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Tag: 2021 News

DWC Updates OMFS Practitioner Services Fees

The Division of Workers’ Compensation (DWC) has posted an order adjusting the Physician and Non-Physician Practitioner Services section of the Official Medical Fee Schedule (OMFS) to conform to relevant 2021 changes in the Medicare payment system as required by Labor Code section 5307.1. The Administrative Director update order adopting the OMFS adjustments is effective for services rendered on or after March 1, 2021. Some of the significant changes include the following.

– Revisions relating to Evaluation and Management (E&M) services for office visits for new and established patients

– – 1995 and 1997 Evaluation and Management Documentation Guidelines are no longer used
– – American Medical Association’s Current Procedural Terminology (CPT) E&M office visit code descriptors and guidelines have been revised
– – Level of E&M office visit service is reported using either level of medical decision making or total time
– -First level new patient office visit code CPT 99201 has been eliminated

Medicare Prolonged Service Code HCPCS G2212 is adopted for use in place of CPT code 99417 for prolonged E&M service provided on the date of service where the level of service is selected based upon time
– – Updated relative value units
– – Updated conversion factors
– – Updated Table A – anesthesia conversion factors adjusted for Geographic Practice Cost Index
– – Updated telehealth list

The Order, effective for services rendered on or after March 1, 2021, and related documents can be found at the DWC OMFS physician fee schedule webpage.

Brentwood Pharmacist Guilty in $4.5M Kickback Scheme

A West Los Angeles pharmacy and its owner pleaded guilty to federal criminal charges stemming from a scheme in which millions of dollars in reimbursements for compounded drugs were generated through the payment of illegal kickbacks for patient referrals and by fraudulently paying patients’ copayments.

41 year old Navid Vahedi, who lives in Brentwood, pleaded guilty to one count of conspiracy to commit health care fraud and payment of illegal remunerations. Vahedi also entered a guilty plea to the felony offense on behalf of his business, Fusion Rx Compounding Pharmacy.

Vahedi and Fusion Rx admitted routing millions of dollars in kickback payments through the businesses of two marketers to steer prescriptions for compounded drugs to Fusion Rx. As part of the scheme, Vahedi and the two marketers provided physicians with preprinted prescription script pads that offered “check-the-box” options on the form to maximize the amount of insurance reimbursement for the compounded drugs.

From May 2014 to at least February 2016, Fusion Rx received approximately $14 million in reimbursements on its claims for compounded drug prescriptions.

As part of its contracts with various insurance networks, Fusion Rx was obligated to collect copayments from patients. Because the copayments might discourage patients from requesting expensive and potentially unnecessary compounded drug prescriptions, Fusion Rx did not collect copayments with any regularity and, in other instances, it provided gift cards to patients to offset the amount of the copayments, according to court documents.

After an audit raised concerns that Fusion Rx’s failure to collect copayments would be discovered, Vahedi directed Fusion Rx funds to be used to purchase American Express gift cards, which were then used to make copayments for certain prescriptions without the patients’ knowledge. Fusion Rx then submitted claims on these prescriptions to various insurance providers, falsely representing that patients had paid the required copayments.

A sentencing hearing is scheduled for  June 28, at which time Vahedi will face a statutory maximum sentence of five years in federal prison. Both defendants have agreed to pay restitution related to the copayment reimbursement part of the scheme, which is estimated to be $4,405,926.

In addition to his obligation under the plea agreement to pay restitution, Vahedi also agreed to forfeit $1,338,511.

Under the terms of the plea agreements, Fusion Rx has also agreed to pay a fine sufficient to divest itself of all its remaining assets, Vahedi has agreed to have his pharmacist license revoked, and both Vahedi and Fusion Rx will be excluded from federal health care programs such as Medicare and Medicaid going forward.

The two marketers involved in the scheme – Joshua Pearson, 41, of St. George, Utah, and Joseph Kieffer, 40, of West Los Angeles – previously pleaded guilty in this case and are scheduled to be sentenced by on May 24 and June 28.

Bakersfield Nurse Assistant Faces 24 WC Fraud Felonies

The Kern County District Attorney announced the filing and arraignment of a major felony case alleging 24 felony counts related to alleged worker’s compensation fraud.

According to a probable cause declaration obtained by KGET.com, Ava McLean failed to disclose and denied prior injuries she suffered when she filed her worker’s compensation claims. Those alleged injuries, which she said prevented her from working, didn’t stop her from dancing, wearing high heels, ziplining and horseback riding.

