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Tag: 2020 News

Rosmead Physician Arraigned for Unlawful Prescribing

The California Attorney General announced the arraignment and surrender of Dr. Po Long Lew for unlawfully prescribing sedatives and muscle relaxants to his patients without a medical purpose.

Dr. Lew allegedly prescribed benzodiazepines such as Xanax, and carisoprodols such as Soma without first completing a legitimate physical exam of his patients and without his patients demonstrating a medical need.

He was arraigned in Los Angeles Superior Court. Dr. Lew is charged with ten counts of Unlawful Prescribing Without Medical Purpose, in violation of Health & Safety Code Section 11153.

Working out of his medical practice in Rosemead, the complaint alleges that between December 2018 and October 2019, Dr. Lew prescribed the muscle relaxant Soma, and two sedatives, Xanax and Ativan to patients individually or in combinations of two of the three medications. Benzodiazepines (sedatives) and carisoprodols (muscle relaxants) are known to cause a dangerous drug interaction when taken with opioids.

They are especially dangerous because each of the medications depress the central nervous system and a person’s ability to breathe. The three medications together are known to those addicted to prescription medication as the “Holy Trinity,” and are highly sought out on the street.

The case stems from an investigation conducted by the California Department of Justice’s Division of Medi-Cal Fraud and Elder Abuse (DMFEA). Through the DMFEA, the Attorney General’s office works to protect Californians by investigating and prosecuting those who perpetuate fraud on the Medi-Cal program.

DMFEA also investigates and prosecutes those responsible for abuse, neglect, and fraud committed against elderly and dependent adults in the state. DMFEA regularly works with whistleblowers, the California Department of Health Care Services, and law enforcement agencies to investigate and prosecute.

It is important to note that a criminal complaint contains charges that are only allegations against a person. Every defendant is presumed innocent until proven guilty.

Appeals Court Affirms Claimant’s Fraud Conviction

In 2013, Latonja Johnson worked at two different jobs. She worked at Goodwill as an e-commerce book handler, sorting books that had been donated. She also worked for a company called Advantage Sales and Marketing (ASM) as an events specialist. Her job was to hand out food samples at Sam’s Club.

Johnson filed a worker’s compensation claim with Goodwill claiming she injured her back on July 12, 2013, while lifting books out of a book bin.

She filed a second worker’s compensation claim with ASM on July 31, 2013, claiming she injured her back on July 11, 2013, while lifting a small oven used to heat food.

She proceeded to be treated by two sets of doctors under both claims.

On May 29, 2015, Latonja Johnson was interviewed by investigators from the Workers’ Compensation Fraud Unit of the San Bernardino County District Attorney’s Office for filing two claims with two separate employers while working for both at the same time.

She said she was employed by Goodwill, and she had filed a claim for her back injury from July 12, 2013, and was treated by company doctors. Defendant said she did not work for another employer while employed with Goodwill. She said she was hired by ASM but only trained with them and did not officially work for them. Defendant said she told her supervisor at Sam’s Club that she was hurt but that she was not injured at Sam’s Club. She claimed her supervisor forced her to file paperwork with ASM anyway.

A jury found Johnson guilty of two counts of knowingly presenting a fraudulent claim. The court of appeal affirmed in the unpublished case of People v Johnson.

Her appeal argued two issues. Whether her conviction for presenting a fraudulent insurance claim in count 3 was part of an indivisible course of conduct, such that the court should have stayed the sentence rather than imposing one year consecutive. And whether the trial court abused its discretion in denying defendant probation.

After the court’s independent review of the record it found no arguable issues.

“Equitable Tolling” Doctrine Applies to Appeal of Cal/OSHA Citation

On August 30, 2014, Isaul Alvarado, an employee of Ventura Coastal, sustained a serious leg injury when he stepped into an uncovered screw conveyor (also known as an auger) located below ground level on Ventura’s premises.

The Division of Occupational Safety and Health conducted an inspection of Ventura’s facility and issued a citation to Ventura under the California Occupational Safety and Health Act for a serious violation of a regulation requiring screw conveyors at or below floor level to be guarded by railings or substantial covers or gratings.

Ventura appealed the citation to the Board, arguing that it did not violate the safety order or, if there was a violation, it was misclassified as serious. The ALJ upheld the citation, finding Ventura committed the violation alleged, and it was properly classified as a serious violation. The ALJ did, however, reduce the proposed penalty.

