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Tag: 2021 News

Feds Pursue Pharmacist for Carelessly Filling Opioid Prescriptions

In a civil complaint filed in the Eastern District of California, the United States alleges that Lawrence Howen and the pharmacy he owns, Nor-Cal Pharmacies Inc. doing business as Lockeford Drug, which operates in Lockford California, unlawfully dispensed controlled substances from 2016 through 2019, in violation of the Controlled Substances Act.

The complaint alleges that Howen failed to meet his obligations as the pharmacist of Lockeford Drug in dispensing dangerous opioids and other drugs. According to the complaint,

Howen knowingly filled over 700 controlled substance prescriptions that were not issued for a legitimate medical purpose, and he filled prescriptions outside the ordinary course of pharmacy practice.

This unlawful conduct resulted in the improper dispensing of over a hundred thousand of doses of controlled substances, primarily prescription opioids.

Civil penalties and injunctive relief are sought to prevent Howen from committing further violations.

“As a pharmacist who filled prescriptions for dangerous controlled substances, Howen had an obligation to fill only those prescriptions that he ensured were legitimate,” said U.S. Attorney Scott.

“Too many lives have been lost during the opioid crisis because those entrusted with responsibility turned a blind eye. This filing represents an important step in our efforts to hold pharmacists and others in the chain of opioid distribution accountable for misconduct.”

“Pharmacists are often the last line of defense to ensure controlled substances are dispensed lawfully and do not fall into the wrong hands. DEA will continue to hold those accountable who choose to ignore red flags and put the public at risk,” stated DEA Special Agent in Charge Daniel C. Comeaux.

This case is the product of an investigation by the Drug Enforcement Administration’s Sacramento Tactical Diversion Squad. Assistant U.S. Attorney Steven Tennyson is prosecuting the case.

Sub-Contractor Lacks Standing to Challenge Privette Doctrine Dismissal

Marcelo Develasco, Sr., a construction worker, was killed when a concrete column formwork toppled over at a construction worksite. The worker’s surviving family members brought this wrongful death action against general contractor Swinerton Builders and formwork supplier Atlas Construction Supply.

Atlas cross-complained against Swinerton for equitable indemnity, contribution, and declaratory relief.

Swinerton moved for summary judgment as to plaintiffs’ complaint on grounds that the common law Privette doctrine precluded Swinerton from being held liable to plaintiffs. Under the Privette doctrine, the hirer of a contractor generally may not be held liable in tort when the contractor is hired to do inherently dangerous work and an employee of the contractor suffers work-related injuries due to the contractor’s negligence.

The trial court entered summary judgment in favor of Swinerton as to plaintiffs’ wrongful death complaint.

Thereafter, Swinerton – in lieu of seeking entry of judgment on the summary judgment order – settled with plaintiffs. Under the settlement, plaintiffs agreed to dismiss their case against Swinerton and Swinerton waived its costs.

Swinerton then requested, and the trial court granted, a good faith settlement determination under Code of Civil Procedure section 877.6.

Apparently under the shared belief that the good faith settlement determination barred Atlas’s cross-complaint against Swinerton, Atlas and Swinerton stipulated to the dismissal of Atlas’s cross-complaint against Swinerton.

Atlas appealed the summary judgment order in favor of Swinerton, the good faith settlement determination, and the dismissal of Atlas’s cross-complaint.

The Court of Appeal dismissed the appeal to the extent it concerns the summary judgment order. In all other respects, the challenged orders were affirmed in the published case of Atlas Construction Supply v. Swinerton Builders.

Atlas claimed that the trial court erroneously ruled that Atlas lacked standing to oppose Swinerton’s motion for summary judgment and, on that basis, the court did not consider a meritorious opposition brief filed by Atlas. Atlas argues that if the court had considered the opposition brief, it is reasonably likely the court would have denied Swinerton’s motion for summary judgment, plaintiffs and Swinerton never would have settled plaintiffs’ wrongful death complaint, the court never would have made the good faith settlement determination, and Swinerton and Atlas never would have stipulated to the dismissal of Atlas’s cross-complaint.

The Court of Appeal concluded that Atlas was not aggrieved by the trial court’s exoneration of Swinerton in the wrongful death action. Therefore, Atlas lacks standing to appeal the summary judgment order in favor of Swinerton.

