Tag: 2020 News

A new California Workers’ Compensation Institute (CWCI) study examined the initial impact of replacing the statewide average GAF in the workers’ comp Official Medical Fee Schedule (OMFS) with a system that uses smaller Metropolitan Statistical Area (MSA) localities when applying regional cost adjustments as part of the fee schedule formula.

The state adopted the GAF change for services rendered to injured workers on or after 1/1/19 to improve payment accuracy and align OMFS allowable fees with those allowed by Medicare and other systems.

Under the new structure developed by Medicare in 2017, there are 32 payment localities in California.

The CWCI study found that switching from statewide to locality-specific geographic adjustment factors (GAFs) in the calculation of California workers’ comp physician and non-physician service fees has not resulted in a major shift in where the dollars go, and despite concerns, the switch does not appear to have generated inappropriate shifting of billing to higher reimbursed areas, or caused rural providers to leave the system.

The study found that both before and after the switch, medical providers in Los Angeles County accounted for a much larger share of the office visit services and payments than providers in any other locality, though their proportion of services and payments did decrease by about 5 percentage points in the first year after the locality specific GAFs were adopted.

Those decreases, however, were offset by 5 percentage point increases in the proportion of E&M visits and payments to providers in nearby San Bernardino/Riverside Counties, a shift that occurred after a large occupational medicine group expanded into the Inland Empire.

Other than that, the study found no significant changes in the proportion of E&M services or payments among the geographic localities, and no indication of a shift in services or payments to providers in either urban or rural areas of the state

The study also showed that the switch to the new GAF had little effect on the types of E&M services used, as follow-up visits by established patients remained the most prevalent type of office visits, accounting for 86.5% of the E&M services in 2018 and 80.5% in 2019.

A key factor influencing the average payments in each locality was the use of discount contracts, such as those paid to providers within an employer’s medical provider network, which allow payments below the fee schedule amounts.

The percentage of E&M services in the study sample that were paid at a discounted rate fell from 78.3% to 76.6%, but the average discount increased from 15.5% to 17.1%, so thus far the use of these contracts has helped mitigate the impact that the change to the fee schedule’s geographic adjustment factor has had on the average amounts paid for E&M services.

A rapper who boasted in a YouTube music video about getting rich from committing unemployment benefits fraud was just arrested on federal charges of carrying out that very scheme by fraudulently applying for more than $1.2 million in jobless benefits, including by using stolen identities.

Fontrell Antonio Baines, 31, who uses the stage name “Nuke Bizzle,” of Memphis, Tennessee and who currently resides in the Hollywood Hills, was arrested pursuant to a criminal complaint alleging a scheme to fraudulently obtain unemployment insurance benefits under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act).

Baines allegedly exploited the Pandemic Unemployment Assistance (PUA) provision of the CARES Act, which is designed to expand access to unemployment benefits to self-employed workers, independent contractors, and others who would not otherwise be eligible.

According to an affidavit filed with the complaint, Baines possessed and used debit cards pre-loaded with unemployment benefits administered by the California Employment Development Department (EDD). The debit cards were issued in the names of third-parties, including identity theft victims. The applications for these debit cards listed addresses to which Baines had access in Beverly Hills and Koreatown.

Evidence gathered during the investigation established that at least 92 debit cards that had been pre-loaded with more than $1.2 million in fraudulently obtained benefits were mailed to these addresses, according to the affidavit. Baines and his co-schemers allegedly accessed more than $704,000 of these benefits through cash withdrawals, including in Las Vegas, as well as purchases of merchandise and services.

The affidavit further alleges that Baines bragged about his ability to defraud the EDD in a music video posted on YouTube and in postings to his Instagram account, under the handles “nukebizzle1” and “nukebizzle23.” For example, Baines appears in a music video called “EDD” in which he boasts about doing “my swagger for EDD” and, holding up a stack of envelopes from EDD, getting rich by “go[ing] to the bank with a stack of these” – presumably a reference to the debit cards that come in the mail. A second rapper in the video intones, “You gotta sell cocaine, I just file a claim”.

On September 23, Las Vegas police arrested Baines, who had in his possession eight debit cards, seven of which were in the names of other persons, the affidavit states.

The criminal complaint alleges three felony offenses – access device fraud, aggravated identity theft, and interstate transportation of stolen property. If convicted of all of these charges, Baines would face a statutory maximum sentence of 22 years in federal prison.

If COVID-19 behaves like other workers’ compensation lung and disease claims, about two out of 100 cases may result in some degree of permanent partial disability and one out of 5,000 may result in permanent total disability, according to a new report by the National Council on Compensation Insurance.

In a follow up to the report by the Claims Journal, Jeff Eddinger, NCCI’s senior division executive for regulatory business management, said Thursday that’s not enough to be a major cost driver, but does represent a real risk that insurers should keep in mind when assessing the potential impact of the pandemic on losses.

“The vast majority of COVID claims are small-dollar claims,” Eddinger said in a telephone interview. “There is a small percentage that will result in permanent disability claims.”

NCCI has included the potential for permanent disability into its Hypothetical Scenarios Tool, a calculator released in May that models COVID-19 costs under various scenarios. The calculator allows users to adjust assumptions, such as the percentage of workers who are infected, the percentage hospitalized and now the percentage who are permanently disabled.

Adjusting the calculator to assume no permanent disability claims results in projected COVID-19 costs of $25.1 billion for the 38 states that use NCCI services. But the total cost increases by $4 billion when using the new default settings for permanent disability provided by NCCI.

NCCI said in a previous study that it assumes 8.5% of workers who file claims will require hospitalization for moderate symptoms and 1.5% will develop severe cases that require critical care.