The Board, on its own motion, ordered reconsideration of the ALJ’s decision regarding the penalty. Ventura also filed a petition for reconsideration by the Board, asserting as grounds for reconsideration that the evidence did not justify the findings of fact, and the findings of fact did not support the decision.

On September 22, 2017, the Board issued its decision after reconsideration, upholding the decision of the ALJ.

On October 20, 2017, Ventura filed a second petition for reconsideration with the Board. It asserted three of the Board’s factual findings were not supported by the evidence, so the decision exceeded the Board’s authority. Alternatively, at a minimum, the violation should be reclassified from serious to general.

On December 15, 2017, Ventura filed a petition for a writ of mandate in the superior court, seeking review of the Board’s September 22, 2017 decision. The Board filed a motion to dismiss or for judgment on the pleadings, asserting the writ petition was statutorily required to be filed within 30 days after the Board’s decision was issued. The trial court granted the Board’s motion and entered a judgment of dismissal.

The Court of Appeal reversed and remand with directions in the published decision of Ventura Coastal LLC, v Occupational Safety and Health Appeals Board.

Ventura’s second petition for reconsideration was not properly filed and had no effect on the timeliness of its petition for writ of mandate. The Board’s decision after reconsideration was filed on September 22, 2017, and Ventura’s time for filing a petition for writ of mandate for review of that decision expired 31 days thereafter, on October 23, 2017 (because October 22 fell on a Sunday). Its petition for writ of mandate was not filed until December 15, 2017.

In light of the recent Supreme Court decision in Saint Francis Memorial Hospital v. State Dept. of Public Health (2020) 9 Cal.5th 710, the time limitation for filing the writ petition is subject to equitable tolling, and the employer should have been allowed to amend its petition to allege facts supporting application of that doctrine.

The requirements for its application present questions of fact that have not yet been addressed by the trial court. This includes questions regarding whether the conduct of Ventura, the reason for its delay in filing the petition, and the length of the delay were reasonable and in good faith. Additionally, if tolling is appropriate, the trial court must determine the length of the tolling period and whether the petition was timely filed, in light of any tolling period that is allowed. The trial court must also address the issues of notice and prejudice to the Board.

Oxnard Roofer Faces 5 Felonies for $4M Premium Fraud

Judy Hein, 71, of Oxnard, was arraigned on five felony counts of insurance fraud after allegedly under reporting payroll for her Simi Valley roofing business by over $4 million, resulting in more than a $2 million loss to the State Compensation Insurance Fund.

On December 19, 2018, the Department of Insurance received a referral from State Fund alleging that Hein’s business, Cal Roofing, Inc., was under reporting payroll in order to receive a reduced rate for its workers’ compensation insurance.

An investigation discovered internet searches that indicated the number of roofing projects and business revenue was not in line with Cal Roofing’s stated number of employees or estimated annual premium. When wage information from the Employment Development Department for Cal Roofing was compared to wage information in corresponding State Fund policy audits large discrepancies were revealed.

The investigation determined Hein was responsible for filing the fraudulent payroll reports with State Fund. She also signed EDD documents, which revealed the under reported payroll to State Fund, which she correctly reported to EDD.

The audit findings and payroll reports filed with State Fund show a payroll of $831,788 from 2013 through 2018. The payroll reports filed with EDD and bank records show a payroll of $4,948,114 for the same policy periods. Hein underreported Cal Roofing’s payroll by $4,116,326 in order to obtain workers’ compensation insurance at a reduced rate. The suspected fraud resulted in an estimated loss of $2,171,330 to State Fund in the form of unpaid insurance premiums.

Hein was arraigned on November 17, 2020, at the Ventura Superior Court. This case is being prosecuted by the Ventura County District Attorney’s Office.

“Illegally under reporting payroll to your insurance company to save on business expenses is a crime,” said Insurance Commissioner Ricardo Lara. “The fraudulent actions of this business owner led to artificially inflated costs to insurance companies, businesses and consumers. Insurance fraud is not a victimless crime. We all pay a cost for these illegal actions.”

Another COVID-19 Employee Tort Case Pending Against Cal. Employer

A list of pending COVID-19 litigation filed by employees against their employers maintained by NCCI, reports two that have been filed against California employers.

Norma Zuniga, the surviving spouse of Pedro Zuniga, an employee, who died on April 13, 2020, after contracting COVID-19, sued the employer, Safeway and Albertsons on May 13, 2020 in California Superior Court.

