Tag: 2021 News

A new FlashReport from the Workers Compensation Research Institute (WCRI) finds that in most states, dermatological agents and nonsteroidal anti-inflammatory drugs (NSAIDs) have become more important than other drug groups as a share of total prescription payments. The 28 states in the study include California.

“This study finds that prescription payments are decreasing in a majority of state workers’ compensation systems, but prescription payments continue to vary widely,” said John Ruser, president and CEO of WCRI. “This study breaks prescription drugs into groups (dermatological agents, NSAIDs, opioids, compounds, etc.) so you can see where workers’ compensation prescribing dollars are being spent and whether spending for those groups of drugs is going up or down.”

The following is an abbreviated list of the study’s other findings:

– – Dermatological agents: Per-claim payments varied widely, from $7 per claim in Iowa to $181 per claim in Illinois and $190 per claim in Louisiana in 2020Q1. Physician dispensing accounted for the majority of payments for the drug group in 12 of the 28 study states. Between 2017Q1 and 2020Q1, payment shares increased by more than 10 percentage points in 5 states (Connecticut, Kansas, Louisiana, South Carolina, and Virginia) and physician dispensing contributed to the rapid growth.
– – NSAIDS: Payment shares for this drug group changed little in many states, but per-claim payments varied widely in 2020Q1, from $21-$22 per claim in Delaware and Massachusetts to $126 per claim in Louisiana.
– – Anticonvulsants: Both payment share and per-claim payment for this group decreased in many states over the study period. The decrease happened mostly between 2019Q2 and 2019Q3, when generic formulations of Lyrica® became available.
– – Opioids: The substantial decline for opioids during the study period continues the declines seen in previous periods. The per-claim payments for opioids decreased by 56 percent in the typical state, and the rate of reduction ranged from 40 percent in Louisiana to 81 percent in California.

In the dermatological category, prescriptions for diclofenac sodium gel accounted for the majority of the prescriptions in the median state, Vennela Thumula, policy analyst for WCRI said, and lidocaine was also commonly prescribed.

While about 56% of the workers prescribed topical diclofenac had documented diagnoses of soft tissue injuries of joints – for which the drug is approved – about 40% of workers were using it for treatment not recommended, often for shoulder and back pain, she said.

Another cost driver in dermatologicals is private-label topicals, which are independently manufactured and not recommended by evidence-based guidelines and also have a much higher price tag compared to comparable products” approved by the Official Disability Guidelines Workers’ Compensation Drug Formulary, also known as ODG, Ms. Thumula said.

Among claims with topicals, private-label topicals are rarely dispensed in half of the study states, but at least a third of the claims have private-label topicals in Louisiana, New Mexico, Maryland, Illinois and South Carolina, and it’s even higher in Delaware,” she said.

Cal/OSHA has cited Foster Poultry Farms, Inc. in Livingston (Foster Farms) and four staffing agencies for not protecting workers from COVID-19.

Cal/OSHA opened its inspection after receiving notification that an employee had died from COVID-19 complications, and subsequently determined that Foster Farms and one of its staffing agencies did not timely report the COVID-19 fatality as required.

Cal/OSHA also opened a separate inspection at the facility’s distribution center. Foster Farms utilized employees from the following staffing agencies that were also cited for COVID-19 violations.

– – Foster Poultry Farms, Inc. – (Poultry Plant) – $103,100.
– – Foster Poultry Farms, Inc. – (Distribution Center) – $78,400.
– – Human Bees, Inc., DBA Human Bees – (Staffing) – $41,000.
– – Marcos Renteria Ag Services, Inc. – (Staffing) – $36,000.
– – Intermountain Employment Services, DBA Ascend – (Staffing) – $18,000.
– – Staffing Solutions Inc. DBA Balance – (Staffing) – $16,200.

