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Tag: 2021 News

NCCI Surveys Employer Post-Pandemic Workplace Plans

In this time of uncertainty, one thing is for sure: the workplace of the future will look different than it does today. For some companies, offering telecommuting continues to be a viable option. At the other end of the spectrum, some employers will likely continue to require high physical proximity working environments for the foreseeable future.

NCCI conducted interviews with several industry professionals to better understand what the future workplace might look like and how new challenges are being addressed.

In speaking with interviewees, NCCI consistently heard that employers have taken similar measures and developed multifaceted risk mitigation strategies, such as:

– – Working remotely when possible
– – Applying social distancing
– – Conducting health/symptom screenings
– – Cleaning and disinfecting
– – Implementing workspace layout changes
– – Limiting visitors

Some employers were able to move to a full telecommuting model within a very short time, while others used what might be called a “hybrid” approach; that is, implementing safety controls for jobs that must be performed onsite, while encouraging telecommuting for employees who can effectively perform their jobs from home.

Employers are looking for ways to reduce travel and human-to-human contact, which may impact workplace congestion, shift work, group training, overnight travel, and the use of cleaning chemicals and tools/equipment. New technologies are enabling more physical distancing to address infectious disease prevention.

Examples include virtual meetings and training sessions, as well as touchless transactions, touchless printing, and wearable technology that supports contact tracing and signaling to prevent close physical proximity.

Insurance companies have many interactions with their customers in various ways, which are critical in this time. Insurers’ roles involve exposure assessment, claims mitigation, loss prevention, audits, etc. Insurers indicated that they are taking similar proactive approaches and have already started to develop new evaluation methods to address physical proximity exposures, while simultaneously providing education and services to their customers.

Examples include using telesurveys and virtual visits for analysis, loss prevention, and audit services to cut back on in-person activity. One insurer noted that policyholders have expanded the duties of their employees to an all-hands-on-deck approach due to workforce cutbacks.

San Jose Employer Faces 20 Premium Fraud Felonies

The San Jose owner of a flooring company was charged this week with fraud, after being caught lying that he had only a single full-time employee and not paying close to a $1 million in overtime to the numerous employees who were working for him.

Martin Helda, 33, of All Bay Area Floors, is facing 20 felony counts of Workers Compensation Premium fraud, Employment Development Department fraud, and wage theft. His arraignment has not yet been scheduled.

Law enforcement is looking for other victims who worked for Helda’s company.

“Greedy business owners are banking that cheated employees won’t come forward,” prosecutor Vonda Tracey said. “These workers did the work. They are owed the pay.”

The investigation, in partnership with the California Department of Insurance, began after an insurance audit revealed that Helda’s payroll did not match the number of people he had working for him.

As part of District Attorney Jeff Rosen’s recent community reforms, this case was worked in conjunction with the newly formed Workers’ Exploitation Task Force (WE TF). DA Investigators utilized partnerships with the Department of Industrial Relations and the State Labor Commission to find justice for all victims of wage theft.

A DA investigation uncovered that Helda withheld at least $900,000 in overtime wages owed to employees known to EDD, but possibly as much as $1.7 million owed to all employees including those not known to EDD.

Because of scant employee records, the DA’s Office cannot identify many of the workers, who could be eligible for compensation.

Workers for Helda at the All Bay Area Flooring Company, are asked to contact Investigator Lt. Michael Whittington at (408) 808-3742 or

WCRI Study – California Claim Costs “Mostly Stable”

A new series of studies, CompScope Benchmarks, 21st Edition, from the Workers Compensation Research Institute provides in-depth analysis of costs per claim and other performance metrics across 18 state workers’ compensation systems for claims with experience through March 2020 for injuries up to and including 2019.

“The CompScope studies can help policymakers and other stakeholders identify current cost drivers and emerging trends in a wide variety of workers’ compensation system components,” said Ramona Tanabe, executive vice president and counsel of WCRI. “The studies include experience on claims through March 2020, at the very beginning of the coronavirus (COVID-19) pandemic, so they are a good baseline for evaluating the impact of the virus on workers’ compensation claims.”

