Tag: 2021 News

The Workers’ Compensation Insurance Rating Bureau of California has released the 2020 California Workers’ Compensation Aggregate Medical Payment Trends report comparing medical payment information from 2018 to 2020.

This report analyzes medical payment and utilization trends by provider type, service locations and different service types. The report also includes an analysis on utilization and cost of opioid prescriptions and physical medicine services over time and by region.

General Trends in the Medical Payments and Transactions in CY2020

– – Overall medical payments declined significantly, largely driven by a sharp drop in the number of claims during the COVID-19 pandemic.
– – Average medical payment per claim and the number of transactions per claim started to increase despite the continuous declines in prior years, potentially due to a decrease in the number of smaller medical-only claims in 2020.
– – Utilization of telehealth services increased sharply, in particular, during the pandemic

Fastest Growing Physician Services Procedures and Therapeutic Group

– – Physical Medicine and Rehabilitation procedures continued to grow and are the fastest growing physician services.
– – Use of Analgesics Anti-Inflammatory increased more significantly than that of any other therapeutic groups.

Opioid and Physical Medicine Utilization and Costs

– – The share of claims that involve opioid prescriptions continued to decrease. Suburban and rural areas have seen higher shares of claims involving opioid prescriptions, while urban areas generally have lower shares.
– – On the contrary, the share of claims that involve physical medicine services increased steadily. Urban areas had a higher share of claims involving physical medicine services, while more suburban and rural areas had lower shares.

The report is available in the Research section of the WCIRB website.

The COVID-19 pandemic and resultant shelter-in-place orders disrupted nearly all business activity, especially access to medical care. While the specific timing of disruptions varied by state, April 2020 saw many healthcare facilities suspend all nonurgent medical procedures.

In a newly published study, the National Council on Compensation Insurance associated costs with the time to treatment for WC claims based on historical information to provide some insight into the impact of postponed medical care for specific WC injuries.

The pandemic’s impact on medical services includes:

– – A decline in active claim volume
– – An increased use of telemedicine
– – Minimal change in both the share and seriousness of injuries treated in an emergency room (ER)
– – An increase (after April 2020) in the use of ambulatory surgical centers (ASCs) above pre-pandemic levels

With respect to time to treatment, the pandemic:

– – Did not adversely impact access to care, as measured by the time from injury to initial treatment
– – Produced a backlog of surgeries in April and May 2020 that diminished throughout the summer
– – May have resulted in greater use of noninvasive treatments that, with comparable outcomes, are often preferred over invasive procedures

For four common WC injuries (one back, one shoulder, and two knee injuries), we studied historical experience of how the total incurred cost per case is associated with the time from injury to surgery and found:

– – Post-pandemic delays are typically too short to impact the average incurred cost per case
– – The largest cost increases occur for back and shoulder injuries – and only after exceptionally long delays to surgery
– – For these four WC injuries, the cost impact due to pandemic – based suspensions is minimal

While NCCI found clear evidence of small delays in access to care associated with the pandemic, it found no convincing evidence that either access to care or the quality of care was adversely impacted. The overall impact on claim costs directly associated with postponed medical care is uncertain. While still preliminary, it found no convincing evidence that access to quality care was adversely impacted.

A lawsuit filed against See’s Candies, a century-old California institution, could make a fundamental change in the workers’ compensation system and its “exclusive remedy” provision.

Matilde Ek, a worker at a See’s distribution center in Southern California, contracted COVID-19 and apparently infected her 72-year-old husband, Arturo, who died. Ek said she worked on the See’s packing line without proper social distancing or other protections even though some workers were coughing, sneezing and showing other signs of COVID-19 infections.

She and her daughters sued See’s, alleging that since her workplace lacked sufficient safeguards against infection, the company is liable for his death.

See’s acknowledged that Ek’s illness was job-related but argued that since it was, the company was protected from liability for her husband’s death under the “exclusive remedy” doctrine.

Los Angeles Superior Court Judge Daniel M. Crowley refused, however, to throw out Ek’s lawsuit, agreeing with Ek’s attorney that her husband’s death was a separate event from her workplace infection.