For approximately 22 years, decedent Pedro Zuniga was employed by Safeway as a material handler in the produce department at the Safeway Northern California Distribution Center in Tracy, California.

Plaintiff alleges that in March 2020, workers at the Distribution Center began to fall ill with COVID-19. These employees were mandated to continue working not only regular shifts, but also additional shifts (6 days per week, rather than 4 or 5) with longer hours (16 hours per day).

By mid-March 2020, employees at the Distribution Center, including Decedent, began complaining to their supervisors about the dangerous working conditions and their fears associated with the same. These complaints were met by superiors with threats of retaliatory disciplinary action, including the potential for accruing ‘points’ which could lead to termination.

On April 1, 2020, after experiencing a fever and other symptoms, Decedent received a COVID-19 test, which came back positive a few days later. On April 13, 2020, Decedent died in the Intensive Care Unit at Memorial Medical Center in Modesto, California, of cardiopulmonary arrest and hypoxic respiratory failure allegedly caused by COVID-19. I

Plaintiff’s Complaint filed in Alameda County Superior Court in May, asserts six causes of action for: (1) Negligence, (2) Gross Negligence, (3) Violations of Federal Occupational Safety and Health Act of 1970 (29 U.S. Code § 654); (4) Violations of the California Occupational Safety and Health Act of 1973 (Title 8, California Code of Regulations § 3203 and California Labor Code § 6400 et seq.); Fraudulent Concealment of Injury (California Labor Code § 3602(b)(2)); and (6) Wrongful Death.

In July, Safeway removed the case to the United States Federal District Court for the Northern District of California, and filed a 33 page Motion to Dismiss the complaint asserting that the California Workers’ Compensation Act provides the sole and exclusive remedy for the injuries suffered by the employee.

In their motion, Safeway argues that “The rule of workers compensation exclusivity is not any different for the contraction of Coronavirus in the workplace and any resulting harm. To wit, the State of California has established that COVID injuries and death are to be processed via workers compensation. See Executive Order N-62-20.”

Subsequently, the parties completed a private mediation on August 11, 2020, but were unable to resolve the action. Thus, the stay of proceedings in federal court was lifted, and the matter was allowed to proceed.

On November 20, Safeway filed a Motion to Change Venue to the Eastern District. And plaintiff Norma Zuniga filed a Motion to Remand the case back to the state courts. Both motions are scheduled for December 29, 2020.

The Plaintiffs remand motion is based in part on her First Amended Complaint which removed the federal cause of action and any federal law relied upon in her initial complaint, thus rendering Defendants Notice of Removal moot.

The second case reported on the NCCI list, Brooks v. Corecivic of Tennessee the Federal Court granted the employer’s Motion tp Dismiss as to Plaintiff’s claims for negligent supervision and intentional infliction of emotional distress, and denied the motion as to Plaintiff’s wrongful constructive termination claims.

Cal/OSHA Emergency COVID-19 Regulations Now in Effect

Cal/OSHA’s emergency regulations requiring employers to protect workers from hazards related to COVID-19 are now in effect, following their approval yesterday by the Office of Administrative Law.

“These are strong but achievable standards to protect workers. They also clarify what employers have to do to prevent workplace exposure to COVID-19 and stop outbreaks,” said Cal/OSHA Chief Doug Parker.

The emergency standards apply to most workers in California not covered by Cal/OSHA’s Aerosol Transmissible Diseases standard. The regulations require that employers implement a site-specific written COVID-19 prevention program to address COVID-19 health hazards, correct unsafe or unhealthy conditions and provide face coverings. When there are multiple COVID-19 infections or outbreaks at the worksite, employers must provide COVID-19 testing and notify public health departments.

The regulations also require accurate recordkeeping and reporting of COVID-19 cases.

As emergency standards, these regulations become effective immediately.

“We understand the need to educate and assist employers as they implement the new provisions of the emergency standards,” Parker noted. “For employers who need time to fully implement the regulations, enforcement investigators will take their good faith efforts to implement the emergency standards into consideration. However, aspects such as eliminating hazards and implementing testing requirements during an outbreak are essential.”

Cal/OSHA has posted FAQs and a one-page fact sheet on the regulation, as well as a model COVID-19 prevention program. Employers are invited to participate in training webinars held by Cal/OSHA’s Consultation Services branch.

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

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.