Cal/OSHA cited Foster Farms $103,100, for five serious, one repeat regulatory, and two regulatory violations at its Livingston plant; and $78,400 for three serious, one repeat regulatory, and two regulatory violations at the distribution center.

Regulatory violations were issued in both Foster Farms inspections and to Human Bees, Inc. for their failure to timely report work-related fatalities. Additionally, Cal/OSHA issued serious violations related to their Injury and Illness Prevention Programs many of which stemmed from failing to properly communicate, assess, correct, and train on COVID-19 workplace hazards.

The third serious violation at the plant was cited for a blocked eyewash station.

A full list of employers cited for COVID-19 violations is posted on Cal/OSHA’s website.

An orthopedic surgeon was sentenced to 15 months in federal prison for accepting nearly $623,000 in bribes and kickbacks in exchange for referring his patients to receive spinal surgeries at a corrupt Long Beach hospital.

Dr. Jeffrey David Gross, 55, who resides in Dana Point and Las Vegas, was sentenced by United States District Judge Josephine L. Staton, who also ordered him to forfeit $622,936. Gross pleaded guilty in August 2020 to one felony count of conspiracy to commit honest services mail and wire fraud.

The kickback scheme centered on Pacific Hospital in Long Beach, which specialized in surgeries, especially spinal and orthopedic procedures. The owner of Pacific Hospital, Michael D. Drobot, conspired with doctors, chiropractors and marketers to pay kickbacks in return for the referral of thousands of patients to Pacific Hospital for spinal surgeries and other medical services paid for primarily through the California workers’ compensation system.

During its final five years, the scheme resulted in the submission of more than $500 million in fraudulent medical bills. To date, 15 defendants have been convicted for participating in the kickback scheme.

From 2008 to 2013, Gross, a licensed neurosurgeon who operated Oasis Medical Providers Inc. in Laguna Niguel, agreed with Drobot to participate in a scheme to defraud patients of their right to honest services by accepting bribes and kickbacks that were paid to induce Gross to refer patients to Pacific Hospital for spinal surgeries and other medical services.

In February 2008, Gross agreed with Drobot to sublease Oasis’s medical office space to a Pacific Hospital-affiliated company, Pacific Specialty Physician Management Inc. (PSPM), in return for monthly payments of $15,000. In November 2008, Gross entered into an option contract with PSPM in which Oasis was paid $15,000 per month to purchase the accounts receivable and all other tangible assets of Oasis.

For both the sublease and option agreements, Gross knew and understood that one purpose of the agreements was to induce him to bring certain spinal surgery patients to Pacific Hospital, though that information wasn’t specified on the lease agreement, nor did Gross disclose that information to his patients.

PSPM paid Oasis $145,000 under the sublease agreement and $105,000 under the option agreement.

In April 2009, Gross entered into an outsourced collections agreement with Pacific Hospital that called for him to assist with collections on some of the spinal surgery cases that he performed at that hospital in exchange for 15 percent of any amounts the hospital collected in relation to those surgeries. This agreement, later amended, called for Gross to be paid 10 percent of the collected amount on other outpatient surgeries. During surgeries, if Gross used hardware from International Implants (I2), a Drobot-formed hardware distribution company, he was advanced $5,000 regardless of subsequent collections. Once again, Gross did not disclose this information to his patients. Pacific Hospital paid Oasis $372,936 under this agreement.

In total, between April 2008 and May 2013, Drobot paid Gross $622,936 pursuant to these agreements. During the same period, Gross referred dozens of patients to Pacific Hospital for spinal surgeries based in part on payments made to him under those agreements.

State Compensation Insurance Fund announced that construction has begun on an extensive sustainability and solar energy program that includes solar, electric vehicle charging stations and energy storage at seven locations throughout California.

Designed and constructed by ENGIE North America, through its affiliate ENGIE Services U.S. Inc., and JLL, State Fund will install 9.8 MW of solar, 2 MW/4.3 MWh of energy storage and 150 Level II and DC charging stations, offsetting nearly 230,000 metric tons of green-house-gas emissions over a 20-year period and saving nearly $65,000,000 in energy costs over the life of the project.