Crowley’s ruling sent the issue into the appellate courts and it’s drawing attention from major California and national business groups, which see it as potentially undermining a bedrock principle of the workers’ compensation system.

The California Chamber of Commerce, California Workers’ Compensation Institute, Restaurant Law Center, California Restaurant Association, National Association of Manufacturers, and National Retail Federation have filed documents in the case as amicus.

They argue that the “issue presented in the petition is extremely important to employers and their employees in California. As explained in the petition, the Superior Court’s overruling of petitioners’ demurrer was contrary to the longstanding “derivative injury rule” that establishes workers’ compensation as the exclusive remedy for all claims that are derivative of an employee’s covered workplace injury – including claims for injuries sustained by members of the employee’s household. The Superior Court created a new exception to that bright-line rule for injuries from COVID-19 that allegedly derive from employees who contract the virus in the employer’s workplace and then infect their family members.”

“The potential impact of this decision on the balance between the workers’ compensation system and the civil court system can hardly be overstated.”

The Court of Appeal docket reflects that an Order was issued to the Superior Court on July 21, 2021, directing that it show cause why a peremptory writ should not issue, ordering it to vacate its April 13, 2021 order overruling petitioners’ demurrer to the complaint. The written return in opposition to the writ shall be served and filed on or before August 18, 2021. Any reply to the opposition shall be served and filed on or before September 16, 2021.

The Controlled Substances Act of 1970 places federally regulated substances into one of five schedules depending on the substance’s “potential for abuse, “medical use,” “safety,” and likelihood of physical or psychological “dependence.” See 21 U.S.C. § 812(b). Schedule I is the most restrictive schedule. Marijuana is currently a Schedule I substance. To merit scheduling in Schedule I, a substance must have “a high potential for abuse,” “no currently accepted medical use in treatment in the United States,” and “a lack of accepted safety for use . . . under medical supervision.”

Stephen Zyszkiewicz, joined by Jeramy Bowers, filed a one-page, handwritten petition to the United States Drug Enforcement Administration (“DEA”) seeking the rescheduling of marijuana in all of its forms under the Controlled Substances Act (“CSA”), 21 U.S.C. § 801 et seq. Zyszkiewicz stated in his petition that he was in prison after a conviction for selling cannabis. In his petition he claimed the current situation of cannabis in Schedule I completely untenable since half the states allow for medical use.

The DEA wrote a letter in response, stating that Zyszkiewicz’s letter was not in the proper format for a petition but that it welcomed the opportunity to respond to his concerns. The DEA’s letter gave reasons for having denied an earlier rescheduling petition filed by Governors Lincoln Chafee of Rhode Island and Christine Gregoire of Washington State. Zyszkiewicz treated the DEA’s answer as a denial of his petition and unsuccessfully sought judicial review.

Zyszkiewicz petitioned for mandamus in the District Court for the District of Columbia. The district court denied mandamus, and the D.C. Circuit affirmed.

Subsequently in May 2020, Dr. Suzanne Sisley an Arizona-based medical marijuana researcher, Scottsdale Research Institute, LLC (“SRI”), Battlefield Foundation (the non-profit research arm of SRI), and three veterans who claim to suffer ongoing harm from cannabis’ status as a Schedule I drug(collectively, “Petitioners”) asked for judicial review of the DEA’s response to Zyszkiewicz’s petition in the 9th Circuit which has jurisdiction over Arizona (and California). These new petitioners did not seek to intervene in Zyszkiewicz’s petition before the DEA, nor have they filed a petition of their own before the DEA.

The government challenges Petitioners’ standing and argues that Petitioners failed to exhaust their claims before the DEA.

The 9th Circuit held in the published opinion of Sisley v DEA that these petitioners satisfy Article III’s standing requirements, but that they have failed to exhaust their administrative remedies under the CSA. The Court therefore did not reach the merits of Petitioners’ arguments. It therefore dismissed their petition for review on this technical ground.

“We are well aware that reclassification of cannabis is a matter of ongoing active debate,” U.S. Circuit Judge William Fletcher, a Bill Clinton appointee, wrote for the panel. “However, this is not an appropriate case in which to consider that issue.”