The 18 states in the study are Arkansas, California, Florida, Georgia, Illinois, Indiana, Iowa, Louisiana, Massachusetts, Michigan, Minnesota, New Jersey, North Carolina, Pennsylvania, Tennessee, Texas, Virginia, and Wisconsin. There are individual reports for every state except Arkansas, Iowa, and Tennessee.

The state studies explore the time from injury to first indemnity payment, the average total cost per claim, the average payment per claim for medical care, and the average payment per claim for indemnity benefits, as well as how state results may reflect system features and processes.

The following are sample findings for some of the study states:

– – California: Total costs per claim with more than seven days of lost time in California have been mostly stable since 2010. In 2019, the most recent year in the study period, total costs per claim increased 4 percent, which was largely driven by a 6 percent increase in indemnity benefits per claim.
– – Florida: From 2014 to 2018, total costs per claim with more than seven days of lost time in Florida had been growing moderately at 4 percent per year at all claim maturities. In 2019/2020, this measure increased 8 percent, driven by faster growth in indemnity benefits and medical payments per claim in the latest 12-month valuation. Growth in costs per claim in Florida since 2014 was faster than in most states.
– – Georgia: Total costs per claim with more than seven days of lost time have remained fairly stable in Georgia since 2008 and were higher compared with other study states. Higher indemnity benefits per claim and litigation expenses per claim in Georgia were the main drivers of the higher-than-typical total costs per claim.
– – Illinois: Total costs per claim with more than seven days of lost time in Illinois have grown between 1 and 3 percent per year since 2012, based on claims with 12-48 months of maturity. This growth reflects small increases in medical payments per claim, indemnity benefits per claim, and benefit delivery expenses per claim.
– – Indiana: Total costs per claim in Indiana increased 3 percent per year from 2014 to 2019 for claims with more than seven days of lost time at 12 months of experience. Those results, however, mask underlying changes from 2014 to 2016 in the key cost components – medical, indemnity, and benefit delivery expenses (expenses for managing medical costs and litigation expenses allocated to claims) – related to provisions of House Enrolled Act 1320.

For more information on these studies, visit

Simi Valley Contractor Pays SCIF $152K for Premium Fraud

49 year old James Wood, who lives in Simi Valley, pled guilty to two felony counts of workers’ compensation insurance fraud.

At the time of his guilty pleas, Wood paid full restitution to the victim insurance carrier State Compensation Insurance Fund (SCIF) in the amount of $151,891.

Wood, a general contractor, has operated Wood Construction Company since March 1997. He admitted to misrepresenting his total payroll and number of employees between 2015 and 2017, to fraudulently obtain lower workers’ compensation insurance premiums, defrauding SCIF of $151,891.

Sentencing in this case is scheduled for May 13, 2021, at 9:00 a.m. in courtroom 23 of the Ventura County Superior Court.

Wood faces a maximum sentence of six years in jail.

The Ventura County District Attorney’s Workers’ Compensation Fraud Unit vigorously investigates and prosecutes insurance fraud in Ventura County. Workers’ compensation premium fraud is not a victimless crime, it results in inflated costs to insurance carriers that are passed along to other law-abiding employers and, ultimately, to consumers.

Perpetrators of premium fraud also obtain an unfair competitive advantage over law abiding businesses because their costs are much lower than their competitors’.

CMS Publishes Section 111 Reporting Guide Version 6.3

The sections of the Social Security Act known as the Medicare Secondary Payer (MSP) provisions were originally enacted in the early 1980s and have been amended several times, including by the MMSEA Section 111 mandatory reporting requirements.

Medicare has been secondary to workers’ compensation benefits from the inception of the Medicare program in 1965. The liability insurance (including self-insurance) and no-fault insurance MSP provisions were effective December 5, 1980.

Workers’ compensation is a primary payer to the Medicare program for Medicare beneficiaries’ work-related illnesses or injuries. Medicare beneficiaries are required to apply for all applicable workers’ compensation benefits. If a Medicare beneficiary has workers’ compensation coverage, providers, physicians, and other suppliers must bill workers’ compensation first. If responsibility for the workers’ compensation claim is in dispute and workers’ compensation will not pay promptly, the provider, physician, or other supplier may bill Medicare as primary. If the item or service is reimbursable under Medicare rules, Medicare may pay conditionally, subject to later recovery if there is a subsequent settlement, judgment, award, or other payment.

