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Tag: 2021 News

Relaxed Cal/OSHA COVID Standards Effective Today

The Occupational Safety and Health Standards Board adopted revisions to the COVID-19 Prevention Emergency Temporary Standards that account for recent guidance from the California Department of Public Health based on increases in the number of people vaccinated.

Governor Gavin Newsom signed an executive order enabling the revisions to take effect without the normal 10-day review period by the Office of Administrative Law – providing clarity and consistency for employers and employees as California fully reopens its economy. The revised standards took effect today.

The revisions include the following:

– – Fully vaccinated employees do not need to be offered testing or excluded from work after close contact unless they have COVID-19 symptoms.
– – Fully vaccinated employees do not need to wear face coverings except for certain situations during outbreaks and in settings where CDPH requires all persons to wear them. Employers must document the vaccination status of fully vaccinated employees if they do not wear face coverings indoors.
– – Employees are not required to wear face coverings when outdoors regardless of vaccination status except for certain employees during outbreaks.
– – Employees are explicitly allowed to wear a face covering without fear of retaliation from employers.
– – Physical distancing requirements have been eliminated except where an employer determines there is a hazard and for certain employees during major outbreaks.
– – Employees who are not fully vaccinated may request respirators for voluntary use from their employers at no cost and without fear of retaliation from their employers.
– – Employees who are not fully vaccinated and exhibit COVID-19 symptoms must be offered testing by their employer.
– – Employer-provided housing and transportation are exempt from the regulations where all employees are fully vaccinated.
– – Employers must review the Interim guidance for Ventilation, Filtration, and Air Quality in Indoor Environments.
– – Employers must evaluate ventilation systems to maximize outdoor air and increase filtration efficiency, and evaluate the use of additional air cleaning systems.

Cal/OSHA is updating its resources to assist employers with understanding their obligations required by the revised emergency standards. The webpage contains an updated fact sheet and Frequently Asked Questions about proposed revisions to the emergency temporary standards. In addition, Cal/OSHA is currently updating its model COVID-19 Prevention Program in English and Spanish and information on planned webinars hosted by its Consultation Services Branch.

Employers with Questions on Requirements May Contact: InfoCons@dir.ca.gov, or call your local Cal/OSHA Consultation OfficeStakeholders Who Wish to Comment on the Rulemaking Process May Contact: oshsb@dir.ca.gov

NSC, Amazon Team Up to Address Workplace Injuries

Amazon and the National Safety Council have created a five-year, $12 million partnership to find innovative solutions to prevent the most common workplace injury: musculoskeletal disorders (MSDs).

MSDs are an under-recognized yet omnipresent safety challenge that affect nearly one-quarter of the world’s population. In the U.S., businesses experienced more than 265,000 MSD injuries involving days away from work in 2019.

MSDs are complex and result from a combination of forceful exertion, repetitive movement and awkward or static posture. The subset of MSDs often referred to as repetitive motion injuries are chronic and result from exposures to risk factors over the course of weeks, months or years. The goal of the partnership is to take a proactive approach to prevent these injuries before they ever occur.

Built on the principles of data and innovation, the partnership will aim to prevent MSDs by engaging key stakeholders, conducting research, inventing new technology and processes, and scaling the results. Amazon’s $12 million contribution is the largest corporate contribution in the Council’s history. The partnership will include five key components:

Advisory Council: Establish an international advisory council of experts, corporations, researchers, practitioners and innovators in the public and private sectors. The advisory council will work together to review the most promising approaches to MSD prevention, shape development of the partnership components and engage external parties on MSD prevention.

Innovative Research: Conduct research utilizing next-generation artificial intelligence, natural language processing and machine learning tools to explore current and future MSD innovation and trends. This research will live in an open-source platform for all industries to explore and glean insights.

Small Business and University Grants: Provide grants for small- to medium-sized businesses, universities and university students. These grants will fund research and innovation that help companies of all sizes achieve impact.

