulatory, administrative, or other legally application requirements, CMS explained. A common example is insufficient or missing documentation for a claim.

Without proper documentation or errors in the documentation, CMS cannot verify if its programs correctly reimbursed for the services rendered. As a result, CMS may over or underpay the provider for the claim.

Additionally, a smaller portion of improper payments should never have been made largely because of issues with medical necessity, coding, beneficiary eligibility, and other errors on the claim. These end up as losses to the government.

The agency has developed a five-pillar program integrity strategy for reducing improper payments.  The five components of CMS’ strategy are stopping bad actors who have defrauded federal healthcare programs; preventing fraud; mitigating emerging programmatic risks related to value-based payment programs; reducing provider burden; and leveraging new technology (e.g., artificial intelligence and machine learning).

CMS implemented the strategy in 2019. Since then, there has been a $3.17 billion reduction in Medicare FFS improper payments, according to the new data.