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Tag: 2020 News

FDA Approves Device Reducing Disc Reherniation Risk

Disc herniation is a common cause of stenosis and the back and limb pain that it leads to. It occurs when disc nuclear material pushes through a tear in the annulus.

Lumbar discectomy is a common procedure used to remove the disc material that is pressing on nerves or the spinal cord. But reherniation is the most common failure mode for these procedures due to the weakened state of the disc annulus.

A study published in April 2020 in the journal Expert Review of Medical Devices (Expert review with meta-analysis of randomized and nonrandomized controlled studies of Barricaid annular closure in patients at high risk for lumbar disc reherniation“) found that symptomatic reherniation rates after lumbar discectomy with Barricaid were 50% lower than lumbar discectomy without Barricaid.

The market and impact for the device is quite large, with Barricaid’s manufacturer, Intrinsic Therapeutics, estimating 400,000 total lumbar discectomy procedures performed in the U.S. annually, 120,000 of which involve a large defect, which is most likely to herniate and benefit from the use of the Barricaid Annular Closure device.

Intrinsic Therapeutics, Inc. of Woburn, Massachusetts, received FDA approval for Barricaid Annular Closure device in 2019.

The device consists of a metallic anchor connected to a polyester plug that the company refers to as the occlusion component. The anchor is affixed to the vertebral body closest to the annular defect and the occlusion component is inserted into the defect. The device is designed to withstand up to 330psi, which allows for normal anatomical movement.

The Centers for Medicare and Medicaid Services (CMS) listed a new billing code for annular closure (C9757) for which the Barricaid Annular Closure device is the only one that is FDA-approved. The new code went into effect on January 1, 2020.

Additionally, the International Journal of Spine Surgery issued guidance supporting both coding and coverage of the device.

CEO and President of Intrinsic Therapeutics, Cary Hagan said in a recent press release, “We appreciate all the progress that is being made on patient access to Barricaid by leading surgeons and spine specialty societies. With more than 20 insurers now covering Barricaid, together with the support of surgeons and specialty societies, and more than 50 peer reviewed manuscripts, we are confident in our ability to continue delivering needed and cost-effective care for lumbar discectomy patients with large annular defects.”

Claim Volume Declines as Insurance Fraud Storm Arrives

From the moment news of COVID-19 started spreading, insurance carriers knew there would be a significant business impact. Exactly what the impact would be was not immediately clear, and still leaves some room for guessing.

First, claims saw a sharp decline as the Coronavirus started hitting worldwide. For the most part, this came as no surprise. With fewer cars on the road, fewer accidents result in damage claims. There are fewer ways for people to hurt themselves if they never leave their homes. Workers’ comp claims decline when the workplace is nearly empty. This was an anticipated and completely logical result.

As the world started to come alive after 3 months and “life as normal” began to resume, claims volume started trending back toward normal. This regional trend was steady as municipalities loosened restrictions.

Friss, a Dutch tech company that provides fraud-detection software to 180 insurers, suggests that now a fraud storm is well underway.

The company said in a blog post last week that it has seen a strong uptick in the volume of fraud investigations tracked by its detection software, even though total claims volume is down. In other words, even though there are fewer claims, a higher proportion of them look suspicious.

A graphic that showed a declining volume of claims starting when coronavirus lockdowns began in March and leveling off as lockdowns eased in June. A corresponding line showed the share of claims investigated rising sharply, easing and then rising again. Exact percentages were not revealed.

We’ve seen this before in economic downturns and other times of hardship, and sadly we predicted this at the onset of the pandemic.

Inflated COVID-related cleaning charges, fake testing locations and non-existent telemedicine visits are just a few of the emerging fraud schemes the company is seeing. Unethical customers are aware of what they can get away with. They are also adept at coming up with new schemes – quickly. When the opportunity is available, it will be taken advantage of.

The take away from this trend is “that carriers who wish to weather the storm must remain diligent on treating their customers well. Policies must be easy to obtain at a competitive price, and claims handling must become more efficient and customer-centric. Modern carriers must adapt quickly and provide the service their customers demand.”