As for the good faith settlement determination and the dismissal of Atlas’s cross-complaint, it concluded Atlas waived its challenge to those orders by failing to make substantive legal arguments specific to those orders. Therefore, it dismissed the appeal insofar as it pertains to the summary judgment order and affirmed the remaining challenged orders.

Cal/OSHA Form 300A Summary of Illnesses and Injures Due on Feb 1

Cal/OSHA is reminding employers in California to post their 2020 annual summary of work-related injuries and illnesses, including those related to COVID-19, in a visible and easily accessible area at each worksite. The Form 300A summary must be posted each year from February 1 through April 30.

Instructions and form templates are available for download from Cal/OSHA’s Record Keeping Overview. The overview gives instructions on completing both the log (Form 300) and annual summary (Form 300A) of work-related injuries and illnesses. The annual summary must be placed in a visible and easily accessible area at each worksite.

Employers that are required to record work-related fatalities, injuries and illnesses must record a work-related COVID-19 fatality or illness like any other occupational illness. To be recordable, an illness must be work-related and result in one of the following:

– – Death.
– – Days away from work.
– – Restricted work or transfer to another job.
– – Medical treatment beyond first aid.
– – Loss of consciousness.
– – A significant injury or illness diagnosed by a physician or other licensed health care professional.

If a work-related COVID-19 case meets one of these criteria, then covered employers in California must record the case on their 300, 300A and 301 or equivalent forms.

Posting of the summary helps ensure workers are aware of work-related injuries and illnesses that occurred the previous year. Current and former employees and their representatives are entitled to a copy of the summary or the log upon request.

The 2020 definitions and requirements for recordable work-related fatalities, injuries and illnesses are outlined in the California Code of Regulations, Title 8, sections 14300 through 14300.48. Employers are required to complete and post the Form 300A even if no workplace injuries occurred.

Many employers in California must also comply with electronic submission of workplace injury and illness records requirements by March 2nd each year. Cal/OSHA has posted details on which employers are required to submit the electronic reports as well as other information online.

Study Shows Healthcare Lab Workers at Highest COVID Risk

The emergence of the COVID-19 worldwide pandemic in December of 2019 and efforts by all levels of government to control the spread of the disease through lock-downs and travel restrictions, has reduced business activity in many industries.

Data released by the Department of Commerce’s Bureau of Economic Analysis (BEA) in late July of 2020 indicated that the country’s GDP decreased by an annual rate of 32.9%. The BEA attributed the decline to “state and local government responses to control the spread of the epidemic”

Consequently, the frequency of musculoskeletal work-related injuries especially in the entertainment, travel and hospitality industries has decreased, as indicated in the California Workers’ Compensation Institute’s interactive app.

As the frequency of the traditional injuries associated with work declined, the risk of exposure to SARS-CoV-2 the virus causing Covid-19, increased significantly for various occupational groups. Many jobs that may typically not be considered high-risk, became high-risk for workers exposed to and infected by SARS-CoV-2.

Recently, a new study published in the Journal of Occupational and Environmental Medicine, sought to determine the industries with the highest proportion of accepted COVID-19 related workers’ compensation claims.

The purpose of this investigation is to quantify the differences in the proportion of COVID- 19 related and non-COVID-19 related injuries and illnesses reported through the workers’ compensation system by industrial classification.

The study included 21,336 WC claims (1,898 COVID-19 and 19,438 other claims) that were filed between Jan 1, 2020 and August 31, 2020 from 11 states in the Midwest U.S.

The overwhelming proportion of all COVID-19 related WC claims submitted and accepted were from healthcare workers (83.77%) followed by individuals employed in retail trades (2.42%) and real estate and leasing (2.37%).

Within healthcare employment, WC claims submitted by workers in medical laboratories had the highest risk.

Conversely, in the study population, employment outside healthcare did not appear to consistently elevate the risk of infection with SARS CoV-2 and filing a claim for workers’ compensation to pay for the medical care and lost time associated with this condition.

NAIC Study – PC Insurance Premium Increase as Losses Flat

The National Association of Insurance Commissioners (NAIC) released the Report on Profitability By Line By State in 2019. The report estimates and allocates profitability in property/casualty insurance by state and line of insurance.