Innovation Challenges: Incubate and foster innovative and practical solutions to address MSDs through Innovation Challenge competitions. These competitions will bring together experts to collaborate, iterate and share techniques and ideas.

Industry Call to Action – The MSD Pledge: Amazon and NSC will share solutions discovered throughout the partnership to inspire change through the creation of The MSD Pledge and a call on other companies to also join the effort to:

– – Track proactive indicators of injuries to ensure proper risk mitigation, and implement prevention strategies based on data.
– – Implement an MSD prevention program that includes educating employees about injury prevention.
– – Embrace and drive forward innovative solutions to reduce MSDs and share best practices with other organizations worldwide.

For further updates on this initiative, you may sign up on the National Safety Council website.

Fresno PD Unit to Review Long Term Industrial Claim Absences

As the Fresno Police Department struggles with a staffing and recruitment problem, Police Chief Paco Balderrama and the City Council during its budget hearing on Tuesday also tackled another department challenge: long-term absences. And the Fresno Bee reported some of the comments made about this problem.

In a related issue discussed at the same meeting, Councilmember Esmeralda Soria pointed out that since 2012, the police department’s workers’ compensation costs steadily climbed, from about $4.96 million 10 years ago to $11.4 million in the upcoming fiscal year 2022 budget. That incline in costs continued to occur despite the adoption in 2015 of an alternative dispute resolution program meant to reduce the number of days officer were out of work and the resulting workers’ compensation costs.

Last year, Soria called for an audit of that program, which apparently never happened.

The department is operating with just under 700 officers, and Mayor Jerry Dyer charged Balderrama with recruiting 120 new officers in 15 months to boost the department’s ranks. It was noted however, that long-term absences are exacerbating the staffing problem.

Balderrama said when he first took the helm of the department in January, over 100 officers were on long-term leave. Since then, that number dropped to 80, but the problem persists. Fresno Police Department’s system pays officers more to stay home, he said.

“What we have here is we have a system like I’ve never seen before,” he said. “The fact that you can be off of work, and you could actually make more money than you do coming to work, so there’s not a whole lot of incentive. … I believe that there was very little to no accountability before.”

To tackle it, Balderrama created an employee services investigative unit to manage workers’ compensation claims and follow up with employees and their doctors if they’re out on extended leave for an injury or medical reason.

“My officers that are working the streets every night are tired of doing it with skeleton crews,” Balderrama said. “If I could wave a magic wand and bring these 80 people back tomorrow, we’d be in a lot better position right now.”

Councilmember Esmeralda Soria wondered if it was appropriate for law enforcement officers to investigate those claims.

The reason (the chief) is using law enforcement, we’re viewing it as a criminal activity,” City Manager Thomas Esqueda said. “If you are, you know, gaming the workers’ comp system, that’s criminal activity. That’s why we’re having police officers investigate that stuff.”

Mayor Dyer said city officials need to look into all of the contributing factors more deeply, but he thinks the workers’ comp fraud unit was a good place to start.

Feds Sue Vacaville Nursing Facilities for Illegal Kickbacks

The United States has filed a complaint under the False Claims Act against a Vacaville company alleging one of its owners and seven skilled nursing facilities systematically paid money to referring physicians to induce those physicians to make patient referrals, in knowing and willful violation of the federal Anti-Kickback Statute.

The complaint in intervention, which was filed in United States District Court in Los Angeles late Monday, names as defendants Paksn Inc.; Prema Thekkek, one of its owners; and seven skilled nursing facilities owned by Thekkek and/or operated by Paksn.

The United States alleges that the defendants entered into medical directorship agreements with certain physicians that purported to provide compensation for administrative services, but in reality, were vehicles for the payment of kickbacks to induce the physicians to refer patients to the seven facilities.

The Anti-Kickback Statute prohibits offering or paying anything of value to encourage the referral of items or services covered by federal health care programs.