In a concurring opinion, Judge Watford said “I write separately to note that, in an appropriate case, the Drug Enforcement Administration may well be obliged to initiate a reclassification proceeding for marijuana, given the strength of petitioners’ arguments that the agency has misinterpreted the controlling statute by concluding that marijuana ‘has no currently accepted medical use in treatment in the United States,”

A landmark $575 million settlement with Sutter Health has now been given final approval by the court. The settlement agreement was reached in 2019, and resolves allegations by the Attorney General’s office, the United Food and Commercial Workers and Employers Benefit Trust (UEBT), and class action plaintiffs that Sutter’s anticompetitive practices led to higher healthcare costs for consumers in Northern California compared to other places in the state.
Sutter is the largest hospital system in Northern California. The Sutter network consists of some 24 acute care hospitals, 36 ambulatory surgery centers, and 16 cardiac and cancer centers. It also includes some 12,000 physicians and over 53,000 employees. In addition, Sutter negotiates contracts on behalf of the Palo Alto Medical Foundation and many affiliated physician groups.

This settlement is the result of litigation that began in 2014 when UEBT filed a class action lawsuit that challenged Sutter’s practices in rendering services and setting prices. They sought compensation for and an end to what they alleged were unlawful, anticompetitive business practices, which caused them to pay more than necessary for healthcare services and products.

In March 2018, the Attorney General’s office filed a similar lawsuit against Sutter on behalf of the people of California, seeking injunctive relief to compel Sutter to correct its anticompetitive business practices moving forward. The separate lawsuits were combined by the court into one case. In October 2019, one day before the trial, the parties reached an agreement to settle. The settlement was filed with the court on December 19, 2019, and in March, Judge Massullo granted preliminary approval.

Today’s finalized settlement requires Sutter to:

– – Pay $575 million to compensate employers, unions, and others covered under the class action, and to cover costs and fees associated with the legal efforts;
– – Limit what it charges patients for out-of-network services, helping ensure that patients visiting an out-of-network hospital do not face outsized, surprise medical bills;
– – Increase transparency by permitting insurers, employers, and self-funded payers to provide plan members with access to pricing, quality, and cost information, which helps patients make better care decisions;
– – Halt measures that deny patients access to lower-cost plans, thus allowing health insurers, employers, and self-funded payers to offer and direct patients to more affordable health plan options for networks or products;
– – Stop all-or-nothing contracting deals, thus allowing insurers, employers, and self-funded payers to include some but not necessarily all of Sutter’s hospitals, clinics, or other commercial products in their plans’ network.
– – Cease anticompetitive bundling of services and products which forced insurers, employers, and self-funded payers to purchase for their plan offerings more services or products from Sutter than were needed. Sutter must now offer a stand-alone price that must be lower than any bundled package price to give insurers, employers, and self-funded payers more choice;
– – Cooperate with a court-approved compliance monitor to ensure that Sutter is following the terms of the settlement for at least 10 years. The monitor will receive and investigate complaints and may present evidence to the court; and
– – Prevent anticompetitive practices by clearly defining clinical integration to include patient quality of care. The settlement makes clear that for Sutter to claim it has clinically integrated a system, it must meet strict standards beyond regional similarities or the mere sharing of an electronic health record, and must be integrating care in a manner that takes into consideration the quality of care to the patient population. This is important because clinical integration can be used to mask market consolidation efforts by hospital systems, when in fact there is no true integration of a patient’s care. For example, saying that hospitals are regionally close or that hospitals are sharing electronic health records is not enough, there must be close coordination that will lead to less costly, higher quality care for local communities.

A report by the University of California Berkeley showed that over-consolidation drives up prices for consumers. According to the study, outpatient cardiology procedures in Southern California cost nearly $18,000 compared to almost $29,000 in Northern California. For inpatient hospital procedures, the cost in Southern California is nearly $132,000 compared to more than $223,000 in Northern California, a more than $90,000 difference. A 2016 study found that a cesarean delivery in Sacramento, where Sutter is based, costs more than $27,000, nearly double what it costs in Los Angeles or New York, making Northern California one of the most expensive places in the country to have a baby.