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Tag: 2021 News

Newsom Reappoints Katherine Zalewski as WCAB Chair

58 year old Katherine Zalewski, who lives in of Richmond, has been reappointed to the Workers’ Compensation Appeals Board, where she has served since 2014 when she was appointed by Governor Brown, and as Chair since 2017.

Zalewski was Chief Counsel at the California Department of Industrial Relations from 2012 to 2014, where she was a Workers’ Compensation Administrative Law Judge and Advisor to the Division of Workers’ Compensation from 2009 to 2011.

Prior to her appointment as a Workers’ Compensation Judge in 2009, Ms. Zalewski represented insurers and self-insured employers in workers’ compensation matters throughout Northern California.

She was Senior Associate at Schmit Law Office from 2000 to 2009 and Manager and an Attorney at Pacific Coast Services from 1998 to 2000 and at Express Network and Direct Legal Support Services from 1993 to 1998. She was an Attorney at Kinder and Wuerfel from 1990 to 1993, at Finnegan and Marks from 1988 to 1990 and at Foreman and Brasso from 1986 to 1988.

Ms. Zalewski received her B.A. from the University of California, Berkeley in 1983 and her J.D. from Hastings College of the Law in 1986.

This position requires Senate confirmation and the compensation is $164,122.

Zalewski is registered without party preference.

Santa Ana PD Officer to Serve Six Months for Comp Fraud

Former Santa Ana Police Officer Jonathan Ridge was fired from the Santa Ana Police Department after admitting to worker compensation fraud.

Ridge pled guilty to several charges: one count of making a false statement to obtain compensation, and three counts of filing a fraudulent insurance benefit claim.

“Mr. Ridge’s criminal conduct is intolerable, erodes the public trust and violates the very oath he took to serve as a peace officer by the City of Santa Ana,” Santa Ana Police Department, Chief of Police David Valentin said in a statement via Twitter. “This conduct does not represent the ethical, principled, and hard-working employees of the Santa Ana Police Department.”

Ridge sustained an injury while on duty in pursuit of a suspect who was driving a stolen vehicle on Oct. 5, 2017. He then went on disability due to the injuries he had sustained.

While on leave in May 2018, Ridge had surgery to repair his injured wrist and his doctor recommended he stay out of work for up to six months. Ridge was cleared by his doctor to return to work in November 2018.

Ridge returned to work with several medical restrictions. However, the City of Santa Ana was unable to accommodate his restrictions despite having an extensive return-to-work program for injured employees. They continued paying Ridge’s disability payments, which comprised the full amount of working pay.

The Santa Ana Police Department began doing surveillance on Ridge in March 2019 after observing little to no improvement to his injury after 18 months off the job.

The investigation revealed that Ridge was engaged in activities beyond what his doctor imposed, including attending college classes weeks after his wrist surgery, taking a road trip to Utah, going to the beach and even riding a motorcycle.

Ridge received his full-time pay for over a year while not working despite being fully capable of returning to work.

“Workers’ compensation fraud costs honest, hardworking businesses and government entities more than $30 billion a year,” Orange County District Attorney Todd Spitzer said in a press release. “We cannot allow those who commit workers’ compensation fraud to go unpunished because the financial cost to government and private business makes the cost of doing business more and more difficult.”

The former SAPD officer was sentenced to six months in jail and two years of probation.

Comp Underwriting Profitability Remains Stable During Pandemic

Underwriting profitability remained relatively stable in the U.S. workers’ compensation market in 2020 as the COVID-19 pandemic raged and premium volumes fell. But while the pandemic may be ebbing in the U.S. in 2021, the workers’ comp space cannot yet say it was unscathed.

The top 3 workers’ compensation players held their positions in 2020 despite seeing sharp falls in premium volume, S&P Global Market Intelligence data shows. The Travelers Cos. Inc. continued to rule the roost with control of 7.3% of the U.S. market, even though its direct premiums written fell 11.3% to $3.74 billion.

Changes further down the ranks were confined to one-position moves. Chubb Ltd. took fourth place from Liberty Mutual Group Inc., AF Group nudged State Insurance Fund Workers’ Compensation Fund out of the eighth spot and Old Republic International Corp. knocked American International Group Inc. out of the top 10.