Additionally, the declaration says, McLean altered medical records and submitted them to her insurance company. She deflected questions from a District Attorney’s office investigator, the document says, by talking about her son’s ailments and saying she now has a brain tumor.

Doctors who examined her over the years noted she showed “narcotic-seeking symptoms.” Between November 2016 and October 2019, McLean had been prescribed or asked multiple doctors to prescribe her pain medications 25 times.

McLean was in vehicle crashes in 2012 and 2017. She initially did not report any injuries following the 2017 accident. But later said she suffered a strained neck, and later still said there were injuries to her feet that would require surgery. McLean filed worker’s compensation claims in both crashes.

Earlier in 2017, months before the crash, McLean had surgery on both ankles and feet to correct her “flat feet,” the declaration says. Implants were placed in both feet, the hardware put in her right foot became displaced and she had post-op problems requiring medical leave from work and opioids for pain into August 2017.

When McLean made the claim regarding the 2017 crash, she failed to inform her insurance of any prior injuries to her feet or neck, the declaration says.

In April 2018, Bakersfield Heart Hospital gave her a final written warning, letting her know she would be fired for any further disciplinary actions, for and expired Basic Life Support Certification, wearing acrylic nails and insubordination.

The next month McLean reported she was experiencing foot and ankle pain, according to the filing. There was no mention of this injury happening at work. The following day, May 16, 2018, she reported neck pain to her doctor – making no mention of foot or ankle pain – and said she had injured herself at work.

McLean told her employer the same day that she had suffered two injuries, one to her back, the other to her ankle, while working at Bakersfield Heart Hospital, according to the filing. She was taken off work and didn’t return, and a co-worker contradicted McLean’s version of events in how she suffered the alleged injuries.

During examinations over the following days – and even when questioned multiple times the next year – McLean denied making any prior worker’s compensation claims, ongoing treatment or prior injuries, the filing says.

It was in 2018 that McLean posted a video on social media of her dancing, horseback riding and engaging in other physical activities with friends, the declaration says. Surveillance video taken of her showed she had no difficulty walking up or down stairs.

McLean pleaded not guilty to the 24 felony charges.

WCJ Rejects Mesa Pharmacy Challenge to L.C. 4615 Stay

On May 22, 2006, Mesa Pharmacy filed Articles of Incorporation. A year later, Pharmacy Development Corporation sprang into existence. Both use the same pharmacy permit number PHY50766 doing business as Mesa Pharmacy VII in Irvine California.

John Garbino became involved with Mesa in late 2011 or 2012. There is a contract between his wholly owned company, Trestles Pain Management, to market Mesa’s pharmaceutical services to doctors. Those doctors would then submit prescriptions to Mesa for fulfillment.

According to the facts found by the WCJ, “Mesa went from a company barely squeaking by to an entity raking in hundreds of millions of dollars essentially overnight.

Mesa provided expensive compounded medications to injured workers and has been a major lien claimant with millions of dollars of liens that are currently outstanding and unpaid.

Garbino was ultimately charged by federal authorities and convicted of Medicare fraud, preventing him from participating in the Workers’ Compensation System. His association with Mesa Pharmacy was examined by the DWC and found to be sufficient to place Mesa on the list of suspended providers under Labor Code §4615.

Mesa Pharmacy challenged that decision, claiming that Garbino never held a position with Mesa that would subject them to the suspension.

A trial followed on the issue of “whether John Garbino, who was convicted of Medicare fraud, was a 10% or greater owner, a director, an officer, or had de facto control of the Lien Claimant, Mesa Pharmacy.”

After taking extensive testimony and documentary evidence, the WCJ found that Garbino had de facto control of Mesa Pharmacy in the WCAB case of Melvin Garcia Galdames v Vinyl Technology.

The WCJ reasoned in part that “In order to be considered a corporation with an existence separate and apart from those who ran it, there were simple steps that had to be taken.”

Mesa had to have a board of directors. On paper it did – but the people listed on those papers weren’t aware of it or admitted to being figureheads. Garbino ended up listed as an owner of Mesa with the Arizona Pharmacy Board. And while that doesn’t prove he was an actual owner, it does show that no one was paying attention to who was being asserted by the corporation as having ownership interest in legal filings in other states. That creates a strong inference that there was no actual corporate structure at Mesa, they just made it up with whatever names seemed to be the best fit at the time.”