Judge Rules OSHA Injury Report Form 300 is Not Confidential

A judge for the U.S. District Court for the Northern District of California ruled that Amazon.com Inc.’s injury data is not confidential information.

The Center for Investigative Reporting, a journalism nonprofit based in Berkeley, California, filed Freedom of Information Act requests between with the U.S. Occupational Safety and Health Administration, seeking annual data on Amazon’s injuries, illnesses and fatalities at certain warehouses.

OSHA requires employers with more than 10 workers to annually submit data on workplace injuries and illnesses using its Form 300. The log includes the name and title of workers who are injured or contract an occupational illness, along with a description of the injury or illness, and the result of the injury or illness. Employers are required to provide copies of these records to current and former employees and their representatives upon request, and employers must retain the records for five years.

OSHA’s final rule on record keeping also stipulates that an “employer may not require an employee, former employee or designated employee representative to agree to limit the use of the records as a condition for viewing or obtaining copies of records.”

Although OSHA noted in 2016 that public access of this data could encourage employers to abate hazards and prevent injuries and illnesses, in August 2019, OSHA stated that it considered the Form 300 data to be confidential commercial information.

The DOL argued that the Form 300 logs fall under the FOIA exemption that shields from mandatory disclosure any “commercial or financial information obtained from a person.”

Judge Kim, however, disagreed in her 28 page July 6, 2020 Order, holding that Amazon itself had not customarily treated its Form 300 data as confidential, and noted that OSHA regulations require employers, including Amazon, to post such information at its facilities for a three-month period.

Although the DOL also argued that the data could be “misused,” Judge Kim dismissed this argument, noting that employees’ personal and medical information does not appear on the form, and that Amazon’s broad disclosures required under the regulations to all current employees, former employees, and employees’ representatives – with no restrictions on their further disclosures – defeats the DOL’s effort to demonstrate confidentiality.

Kim’s ruling comes just one month after another federal judge in Oakland, California, ruled against the Department of Labor in a similar lawsuit brought by the Center for Investigative Reporting. In that case, U.S. District Judge Donna Ryu ordered the department to release 237,000 workplace injury logs submitted by various employers from Aug. 1, 2017, through Feb. 6, 2018. Like Kim, Ryu also found the companies were already warned the information could be posted on a public website in 2016.

Monterey County DA Reports Two Premium Fraud Cases

Monterey County District Attorney announced that Monica Herrera, a 43-year-old resident of Newman, California and former owner of a licensed, Monterey County cannabis company, pled no contest on July 7, 2020 to felony payroll tax fraud and not having workers’ compensation insurance, a misdemeanor.

Herrera owned and operated Holistic Farms, LLC, pursuant to a California Temporary Cannabis Cultivation License and a Monterey County permit. The licensing and permits authorized Herrera to run her business at 2242 Alisal Road in Salinas, California.

During the course of a search warrant served on June 26, 2018 in an unrelated investigation, Monterey County District Attorney investigators discovered that Herrera had violated her license and permit conditions by relocating her cannabis processing operations to 2348 Alisal Road.

During that search, investigators interviewed multiple individuals who verified that they worked for Herrera as cannabis processors and that Herrera paid their wages in cash. Though Herrera had employees, investigators confirmed with public agencies that Herrera had never paid payroll taxes on employee wages to the California Employment Development Department and she did not have workers’ compensation insurance.

Herrera will be sentenced on August 25, 2020. The Court is expected to place Herrera on probation, order her to pay fines of as much as $30,000 and perform 300 hours of community service.

The Monterey County District Attorney also just announced that John Bresciani, a 65-year-old Salinas resident and owner of Pacific Coast Battery Service, Inc. (“PCBS”), pled no contest to defrauding his insurance carrier.

In September 2018, while investigating an insurance claim, Mr. Bresciani’s insurer determined that an injured worker had not been identified in prior policy years. In an ensuing investigation by the Monterey County District Attorney’s Workers’ Compensation Fraud Unit, Mr. Bresciani conceded that he had not truthfully reported the worker’s employment and had kept the employee “off book” by paying cash wages.