Those seven facilities are four facilities in Hayward – Bay Point Healthcare Center, Gateway Care & Rehabilitation Center, Hayward Convalescent Hospital, and Hilltop Care & Rehabilitation Center – as well as Martinez Convalescent Hospital, Park Central Care & Rehabilitation Hospital in Fremont, and Yuba Skilled Nursing Center.

The United States specifically alleges that the defendants hired certain physicians who promised in advance to refer a large number of patients to the nursing facilities, paid physicians in proportion to the number of expected referrals, and terminated physicians who did not refer enough patients.

On one occasion, a Paksn employee told Thekkek that two physicians were being hired because “they are promising at least 10 patients for $2000 per month.” On another, Thekkek complained that if Paksn’s employees did not pay medical directors promptly every month, “[t]hese doctors will not give us patients.” On a third occasion, a Paksn employee told Thekkek that because “lately there are no real referrals” from one of the medical directors, “i am planning to say goodbye to him.”

This case was initially filed in December 2015 by Trilochan Singh, who was previously employed as Paksn’s vice president of operations and chief operating officer, under the whistleblower provisions of the False Claims Act. Those provisions authorize private parties to sue on behalf of the United States for false claims and share in any recovery. The Act permits the United States to intervene and take over the lawsuit, as it has done here in part. Those who violate the Act are subject to treble damages and applicable penalties.

The case is captioned United States of America ex rel. Trilochan Singh v. Paksn, Inc., et al., CV15-9064.

Texas Trucker Loses 5th Circuit Battle Over Cal/OSHA Jurisdiction

Bulkley & Associates, LLC is a Hopkins County, Texas, company that transports refrigerated goods interstate.

In 2015, a Bulkley truck driver fell off a truck and was injured while delivering goods to a customer in Salinas, California.

Defendant Department of Industrial Relations, Division of Occupational Safety and Health of the State of California, cited Bulkley and assessed penalties for three violations of California health and safety law: (1) failing to timely report an injury to California authorities, (2) failing to develop an injury-prevention program compliant with California law, and (3) failing to require foot protection in accordance with California law.

Bulkley pursued administrative appeals in California, disputing the Department’s authority to require Bulkley to comply with California law. Bulkley lost and has since filed two lawsuits challenging the Department’s authority.

Bulkley I began in 2018, when Bulkley filed a petition for mandamus in Hopkins County court, seeking judicial review of the California administrative appeal that Bulkley lost. The Department removed the petition to federal court, and promptly moved to dismiss for lack of personal jurisdiction. Bulkley argued that the Texas court had personal jurisdiction because Bulkley is a Texas resident and because the California law authorizing judicial review of agency action directs litigants to the county court where they reside.

Bulkley also argued that the Department had minimum contacts with Texas because the citations “penalized Bulkley for its work rules and procedures, which were created and implemented in Texas.” They did not prevail in Bulkley I.

After Bulkley I and before Bulkley II, in August 2019, the Department sent Bulkley a letter to collect the unpaid penalties of $6,180, informing Bulkley that the Department would pursue a judgment in California court if Bulkley failed to pay. On September 9, 2019, the Department sent Bulkley another letter, referencing violations of California law “observed during the inspection completed on 09/04/2015 [at] the place of employment” “maintained by” Bulkley and located in Salinas, California.

Bulkley sought and obtained injunctive relief in Hopkins County court (commencing Bulkley II, the current case), pointing to the September 9, 2019 letter as proof that the Department had possibly inspected Bulkley in Texas and was threatening to do so again.

The Department again removed the action to federal court and again moved to dismiss for lack of personal jurisdiction. The district court again concluded the Department lacked minimum contacts and dismissed Bulkley’s complaint for lack of personal jurisdiction.

The United States Court of Appeals for the Fifth Circuit affirmed the dismissal in the case of Bulkley & Associates, L.L.C., v Department of Industrial Relations, Division of Occupational Safety and Health of the State of California.

