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Tag: 2020 News

S.F. District Attorney Files DoorDash Misclassification Case

San Francisco’s District Attorney has joined a growing chorus of California regulators and enforcement officials taking aim at gig economy companies for what they see as the misclassification of workers as contractors.

The chief prosecutor announced the filing of an employee protection action against DoorDash alleging the company has and continues to illegally misclassify its delivery workers as independent contractors when, in fact, they are employees. The action seeks restitution for workers, an injunction requiring DoorDash to properly classify its delivery workers as employees, and civil penalties.

DoorDash is a business that delivers food, beverages and other items from local restaurants and stores to nearby customers. It refers to its delivery workers as “Dashers” and employs them to pick up orders from merchants and deliver them to customers. DoorDash is headquartered in San Francisco.

According to the complaint, misclassification is a major issue negatively impacting California workers. The California Supreme Court has discussed that misclassification is a “very serious problem” that was depriving “millions of workers of the labor law protections to which they are entitled.”

The California Legislature has stated that misclassification contributes to the rise in income inequality and the shrinking of the middle class.

Additionally, the San Francisco Board of Supervisors recently adopted a Resolution urging “City Attorney Dennis Herrera and District Attorney Chesa Boudin to seek immediate injunctive relief to prevent the misclassification of San Francisco workers as they seek to access basic workplace rights like paid sick leave, unemployment insurance, and benefits provided under the San Francisco Health Care Security Ordinance.”

Under California’s protective labor laws, workers are presumed to be employees and it is the employer’s burden to justify classifying workers as independent contractors.

The District Attorney also claims that “properly classifying employees is especially important during the ongoing COVID-19 pandemic. Dashers were already performing dangerous work, forced to navigate traffic conditions as quickly as possible to make their deliveries or risk being suspended or terminated by DoorDash. The job of a Dasher became substantially more perilous during this pandemic. Dashers have been deemed essential workers yet DoorDash does not even provide them with workers’ compensation insurance and prevents them from having access to paid sick and disability leave under state laws.”

COVID-19 Distancing Rules Becoming a “Political Hazard”

The first wave of COVID-19 came slowly to San Joaquin County in the heart of California’s breadbasket, but the much-feared second surge is roaring through, sickening as many people in the two weeks since Memorial Day as in March and April combined.

In San Joaquin County, Health Officer Maggie Park attributes the rise in cases to two cherry packing plants where people are working in close proximity, and to families and friends gathering without wearing masks or physical distancing, along with recent moves to re-open the economy.

Hospitalizations have spiked by 40%, and the county is one of ten in the most populous U.S. state put on a watch list of places that might be ordered to lock down their economies again after weeks of careful reopening.

But Reuters reports that when Michael Tubbs, mayor of the county seat of Stockton, submitted an ordinance requiring residents to wear masks when they are in public, he did not get a single vote from the six other members of the city council.

It is “a political hazard to act in the interest of public health,” complained Tubbs, a liberal whose city has several conservatives on the council.

The pushback Tubbs experienced – and the spike in cases the county’s health director says was exacerbated when people celebrated Mothers Day and Memorial Day without following physical distancing rules – offers a glimpse into the complicated politics around lifting coronavirus restrictions.

Last week, the chief health officer for Orange County in Southern California resigned amid protests and personal attacks after she issued an order to wear masks in public. Four other health officers in California have resigned or retired in the last two months, as have two public health department directors, local media have reported as cases and deaths continue to rise in the state.

On Tuesday, the state reported nearly 160,000 confirmed COVID-19 cases and over 5,200 deaths.

Health directors and the U.S. Centers for Disease Control and Prevention say wearing face coverings in public is essential to slow the spread of the virus.

Public health restrictions run against the grain of individualism in American culture, and often generate resistance, said U.C. Berkeley epidemiologist Arthur Reingold. Chafing under rules requiring masks in public is reminiscent of prior health care emergencies, such as the uproar that followed efforts to close gay bath houses during the HIV epidemic, Reingold said.

Throughout the country, resistance to public health measures has also taken on a partisan tinge. A Reuters/Ipsos survey conducted last month found that just one-third of Republicans were “very concerned” about the virus, compared to nearly half of Democrats. Trump eschews wearing a mask in public, while his Democratic opponent in November, Joe Biden, generally wears one.