Mesa Board of Directors had to keep regular accounts of their dealings…. People allegedly serving on the board couldn’t recall having meetings outside of an occasional vague memory. This court ordered Mesa to produce the corporate minutes. They could not, or would not, do so.

The court can, and does, look to whether the facts demonstrate that there was a person behind the curtain pulling on the strings. Garbino showed up, turned on the music, and Kurtz and the others waltzed into the pile of cash that stood to be made. He told them what to do and how to do it. He connected them with financers. He supplied the pool of doctors to write the prescriptions Mesa would fill. He made them rich on paper. He was the catalyst that catapulted Mesa from a corner drug store to being in reach of nationwide chain status. Mesa’s two-bit cast of grifters with a reasonably intelligent front-man found a real crook to teach them to do business. Now they have to live with the taint of his wrong-doings.”

Floyd Skeren Manukian Langevin, LLP Hearing Representative John Castro participated in this trial.

DWC Extends QME Emergency Regs 36.7 and 46.2

The Division of Workers’ Compensation (DWC) has issued a Notice of Emergency Regulation Re-Adoption to extend current measures that allow workers’ compensation claims to move forward during COVID-19 restrictions.

Emergency regulations § 46.2 and § 36.7 are set to expire on March 12, 2021. This re-adoption would extend the emergency regulations for up to an additional 210 days in accordance with Executive Orders N-40-20 and N-66-20. After this re-adoption, DWC can seek one final re-adoption.

Re-adopting the emergency regulations will continue to help employers and injured workers move workers’ compensation claims toward a resolution and avoid undue delay. These regulations provide for how a medical-legal evaluation can occur and alternatives for service of required forms for a medical-legal evaluation and report.

The regulations concern how medical-legal evaluations and payment for those evaluations can occur during this emergency period. Also provided in the regulations are alternative forms of service for required forms related to medical-legal evaluations and reports.

– – QME Regulation 36.7 specifies how and under what circumstances the parties may serve documents electronically.

– – QME Regulation 46.2 specifies how and under what circumstances QME, AME and other evaluations may be conducted by telehealth.

DWC will file the re-adoption of the emergency regulations with the state’s Office of Administrative Law (OAL) on February 16, 2021.

For information on the OAL procedure, and to learn how you may comment on the emergency regulations, go to the OAL’s website.

Upon OAL approval and filing with the Secretary of State, a notice will be posted on the DWC website.

Long Beach Supermarkets Close Over City “Hero” Pay Law

Two grocery stores in Southern California will shutter in April in response to a local “hero pay” measure requiring a $4-an-hour increase for grocery workers during the pandemic.

Kroger, which owns more than a dozen grocery chains, announced this week that it would close a pair of Long Beach stores – a Ralphs and a Food 4 Less – specifically citing the ordinance the city’s mayor signed into law late last month. The city was the first in the state to introduce a measure requiring some grocery retailers to give workers a temporary hourly pay bump during the pandemic.

“The irreparable harm that will come to employees and local citizens is a direct result of the City of Long Beach’s attempt to pick winners and losers,” the company said in a statement, calling it “deeply unfortunate.”

The report in the Washington Post says that Kroger’s move to close the stores comes amid growing momentum for similar hazard pay policies in cities across the state, as well as elsewhere in the country. Officials in two other cities – the Oakland City Council and the Los Angeles City Council – voted unanimously on Tuesday to mandate temporary $5-per-hour pay increases for some grocery workers.

The Long Beach policy is in place for 120 days and includes groceries that sell at least 70 percent food products and employ more than 300 people nationally with at least 15 employees per store. Under those terms, it may exclude retailers like Target and Walmart.

Long Beach Councilwoman Mary Zendejas, who sponsored the measure, said she was “incredibly disappointed” in Kroger’s move to close stores.

“It really saddens me that they’d rather take away 200 jobs instead of doing the right thing, which is paying hazard pay for these local grocery store workers who risk their lives every day they come in and who are putting their lives on the line every second they’re working,” she told The Washington Post.

She said the closures will also have an impact on the communities they serve, noting that Food 4 Less serves many low-income residents in the area.

Experts and groups on both sides of the hazard pay debate are worried Kroger’s decision could signal a broader response.

Molly Kinder, a fellow at the Brookings Institution who studies front-line workers, said it was notable that Kroger is closing two stores in the first city in California to introduce such a mandate.