The Department did not establish minimum contacts solely by way of sending the September 2019 letter. And the possibility that the Department has inspected or will inspect Bulkley in Texas does not establish minimum contacts. It does not matter if the Department’s letter instructed Bulkley to remedy violations of California law, which Bulkley could only do by changing its policies in Texas.

California Fentanyl Overdose Deaths Jump 2100% in 5 Years

When San Francisco police seized seven kilos of powder-filled baggies containing the deadly opioid fentanyl last week, the city’s police chief warned the bust contained “enough lethal overdoses to wipe out San Francisco’s population four times over.

But, according to a report published in The Guardian, drug addiction experts say the haul may represent just a tiny fraction of the massive volume of the powerful synthetic drug that is flooding California, after being mostly an east coast phenomenon for years.

The evidence is in the rapidly surging death rates. The number of deaths from fentanyl overdoses jumped by more than 2100% in California in five years, state figures show. Overdoses of synthetic opioids (mostly fentanyl) killed nearly 4,000 residents in the state last year, according to the most recent estimate from the US Centers for Disease Control and Prevention.

In San Francisco, drug users are dying at a rate of nearly two a day, many on the streets of the city’s Tenderloin District.

In San Diego, fentanyl is coursing through the homeless population, according to experts and recent media reports. Santa Clara county saw the number of fentanyl deaths more than double last year, KQED reported, with victims on average younger than in previous years.

“Fentanyl has moved west,” said Dr Daniel Ciccarone, a professor specializing in addiction medicine at the University of California, San Francisco. Ciccarone said the lab-made drug was barely seen in western states before 2017. Instead, he said, it used to be distributed by drug trafficking networks supplying the east coast, who often slipped it into heroin supplies without telling users.

In a paper released this month, Ciccarone describes the explosion of accidental overdose deaths occurring west of the Mississippi as part of a “fourth wave” of the opioid crisis.

In California, the drug is being sold under its own name, as powders or tablets. It’s also being mixed with stimulants, like methamphetamines.

Fentanyl is so powerful that a quantity small enough to fit under a fingernail can be deadly within minutes. Dr Aimee Moulin, a professor of emergency medicine at the University of California, Davis medical center in Sacramento, said she was seeing adolescents as young as 13 overdose on counterfeit opioid pills available for home delivery over the internet.

“The potency is so high that a decimal point difference in the concentration can be lethal,” she said.

Fentanyl is an attractive product for drug cartels because it can be cheaply manufactured in foreign clandestine laboratories and substituted for more expensive drugs like the white-powdered heroin commonly sold on the east coast or pressed into counterfeit pills sold as OxyContin or Percocet, according to the 2020 National Drug Threat Assessment from the US Drug Enforcement Administration.

The Sinaloa cartel and Jalisco New Generation cartel from Mexico have been taking over production and distribution from prior sources, which included China, the report said.

Medical Evidence Required to Add Rather Than Use CVC

Carmen Torres sustained an admitted injury from a slip and fall accident in 2011 while working for the Santa Barbara Community College District.

She had dual employment at the time of her injury as a bilingual GED instructor at Santa Barbara Community College, and a teacher’s aide working for the Santa Barbara Unified School District as a bilingual assistant in special education classes. Applicant stopped working at both jobs after her industrial injury.

She testified that she last worked in 2011, and has retired, due to her industrial injury, and in part due to her need to help her daughter who has special needs, though she emphasized that caring for her daughter was not her primary motivation. She testified that she devotes four to five hours per day to her daughter. She now receives a pension.

Her treating physician returned her to work with restrictions, but the restrictions could not be accommodated. She has had no treatment since 2017. No doctor told her she could not return to gainful employment. She sought to return to employment as a translator, but could not type documents due to pain in her shoulders, low back, hands and wrists.