In California, Governor Gavin Newsom has loosened the state’s shutdown even as cases in some areas continue to rise. Stockton, which also has a number of conservative members of the county Board of Supervisors, is emblematic of places where wearing a mask has become politicized.

Contracting Industry Injuries Highest in Opioid Use

Strong responses to the opioid epidemic have led to decreased opioid use over the past five years. However, has the decline been consistent across industries?

A new article published by the National Council on Compensation Insurance (NCCI) explores the difference in opioid use between industry groups by looking at data-driven trends underlying opioid prescribing patterns in workers compensation – with a special focus on the contracting industry.

Studies have shown that certain industry groups have been more prone to opioid use and abuse than others. Further, NCCI data shows that the treatment of injured workers in certain industry groups is significantly more likely to include opioids. For example, in the contracting industry, the quantity of opioids prescribed to injured workers is more than double the average number prescribed to those in all other industry groups.

The share of claims receiving an opioid is greater for the contracting industry group (20%) when compared with all other industry groups combined (14%).

This means that, on average, one out of every five contracting claims involves at least one opioid prescription. In addition, these contracting industry group claimants, on average, receive both 20% more opioid prescriptions and opioid prescriptions that are 20% stronger.

One factor contributing to the higher opioid usage in the contracting industry group is the greater likelihood for serious injuries to occur. Higher medical costs are typically associated with more serious injuries-claims that may be more likely to require pain management efforts, including the potential use of opioids.

For accidents occurring in 2017, the average medical cost per claim, including prescription costs, in the contracting industry group was approximately 2.3 times greater than that for all other industry groups combined.

Opioid usage has experienced decreases in recent years, including among the contracting industry. Between 2012 and 2017, overall, per-claim opioid usage fell by 49% in the contracting industry group.

Decreased opioid usage in the contracting industry group can be primarily explained by a combination of two factors: fewer claimants receiving an opioid prescription, and a reduced number of opioid prescriptions for those who do receive them.

WCRI Reports on Workers’ Compensation Prescription Regulations

The Workers Compensation Research Institute (WCRI) released a new report that gathers in one place the numerous state regulations affecting drugs prescribed to workers with injuries in all 50 states and the District of Columbia.

“Across the country, states have implemented an array of different regulatory strategies, overseen by different agencies, to address prescribing of medicine,” said Ramona Tanabe, WCRI’s executive vice president and counsel.

“This report provides policymakers and system stakeholders with a basic understanding of the different strategies adopted by states, with references to the regulations for those seeking more detail.”

The report, Workers’ Compensation Prescription Drug Regulations: A National Inventory, 2020, also provides information on some of the most prominent prescription drug issues stakeholders are concerned about today, such as the following:

— Rules for Limiting and Monitoring Opioid Prescriptions
— Medical Marijuana Regulations
— Workers’ Compensation Drug Formularies
— Prescription Drug Monitoring Programs
— Price Regulations for Pharmacy- and Physician-Dispensed Drugs
— Drug Testing Regulations

The tables in this report were compiled from completed surveys of two agencies for each of the 50 states and the District of Columbia as of January 1, 2020.

For more information or to purchase, visit its website.

Global Insurance Fraud Detection Market to Grow 22% Annually

Analysts predict the Global Insurance Fraud Detections market to show a compound annual growth rate of 21.66% from 3.7 billion in 2019 to reach 12 billion by 2026.

The major factors contributing to the growth of the market are the need to manage huge volumes of identities by organizations productively, increasing operational efficiency and improving the customer experience, growing adoption of advanced analytics techniques, and stringent regulatory compliance requirements.

The global Insurance Fraud Detection Market is bifurcated into Fraud Analytics, Authentications, Governance Risk and Compliance, and others.

Fraud analytics is expected to constitute the largest market share. Such systems track and analyze data from multiple data sources, identify anomalies and suspicious and irregular activity across all channels, and provide real-time control mechanisms to prevent fraudulent practices. Hence, leading to the growth of the segment.

The emergence of advanced solutions such as the use of automated business rules, self-learning models, text mining, image screening, network analysis, predictive analytics, and device identification is estimated to deliver actionable insights to advance claims processes.

As a result, insurance organizations are adopting fraud detection solutions that not only recognize the genuine claims process but also decrease the number of false positives.

