Tag: 2020 News

Jaime Chavez Jr. claimed injury to his left leg, right shoulder, bilateral knees, cervical spine, psyche, vision and internal system on October I 3, 2017 while employed as a tree trimmer by Cut It Right Tree Service.

He was assigned to cut multiple mulberry trees and a camphor tree. He was given a harness that was missing the right thigh strap. His task was to strip the three mulberry trees, to clear and shape them, and to clear and shape the camphor tree.

He became concerned, however, with how the ground crew was handling the debris. The brush was being moved in a manner that tangled his rope. He spoke with both the members of the ground crew to “stop playing with his life.” It appeared that they improved in their work.

But after lunch, approximately 3:00 p.m, he heard “an explosion.” He thought that the chainsaw had blown or the wood chipper. But his harness had cinched up and he saw that his leg had been ripped off and was hanging. As he came to realize later, the rope had wrapped around his leg, pulled tight, and then noticed that the left pant leg was now hanging flat. He knew that his leg had been popped out of the socket. As he understood later, the rope auto-amputated his leg from the knee down.

Mr. Chavez stated he had 15 years working in the tree trimming business. Prior to what happened to him, he has not heard of anyone suffering a leg amputation.

The matter proceeded to trial on February 3, 2020. The parties stipulated to injury AOE/COE to the following parts: left leg (amputation), right shoulder, bilateral knees and cervical spine. One of the issues was “sudden and extraordinary event.”

The WCJ commented in the Opinion on Decision “The defense contends that Applicant’s injuries are, first, barred by the six month rule. However, from a plain reading of the facts of this case, it is clear that this was both a “violent act” (as defined under Labor Code § 4660.1) and a “sudden and extraordinary” event (as defined under Labor Code § 3208.3). Thereby, Applicant is entitled to benefits for his psychiatric injuries, including the possibility of impairment benefits.

Defendants petition for reconsideration of this finding was denied in the panel decision of Chavez v Cut it Right Tree Service, SCIF.

The legislative and judicial history of section 3208.3(d) show that a “sudden and extraordinary” employment condition means something that is not regular and routine, and is uncommon, unusual and unexpected. (See Matea v. Workers’ Comp. Appeals Bd. (2006) 144 Cal.App.4th 1435, 1449 (71 Cal.Comp.Cases 1522].) The Court of Appeal in Matea acknowledged that “[g]as main explosions and workplace violence are certainly uncommon and usually totally unexpected events; thus, they may be sudden and extraordinary employment conditions.”

“Applicant’s unrebutted testimony reflects that the injury occurred so quickly that he did not initially realize what had happened until he saw his leg. Defendant’s contentions that applicant had “notice” that the injury would occur because of his warnings to co-workers to be careful with his rope are unpersuasive. The injury was caused by a sudden employment condition.”

Mallinckrodt filed for bankruptcy protection on Monday, saddled with lawsuits alleging it helped fuel the U.S. opioid epidemic. They are the third major durgmaker to seek bankruptcy protection.

The company had said in February it planned to have its generic drug business file for bankruptcy as part of a tentative $1.6 billion opioid settlement to resolve claims by state attorneys general and U.S. cities and counties.

Last March, the company also lost a court battle to avoid paying higher rebates to state Medicaid programs for its top-selling drug.

In September, Mallinckrodt hired restructuring advisers to help limit its liabilities regarding the opioid settlement and a potential restructuring. The opioid litigation had caused some concern at the company, including a suspension of its plans to spin off its generics business into a standalone entity due to the opioid litigation, as well as “market conditions.”

Mallinckrodt said on Monday it had agreed to pay $1.6 billion over several years to settle opioid-related litigation. About $450 million would be paid as part of its settlement once the company emerged from chapter 11 bankruptcy.

The company would then pay $200 million in the first and second year after its emergence from the bankruptcy, and $150 million subsequently through the seventh year.

Mallinckrodt had agreed to pay $260 million over seven years to resolve disputes related to its multiple-sclerosis drug H.P. Acthar gel and pay out rebates to state Medicaid programs.

Mallinckrodt also plans to dismiss its appeal to a March ruling related to Acthar gel, whose price per-vial has risen from about $50 in 2001 to $38,892 in 2019.

During the bankruptcy protection, the company said it aims to resolve opioid-related claims and reduce its debt by about $1.3 billion, while surviving on cash on hand and cash generated from operations.

The company listed both assets and liabilities in the range of $1 billion to $10 billion in a filing with the U.S. Bankruptcy Court for the District Of Delaware.

Under terms of the settlement announced this morning, the court-supervised process will lead to the creation of a trust, which, as the company said, will “establish an abatement fund to offset the expense of helping to combat opioid addiction and providing support to communities impacted by opioid abuse.” The court-supervised process is also expected to resolve all opioid-related claims against Mallinckrodt and its subsidiaries, the company said.