The ability to analyze results by state and line of business enhances transparency on the financial impact the economic climate has had on each of these lines. When combined with other information, the report can be utilized in further analysis of competition and market performance.

The Report on Profitability By Line By State in 2019 includes aggregate data from annual statement exhibits to develop estimates of profits on earned premium and the return on net worth by line and by state.

Some key highlights from the report include:

– – Total premiums earned increased over the nine years included in the report, while losses incurred, and loss adjustment expenses have remained relatively flat.
– – The countrywide direct return on net worth for the total property and casualty insurance market increased for a second consecutive year to 8.6%.
– – Private Passenger Auto (PPA) makes up a large portion of the Property & Casualty market, accounting for approximately 37% of the total direct premiums earned in 2019.
– – The return for PPA decreased minimally over the prior year moving from 7.5% in 2018 to 7.15% in 2019. In 2018 and 2019, losses and loss adjustment expenses accounted for over 70% of direct premiums earned countrywide for all property and casualty lines combined.

The report also shows the various components of estimated profits including: premiums earned; losses incurred; loss adjustment expense; general expenses; selling expenses; state taxes, licenses and fees; dividends to policyholders; changes in premium deficiency reserves; underwriting profits; investment income and federal income taxes. As fluctuations in calendar year financial results occur, long-term historical averages are also provided.

The complete report is available on the NAIC publications page.

Officials Say 33% of L.A. County Residents Were COVID Infected

The statistics, released on Wednesday by the county’s Department of Health Services, suggest a spread much wider than even the county’s own confirmed toll.

The summary of the statistics reported by the Los Angeles Daily News says that as of Thursday, the county’s total number of officially confirmed positive cases throughout the year was 975,299, with a seven-day average positivity rate of 18.2% – nearly 1 in every 5.

But officials continue to believe that in a region of 10 million people, the virus likely infected many more people who simply have not been tested or exhibited symptoms. Their scientific projections arrived at a one-of-three ratio, or about 3.2 million infections, officials said.

Officials believe that for every reported case, between three and four actual infections have occurred, officials said.  And the results, if traditional patterns of behavior during the pandemic hold up, could spur crisis-level demand at hospitals, if the expected holiday surge takes hold.

But even if there wasn’t more transmission over the holidays, county researchers estimate that 1 in every 115 county residents is infectious to others – a higher rate than a week ago, when 1 in 125 residents were infectious.

The estimated undercount is a function of various patterns of behavior, said Dr. Roger Lewis, director of COVID-19 demand modeling for L.A. County Department of Health Services.

“There’s a period when you may be infected without any symptoms, and some people never ever have symptoms and have no way of ever knowing they got sick,” Lewis said – so they don’t get tested.

Then there are people who have mild symptoms. Maybe a slight cough or a cold. They often feel there’s no reason to be tested. And there’s another group who know they are positive – perhaps they live in a household where another is infected, but they don’t go out or present themselves for care because they don’t want to infect others.

“We’re quite confident that it’s in that range,” Lewis said. “If the truth turns out to be 1 in 4, that’ not inconceivable to me. One in 2 seems less likely. I’m quite confident we are in the right range.”

What has complicated considerations for public health researchers and the healthcare providers is the devious nature of the disease itself.  “It’s a disease that can affect two people who look the same – but one will get over in a week to 10 days and one will end up on on a ventilator or die,” he said.

Dr. Thomas Yadegar, medical director of the Intensive Care Unit at Providence Cedars-Sinai Tarzana Medical Center, knows that complex nature well. He said the 3-to-1 ratio seemed a bit high, “but it wouldn’t surprise me,” if it was accurate, he said.

“But even if the number was that high, that’s still nowhere near where it needs to be for us to have herd immunity,” said Yadegar, who for months has been sounding an alarm about the need to intervene early to prevent out-of-control and inflammatory immune responses called cytokine storms. “I still fear the next few months we are going to continue to be in crisis mode.”

Lewis said a new batch of projections will be out next week, and could be the biggest indicator of whether an expected holiday wave will emerge in the coming weeks.