Various factors, such as a rise in the sophistication level of cyber-attacks and enormous monetary losses due to these attacks in the insurance sector, are anticipated to drive the market. An increase in the generation of enterprise data and its intricacy, high industry-specific requirements, and an increase in the incidence of fraud further supplement the fraud detection market growth.

With the growing awareness of criminals and sophisticated crimes, fraud prevention and detection capabilities are increasing. Global concerns about the constantly increasing cases of insurance fraud, coupled with sophisticated organized crime, have signaled the need for all insurance companies to act consistently.

Different factors, such as an exponential rise in cyber-attack sophistication and substantial monetary losses due to these assaults in the insurance sector, are expected to drive the market.

DWC Posts Draft Revisions to the Pharmaceutical Fee Schedule

The Division of Workers’ Compensation has posted draft revisions to the Official Medical Fee Schedule regulations that govern the maximum reasonable fee for pharmaceuticals dispensed to injured workers.

Under the California Labor Code, the fee schedule for dispensed pharmaceuticals is based primarily upon the Medi-Cal pharmacy payment system. Medi-Cal has implemented a revised payment methodology approved by the Centers for Medicare and Medicaid Services (CMS) utilizing “National Average Drug Acquisition Cost” (NADAC) based upon survey data compiled by CMS instead of the “average wholesale price” (AWP).

The new Medi-Cal methodology also revises the pharmacy dispensing fee value and structure by updating the dispensing fee from $7.25 to a two-tier dispensing fee of $10.05 or $13.20, depending on the volume of pharmacy claims processed.

DWC proposes to amend the workers’ compensation pharmaceutical fee schedule in accordance with the provisions of Labor Code section 5307.1, and in light of the Medi-Cal payment system changes.

The proposed regulations set forth separate provisions for pharmacy-dispensed and physician-dispensed pharmaceuticals in order to implement statutory provisions with additional fee caps for some physician-dispensed pharmaceuticals.

The regulation draft would:

— Amend existing regulations in the Physician Fee Schedule (Sections 9789.12.1, 9789.13.2, 9789.13.3) that cross reference to the pharmaceutical fee schedule
— Amend existing Pharmacy Fee Schedule regulation (Section 9789.40)
— Adopt new Pharmaceutical Fee Schedule regulations and structure; separate provisions for pharmacy-dispensed pharmaceuticals (Sections 9789.40.1, 9789.40.2, 9789.40.3) and physician-dispensed (Sections 9789.40.4, 9789.40.5) pharmaceuticals
— Amend Official Medical Fee Schedule section 9789.111 which sets forth effective dates

The draft regulations, a sample excerpt of the fee data file, a sample excerpt of the dispensing fee file and background information on the Medi-Cal fee methodology changes are available on the DWC Forum webpage under “current forums.” Comments will be accepted on the forum until 5 p.m. on Friday, July 3, 2020.

SCIF Sent Back to Trial After a 15 Year Premium Collection Effort

ReadyLink Healthcare is a nurse staffing company based in Thousand Palms, California. It contracts with registered nurses and other healthcare providers throughout the United States, and places them at hospitals, on a short-term basis.

SCIF and ReadyLink have been engaged in a multiyear, multijurisdictional dispute over the final amount of workers’ compensation insurance premium that ReadyLink owes to SCIF for the 2005 policy year, based on an audit of ReadyLink’s payroll for that year performed by SCIF. During the audit, SCIF determined that certain payments made by ReadyLink to its nurses, which ReadyLink characterized as per diem payments, should instead be considered to be payroll under the relevant workers’ compensation regulations. SCIF’s audit resulted in a significant increase in ReadyLink’s premium.

After 15 years of litigation attempting to collect additional premium from its insured, the State Compensation Insurance Fund was sent back essentially to square one to a trial court in Riverside. The convoluted litigation history is enough to give anyone a headache.

ReadyLink first challenged SCIF’s application of the regulations by filing an appeal of the audit to the Insurance Commissioner. The Commissioner approved SCIF’s application of the relevant regulation.

A trial court then rejected ReadyLink’s petition for a writ of administrative mandamus to prohibit the Insurance Commissioner from enforcing its decision, and an appellate court affirmed the trial court’s judgment.