The Benefits Coordination & Recovery Center (BCRC) consolidates the activities that support the collection, management, and reporting of other insurance or workers’ compensation coverage for Medicare beneficiaries. The BCRC updates the CMS systems and databases used in the claims payment and recovery processes.

The BCRC assists in the implementation of MMSEA Section 111 mandatory MSP reporting requirements as part of its responsibilities to collect information to coordinate benefits for Medicare beneficiaries on behalf of CMS.

Section 111 of the Medicare, Medicaid, and SCHIP Extension Act of 2007 (MMSEA Section 111) adds mandatory reporting requirements with respect to Medicare beneficiaries who have coverage under group health plan (GHP) arrangements, and for Medicare beneficiaries who receive settlements, judgments, awards or other payment from liability insurance (including self-insurance), no-fault insurance, or workers’ compensation.

Implementation dates were January 1, 2009, for GHP arrangement information and July 1, 2009, for information concerning liability insurance (including self-insurance), no-fault insurance and workers’ compensation.

CMS continues to update and implement the Section 111 requirements. New versions of the Section 111 User Guide will be issued when necessary to document revised requirements, and when additional information has been added for clarity.

On April 5, 2021, CMS published NGHP Section 111 User Guide (Version 6.3).

This Policy Guidance Chapter of the MMSEA Section 111 NGHP User Guide provides an overview of Section 111 related legislation and MSP rules, as well as information describing the policy framework behind the MSP liability insurance (including self-insurance), no-fault insurance and workers’ compensation reporting requirements mandated by Section 111 MMSEA.

The other four chapters of the NGHP User Guide (Introduction and Overview, Registration Procedures, Technical Information, and Appendices) should be referenced as needed, for applicable guidance.

Industry Leaders Oppose Statewide MPN for WC Treatment

AB-1465 would require the DWC Administrative Director to establish a statewide medical provider network, called the California Medical Provider Network (CAMPN).

The bill was introduced in late February by Assemblywoman Eloise Gomez Reyes, D-San Bernardino, and Lorena Gonzalez, D-San Diego. It was referred to the Assembly Committee on Insurance.

The bill would establish that an employee may choose to treat within their employer’s network or the CAMPN. The bill would require that the providers in the CAMPN be sufficient to enable treatment for a variety of injuries in all parts of the state. The bill would specify criteria physicians must meet to be included in the CAMPN and would require inclusion for those physicians that meet the criteria.

The bill would require the administrative director to establish rules and procedures for the CAMPN and create and adopt a continuity of care policy.

All treatment within the CAMPN shall be provided in accordance with the medical treatment utilization schedule established pursuant to Section 5307.27, which remains presumptively correct.

Treatment within the CAMPN shall be subject to utilization review, as described in Section 4610, and independent medical review, as described in Section 4610.5.

The Insurance Journal reports that one coalition is now sounding a warning on the bill, saying it would undermine the system of providing medical care in California’s workers’ comp system and “lead to significant cost increases for employers and lower quality care for injured workers.”

The California Coalition on Workers’ Compensation, in partnership with American Property Casualty Insurance Association, California Chamber of Commerce, California Association of Joint Power Authorities, and Public Risk Innovation, Solutions, and Management, is opposing AB 1465.

A bill like this not only rolls back previous reforms but threatens the stability of the workers’ comp system as we know it,” reads a recent email to CCWC members encouraging them to voice opposition to the bill.

Mark Walls, vice president, communications and strategic analysis for Safety National, has already been sounding the alarm over Assembly Bill 1465.

John Norwood with Norwood Associates, an industry lobbyist, called it a “terrible bill.” He said there have been no discussions regarding this issue, and there are no studies or other information supporting the need for this change.

“Implementation of something like this will likely adversely affect medical care received by injured workers and substantially increase costs to the state and employers,” Norwood said.