The bottom line: There is a 2.3% chance that a reported COVID-19 claim will result in permanent partial injury and there’s a 0.05% chance that a COVID claim will result in a permanent total injury.

The Claims Journal analysis continues to note that data reported by state officials in California and Florida suggests that COVID-19 claims have become a sizable fraction of the total number of workers compensation claims filed. According to the California Division of Workers’ Compensation, COVID-19 was the cause of 44,354 first reports of injury from Jan. 1 to Sept. 30, or 11% of the total number.

The Florida Division of Workers’ Compensation reports that 21,221 COVID-19 indemnity claims have been filed as of Sept. 30, or 31.8% of the total number of injury and illness claims in the state.

Marsh issued a report this week that concludes, “many of the most dire predictions about COVID-19’s impact on workers’ compensation systems have not been realized.”

“Claims of COVID-19 exposure in the workplace have been outpaced by a decline in other types of reported occupational injuries, and the workers’ compensation insurance market remains competitive,” the report says.

Marsh said data from its clients shows that the number of new claims reported from January through August showed illness and injury rates ranged from a 29% decrease in April to a 5% increase in June.

The claims filed so far have proven to be inexpensive: 96% cost less than $3,500, according to one respondent to the Health Strategy Associates survey.

The US healthcare industry is undergoing significant disruptions as the coronavirus pandemic catalyzed the need for improved healthcare delivery and digital health startups are at the helm of this transformation.

Globally, healthcare funding to private firms reached $18.09 billion in Q2 2020, establishing a new quarterly record, with equity investments growing 6.3% quarter-over-quarter from 1,197 deals in Q1 2020 to 1,272 deals in Q2 2020.

In a new report, Insider Intelligence examined the top five US digital health startups in AI, telehealth, and medical devices – the areas of digital health with the most number of deals in the first half of 2020.

The companies mentioned in this report are: 98point6, Abbott, Aetion, Anthem, Bigfoot Biomedical, Biofourmis, Bright.md, Chugai, Cigna, Element Science, Firefly Health, Gaido Health, Genesis Health, Happify Health, K Health, Komodo Health, Mindstrong, Modern Fertility, Oak Street Health, Onera Health, Premera Blue Cross, Vicarious Surgical, and Virta Health.

Here are some key takeaways from this report:

— Digital health startups are transforming the US healthcare system amid the growing demand for improved healthcare delivery catalyzed by the coronavirus pandemic.
— The AI, telehealth, and medical device spaces are the three areas of healthcare where technology is causing the biggest disruptions. These spaces represent the digital health market areas that scored the most number of deals in the first half of 2020.
— AI’s ability to rapidly sift through vast sums of data, facilitate remote patient monitoring, and power digital therapeutics highlights the transformative power of the tech in healthcare – and it’s attracting substantial investor attention.
— Telehealth usage – and investments – have surged amid the coronavirus pandemic, underscoring how virtual care solutions are already making a sizable impact on the US healthcare delivery landscape.
— The medical device market, with tech ranging from remote monitoring devices to robotics-based surgical tools, is experiencing record-breaking investment activity.

The full report:

— Highlights how the coronavirus pandemic has accelerated growing demand for improved healthcare delivery, and the steps digital health startups are taking to transform the US healthcare system.
— Provides an overview of the three areas of healthcare where technology is causing the biggest disruptions – AI, telehealth, and medical devices – and the factors making these markets particularly ripe for transformation.
— Identifies the top 5 US startups to watch in the AI, telehealth, and medical device market areas.
— Shares forward-looking insights on what’s next for each of the featured startups.

A Santa Monica day spa owner was just charged in federal court with accumulating N95 respirators in anticipation of the COVID-19 pandemic and then price gouging by selling the scarce masks at vastly inflated prices – sometimes nearly 1,100 percent over list price.

Niki Schwarz, 55, of Santa Monica, the owner of Tikkun Holistic Spa, was named in a criminal information charging her with one count of hoarding and price gouging. In a plea agreement also just filed, Schwarz agreed to plead guilty to the misdemeanor offense.

In the plea agreement, Schwarz admitted that in February she began accumulating N95 respirators in anticipation of a shortage that would be caused by a global pandemic resulting from the spread of the novel coronavirus. From the beginning of February until the end of June, Schwarz accumulated nearly 20,000 N95 masks that had been manufactured by 3M (list price ranging from $1.02 to $1.27) and Alpha Pro (list price of 86 cents).

In March, the United States government designated N95 respirators as “scarce materials” under the Defense Production Act of 1950 due to the overwhelming need of health care providers dealing with COVID-19 patients to use personal protective equipment.

Schwarz admitted that she obtained the N95 respirators for the purpose of reselling them at above-market rates, and that she sold the masks for up to $15 each.

Schwarz “accumulated and resold the masks at prices in excess of the prevailing market prices willfully, that is, with knowledge that masks had been designated as scarce materials and with knowledge that accumulation of the designated materials to resell in excess of prevailing market prices was unlawful,” according to the plea agreement.

On March 1, an associate informed Schwarz that the associate was going to stop selling N95 masks because she believed it was crime – and that price gouging could result in one year in prison – but Schwarz continued to sell the masks at inflated prices.

The hoarding and price gouging offense that Schwarz admits in the plea agreement carries a statutory maximum sentence of one year in federal prison.

The case is being prosecuted by Assistant United States Attorney Jeff Mitchell of the Major Frauds Section, who is a regional coordinator of the Justice Department’s COVID-19 Hoarding and Price Gouging Task Force.