Mark Trudeau, president and chief executive officer of Mallinckrodt, said reaching the agreement and undergoing debt refinancing are important steps moving the company forward.

“Importantly, when finalized, we believe the proposed settlement and capital restructuring activities will provide us with a clear path forward to achieving our long term strategy, preserving value for our financial stakeholders and providing us with the flexibility to operate effectively,” Trudeau said in a statement.

Trudeau continued but adding that, while the company has had some uncertainties, it has delivered strong earnings and has a strong pipeline that continues to “build momentum.” Trudeau said the company anticipates seeking regulatory approval of terlipressin and StratGraft in the coming months, as well as the completion of key clinical study results and data readouts across the portfolio.

Charles Lewis filed a claim for an injury against Horizon Christian Fellowship that occurred on May 11, 2015 and also filed a cumulative trauma, a lower back injury, that he alleged occurred from April 11, 2016 to April 11, 2017.

Horizon was insured by GuideOne Mutual Insurance From March 1, 2015 to June 1, 2017, and was insured by Brotherhood Mutual Insurance Company from February 28, 2013 to February 28, 2015. On August 30, 2018 GuideOne filed a Petition for Joinder of Brotherhood as an additional party under Labor Code section 5500.5.

GuideOne and Lewis entered a Joint Compromise and Release which the WCJ approved on September 17, 2018. Brotherhood was joined as a party on October 16, 2018.

On January 18, 2019, GuideOne filed a Declaration of Readiness to Proceed on the issues of “Joinder Order issued 10/16/2018,” and that the complete file had been served on Brotherhood on 11/19/2018.

On January 31, 2019, Brotherhood filed an objection to the Declaration of Readiness to Proceed, stating it had not received the complete file and that it had subpoenaed additional records, which were needed before a hearing takes place on contribution issues.

on October 21, 2019, GuideOne filed another Declaration of Readiness for a Mandatory Settlement Conference (MSC) on the issue of Contribution/Arbitration and the conference was set for December 18, 2019. During the conference, Brotherhood “reserved its defense of untimely filing of the Petition for Contribution” as an issue for the arbitrator.

Brotherhood argued that GuideOne’s claim for contribution was barred because it had not timely submitted a pleading titled “Petition for Contribution” by September 17, 2019, one year after the Compromise and Release was approved. GuideOne argued that its January 18, 2019 Declaration of Readiness was sufficient to initiate contribution proceedings.

The arbitrator issued an order rejecting Brotherhood’s arguments, and noted in his decision that although a better practice is the filing of an actual petition for contribution that clears any confusion, he concluded that the Declaration of Readiness was sufficient to initiate the contribution proceeding.

The WCAB denied reconsideration. The fourth district Court of Appeal affirmed the arbitrator in its minute order of a Summary Denial in the case of Brotherhood Mutual Insurance Company v. WCAB, Guideone Mutual Insurance Company et al. Case Number D 077799.

In general the WCAB has inherent power to control its practice and procedure to prevent frustration, abuse, or disregard of its processes.” (Crawford v. Workers’ Comp. Appeals Bd. (1989) 213 Cal.App.3d 156, 164.) A review of a decision of the WCAB is limited to whether the WCAB acted without or in excess of its powers and whether the order, decision or award was unreasonable, not supported by substantial evidence or procured by fraud. (Lab. Code § 5952.)

Rule 10510 states, “After jurisdiction of the Workers’ Compensation Appeals Board is invoked pursuant to rule 10450, a request for action by the Workers’ Compensation Appeals Board, other than a rule 10500 form pleading, shall be made by petition.”

The WCAB has previously concluded a Declaration of Readiness is sufficient under that statutory provision and rule 10510 to initiate proceedings. (See Old Republic Ins. Co. v. Workers’ Comp. Appeals Bd. (Bennett) (2010) 75 Cal.Comp.Cases 168, 169 (Bennett).) As the WCAB found in Bennett, neither section 5500.5, subdivision (e) or rule 10510 specify that a petition is required in this circumstance. Section 5500.5, subdivision (e) does not specify what document must be used to initiate a contribution proceeding and rule 10510 contains an explicit exception for the use of a Declaration of Readiness.

Federal officials announced a historic nationwide enforcement action involving 345 charged defendants across 51 federal districts, including more than 100 doctors, nurses and other licensed medical professionals.

These defendants have been charged with submitting more than $6 billion in false and fraudulent claims to federal health care programs and private insurers, including more than $4.5 billion connected to telemedicine, more than $845 million connected to substance abuse treatment facilities, or “sober homes,” and more than $806 million connected to other health care fraud and illegal opioid distribution schemes across the country.

“This nationwide enforcement operation is historic in both its size and scope, alleging billions of dollars in healthcare fraud across the country,” said Acting Assistant Attorney General Brian C. Rabbitt.