Premium volume was down across the board as the pandemic kept workers at home or saw them furloughed or laid off. Direct written premiums were down 10.5% year over year to $31.41 billion for the top 20 and 9.2% to $51.06 billion for the industry.

However, underwriting profitability looks to have held up despite concerns about a flurry of losses from the introduction of rebuttable presumptions for pandemic-related workers’ compensation claims in several states, which shifts the burden of proof to the employer from the employee.

The workers’ compensation industry’s collective direct incurred loss ratio, prior to consideration of reinsurance, increased year over year, but only by 1.3 percentage points to 47.4%.

The combined ratio is likely to have seen a similar trend. Dan Aronson, U.S. casualty leader at insurance broker Marsh LLC, said during an April webinar that the industrywide private carrier combined ratio was estimated to be 86% for 2020, compared with 85% for 2019.

Workers’ compensation underwriting profitability has been “pretty solid” in recent years because of falling claims frequency, Sid Ghosh, vice president at Moody’s, said in an interview. The pandemic, which halted many business activities, has helped workers’ compensation claims frequency “tremendously,” he said.

There are signs that claims costs from workers catching COVID-19 will not be as high as feared. Dennis Tierney, Marsh’s director of workers’ compensation claims, on the webinar said one surprise was that the average COVID-19 claim cost less than $5,000, compared with around $20,000 for the typical workers’ compensation claim.

That said, the workers’ compensation market may not be done with the pandemic yet. Tierney said the potential for long-term health effects of COVID-19 is not yet fully known. As time goes on, the overall picture of the pandemic’s impact may change, he said.

Ghosh said another unknown is how working from home for a prolonged period of time may affect workers’ health in the long run. “We don’t know how that is going to evolve,” he said. He also noted that the claims frequency reductions were “a temporary benefit to the industry” that would be reversed as people return to work.

The introduction of new presumption rules in several states is “a worry for the workers’ comp industry,” Ghosh said, although Moody’s not aware of a material number of claims resulting from these changes so far. He added that some states were considering whether to expand the rules from essential workers to a wider group.

Pharmaceutical Company Resolves Kickback Charges for $12.6M

A pharmaceutical company headquartered in Delaware has agreed to pay $12.6 million to resolve allegations that it violated the False Claims Act by paying kickbacks.

The settlement resolves allegations that Incyte Corporation purportedly used an independent foundation as a conduit to pay the copays of certain federal beneficiaries taking Incyte’s drug Jakafi, which was approved to treat myleofibrosis in 2011.

Specifically, Incyte was the sole donor to a fund that was opened in November 2011 to assist only myleofibrosis patients. After the fund opened, the government alleges that Incyte used the fund to pay the copays of federal beneficiaries taking Jakafi who were ineligible for assistance from the fund because they did not have myleofibrosis.

Incyte managers pressured the foundation, through phone calls and emails, to provide economic assistance to these ineligible patients, and Incyte’s contractor helped ineligible patients to complete applications submitted to the fund for assistance. The government alleges that through this conduct, Incyte caused false claims for Jakafi to be submitted to Medicare and TRICARE.

When a beneficiary obtains a prescription drug covered by Medicare or TRICARE, the beneficiary may be required to make a partial payment, which may take the form of a copayment, coinsurance or a deductible. Congress included copay requirements in these federal programs, in part, to serve as a check on health care costs, including the prices that pharmaceutical manufacturers can demand for their drugs.

Under the Anti-Kickback Statute, a pharmaceutical company is prohibited from offering or paying, directly or indirectly, any remuneration – which includes money or any other thing of value – to induce federal beneficiaries to purchase the company’s drugs. This prohibition extends to the payment of patients’ copay obligations.

The civil settlement includes the resolution of claims brought under the qui tam or whistleblower provisions of the False Claims Act by Justin Dillon, a former compliance executive at Incyte. Under those provisions, a private party can file an action on behalf of the United States and receive a portion of any recovery. The qui tam case is captioned U.S. ex rel. Dillon v. Incyte Corp., No. 2:18 -cv-2642 (E.D. Pa.).

Dillon will receive approximately $3.59 million of the recovery.

3D Printed Pills on Future Pharmaceutical Landscape

The days of waiting some time for a pharmacist to fill a prescription made by your doctor may soon be behind us.

Pharmacies, doctors’ offices and other medical institutions could one day offer individual patients medications that are customized to their needs using 3D printing technology.  

