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Tag: 2020 News

WCAB En Bank Limits Walk-Through Orders

Governor, Gavin Newsom, declared a state of emergency in response to the spread of the novel coronavirus, and issued Executive Order N-33-20 which required all Californians to stay home with certain limited exceptions.

The DWC temporarily closed the district offices for filing to protect the health and safety of staff and the community. The district offices reopened for filing effective April 13, 2020, but limited filings to e-filing via the Electronic Adjudication Management System (EAMS), JET filing or by mail. The DWC has continued to conduct hearings via teleconference or video, but does not currently permit filing of walk-through documents.

The California Department of Public Health issued a Regional Stay At Home Order applicable based on a region’s intensive care unit (ICU) capacity on December 3.

And as a result, the WCAB in it’s December 15, en bank decision, ordered suspension of WCAB Rule 10789(c) regarding the required timeframes for assignment of walk-through cases.This suspension is applicable to all district offices in the State.

This rule states that certain documents “may be submitted on a walk-through basis” including the following: (1) Compromise and Releases; (2) Stipulations with Request for Award; (3) Petitions for attorney’s fees for representation of the applicant at a deposition; (4) Petitions to compel attendance at a medical examination or deposition; and (5) Petitions for Costs pursuant to rule 10545.

The rule also provides that “Each district office shall have a designee of the presiding workers’ compensation judge available to assign walk-through cases from 8:00 a.m. to 11:00 a.m. and 1:00 p.m. to 4:00 p.m. on court days.”

The order of suspension of WCAB Rule 10789(c) will provide the district offices with the ability to schedule timeframes for walk-through of documents as appropriate for their capacity under these circumstances.

WCAB Rule 10789(a) is permissive and the documents that may be submitted on a walk-through basis may therefore be further restricted by the district offices at the discretion of the presiding workers’ compensation judges.

The presiding workers’ compensation judge has full responsibility for assignment of cases to the workers’ compensation judges in each district office. This includes the authority to decline to assign a document submitted on a walk-through basis.

The presiding workers’ compensation judges are empowered to prioritize which documents may be assigned on a walk-through basis to expedite resolution of claims and to account for limited capacity in their respective offices in determining whether to permit a document to be assigned as a walk-through.

This order will remain in effect until further notice.

Mitchell International Releases 4th Quarter Comp Trends Report

Mitchell International, Inc., released its fourth quarter Industry Trends Report for 2020. In this report, industry experts from across Mitchell predict and analyze the key trends that will impact 2021, providing insights that can help guide planning for organizations across the industry.

In 2020, the workers’ compensation industry has faced no shortage of challenges – treatment gaps, delays in elective surgeries, the shift to work-from-home, an onslaught of emergency regulations and more. In 2021, the industries will continue to face pandemic-related challenges that will require adaptations and focus to address.

One of the major issues the workers’ compensation industry has faced during the pandemic is access to care. Across the country, hospitals, medical offices and other sites of service limited or delayed elective surgeries and treatments, leaving gaps in care for many workers’ compensation claims. These trends are expected to continue through the pandemic in line with state COVID-19 rules and restrictions.

The shifting workforce will be the biggest trend to watch in 2021. Much of the U.S. workforce has shifted to work from home, with many workers expected to stay remote even after the pandemic ends. For the workers’ compensation industry, this will pose a challenge when it comes to worker safety, as the risks are different in a home environment compared to an office.

They also anticipate that next year, claims organizations will lean into automating the end-to-end claims process more than ever, that telemedicine will undergo both innovation and additional regulatory and security scrutiny and that we will see increases in certain types of workers’ compensation claims like ergonomic injuries and growing COVID-19 illness claims.

For adjusters and other claim handlers, the biggest game changer will be having a clear understanding that telemedicine, telehealth, telerehab and others are acceptable forms of treatment.

Mitchell experts also caution that in 2021 we may see continuing concerns in the pharmacy system, including escalating drug costs and a growing opioid crisis that has led to an estimated 18% increase in overdoses in 2020, though mostly from synthetic drugs.

Fraud, which costs $30 billion each year, should also remain top of mind right now for carriers, since the changes caused by the pandemic have altered previous patterns, making fraud harder to detect.