Felony criminal charges for insurance premium fraud were filed on December 11, 2019. Mr. Bresciani cooperated with the investigation and paid restitution to his insurance carrier for the $2,943.44 premium that should have been paid. He pled guilty to a misdemeanor charge and Judge Andrew Liu accepted the plea on July 8, 2020. Mr. Bresciani was placed on 3 years’ probation and ordered to pay a $5,000 fine.

Novartis Pharmaceuticals Resolves Kickback Case for $51M

Novartis Pharmaceuticals Corporation has agreed to pay $51.25 million to resolve allegations that it violated the False Claims Act by illegally paying the Medicare co-pays for its own drugs.

When a Medicare beneficiary obtains a prescription drug covered by Medicare Part B or Part D, the beneficiary may be required to make a partial payment, which may take the form of a co-payment, co-insurance, or deductible. Congress included co-pay requirements in these programs, in part, to encourage market forces to serve as a check on health care costs, including the prices that pharmaceutical manufacturers can demand for their drugs.

The Anti-Kickback Statute prohibits pharmaceutical companies from offering or paying, directly or indirectly, any remuneration – which includes money or any other thing of value – to induce Medicare patients to purchase the companies’ drugs.

Officials say Novartis coordinated with three co-pay foundations to funnel money through the foundations to patients taking Novartis’ own drugs, As a result, the Novartis’ conduct was not ‘charitable,’ but rather functioned as a kickback scheme that undermined the structure of the Medicare program and illegally subsidized the high costs of Novartis’ drugs at the expense of American taxpayers.

Novartis used The Assistance Fund as a conduit to pay kickbacks to Medicare patients taking Gilenya, a Novartis drug for multiple sclerosis, and used the National Organization for Rare Disorders and Chronic Disease Fund as conduits to pay kickbacks to Medicare patients taking Afinitor, a Novartis drug for renal cell carcinoma and progressive neuroendocrine tumors of pancreatic origin.

In October 2012, Novartis learned from Express Scripts, which then was managing Novartis’ free drug program for Gilenya, that Novartis was providing free Gilenya to 364 patients who would become eligible for Medicare the following year.

Novartis and Express Scripts transitioned these patients to Medicare Part D so that, in the future, Novartis would obtain revenue from Medicare when the patients filled their prescriptions for Gilenya.

Knowing that these patients could not afford co-pays for Gilenya, Novartis developed a plan for it to cover their co-pays through The Assistance Fund, which operated a fund that, ostensibly, offered to cover co-pays for any MS patient who met its financial eligibility criteria, regardless of which MS drug the patient was taking.

Novartis entered into a five-year corporate integrity agreement as part of this settlement. Novartis will be required to implement measures, controls, and monitoring designed to promote independence from any patient assistance programs that it finances. In addition, Novartis agreed to implement risk assessment programs and to obtain compliance-related certifications from company executives and Board members.

To date, the Department of Justice has collected over $900 million from ten pharmaceutical companies (United Therapeutics, Pfizer, Actelion, Jazz, Lundbeck, Alexion, Astellas, Amgen, Sanofi, and Novartis) that allegedly used third-party foundations as kickback vehicles. The Department also has reached settlements with four foundations (Patient Access Network Foundation, Chronic Disease Fund, The Assistance Fund, and Patient Services, Inc.) that allegedly conspired or coordinated with these pharmaceutical companies.

CASISF Approves 2020-21 $6.5B Alternative Security Program

The California Self-Insurers’ Security Fund supports businesses by helping lower their workers’ compensation costs and freeing up their working capital.

The program provides a financial backstop to replace security deposits required to collateralize self-insured workers’ compensation liabilities.

The CASISF Board of Trustees has approved and implemented the 2020/21 Alternative Security Program, which frees $6.5 billion in working capital and provides California self-insured businesses greater financial flexibility. Moreover, there has been no increase in the Security Fund’s general assessment from last year.

These continuing savings make the program and costs even more competitive for California self-insured businesses. “The Fund’s historically sound and rigorous credit monitoring practices have positioned the Fund to address the economic impacts of the coronavirus pandemic,” said Dan Sovocool, a partner at Nixon Peabody LLP and the Security Fund’s outside General Counsel. “The Fund continues to be a strong resource and partner for California’s self-insured employers.”