The largest amount of alleged fraud loss charged in connection with the cases – $4.5 billion in allegedly false and fraudulent claims submitted by more than 86 criminal defendants in 19 judicial districts – relates to schemes involving telemedicine: the use of telecommunications technology to provide health care services remotely.

According to court documents, certain defendant telemedicine executives allegedly paid doctors and nurse practitioners to order unnecessary durable medical equipment, genetic and other diagnostic testing, and pain medications, either without any patient interaction or with only a brief telephonic conversation with patients they had never met or seen.

Durable medical equipment companies, genetic testing laboratories, and pharmacies then purchased those orders in exchange for illegal kickbacks and bribes and submitted false and fraudulent claims to Medicare and other government insurers.

The continued focus on prosecuting health care fraud schemes involving telemedicine builds on the efforts and impact of the 2019 “Operation Brace Yourself” Telemedicine and Durable Medical Equipment Takedown, which resulted in an estimated cost avoidance of more than $1.5 billion in the amount paid by Medicare for orthotic braces in the 17 months following that takedown.

The “sober homes” cases include charges against more than a dozen criminal defendants in connection with more than $845 million of allegedly false and fraudulent claims for tests and treatments for vulnerable patients seeking treatment for drug and/or alcohol addiction. The subjects of the charges include physicians, owners and operators of substance abuse treatment facilities, as well as patient recruiters (referred to in the industry as “body brokers”).

The cases involving the illegal prescription and/or distribution of opioids or that fall into more traditional categories of health care fraud include charges and guilty pleas involving more than 240 defendants who allegedly participated in schemes to submit more than $800 million in false and fraudulent claims to Medicare, Medicaid, TRICARE, and private insurance companies for treatments that were medically unnecessary and often never provided.

According to court documents, in many cases, patient recruiters, beneficiaries and other co-conspirators were allegedly paid cash kickbacks in return for supplying beneficiary information to providers, so that the providers could then submit fraudulent bills to Medicare. Also included are charges against medical professionals and others involved in the distribution of more than 30 million doses of opioids and other prescription narcotics.

The Department of Justice also announced the creation of the National Rapid Response Strike Force of the Health Care Fraud Unit of the Criminal Division’s Fraud Section. The National Rapid Response Strike Force’s mission is to investigate and prosecute fraud cases involving major health care providers that operate in multiple jurisdictions, including major regional health care providers operating in the Criminal-Division-led Health Care Fraud Strike Forces throughout the United States.

Prior to the charges announced as part of this historical nationwide enforcement action and since its inception in March 2007, the Health Care Fraud Strike Force program had charged more than 4,200 defendants who have collectively billed the Medicare program for approximately $19 billion.

Further information:
— Graphics, Images and Resources.
— Case Descriptions.  
— Court Documents.

The Workers’ Compensation Insurance Rating Bureau of California has published its report on insurer loss and premium experience valued as of June 30, 2020. This Quarterly Experience Report contains charts illustrating current cost drivers in the system. Highlights of the findings include the following.

Written premium for the first two quarters of 2020 is 11% below that for the first two quarters of 2019. The impact of the COVID-19 crisis on the California economy is expected to significantly reduce employer payroll and insurer premium for the remainder of 2020. The large decrease in premium for the second quarter of 2020 is driven by the sudden and sharp slowdown in the economy.

The average charged rate for the first two quarters of 2020 is 8% below that for 2019 and 40% below the peak in 2014. The January 1, 2020 approved advisory pure premium rates are on average 47% below those for January 1, 2015. Absent COVID-19, the indicated average advisory pure premium rate for January 1, 2021 was slightly below the 2020 level. However, when including the COVID-19 claim impact, the WCIRB proposed a 2.6% increase in average advisory pure premium rates.

The projected combined ratio for 2019 is 8 points higher than 2018 and 16 points higher than the low point in 2016 as premium levels have lowered while claim costs increased moderately. Despite the recent increase, combined ratios for 2013 through 2019 are below 100% and are the lowest since the 2003 through 2007 period.

Claim activity in the second quarter of 2020 was significantly slower due to the pandemic and shelter-in-place period and may not be indicative of future claim activity.

Indemnity claims have settled quicker over the last several years, largely driven by SB 863 and SB 1160 reforms. Average claim closing rates declined sharply in the second quarter of 2020 as a result of the pandemic and shelter-in-place period.

Incremental reported claims have generally increased through 2019. Reported indemnity claims in the second quarter of 2020 were 10% lower than the second quarter of 2019, while medical-only claims were one-third lower. The recent lower claim counts are likely due to the slowdown of economic activity, less work being done outside the home, and delays in reporting of claims during the shelter-in-place period.

The number of liens filed in 2019 and 2020 are more than 60% below pre-SB 1160 and AB 1244 levels. Lien filings decreased in the first two quarters of 2020, though some of the decrease is likely due to the pandemic.