The also expect in 2021 that Congress is going to do something to reconcile the difference between where the states are at and where the federal government is at when it comes to marijuana. The federal government might allow states to regulate marijuana similar to alcohol, allowing each state to decide the right policy.

U.S. Supreme Court Allows States to Regulate PBM Drug Prices

The U.S. Supreme Court published its decision in Rutledge v. Pharmaceutical Care Management Association. The question presented was whether ERISA preempts Arkansas Act 900, an Arkansas law that regulates the price at which pharmacy benefit managers (PBMs) reimburse pharmacies for the cost of drugs covered by prescription drug plans.

PCMA, the Pharmaceutical Care Management Association, which represents some of the largest PBMs in the country, challenged Arkansas Act 900 by arguing that the Act is preempted by ERISA. The Supreme Court reversed the judgment of the U.S. Court of Appeals for the Eight Circuit, ruling that Act 900 was not preempted by ERISA.

The Opinion reasoned that Arkansas Act 900’s requirements were too far away from ERISA and ERISA plans to have an “impermissible connection” with ERISA plans, even though the law has an indirect effect on what ERISA plans pay for prescription drugs. “State regulations that merely increase the costs or alter incentives for ERISA plans without forcing plans to adopt any particular scheme of substantive coverage are not preempted by ERISA,” Justice Sotomayor wrote, citing earlier Supreme Court opinions.

The Court’s Opinion is a strict preemption analysis and does not cite to, or reference, the many amicus briefs filed in the case or the political debate surrounding Arkansas Act 900, other than to reiterate the express legislative intent in enacting Arkansas Act 900.

PBMs typically use a “maximum allowable cost” list to determine how much pharmacies should be reimbursed. Trade groups for rural and independent pharmacies have argued that PBM’s strategies in reimbursement rates of maximum allowable costs are unfair and can be lower than the pharmacies’ cost to purchase the drug.

Conversely, other trade groups in support of PCMA, state that PBMs have expertise in ensuring efficiency and cost reduction, and that drug prices are largely established by drug manufacturers.

According to America’s Health Insurance Plans, Inc. (AHIP), PBMs provide incentives to pharmacies to offer low-cost generic drugs and to be more efficient with their drug purchasing. AHIP also claims that PBMs have the expertise in pharmaceutical manufacturing and distribution systems, and that the compliance costs of managing different state regulations make work in this area prohibitively expensive.

The Court’s Opinion may lead to further state regulation of PBMs.

A statement from PCMA expressed disappointment and urged states to proceed cautiously: “We are disappointed in the Court’s decision that will result in the unraveling of federal protections under . . . ERISA,” and “As states across the country consider this outcome, we would encourage they proceed with caution and avoid any regulations around prescription drug benefits that will result in higher health care cost for consumers and employers.”

Riverside Woman Learns $500K EDD Fraud Scheme on YouTube

A Riverside County woman pleaded guilty to a federal criminal charge for fraudulently obtaining more than $500,000 in COVID-related unemployment benefits for herself.

Cara Marie Kirk-Connell, 32, of Menifee, pleaded guilty to a single-count information charging her with use of an unauthorized access device.

Kirk-Connell knowingly used approximately 50 unauthorized access devices. Specifically, she used stolen personal identifiable information, such as dates of birth and Social Security numbers, to apply for unemployment insurance benefits in the names of other people.

Based upon Kirk-Connell’s false and fraudulent applications, she obtained from the California Employment Development Department (EDD) multiple debit cards that contained more than $500,000 in COVID-related unemployment benefits to which she was not entitled, the plea agreement states.

Kirk-Connell admitted she knew people who access the “dark web” to purchase stolen identities that she used to then file fraudulent claims with EDD. She further admitted to watching YouTube videos that instructed viewers on how to commit EDD fraud.

When Murietta police arrested Kirk-Connell on September 11 during a traffic stop, she possessed eight EDD debit cards in other people’s names and, the day before her arrest, Kirk-Connell used fraudulently obtained EDD debit cards to withdraw more than $1,000 in cash. When federal law enforcement arrested Kirk-Connell on October 9, she possessed in her purse four EDD debit cards in victims’ names, four additional debit cards in victims’ names in her car trunk, and approximately $10,000 in cash, according to the plea agreement.