“Breaking ground on this project is a huge step forward in our drive to reduce our use of fossil fuels, limit the load we place on local and statewide electrical grids, and improve air quality throughout California,” said Andreas Acker, Executive Vice President and Chief Administrative Officer at State Fund. “Increasing our efforts and investments around sustainability initiatives will bring a number of benefits to our customers, employees, and California as a whole.”

The State Fund construction sites are located in Vacaville, Pleasanton, Redding, Fresno, Bakersfield, Sacramento and Riverside. The portfolio of solar projects is projected to produce 311 GWh over 20 years, enough to power more than 26,500 homes, and provide a reduction in CO2 emissions equivalent to taking 47,000 gas vehicles off the road.

“In addition to supporting State Fund’s greater environmental strategy, the construction helps the California economy during this critical time for recovery after the pandemic,” said Courtney Jenkins, General Manager and Vice President for Cities & Communities at ENGIE North America. “State Fund is truly a partner that aligns with ENGIE’s mission to help our customers decarbonize and optimize energy use.”

State Fund’s EV charging stations will be available to its employees and used by the company’s fleet vehicles. State Fund’s fleet currently includes eight battery electric vehicles, three of which are new long-range BEVs that allow employees to travel between State Fund locations while lowering their reliance on fossil fuels.

“JLL is proud to play an active role in initiatives that support adoption of renewable and sustainable energy like State Fund’s, a trend whose adoption is quickly accelerating,” said Kyle Goehring, Executive Vice President, JLL Clean Energy Solutions. “As a global company, we have an inherent responsibility to drive sustainability and corporate social responsibility efforts. We embrace technology to meet the needs of today and opportunities of tomorrow.”

The Workers Compensation Research Institute released an updated version of its study that helps compare prices paid for medical professional services across 36 states and monitor price changes from 2008 to 2020, which includes the beginning months of the COVID-19 pandemic.

“The study shows how prices paid for these services compare across states, how the prices have changed, and whether price growth is part of a broader phenomenon or unique to a state. The study also discusses the price comparison results and price trends in relation to the principal policy mechanism for regulating prices – fee schedules,” said Ramona Tanabe, WCRI’s executive vice president and counsel.

The study, WCRI Medical Price Index for Workers’ Compensation, 13th Edition (MPI-WC), focuses on professional services (evaluation and management, physical medicine, surgery, major and minor radiology, neurological testing, pain management injections, and emergency care) billed by physicians, physical therapists, and chiropractors. The following are among the study’s findings:

– – Prices paid for a similar set of professional services varied significantly across states, ranging from 29 percent below the 36-state median in Florida to 167 percent above the 36-state median in Wisconsin in 2020.
– – States with no fee schedules for professional services had higher prices paid compared with states with fee schedules – 44 to 179 percent higher than the median of the study states with fee schedules in 2020.
– – Most states with no fee schedules experienced faster growth in prices paid for professional services compared with states with fee schedules—the median growth rate among the non-fee schedule states was 37 percent from 2008 to 2020, compared with the median growth rate of 9 percent among the fee schedule states.
– – Eight study states (Arizona, Illinois, Kentucky, Massachusetts, New York, North Carolina, Texas, and Virginia) had substantial changes (i.e., an increase or a decrease of 10 percent or more) in overall prices paid following major fee schedule changes during the study period.

This edition covers 36 states that represent 88 percent of the workers’ compensation benefits paid in the United States. These states are Alabama, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, Oklahoma, Oregon, Pennsylvania, South Carolina, Tennessee, Texas, Virginia, and Wisconsin.

The authors of this study are Dr. Rebecca Yang and Dr. Olesya Fomenko. To download a FREE copy of this report, visit WCRI’s website.