Courthouse News reports that the new technology has been developed in recent years under an expanding field of pharmaceutical research aiming to understand how to shape the effect medication has on patients.

The 3D-printed pill model could spark a wave of personalized pharmacological interventions tailored to meet the unique needs of all patients, according to lead researcher of the study Sheng Qi.

Qi, a professor at the United Kingdom’s University of East Anglia, said in a statement released with the study that the current pharmacological landscape currently takes the opposite approach, manufacturing one form of medication meant to satisfy all patients.

“Personalized medicine uses new manufacturing technology to produce pills that have the accurate dose and drug combinations tailored to individual patients. This would allow the patients to get maximal drug benefit with minimal side effects,” Qi said. “Such treatment approaches can particularly benefit elderly patients who often have to take many different types of medicines per day, and patients with complicated conditions such as cancer, mental illness and inflammatory bowel disease.”

The study’s findings could one day shape an element of personalized medicine that can create a tailored pharmacological regimen at the site where patients are being treated, Qi said.

Most 3D-printed products and objects use a device that heats filament material and places tiny fragments of the filament into a custom pattern.

The personalized pills are created using a newly developed 3D printing method that can shape a pill containing the medication without the use of filaments.

The research team led by Qi has developed the ability to print pills that feature more porous structures allowing for faster or slower release of medicine when taken orally.

The findings show that the speed of medicine dispersing within the body can be regulated by pill structures created using the new technology, according to the study published Monday in the International Journal of Pharmaceutics.

The study said future research is needed to make the technology produce pills that can regulate dosing frequency.

If the technology is improved, people on complex medical regimens requiring multiple medications taken each day could one day be able to take one pill that slowly releases a day’s worth of doses.

Researchers Andy Gleadall and Richard Bibb of England’s Loughborough University also contributed to the study.

Members of the study team did not immediately respond to a request for further comment on the report.

Claimant Caught Working as Bartender While on TTD

Brooke Gomez, 29, of Maxwell, was convicted and sentenced on one misdemeanor count of workers’ compensation insurance fraud after she claimed to be too injured to work in order to collect workers’ compensation benefits while working for another employer.

Gomez pleaded no contest to the misdemeanor charge and was sentenced in Colusa County Superior Court on April 26, 2021. She was placed on 12 months summary probation and ordered to pay $6,000 in restitution and $630 in fines.

On August 14, 2019, while working as a rice grader, Gomez sustained an abdominal injury while lifting bags of rice. Following her injury, a workers’ compensation claim was filed with her employer’s insurance company and Gomez began receiving workers’ compensation payments.

Gomez told her employer she had been offered several part-time jobs, but declined the offers due to her work injury. However, other mill workers reported to their employer that they witnessed Gomez working as a bartender at a local bar.

An investigation by the California Department of Insurance found Gomez misrepresented her symptoms to medical professionals and those handling her claim. Undercover surveillance showed Gomez interacting with customers, serving drinks, completing cash transactions with patrons and wiping down tables – all functions she claimed not to be able to do as a result of her injury.

The surveillance also discovered Gomez discussing her workers’ compensation claim with bar patrons and discussing her hopes of not getting caught working at the bar while receiving workers’ compensation benefits.

Due to Gomez’s misrepresentations, she received $6,893 in undeserved workers’ compensation payments and her employers’ insurance company lost an additional $8,992 in legal and investigation costs.

NCCI Economic Briefing Predicts End of COVID Recession

The current issue of the National Council on Compensation Insurance, Quarterly Economics Briefing – Q1 2021, surveys recent developments related to employment and wages and considers the risk to the emerging economic recovery from a possible fourth COVID surge.

The two-month fall in coronavirus case rates, coincident with the appearance of new vaccines, has kindled optimism. The expectation that new vaccines will bring the coronavirus pandemic under control by year-end, if not sooner, is itself a powerful driver for rapid recovery of spending and jobs in the United States – if that expectation is borne out in coming months.

After stagnating during the nationwide coronavirus (COVID-19) surge last winter, the pace of job recovery picked up in February and March. The rollout of new vaccines and a fall in coronavirus case rates are creating an expectation that the COVID recession may be over by year-end, if not sooner. This is also boosting discretionary consumption and new hiring.

However, an uptick in case rates beginning in late March casts a shadow on the prevailing mood of optimism.