The WCJ awarded applicant 52% permanent disability. The rating added the right and left shoulder disability and combined them with the remaining disability.

The WCJ explained that in finding applicant was not permanently totally disabled, he found persuasive applicant’s testimony concerning the activities she performs for her daughter, indicating her ability to perform activities including driving, meal preparation, cleaning and laundry. He found applicant’s claim for permanent total disability not supported by the evidence. The WCAB agreed in the panel decision of Torres v Santa Barbara Community College District.

On reconsideration, Torres argued that this record justifies a finding that she is permanently totally disabled, without apportionment, based on a vocational rebuttal of the scheduled rating of her impairments. Secondly, she contends that her rating should be based on the addition of her impairments, rather than use of the CVC, because of a lack of overlapping disability in her injured body parts.

The panel affirmed the WCJ’s conclusion that applicant did not establish through vocational evidence that she has rebutted the scheduled rating of her permanent disability. And also concurred with the WCJ’s conclusion that applicant has not established a medical basis for rating her impairments, other than her shoulder disabilities, using the additive method recognized in Athens Administrators v. Workers’ Comp. Appeals Bd. (Kite) (2013) 78 Cal.Comp.Cases 213 (writ den).,rather than using the CVC.

Impairments may be added if substantial medical evidence supports a physician’s opinion that adding them will result in a more accurate rating of the applicant’s level of disability than the rating resulting from the use of the CVC. A physician’s opinion on the most accurate rating method should be followed if he provides a reasonably articulated medical basis for doing so. (De La Cerda v. Martin Selko & Co. (2017) 83 Cal. Comp. Cases 567 (writ den.).)

Applicant has not cited any medical reports that concluded that use of the CVC to combine her other impairments would not accurately reflect applicant’s overall disability. Dr. Gjerdrum testified that only the shoulder disability should be added, and that applicant’s neck and back disability should be combined. A WCJ cannot make the determination to add disability in the absence of a physician’s opinion that adding them will result in a more accurate rating of the applicant’s level of disability.

Experts Petition FDA to “Slow Down” Full Vaccine Approval

MedPageToday reports that a group of clinicians and researchers has petitioned the FDA to delay fully approving any COVID-19 vaccines before clinical trials have been completed, calling the notion of approval to stimulate vaccination rates “backward logic.”

The group, led by Linda Wastila, BSPharm, MSPH, PhD, professor of pharmaceutical health services research at the University of Maryland School of Pharmacy, includes 27 petitioners, including 16 experts outside the U.S., primarily based in Europe.

The message of our petition is ‘slow down and get the science right — there is no legitimate reason to hurry to grant a license to a coronavirus vaccine.’ We believe the existing evidence base — both pre- and post-authorization — is simply not mature enough at this point,” they wrote in a blog post published in The BMJ.

“If the FDA listens to us, they won’t give serious consideration to approving a COVID-19 vaccine until 2022. Our first request is that the FDA require manufacturers to submit data from completed phase III trials — not interim results. Trials by vaccine manufacturers were designed to follow participants for two years, and should be completed before they are evaluated for full approval, even if they are now unblinded and lack placebo groups. These phase III trials are not simply efficacy studies; they also are necessary and important safety studies,” the group wrote.

Full approval is not necessary to address public health, they argued, because the emergency use authorizations that the FDA has already issued for three vaccines are substantial enough to provide adequate vaccine access.

However, full approval may convince more people to get vaccinated, the group tacitly acknowledged. “While approval might lead to increased public confidence in COVID-19 vaccines, as well as provide legal support for employer-instituted vaccine mandates, to approve a medical product for these reasons is outside FDA’s regulatory purview. Approval decisions must be driven by the safety and efficacy data,” they wrote in the blog post.