“I have to interpret that this statement is meant to signal that more Krogers could close if this is expanded,” Kinder said, adding it seemed to “send a message that mandates could come with consequences.”

Ronald Fong, president of the California Grocers Association trade group, which filed a lawsuit over the Long Beach ordinance, said the group tried to warn the city about “unintended consequences” of the measure.

“When a city tries to enact what is a 30 percent raise for grocery store workers, it is impossible to be able to absorb that without doing one of three things,” Fong told The Post. “Raising prices and passing it along to our customers, closing stores because they will no longer be profitable with that kind of labor expense or reducing hours and cutting shifts.”

The group announced Wednesday that it would also file lawsuits against Oakland and the city of Montebello to challenge similar $5-an-hour hazard pay measures.

DWC Opens Registration for Educational Conference

The California Division of Workers’ Compensation announced dates for its 28th annual educational conference.

The conference will take place on a virtual platform from March 24-26, 2021.

Sessions will also be available to view on demand through April 9, 2021 for registered participants.

This annual event is the largest workers’ compensation training in the state and allows claims administrators, attorneys, medical providers, return-to-work specialists, employers, human resources and others to learn firsthand about the most recent developments in the system, including any new laws or requirements.

Speakers from the Division of Workers’ Compensation and the private sector will address topics pertinent to claims administrators, medical providers, attorneys, rehabilitation counselors and others involved in workers’ compensation.

DWC has applied for continuing educational credits by attorney, rehabilitation counselor, case manager, disability management, human resource and qualified medical examiner certifying organizations among others.

Organizations who would like to become sponsors of the DWC conference can do so by going to the IWCF Website.

Attendee, exhibitor, and sponsor registration may be found at the DWC Educational Conference Webpage.

California Legislators Seek “Reboot” of Failing EDD

Inheriting a mounting bureaucratic disaster that has floated lifelines to inmates but left newly jobless Californians broke, lawmakers are calling for a reboot of the state’s Employment Development Department.

Pressed to act after a series of criminal investigations and audits revealed inmates and fraudsters took the department for at least $10 billion during the pandemic, a group of Assembly members say sweeping changes are needed to make the troubled department functional once again.

Assemblyman Rudy Salas, said “We want to fix it. EDD needs to be reformed, it needs to more responsive to Californians especially during a time of need.”

The bills call for improvements to the department’s identity verification process, an oversight board to monitor unemployment claims, a task force to further investigate fraud, simplified application processes and direct deposit options for claimants.

Courthouse News reported that the reform package comes one day after the department’s leadership received a lashing from an Assembly committee.

During a marathon oversight hearing, flummoxed and angry lawmakers on both sides of the aisle spent five hours recounting stories of people forced to live in their cars while waiting for unemployment benefits that never came.

One of the proposals, Assembly Bill 110, attempts to prevent benefits from going to inmates by requiring EDD to cross-check all claims against state and local incarceration records. Lawmakers also want to spend $55 million on a task force to aid ongoing fraud investigations as well as a new oversight board to ensure unemployment benefits are being distributed swiftly and accurately.

Assemblywoman Cottie Petrie-Norris said many of the EDD’s troubles are systemic and far from new.

“The truth is this department has been failing for years and this pandemic really has brought those failures into sharp focus. It has become a crisis for our state.”

In addition to cracking down on past and future fraud, the lawmakers want to make the system easier to use and more accessible.

As highlighted in the recent state audits, while unemployment skyrocketed last year EDD answered fewer than 1% of phone calls made by confused residents. Unable to get through to the department, residents have instead flooded their local elected officials with requests to help with unemployment applications.

Assembly Bill 402 would give people an official avenue for help by creating a sort of consumer advocate arm to sift through application issues. Related proposals would allow claimants to receive benefits via direct deposit, require EDD to offer more options for non-English speakers and a streamlined application process.

San Diego Assemblywoman Lorena Gonzalez said her direct deposit bill is a common-sense proposal born from an incident last summer when Bank of America froze benefit cards amid the spike in fraud. She noted California is just one of three states that doesn’t let people get benefits via direct deposit and that her bill would “cut out the middleman” in reference to the state’s contract with Bank of America.

Cal/OSHA Cites Two State Prisons an Others for COVID Issues

Cal/OSHA has cited multiple employers for not protecting workers from COVID-19 during inspections in various industries throughout the state.