All employers in California are required to have workers’ compensation insurance to cover their employees in the event of work-related injuries or illnesses. Employers may satisfy this requirement by obtaining an insurance policy or gaining authority from the DIR’s Office of Self Insurance Plans (OSIP) to self-insure the businesses’ workers’ compensation liabilities.

Self-insured employers maintain a deposit equal to their estimated liabilities. Employers may post the deposit in cash, letters of credit, surety bonds, or securities. The use of these instruments limits the employer’s ability to use their cash or credit line. In contrast, the Security Fund’s ASP allows employer members to free up their cash or line of credit, allowing them to reinvest this capital back into their businesses. The ASP provides the member with a low-cost substitute for collateral with no balance sheet impact.

California currently has more than 3,500 private employers protecting more than 2.2 million workers representing a total payroll of nearly $113 billion through self-insurance workers’ compensation plans.

A self-insurance plan protects one of every eight California workers. Self-insured private employers in California represent large and midsized private companies and industry groups.

The California Self-Insurers’ Security Fund (CASISF) has been serving its members for 36 years since its founding on July 6, 1994. It is a member-driven non-profit organization with leadership by a volunteer Board of Trustees representing members serving members. The Security Fund is a strategic partner supporting California self-insured workers’ compensation programs.

Bay Area Woman Sentenced for Filing $9.5M Fraudulent SDI Claims

68 year old Linda Nguyen of Union City, was sentenced to two years in prison for her role in a multi-million dollar mail fraud conspiracy involving California State Disability Indemnity (SDI) benefits. Nguyen pleaded guilty to the charge on July 17, 2019.

The SDI program is designed to provide partial wage replacement benefits to eligible California workers who are unable to work due to a non-work-related illness, injury, or pregnancy. To receive SDI benefits, a claimant must file a claim for benefits supported by a Physician/Practitioner Certification attesting to the claimant’s disability.

Nguyen admitted that from January 2013 until January 2019, she agreed with a licensed physician and others to commit mail fraud by defrauding California’s SDI program.

Specifically, Nguyen admitted she helped non-disabled persons prepare and submit fraudulent applications and certifications for SDI benefits. In exchange for her services, Nguyen charged the non-disabled SDI applicants a fee equal to 10% of the SDI benefits that they received. In addition, she paid the physician for each certification he completed for the fraudulent application.

Nguyen’s plea agreement contains four examples of individuals for whom she completed fraudulent applications.

The agreement further describes how Nguyen paid a physician to complete and sign the practitioner disability certifications even though the applicants were never treated by the physician. Nguyen acknowledged in the agreement that the total loss attributable to the fraudulent scheme in which she participated is estimated to be between $3,500,000 and $9,500,000.

A federal grand jury indicted Nguyen on January 29, 2019, charging her with one count of conspiracy to commit mail fraud, in violation of 18 U.S.C. § 1349, and one count of substantive mail fraud, in violation of 18 U.S.C. § 1341. Nguyen pleaded guilty to the conspiracy count and the substantive mail fraud count was dismissed at sentencing.

In addition to the prison term, Nguyen was ordered to serve a three year term of supervised release, to begin at the end of the prison term, and to pay restitution.

New Reporting Forms Required for Public Self-Insureds

The Department of Industrial Relations’ Office of Self-Insurance Plans (OSIP) has promulgated regulations that require public self-insured employers to submit reports with the information needed to evaluate the administrative cost, workers’ compensation expenditures, solvency and performance of public self-insured employer workers’ compensation programs.

These regulations became effective on July 1 and include the addition of the following new reporting forms:

— Joint Powers Authority Self-Insurer’s Profile and Financial Summary Report (Form J-1)
— Self-Insurer’s Profile and Financial Summary Report (Form P-1)
— Aggregate Claims Information (Form AR-2 Addendum)

The reporting forms for public self-insured employers are posted online. They must be submitted with the 2019-2020 annual report, which is due on October 1, 2020 and annually thereafter.

Employers who require additional time to comply with the regulations this year should contact OSIP Chief Lyn Asio Booz at LAsioBooz@dir.ca.gov to request an extension. Deferrals of up to 60 days may be granted to employers who can demonstrate that they may not be able to comply with their reporting requirement.