The group also asked the FDA to hold off approval until the agency:

– – Confirms there is substantial evidence that clinical effectiveness outweighs harms among special populations
– – Requires a “thorough” safety analysis of spike proteins produced in situ after vaccine administration, including studies on spike proteins’ “full biodistribution, pharmacokinetics, and tissue-specific toxicities”
– – Completes vaccine biodistribution studies “from administration site and safety implications of mRNA translation in distant tissues”
– – Comprehensively investigates all severe adverse reactions reported after vaccination
– – Examines the safety of people taking more than two doses
– – Includes gene delivery and therapy experts in its Vaccines and Related Biological Products Advisory Committee
– – Enforces “stringent conflict of interest requirements to ensure individuals involved in data analysis and decision making” related to Biologics License Applications lack such conflicts with the vaccine manufacturers

The group submitted their petition June 1, calling on FDA to provide an answer by June 11 in part “to allow Petitioners the opportunity to seek emergency judicial relief should the instant Petition be denied,” they stated. Group members also plan to lobby Congress, according to an email from the group to MedPage Today.

Approving a COVID-19 vaccine now risks setting a precedent of lowered standards for future vaccine approvals. The ‘FDA approved’ seal must represent a high bar — and premature licensure of a COVID-19 vaccine could seriously damage public confidence in regulatory authorities, particularly if long-term safety issues were to emerge following licensure,” they wrote in the blog post.

Indictment Adds Details to Illegal Comp Referral Prosecutions

Last week, news accounts of the criminal complaint filed by Orange County prosecutors reported that that 45 year old Steven Omid Mehr, an attorney, allegedly used an illegal referral system to send potential clients to California workers’ compensation attorneys, and load them up with fees in the process.

A review of the Grand Jury indictment adds details to the case, as well as the employers and insurance carriers who were victims of $3.8 million in allegedly fraudulent copy service and interpreter bills. Mehr allegedly used the system to direct business to copying and printing services providers he controlled, bilking unsuspecting clients and worker compensation insurance companies.

To support allegations of a violation of Section 3215 of the Labor Code for illegal referral of clients, prosecutors allege Mehr formed Web Shark 360, a marketing firm specializing in advertising for attorneys. He utilized various marketing and advertising platforms to attract persons seeking legal assistance, including purchasing rights to use the name “Jacoby & Meyers” and falsely identifying it as a law firm the public could hire for legal representation.

His intake staff received “leads” in the form of telephone calls, online inquiry submissions, and live-chat notifications through toll-free numbers appearing on “Jacoby & Meyers” advertisements and websites, and leads from other web-based attorney-advertising platforms. His intake staff was allegedly directed to communicate with these prospective clients, or “leads,” and convert them into clients who would be retained for attorneys paying Mehr for client referrals.

Attorneys Gil Alvandi, Tracy Briles, Emily Mehr, Mahdis Kaeni, Anton Diffenderfer and Ziad Rawa (Rawashdeh), amongst others, allegedly agreed to pay defendant Mehr a monthly fee for a predetermined number of client referrals, or a percentage of the attorney’s fees collected from the referred case.

To support a conviction for violation of section 550(b )(3) of the Penal Code (Insurance Fraud), prosecutors allege that Mehr formed and co-owned two copy service companies, Expedited Attorney Services and Capital Attorney Services, with his co-defendant George Hobson III. who is not an attorney. He also formed and co-owned a translation/interpretation company, National Translation Services, with Hobson.

Employees of the copy service companies were sent to law offices of a select group of workers’ compensation applicant attorneys, where they were given access to the law firm’s client files in order to identify entities or “locations” that the copy service could serve with records subpoenas. The copy service companies then billed workers’ compensation insurance companies for each individual location they served with a records subpoena.

The same select group of workers’ compensation applicant attorneys used National Translation Service for translation/interpretation services for their clients. National Translation Service billed workers’ compensation insurance companies for all translation services rendered for these law firms.