While ReadyLink’s appeal from the trial court’s denial of its petition for a peremptory writ of administrative mandamus was pending, ReadyLink filed a putative class action lawsuit in federal district court against SCIF and the Insurance Commissioner.  (ReadyLink Healthcare, Inc. v. State Compensation Ins. Fund (9th Cir. 2014) 754 F.3d 754, 757).

The federal district court dismissed the case concluding that it was appropriate to decline to exercise supplemental jurisdiction over the remaining state-law claims. While ReadyLink’s federal appeal was pending, California’s Second District Court of Appeal issued its opinion in ReadyLink Healthcare affirming the trial courts ruling.

SCIF then filed the action underlying this current appeal in Riverside County Superior Court on January 13, 2015. SCIF alleged causes of action against ReadyLink for breach of contract, money due on an open book, and common count. The trial court ultimately granted SCIF’s motion for judgment on the pleadings, finding that the amount owed was precisely what was determined in the underlying administrative decision and appeals, the amount of $555,327.53, plus prejudgment interest of $571,606.99.

ReadyLink appealed the money judgment in favor of SCIF. The Court of Appeal reversed in the new published opinion of SCIF v ReadyLink Healthcare inc.

A review of ReadyLink Healthcare, supra, 210 Cal.App.4th 1166, demonstrated that the issues that remain to be decided in this collection action were not previously considered, let alone decided, in the appellate review from the writ proceeding.

The single issue before the ALJ was whether SCIF’s inclusion as payroll those amounts that ReadyLink paid to its employee nurses as per diems for the 2005 policy year complied with the California Workers’ Compensation Uniform Statistical Reporting Plan.

In its ruling on ReadyLink’s petition for a writ of administrative mandamus, the trial court did not suggest that the dispute involved other questions, such as the total amount of the premium owed by ReadyLink, or whether SCIF’s past conduct in relation to ReadyLink might provide a legal basis for ReadyLink to avoid having to pay the premium for the 2005 policy year as determined by SCIF.

The trial and appellate courts in the federal action did not consider, much less decide, the question of the amount of premium actually owed by ReadyLink for workers compensation insurance for the 2005 policy year.

Thus, the Court of Appeal’s review of the collateral proceedings between ReadyLink and SCIF makes clear that the trial court erred in concluding that the issues raised by SCIF’s collection action and by ReadyLink’s affirmative defenses to that action had been litigated and decided in a prior action.

The judgment of the trial court was reversed. The trial court’s order denying ReadyLink’s motions to compel further discovery was also reversed.

ACOEM Studies Employer Costs for Opioid Use Disorders

A new study published in the Journal of Occupational and Environmental Medicine concluded that employers can make a business case for expanding access to pharmacotherapy treatment for Opioid Use Disorder (OUD) based on its finding that receipt of pharmacotherapy significantly reduces overall health care costs.

Prior research has measured the impact of employee opioid use disorder (OUD) on employer costs. One study found that employees who are dependent on opioids but have not been diagnosed with OUD have lower at-work productivity, which costs employers approximately $16 million a year.

Another study using 2006 to 2012 data reported that individuals with OUD had seven more medically related absenteeism days annually relative to matched controls.

A third study found that US adults who misuse prescription pain relievers have higher work absenteeism than do employees who do not.

Studies focusing on health care costs have found that individuals who misuse opioids have more than $10,000 more in annual expenditures.

However, employers do not have a recent or full picture of costs related to OUD. Employees who have a spouse or dependent with an OUD may have additional lost productivity days and days absent because of family member health concerns. Employees may have to help their family member navigate health care benefits during business hours, including identifying appropriate and available providers for substance use disorder (SUD).

Employees also may assume a caregiving role, particularly during relapse or potential relapse. A cross-sectional study of caregivers of individuals with advanced cancer found a 23% drop in average productivity. Another study that looked at caregivers of patients with poststroke spasticity found that lost-productivity cost per employed caregiver was $835 per month, with 72% attributable to presenteeism.

To update this information, ACOEM researchers conducted a cross-sectional analysis of 2016 to 2017 commercial enrollment, health care, and pharmacy claims and health risk assessment data using the IBM® MarketScan® Databases (Ann Arbor, MI).

The results of the new study were consistent with previous research that found that employers incur significant costs from OUD. The findings add to the literature by providing evidence that employers would benefit financially from expanding access to pharmacotherapy for their employees with OUD.