EDD records showed that the cards and identities that Kirk-Connell possessed had been used to apply for and authorize approximately $534,149 in COVID-related unemployment benefits from California’s EDD program, of which nearly $270,000 had already been spent, according to an affidavit filed with a criminal complaint in this case.

The California EDD distributes unemployment benefits under the Coronavirus Aid, Relief, and Economic Security Act, passed by Congress in March. The CARES Act expanded unemployment benefits to cover those who were previously ineligible, including business owners, self-employed workers, and independent contractors, who were put out of business or significantly reduced their services because of the COVID-19 pandemic.

She is scheduled for an April 9, 2021 sentencing hearing, at which time Kirk-Connell will face a statutory maximum sentence of 10 years in federal prison.

WC Claim, and CalPERS Retirement Defeats FEHA Claim

Jacob Lopez, was an employee of the Los Angeles County Metropolitan Transportation Authority. In February 2014 Lopez went on medical leave and submitted a doctor’s note stating he was “to remain totally disabled from work,” because of pain in his back that could not be resolved by ergonomics at work.

When Lopez was ready to come back to work, the Authority did not allow him to return to his position as a transit security lieutenant because his doctor said Lopez had certain physical restrictions.

Lopez sought disability benefits from the California Public Employees’ Retirement System (CalPERS). In his application to CalPERS Lopez claimed that he had “cumulative trauma” to his back and hands, anxiety, and depressive symptoms; that he had lifting, sitting, and standing restrictions and that he was unable to perform his job.

He also filed a workers’ compensation claim against the Authority, claiming he suffered hand, back, and psychological injuries.

In September 2015 CalPERS approved Lopez’s application for disability retirement benefits, finding Lopez was “substantially incapacitated from the performance of [his] usual duties as a Transit Security Lieutenant . . . based upon [his] orthopedic (low back, bilateral hands) condition.” In December 2016 the Workers’ Compensation Appeals Board approved a settlement between Lopez and the Authority for $65,000.

Lopez then filed a civil action, alleging the Authority violated provisions of the Fair Employment and Housing Act (FEHA) that prohibit disability discrimination and that require employers to engage in good faith in the interactive process to find reasonable accommodations.

The trial court granted the Authority’s motion for summary judgment, ruling Lopez could not prevail on either of his two causes of action, in part because he was judicially estopped from asserting he could have performed the duties of his prior position. The court of appeal affirmed the dismissal in the unpublished case of Lopez v Los Angeles County Metropolitan etc.

The trial court ruled that, because Lopez stated in his disability application with CalPERS and in his Workers’ Compensation Appeals Board proceeding that he could not work as a transit security lieutenant, and because Lopez received benefits from CalPERS and settled his workers’ compensation claim, he was judicially estopped from contending he could perform the essential functions of the position.

Several courts have held that, to prevail on a cause of action for failure to engage in good faith in the interactive process, the plaintiff must identify a reasonable accommodation that was available at the time the interactive process (should have) occurred and that the defendant employer could have offered.

Lopez never argued he needed an accommodation, reasonable or otherwise, to return to his position as a transit security lieutenant.

16 Pharmacies Admit Health Care Fraud Schemes

Residents of Los Angeles, California, and Henderson, Nevada, and 16 pharmacies scattered between California, Texas, Wyoming, Arizona and Nevada, pled guilty to charges of healthcare fraud, conspiracy to commit fraud, and/or conspiracy to violate the federal anti-kickback statutes.

Those pleading guilty included brothers Mehran David Kohanbash, and Joseph Kohan and their nephew, Nima Rodefshalom.

In addition guilty pleas included pharmacies Insure Nutrition, Inc., Affordable Pharmacy, Inc., ASC Pharmaceutical, LLC, DQD Enterprise Corporation, DTST Ventures, LLC, Econo Pharmacy, Inc., Emerson Pharmacy, Inc., Genorex Pharmaceutical, LLC, Nutrition Plus, Inc., Pharmatek Pharmacy, Inc., Premier Med Services, Inc., Rexford Pharmacy, Inc., Specialty Pharmacy Management of America, Inc., Solutech Pharmaceuticals, LLC, Village Drug & Compounding, Inc., and Vitamed LLC.