Employers Sued for Not Reimbursing Home COVID Expenses

According to an article by Fisher Phillips, recent California class and collective lawsuits are starting to reveal a particular trend of litigation where employees are claiming unreimbursed work-related expenses.

For instance, a Private Attorneys General Act (PAGA) action filed on January 15 in the Superior Court of Merced alleges that Foster Farms failed to provide and reimburse employees for the cost of personal protective equipment (PPE). Specifically, the employees allege that they were forced to purchase PPE such as masks, gloves, and hand sanitizer without reimbursement.

In their complaint, the employees argue that California case law requires employers to provide their employees with PPE, at the employer’s expense, and employees must be reimbursed for any such materials that the employees purchase if the employer fails to do so.

In another recent 2021 lawsuit, a class action filed in Orange County Superior Court, the employee alleges that Anyone Home, Inc. failed to provide reimbursement for her and other similarly situated employees’ home internet, home telephone, personal cell phone, personal computer, utility costs, office furniture, and insurance from July 2019.

In both of these cases, the employees allege they were required to purchase alleged necessary business expenses but not reimbursed for these purchases.

Both cases are at their infancy, and no court has made a ruling on the merits of the allegations raised in either case.

California Labor Code § 2802 explicitly requires employers to reimburse their employees for the necessary business expenses that they incur. Specifically, employees must be reimbursed for expenses that are necessarily incurred in direct consequence of their job duties or in complying with an employer’s directions. In general, the law only requires reimbursement of necessary and reasonable expenses; unnecessary or unreasonably exorbitant expenses need not be reimbursed.

Traditionally, most remote work expenses have not been reimbursable because most employers’ telecommuting and remote work programs were typically voluntary and not required.

However, in today’s COVID-19-regulated environment, remote work has become mandatory for many industries, therefore changing certain employers’ reimbursement obligations. When remote work is mandatory – even if ordered by California or local authorities – employees must be reimbursed for the necessary expenses they incur while working at home. The issue of whether certain expenses were “necessarily incurred” by an employee is subject to court scrutiny and various employer defenses.

Regrettably, the California Labor Commissioner’s office has failed to issue COVID-specific expense reimbursement guidance to aid employers in navigating this new vast remote work environment.

Even Rhode Island Fraudsters Easily Steal EDD Cash

This week, 15 Rhode Island defendants were charged by way of federal criminal complaints in U.S. District Court with wire fraud and money laundering.

WPRI reports that the state’s top federal prosecutor announced the arrests during a news conference in Providence, accusing the defendants – all Rhode Islanders – of fraudulently filing claims through unemployment insurance programs across 11 states including California. The defendants filed claims for an estimated $578,571, including $126,000 in Rhode Island, according to prosecutors.

At least one defendant was able to “line his pockets” with almost $90,000, according to the investigators.

The charges were unsealed in Rhode Island U.S. District Court Thursday afternoon, and multiple suspects were discovered in part because they took out large sums of money at Twin River Casino.

According to a sworn affidavit filed by R.I. State Police Trooper Courtney Elliott, investigators were notified in August about several “suspicious high-dollar cash advances” made at the Lincoln casino.

Upon further investigation, police said they discovered Tyrone Hazard of Central Falls had made a $9,000 cash advance using a California Employment Development Visa debit card, which is issued through the state of California to provide unemployment insurance, according to the affidavit.

After getting the cash, Hazard left the casino without playing any games, according to the affidavit. Investigators said they later discovered Hazard had previously made two different unemployment insurance claims in California and Massachusetts, according to court documents.

Similarlly, defendant Rashaad Smith Muskelly of Lincoln is accused of taking out two cash advances at Twin River, according to the complaint. Muskelly is accused of filing for unemployment insurance in eight states: Arizona, California, Massachusetts, Nevada, New York, Rhode Island, Virginia and Texas.

Applied Underwriters Featured in New TV Series

Applied Underwriters will be featured in episodes of an upcoming TV series called Back from the Brink.

The series, set for the fourth quarter of 2021 and the first quarter of 2022 on the Discovery Life channel, will be presented weekday evenings in prime time nationally.