Employers should work with other payers to tackle important barriers to treatment for OUD by supporting efforts to expand provider education and licensure requirements to include MAT and increasing insurance coverage for these treatments.

3M Sues California Company Selling Fake N95 Masks

3M’s legal battle to keep price gougers from profiting on sales of its N95 face masks during the coronavirus pandemic grew on new fronts.

The Star Tribune reports that on Monday, 3M targeted a third-party seller on for using its trademark to sell $350,000 worth of masks at up to 20 times list prices.

KM Brothers Inc., a California company trading under several different business names, “claimed to be reselling authentic N95 respirators, while actually selling damaged and fake goods at highly inflated prices,” 3M said.

After customer complaints, Amazon pulled the KM Brothers ads from its online shopping forum.

3M’s federal court lawsuit against Mao Yu, the owner and operator of KM Brothers, explains a strategy that uses multiple business names to carry on selling if a single business gets taken down.

3M said that on Feb. 20, various business under KM Brothers control began selling “what were purported to be 3M-branded N95 respirators across three connected accounts on”

The company also “maintained at least 45 different Amazon Standard Identification Numbers.”

The new lawsuits offer a glimpse into the depth and breadth of attempts to profit from a national shortage of N95 masks, said to be among the most effective in blocking airborne COVID-19 molecules.

The new legal actions bring to 14 the number of suits 3M has filed since January to try to control price gouging for its product by what the company calls “pandemic profiteers.”

3M said it “has won five temporary restraining orders and three preliminary injunction orders from courts across the country that put a stop to other defendants’ unlawful and unethical profiteering from the pandemic.”

It has shut down more than 3,000 websites and 4,000 social media posts that try to expropriate the 3M brand for profit, the company explained.

3M asks the court to shut down KM Brothers’ mask-selling operations and to force the company to repay any profits derived from by claiming the resale of 3M masks when it was instead “selling counterfeit, damaged, deficient, or otherwise altered masks.”

The seller charged Amazon customers up to $23.21 for a single mask that normally listed for prices ranging from 60 cents to $3.40 each. Customer complaints tipped off Amazon.

Reopenings Continue Despite COVID-19 Hotspots

Facing budget shortfalls and double-digit unemployment, governors of U.S. states that are COVID-19 hotspots on Thursday pressed ahead with economic reopenings that have raised fears of a second wave of infections.

Governors face pressure to fire up economies facing fiscal year 2021 budget shortfalls of up to 30% below pre-pandemic projections in New Mexico. Nevada, which has seen cases increase by nearly a third in the past two weeks, is suffering 28% unemployment.

Reuters reports that the moves by governors of states such as Florida and Arizona came as Treasury Secretary Steven Mnuchin said the United States could not afford to let the novel coronavirus shut its economy again and global stocks tanked on worries of a pandemic resurgence.

As Florida reported its highest daily tally of new coronavirus cases on Thursday, Governor Ron DeSantis unveiled a plan to restart public schools at “full capacity” in the autumn, arguing the state’s economy depended on it.

North Carolina reported record COVID-19 hospitalizations for a fifth straight day on Thursday, a day after legislators passed a bill to reopen gyms, fitness centers and bars in a state where more than one in ten workers are unemployed.

“This is about saving lives, this is also about livelihoods in the state of Arizona,” Governor Doug Ducey told a news briefing, adding that a second shutdown of the economy was “not under discussion” despite official figures showing a 211% rise in virus cases over the past 14 days.

About half a dozen states including Texas and Arizona are grappling with rising numbers of coronavirus patients filling hospital beds.

Ducey and Texas Governor Greg Abbott say their hospitals have the capacity to avoid the experiences of New York, where the system was stretched to near breaking point as some COVID patients were treated in hallways and exhausted workers stacked bodies in refrigerated trailers.

A note of caution came from Utah, where Governor Gary Herbert said most of the state would pause its reopening after a 126% rise in cases over the past two weeks.

Austin, Texas on Thursday also said it would likely extend stay-at-home and mask orders past June 15 after the state reported its highest new case count the previous day. Austin health officials blamed a record week of infections on easing business restrictions and Memorial Day gatherings.

There was no talk of new shutdowns.

In New Mexico, Health Secretary Kathy Kunkel pointed to outbreaks at the Otero County Prison Facility, as well as in nursing homes and assisted living facilities, as factors behind an uptick in cases.