Blood Type Research May Support COVID-19 Apportionment

With the likelihood of workers’ compensation COVID-19 claims on the horizon, and with presumptions supporting them, opportunities for apportionment of permanent disability may be more important than ever in claims management.

Researchers who just published a new study, report that a person’s blood type may affect their risk for COVID-19, the disease caused by the new corona virus.

The findings appear on the website medRxiv, where health researchers publish studies before they undergo the peer review process required by journals.

Researchers used observational healthcare data on 1559 individuals tested for SARS-CoV-2 (682 COV+) with known blood type in the New York Presbyterian (NYP) hospital system to assess the association between ABO+Rh blood type and SARS-CoV-2 infection status, intubation, and death.

They found a higher proportion of blood group A and a lower proportion of blood group O among COV+ patients compared to COV-, though in both cases the result is significant only in Rh positive blood types.

The effect of blood type is not explained by risk factors they considered (age, sex, hypertension, diabetes mellitus, overweight status, and chronic cardiovascular and lung disorders).

In a meta-analysis of NYP data with previously-reported data from China, they found enrichment for A and B and depletion of O blood groups among COVID-19 patients compared to the general population. They also found new evidence of associations between B, AB, and Rh blood groups and COVID-19 and further evidence of recently-discovered associations between A and O blood groups and COVID-19.

The China study was limited because of its small size and it didn’t offer an explanation for its findings, Gao Yingdai, a researcher from the State Key Laboratory of Experimental Hematology in Tianjin, told the South China Morning Post.

The finding that blood type may affect COVID-19 risk could be important for healthcare workers treating COVID-19 patients, because those with A blood types” “might need particularly strengthened personal protection to reduce the chance of infection.”

Also, people with A blood types might require “more vigilant surveillance and aggressive treatment,” and identifying a person’s blood type as a routine part of treating COVID-19 and other coronavirus infections might be helpful, according to the researchers, Newsweek reported.

Court Jurisdiction in Subrogation Action Ends When Case Dismissed

Daniel Brodie Howard suffered major injuries in an automobile accident while acting within the scope of his employment with Agra Tech, Inc. Hartford was Agra Tech, Inc.’s workers’ compensation carrier. He was hospitalized and in a coma. Thus the probate court appointed his brother, David Howard as conservator of his person and estate.

A civil tort action was filed against multiple parties to recover for the injuries. Hartford filed a complaint in intervention seeking to recover the workers’ compensation benefits it had paid as a result of conservatee’s accident.

In 2012, a WCJ found conservatee to be totally and permanently disabled and awarded permanent disability, medical care for life, and attorney fees.

On October 30, 2013, conservatee, Hartford, and Toyota, one of the tort defendants, signed a mediation agreement that called for Toyota to pay a specified sum to conservatee. In 2014, the probate court signed an order approving the compromise of the disputed claim against the other driver and Toyota and directed payments from the settlement proceeds for attorney fees and expenses, to Hartford (for medical and like expenses it had paid), and conservatee (for the balance of the settlement).

Numerous disputes arose between the parties over the distribution of funds, each of which were subsequently resolved.

Then, in 2016, conservatee filed a motion in the probate court to assess attorney fees, asking the probate court to order Hartford to “reimburse Conservatee $150,934.76 in costs and $179,605.48 in attorney’s fees as Hartford’s pro rata share of Conservatee’s costs and attorney’s fees in creating the Toyota settlement.” Conservatee stated the authority for the motion was labor code sections 3856, subdivision (b), and 3860, subdivision (e), and the “common fund” doctrine.

The probate court concluded that it lacked jurisdiction to consider conservatee’s claims because the underlying civil case had been dismissed with prejudice upon conservatee’s request. The court of appeal agreed and affirmed the order in the unpublished case of Conservatorship of Howard.

Conservatee’s motion to assess attorney fees did not revive the civil action or overcome the effect of the voluntary dismissal of that action. Upon dismissal of the civil action, the probate court no longer had jurisdiction to enter any further order distributing the settlement proceeds from the civil action.