Each episode will feature the real-life stories of individuals who suffered and survived near death accidents, but whose sudden, dire circumstances required an enormous degree of care from a cross-section of individuals and professionals working with unusual devotion to bring these victims back to enjoy a good quality of life.

Back from the Brink researchers identified several sources, including Applied Underwriters, because it has been regularly cited, including recently by the State of California, as a top performer in claims management.

Several of the episodes will be drawn from Applied Underwriters’ files, notably the stirring saga of an electrical lines worker who was electrocuted falling to his “near death” only to be rescued and brought back to life with the use of his limbs and a reconfigured face and neck through groundbreaking surgeries.

A second, compelling story is that of a severely injured lumberjack who fell 60 feet to the ground and was crushed by the tree he was cutting, only to be brought back to vitality by an amazing concert of a giving family, devoted clergy, and a talented, focused team of professionals.

The choice of Applied Underwriters’ experiences and successes in treating patients all the way through to the revitalization of their lives and capacities is a great source of pride for Applied, according to Steve Menzies, the Company’s Chairman: “The role that our Claims Department and others have played in the recovery of so many injured workers over the years is itself a deep source of gratification to the Company’s dedicated staff; that it is recognized and selected for airing, is a second source of great satisfaction to us all.”

Mr. Menzies continued, “Our philosophical approach is ‘service well beyond the letter of the policy and the financial resolution. We believe that our Company’s good soul is expressed in the treatment of claimants, especially injured workers who have had to come ‘back from the brink.'”

The program will look at the ways an injured person’s community of resources worked to overcome challenging odds, following changing courses and regimens as the patients recovered and reached the plateaus that marked progress, according to Mr. Menzies, who concluded: “We believe that the insurance industry does not get the credit it deserves for playing a role beyond simply paying claims fully and promptly, so we appreciate the angle that this show takes – demonstrating that recovery is a concerted effort of many committed professionals who, while concentrating upon one injured worker, martial resources from far and wide to bring to bear – all, with special determination and courage. We hope the series will present insurers in a more fittingly favorable light and have a great following. We are delighted to be a part of it.”

Health Net Pays $97M to Resolve Inflated Charges Claim

Health Net Federal Services LLC has paid $97,237,391 to resolve duplicate and inflated claims submitted to the Department of Veterans Affairs.

In 2013, Health Net entered a $5.05 billion contract with the VA under the Patient-Centered Community Care program, which offered private health care to veterans when VA facilities could not do so in a timely manner.

The Veterans Access, Choice and Accountability Act of 2014 expanded the services to cover veterans who waited more than 30 days for care or lived more than 40 miles away from a VA medical facility. Under this contract, Health Net served as the third-party administrator that secured private health care for veterans, reimbursed these providers for services to veterans, and in turn billed the VA for the services.

In 2017, the VA Office of Inspector General (VA OIG) audited Health Net and found evidence suggesting the company had billed the VA for duplicate claims amounting to approximately $30 million and failed to reduce billings to the VA for approximately $1 million in provider rate savings, as contractually required.

The ensuing investigation confirmed the conduct, and Health Net ultimately repaid $93,682,428 in overpayments, as well as $3,554,963 in interest.

“Providers must be held to the highest standard of care and must rigorously comply with their contractual obligations,” said Acting U.S. Attorney Talbert. “This office is committed to assisting the VA and other agencies of the United States to ensure the integrity of important federal programs, such as those reimbursed by this settlement that will help our veterans.”

“The VA Office of Inspector General is strongly committed to promoting fiscal accountability throughout VA,” said VA Inspector General Michael J. Missal. “This settlement will return funds to VA programs and services that directly benefit our nation’s veterans. I applaud the teamwork and dedication that led to this significant recovery.”

This settlement is the result of work by the U.S. Attorney’s Office for the Eastern District of California and the Civil Division’s Commercial Litigation Branch, with help from the Department of Veterans Affairs Office of Inspector General and the Federal Bureau of Investigation. Assistant U.S. Attorney Catherine J. Swann handled the matter for the United States.