Key Themes and Takeaways

– – Strong employment growth in February and March, plus declining coronavirus case rates and increasing vaccinations, point to an accelerating pace of economic recovery in 2021.
– – The March national employment gap is down to -=5.4%, a shortfall of 7 million jobs relative to seasonally expected employment levels. Lost jobs remain concentrated in service sectors, especially Leisure and Hospitality. Construction and Manufacturing are recovering strongly, but both sectors face material shortages and supply chain bottlenecks.
– – Unadjusted average weekly wages rose by more than 7% in 2020, in large measure because COVID-related job losses are concentrated among low-wage workers. Adjusting for the effect of COVID-related job losses on the wage distribution, average weekly wages rose by 3% in 2020 among workers who remained employed.
– – Economic impact payments from two new federal stimulus programs enacted in December and March were distributed to households during the first quarter. Transfer payments have kept national household disposable income and savings above pre-pandemic 2019 levels. Strong household balance sheets provide wherewithal to drive a rapid rebound in discretionary consumption spending in 2021.
– – About 30% of the United States population received at least one vaccine dose by the end of March, and vaccination rates are currently on the order of 3 million people per day. New coronavirus cases in March were down to about one-third of January’s rate. However, several states reported increases in cases and hospitalizations in late March attributed to a new and more contagious variant of the coronavirus.
– – Job losses from a new COVID surge, if it develops, may be modest – like those during last winter’s surge, but much lower than in two previous virus surges in spring and summer 2020.

Read the full Quarterly Economics Briefing for an in-depth look at the economy and how it is impacting workers compensation.

NSDUH Recommends Routine Screening for Cannabis Use

Cannabis use more than doubled over the past decade among Americans 50 and over, with nearly one in 10 now reporting usage over the past year, an analysis of the National Survey on Drug Use and Health (NSDUH) found.

Of the 8.9% who reported using cannabis in the past year; roughly one in five (18.5%) reported using it for medical purposes such as treatment of chronic pain or depression, or for diseases like arthritis, reported Namkee Choi, PhD, and Diana DiNitto, PhD, both from University of Texas at Austin.

Compared to recreational users, those using cannabis for medical purposes were more likely to discuss drug use with a healthcare professional (adjusted OR 4.18, 95% CI 2.53-6.89), to purchase from a medical cannabis dispensary (aOR 4.38, 95% CI 2.47-7.76), and to report more frequent use (aOR 2.56, 95% CI 1.35-4.86), according to the research in the American Journal of Drug and Alcohol Abuse.

“The findings suggest that some medical users may be self-treating without healthcare professional consultation,” Choi said. “As part of routine care, healthcare professionals should screen for cannabis and other substance use, and for mental health problems, and recommend treatment when necessary.”

For their study, the researchers examined 2018 and 2019 NSDUH data involving 17,685 individuals ages 50 and up, 55% of whom were women. Of self-described medical cannabis users — which by NSDUH definition implies physician-recommended use – less than 40% reported discussing cannabis use with a healthcare provider, which the authors noted suggests that some reported medical use without a doctor’s recommendation, possibly because they believed it to be necessary for relieving their symptoms.

Indeed, Choi and DiNitto cited another large survey performed in the U.S. in 2017 that found the most common medical reasons for marijuana use were anxiety (49%), insomnia (47%), chronic pain (42%), and depression (39%). Among those using marijuana for medical purposes, 21% did not have a doctor. Among those with doctors, 33% did not inform them, 28% reported their doctor was neutral on their use, 32% reported their doctor was supportive, and 8% reported their doctor was not supportive.

In the current study, while medical users reported using cannabis more frequently, with 40% using it roughly 4 to 7 days per week, they were less likely to have alcohol use disorder compared with nonmedical cannabis users (aOR 0.39, 95% CI 0.20-0.76). Otherwise, medical and nonmedical users did not differ on physical and most behavioral health indicators, although cannabis users in general had significantly higher rates of alcohol use disorder, nicotine dependence, other illicit drug use, and mental illness compared with nonusers.

Most were experienced users rather than new to cannabis use; most obtained cannabis from private/informal sources, reportedly with little difficulty. Of self-reported medical users, 71% reported exclusive medical use; the rest reported both medical and nonmedical use.