The three individual defendants together with the defendant pharmacies engaged in a series of interconnected actions that resulted in misleading advertising associated with supplying what were described to the Court as nutritional shakes.

The defendants secured the patients’ insurance information which in turn resulted in the defendants soliciting the patients to appeal to their respective physicians to prescribe what were described for the Court as High Yield (expensive) medications.

These medications were often compounded, meaning that one or more of the pharmacies mixed together preexisting medications or substances to provide a new or different product.

It was a part of the scheme(s) involved in the guilty pleas that the defendants conspired to promote these medications that often yielded extremely high profits, by manipulating the collection of co pays on various medications to make it appear that co pays were being collected when in fact they were not.

Sentencing is scheduled for April 7-8, 2020 for the individual defendants. Sentencing for the defendant pharmacies has not been scheduled.

For each individual defendant, the law provides for a maximum total sentence of 35 years in prison, a fine of $750,000, or both.

The three defendants and the 16 corporations agreed to forfeiture, restitution, fines and civil penalties amounting to more than $60,000,000.

Pain Medicine QME Pays $153K to Resolve Opioid Charges

Escondido pain clinic doctor, and board-certified physiatrist, Bradley Chesler, M.D., has paid the United States $153,000 to resolve allegations that he overprescribed opioids.

Dr. Chesler is listed as a Qualified Medical Evaluator by the DWC in the specialties of Pain Medicine and Physical Medicine and Rehabilitation. His QME office address is 1955 Citracado Pkwy, in Escondido.

This settlement stems from the investigation into whether Dr. Chesler illegally prescribed opioids to his patients in violation of the Controlled Substances Act.

Pursuant to the Controlled Substances Act, doctors may write prescriptions for opioids only for a legitimate medical purpose while acting in the usual course of their professional practice.

Federal investigators alleged that from January 1, 2014 to August 31, 2019, Dr. Chesler wrote opioid prescriptions that violated the Controlled Substances Act, which included prescriptions for fentanyl, hydromorphone, methadone, and oxycodone.

Dr. Chesler allegedly prescribed opioids while he concurrently prescribed benzodiazepines, and he prescribed to some patients a combination of at least one opioid, one benzodiazepine, and one muscle relaxant.

Drug abusers colloquially refer to the opioid, benzodiazepine, and muscle relaxant combination as the “Trinity” because of its rapid euphoric effects. These drug combinations are known to increase the risk of abuse, addiction, and overdose.

Chesler prescribed large quantities of opioids to his patients that reached high daily Morphine Milligram Equivalent (MME) levels (sometimes even exceeding 180 MME). The United States further alleged that Dr. Chesler failed to properly address aberrant urine drug test results when prescribing opioids.

Public health experts have long warned health care providers that overdose risk is elevated in patients receiving medically prescribed opioids, particularly those receiving high dosages. Among other things, tracking MMEs advances better practices for pain management by reinforcing the need for providers to consider alternatives to using high-dosage opioids to treat pain, and to appropriately justify decisions to use opioids at dosages that place patients at high risk of addiction, abuse, and overdose.

DEA Special Agent in Charge John Callery said, “Although 99 percent of medical professionals abide by DEA guidance and federal law, we will investigate those who put illicit profits before their oaths and bring them to justice.”

DWC Responds to Increasing COVID Infection Rates

The Division of Workers’ Compensation (DWC) has been working since the start of the COVID-19 crisis to provide critical services while keeping employees safe.

To that end, DWC has implemented multiple options for virtual hearings, including a call-in option on April 3 and a video option for trials that are usually heard at DWC district offices on August 12.

DWC has maintained a limited staff in its 24 district offices during this crisis and has not been accepting any walk-in requests or walk-in filings.

Increasing infection rates have resulted in the closure of many state offices throughout California. While DWC will continue to maintain all critical functions in its district offices, including holding all remote hearings and processing documents, it will have limited staff during the next three weeks to process documents.

This might result in extended processing times for documents that are mailed to the district offices.