The victims where allegedly ACM, AIG, Amtrust, Berkshire Hathaway, City of Los Angeles, County of Los Angeles, County of Riverside, Employers Insurance, Farmers Insurance, Gallagher Bassett, Hartford Insurance, ICW Group, Liberty Mutual, Markel Corporation, Matrix Absence Mgmt., Midwest Insurance, SCIF, Sedgwick, Travelers Insurance, York Risk Services Group, Zenith Insurance, Zurich Insurance.

The indictment names the 44 witnesses called by the Grand Jury to investigate these allegations, and claims further that the victims suffered $3.8 million in losses.

Spine Device Makers Resolve Sunshine Act Kickback Cases

The U.S. Department of Justice signaled its continued focus on enforcement of the federal Physician Payment Sunshine Act, when it announced the second major settlement involving Sunshine Act allegations in just over six months. Under the settlement, which also resolves claims asserted in a qui tam lawsuit,

Medicrea International, a French medical device manufacturer, and its American affiliate, Medicrea USA Inc.agreed to pay $1 million to resolve allegations that it failed to fully report certain payments and transfers of value under the Sunshine Act as well as $1 million to resolve alleged violations of the federal Anti-Kickback Statute and federal False Claims Act.

The California Attorney General also announced that California will receive nearly $93,000 from this settlement.

The settlement agreement arise from allegations that during an ex-U.S. medical professional society meeting in 2013 in Lyon, France, Medicrea provided meals, alcoholic beverages, entertainment, and coverage of travel expenses to U.S.-based physicians to induce these physicians to purchase or order Medicrea’s spinal devices, resulting in the submission of false claims to the government, and failed to fully report such payments and transfers of value to the Centers for Medicare & Medicaid Services as required under the Sunshine Act.

The Sunshine Act requires manufacturers of certain products that are reimbursed by Medicare, Medicaid, or the Children’s Health Insurance Program to track and annually report all payments and other transfers of value made to certain healthcare providers and U.S. teaching hospitals, collectively referred to as “covered recipients,” unless an exception applies. See 42 U.S.C. § 1320a-7h; see also 42 C.F.R. § 403.904.

In 2020, the U.S. DOJ announced a settlement with medical device manufacturer Medtronic USA Inc.for $9.2 million to resolve allegations that: the company paid kickbacks to induce a neurosurgeon to use its products; and failed to accurately report payments to this neurosurgeon in violation of the Physician Payments Sunshine Act.

This settlement arises from an investigation into certain financial arrangements between Medtronic and South Dakota-based neurosurgeon Wilson Asfora. The government alleged that Medtronic, at Dr. Asfora’s request and contrary to the company’s compliance policies, agreed to pay for events at Carnaval Brazilian Grill, a local restaurant owned by Dr. Asfora and his wife. Allegations in the settlement agreement claim that  Medtronic held over 130 events at Carnaval for which it paid over $87,000 to Dr. Asfora’s restaurant.

Medtronic’s sales personnel allegedly stated in internal expense reports that the events were held to discuss educational content or business information. However, the government alleged that these events were social events that included the provision of lavish meals and alcohol to social acquaintances, business partners, favored colleagues, and referral sources selected by Dr. Asfora, with little or no discussion of Medtronic products.

Immediately after the 2020 settlement, Medtronic announced that it has completed its friendly tender offer for Medicrea International. As a result of completion of the tender offer, Medtronic currently owns in excess of 90% of Medicrea’s share capital and voting rights and was expected to request the implementation of a squeeze-out procedure under French law, which will result in Medicrea becoming a wholly-owned subsidiary of Medtronic.

Less than a year later, its acquisition target was accused of a similar Sunshine Act violation.

Until these recent settlements, there had been no public enforcement actions involving Sunshine Act violations. However, following Congress’s expansion of the Sunshine Act in October 2018 to include five new categories of “covered recipients” subject to reporting requirements, the Senate Finance Committee requested that CMS review the Open Payments database for potential Sunshine Act violations.