Violations were identified in industries including health care, restaurant, retail, fitness centers, correctional institutions and more. Cal/OSHA opened the inspections after learning of COVID-19 fatalities and illnesses, after receiving complaints and during targeted inspections. The full list of employers cited for COVID-19 violations is posted on Cal/OSHA’s website.

Inspections at the San Quentin and Avenal state prisons occurred after reports of hospitalizations of staff following outbreaks at the institutions. Cal/OSHA determined that San Quentin staff were not provided adequate training or equipment for working with COVID-19 infected individuals, and employees who had been exposed to COVID-19 positive inmates were not provided proper medical services, including testing, contact tracing and referrals to physicians or other licensed health care professionals. Cal/OSHA issued citations for four willful-serious, five serious, one regulatory and four general category violations, including the employer’s failure to institute an effective aerosol transmissible diseases (ATD) control exposure plan.

Avenal State Prison was cited for three serious violations after Cal/OSHA found it failed to maintain an effective written ATD program including site-specific instruction, had an inadequate written respiratory protection plan, and failed to implement and/or enforce work practice controls to minimize exposure to COVID-19 amongst employees.

Ventura-based fitness center BSF Fitness was cited for one willful-serious, two serious and six general category violations following a complaint-initiated inspection opened last July, after a report that the employer was not enforcing face covering use and physical distancing in its gym.

Accident inspections were opened following reports of serious COVID-19 related illnesses at the Kaiser Permanente medical centers in San Leandro, Antioch and Walnut Creek, and Burlingame-based Mills-Peninsula Medical Center; and opened a complaint-initiated inspection at Fairfield-based NorthBay Medical Center. The facilities were cited for serious and regulatory violations after Cal/OSHA found multiple deficiencies in their ATD and respiratory protection programs.

Also cited were four skilled nursing centers: Sunray Healthcare Center and Sherman Village Healthcare Center (both located in the Los Angeles area), Fremont Healthcare Center in Fremont, and San Miguel Villa in Concord. Fremont Healthcare Center and San Miguel Villa were also cited for a regulatory violation because they failed to immediately report serious illnesses suffered by employees.

Cardenas Market in Oakland was cited for multiple violations including three serious-category violations following media coverage of an outbreak where seventeen workers tested positive for COVID-19 last May.

Grimmway Enterprises, Inc. was cited for multiple violations including two serious-category violations, following a fatality-initiated inspection.

Cal/OSHA also cited Carter’s Children’s Wear in Gilroy for failing to immediately report a COVID-19 related serious illness and failing to establish, implement and maintain an effective Injury Illness Prevention Program.

Supreme Court Denies Union Effort to Invalidate Prop 22

The California Supreme Court rejected a major labor union and several ride-hailing drivers attempt to overturn a newly passed ballot measure classifying gig workers as independent contractors in California.

The groups filed suit in the Supreme Court, alleging Proposition 22 violated the state constitution and limits the power of state legislators to implement certain worker protections they are authorized to grant.

The Service Employees International Union and group of ride-hailing drivers, asked the state Supreme Court to invalidate Prop 22, which classified gig driver’s status as independent contractors after more than 58 percent of voters supported it in November.

They argued the measure limits state legislators’ ability to implement a system of workers’ compensation in defiance of their constitutional authority to do so. It also argues that the proposition unconstitutionally defines what comprises an amendment to the measure, as well as violating a rule limiting ballot measures to a single subject to prevent voter confusion.

The Protect App-Based Drivers and Services coalition, which represents gig companies such as Uber, Lyft and Doordash, criticized the lawsuit in a statement attributed to Uber driver Jim Pyatt, an activist who has worked in favor of Prop 22.

The groups that filed the suit, which also include SEIU California State Council, took particular issue with the measure’s inclusion of a provision requiring a seven-eighths legislative supermajority to amend and even define what constitutes an amendment.

They said they were suing in the state Supreme Court rather than a lower court because the issues were of broad public importance and required a speedy resolution to minimize harm to gig workers.

However the Supreme Court refused to hear the case, and did not write a formal opinion. The docket entry simply stated “The petition for writ of mandate is denied without prejudice to refiling in an appropriate court.”

Thus, their arguments were not heard on the merits. They were redirected to the jurisdiction of lower courts. However, as they pointed out, this would now require years of costly litigation, first in lower courts, then intermediate appellate courts, and finally back to the Supreme Court.

It would not be unusual for this to be a ten year journey.