DWC strongly encourages all parties to e-file or JET file documents to reduce processing times. For documents that are subject to a statute of limitations and cannot be otherwise e-filed or JET filed the parties may file those documents via e-mail as instructed in the Newsline dated April 23 and the WCAB en banc order of April 6.

DWC previously posted instructions on its website on how to file settlement documents in EAMS. Parties should review those instructions. If you are not already an e-filer and would like to become one please go to DWC’s EAMS page to learn how or send a request to EFORMS@dir.ca.gov for more information.

These recommendations also apply to the DWC Subsequent Injury Benefit Trust Fund Unit, which is also experiencing delay times for processing documents due to the reduction in staff during the COVID-19 crisis. Parties are strongly encouraged to file their documents electronically.

New NCCI Report Tracks COVID-19 Impact on Comp Claims

The National Council on Compensation Insurance (NCCI) is undertaking several activities to better understand the impacts of the COVID-19 pandemic on the Workers Compensation system. One action is monitoring several medical data-related metrics, which were developed to provide insight into the effect of COVID-19 on several aspects of the medical system as it relates to WC.

These metrics track quarterly results over time, allowing it to compare the data before the onset of the pandemic and workers compensation medical experience thereafter. Looking at the first two quarters of 2020, it identified general demographics and cost characteristics of claims having COVID-19 medical treatments.

In it’s recent article NCCI shares some of the aggregated-multi-state results for these metrics including data from the first and second quarter of 2020.

Some of the conclusions of the report show:

Hospitalization and intensive care unit (ICU) treatment are key cost indicators of COVID-19 claims.
— Overall active claim volume decreased during 2Q20.
Increased use of telemedicine in 2Q20, to varying degrees across states.
Evaluation and management and physical medicine show a decrease in the utilization of in-person services in 2Q20.
— The share of claims with surgery has remained steady, but the decreased intensity of surgery procedures seems to reflect a change in injuries or surgery mix.
Drug share of medical costs took an upward turn, in part driven by increased utilization of opioids.

While it is too early to fully assess the impact that the COVID-19 pandemic will have on the WC system, NCCI is beginning to identify the medical aspects of the system that are likely to be affected.

Furthermore, the measures of the potential indirect impact of the pandemic on medical services provided to all injured workers in the first two quarters of 2020, at first blush, do not show evidence of substantial disruption.

As data emerges, future updates to these metrics will be available on NCCI.com. A medical data dashboard will include state-specific results, allowing the user to compare a state’s experience to a multi-state benchmark.

OSIP Publishes Public Self-Insured Annual Summary

The annual summary of public self-insured data issued on December 6 by the Office of Self-Insurance Plans (OSIP) offers the first look at the workers’ comp experience of cities, counties, and other public self-insured entities for the 12 months ending June 30 of this year, including the first 6 months of the pandemic.

The new report shows California’s public self-insured work force declined by 1 percent to 2.09 million workers last year, with wages and salaries for those workers totaling $137.2 billion. The public self-insured employers reported 108,080 claims last year, 7,437 fewer than in the FY 2018/2019 initial report, which was by far the biggest decline in the past decade.

While claim volume fell 6.4% compared to the prior year, medical-only claims accounted for nearly all of that decline.

Meanwhile, average indemnity payments per claim rose 16.9%, more than offsetting a 3.7% decline in average medical payments, so even though there were fewer claims, total paid benefits increased for the sixth year in a row, edging up by $2.2 million to a record $414.9 million for the fiscal year ending June 30.

The first report data on incurred losses (paid amounts plus reserves for future payments) show a somewhat different pattern for public self-insured claim costs.

Aggregate incurred losses on the FY 2019/2020 claims totaled $1.33 billion, 2.8% less than the first report total from the prior year. The 6.4% decline in public self-insured claim volume in the initial report accounted for much of the one-year decline in total incurred, while a 1.8% decline in average incurred medical also contributed a small amount, though it did not offset the 11.0% increase in average incurred indemnity, which led to a 3.9% increase in the average incurred loss per claim, which hit a record $12,309.

OSIP also compiles private self-insured claims data, which is reported on a calendar year basis rather than on a fiscal year basis, so the private self-insured data, which was posted in June, now lags the private self-insured data by 6 months. The next report on private self-insured experience should be released next summer.

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