It is important that patients be made aware of the risks of obtaining cannabis and cannabis products from unregulated sources, the authors noted. “Given the increase in THC [tetrahydrocannabinol] potency, healthcare professionals should educate older cannabis users, especially high-frequency users, on potential safety issues and adverse effects.”

In addition to urging doctors to do more to screen and educate their patients, the study authors say the NSDUH needs updating to “reflect changing cannabis product commercialization,” with cannabidiol, topical solutions, and edibles often available now.

In fact, there has been a push in recent years to help familiarize healthcare providers with the health effects of cannabis: Last year, citing a 2015 survey of healthcare providers, Nora Volkow, MD, director of the National Institute on Drug Abuse, concluded that providers “perceive a knowledge gap related to cannabis dosing, treatment plans, and different areas related to cannabis products, so providers themselves realize the need for research and expertise to be developed in this area.”

In the face of increasing patient requests, new guidelines have been issued on medical cannabis for chronic pain; and last fall, MedPage Today reported on the publication of Medical Marijuana: A Clinical Handbook.

Researchers noted that limitations of their study included the relatively small number of medical users and the fact some respondents may have under-reported their cannabis and other substance use.

DWC Posts Proposed Amendments to the QME Regs for Comment

The Division of Workers’ Compensation has posted proposed amendments to the Qualified Medical Evaluator (QME) regulations to its online forum where members of the public may review and comment on the proposals.

The proposed changes are necessary to bring existing regulations into compliance with amendments to the Labor Code and to clarify the Administrative Director’s authority with respect to the processes related to appointment and reappointment of Qualified Medical Evaluators, which is granted by relevant statutory authority.

The draft regulations include:

– – Clarification of regard to definitions to conform to changes made by Senate Bill 863
– – Provisions prohibiting providing false information on the application or reapplication for appointment
– – Provisions to conform amended regulations with proper gender pronouns
– – Provisions for electronic service of medical-legal reports and use of electronic signatures in the QME program
– – Revision of the number of hours necessary for initial qualification of physicians as QMEs
– – Revision of continuing education requirements including hourly requirements and the addition of anti-bias training for QMEs
– – Provisions that require a QME to comply with all Administrative Director’s regulations in order to be reappointed as a QME.
– – There is also a new regulation that provides a specific implementation of existing discretionary authority of the Administrative Director pursuant to Labor Code § 139.2
– – Clarification of the use of probation as a disciplinary sanction and allowing the Administrative Director to designate hearing officers for adjudication of disputes regarding appointment and reappointment applications
– – Clerical changes to the regulation on QME unavailability
– – Provisions allowing QME reappointment hearings to be heard by other tribunals in addition to the Office of Administrative Hearings
– – Regulations that are consolidated into new subdivisions are repealed.

The forum can be found on the DWC forums webpage under “current forums.” Comments can be submitted to DWCrules@dir.ca.gov and will be accepted until 5 p.m. on Friday, May 14, 2021.

DIR Publishes Annual IMR Report

The Department of Industrial Relations (DIR) and its Division of Workers’ Compensation (DWC) have posted an annual report on the Department’s Independent Medical Review (IMR) program.

IMR is the medical dispute resolution process for the state’s workers’ compensation system that resolves disputes about the medical treatment of injured workers. The report describes IMR program activity in 2020, the eighth year since the program was implemented.

The Independent Medical Review Organization (IMRO) administering the program, Maximus Federal Services, Inc., received 184,100 IMR applications, and issued 136,740 Final Determination Letters, each addressing one or more medical necessity disputes.

In the first half of 2020, IMR program activity slowed with the emergence of the pandemic, but rebounded in the second half. Throughout the year, the IMRO issued decisions, on average, eight to 12 days after receipt of all medical records.

Some highlights of the report:

– – Nearly 94% of all unique IMR filings were deemed eligible for review, the highest annual percentage since IMR began.
– – Pharmaceutical requests accounted for 34% of all treatment requests sent for IMR, a smaller proportion of total service requests than in previous years.
– – Opioids comprised three out of 10 pharmaceutical requests.
– – Treatment request denials were overturned at a rate of 9.5%. Specialist consultants, office visits and mental health services were overturned most often.
– – Guidelines contained in the Medical Treatment Utilization Schedule continue to serve as the primary resource for the determination of medical necessity.

The progress report is posted on the DIR website.