O.C. Healthcare Group Resolves $40M Respirator Fraud Claim

The California Attorney General announced a $40 million nationwide settlement with Apria Healthcare Group, Inc. and Apria Healthcare LLC resolving allegations that the respiratory services provider violated the Federal False Claims Act (FCA), along with numerous state anti-fraud laws by seeking Medicaid reimbursement for ventilation machines that were not medically necessary or reasonable.

Of the $40 million nationwide settlement, $4,812,000 relates to violations of Medicaid laws. California’s share of the Medicaid-related settlement is $206,338.30.

In February 2017, a civil action was filed against Apria in a New York District Court claiming the company sought reimbursements for non-invasive ventilators (NIVs) when it was medically unnecessary or unreasonable.

Apria is headquartered in Lake Forest California, and offers three categories of respiratory equipment, with each category performing more complex and costlier procedures than the last. NIVs are in the third tier, and therefore receive the highest and longest paid Medicare and Medicaid reimbursement rate due to their high maintenance.

From January 1, 2014, to December 31, 2019, it was found that Apria aimed to increase profits by attempting to persuade healthcare providers to convert patients from the second category of respiratory devices to NIVs. Apria then billed for NIVs that were either not used by patients, were used inconsistently, or only performed the function of respiratory equipment in the first or second tier. Routine physician visits to confirm individuals were following correct NIV procedures were also neglected, and in 2017, half were not completed.

After analyzing this fraudulent behavior, it was concluded by both the federal and state governments that Apria had failed its duty to correctly and accurately report NIV usage and in turn violated the Federal False Claims Act, along with numerous state anti-fraud statutes including the California False Claims Act.

Nonetheless, Apria filed documents with the Securities and Exchange Commission on January 18, 2021, announcing its intent to go forward with an Initial Public Offering (IPO),

Apria discloses in the SEC documentation, that it served nearly 2 million patients, made nearly 2.4 million deliveries and conducted more than 744,000 clinician interactions with patients in 2019. It generated $1.1 billion in net revenues, $15.6 million in net income, $174 million in adjusted EBITDA and $80.5 million of adjusted EBITDA less patient equipment capex. The company says that home respiratory and sleep therapy represent 80% of its 2019 revenue.

It went on to say “Through various strategic and operational initiatives, we have improved profitability despite reimbursement rate pressure, improving our adjusted EBITDA margin by 110 basis points from 2017-19 on a basis that excludes the impact of new accounting policies adopted in 2018 and 2019.”

Apria was a public company before, prior to 2008, when Blackstone Group bought the company for $1.6 billion. In 2014, it was rumored Blackstone Group was in discussions to sell Apria.

The settlement was negotiated by the California Department of Justice’s Division of Medi-Cal Fraud and Elder Abuse (DMFEA), working with a team of other states and the federal government.

The DMFEA receives 75 percent of its funding from the U.S. Department of Health and Human Services under a grant award totaling $33,829,000 for Federal fiscal year 2019-20. The remaining 25 percent, totaling $11,379,000 for fiscal year 2019-20, is funded by the State of California. The Federal fiscal year is defined as October 1, 2019, through September 30, 2020.

35,000 California Prison Inmates Filed Fraudulent Unemployment Claims

Fed up with the state’s inability to probe and manage the aftermath of a multi-billion-dollar unemployment fraud fiasco, a California congressman is turning to the IRS to protect his constituents.

Courthouse News reports that Representative Josh Harder is warning that a wave of unsuspecting Californians will soon find out they were caught in the massive identity fraud ring that rocked the state during the early stages of the pandemic via a tax bill from the federal government. On Thursday, the second-term congressman urged the IRS to devise a plan to quickly help the still unknown number of victims.

The California Employment Development Department is an absolute catastrophe – and the IRS isn’t known for its customer service, but we can’t have thousands of Californians getting a tax bill for benefits they didn’t get,” Harder said in a statement.

In a letter to IRS Commissioner Charles Rettig, Harder pressed the federal government to take a proactive approach and quickly develop a streamlined system for identity fraud victims to clear wrongful tax bills. Noting that tax season is on the horizon, he says the IRS should be working with the unemployment departments of California and others to get ahead of the problem.

California’s department in particular has failed miserably under the strain of the pandemic.

The problems began shortly after the state’s initial lockdown order was issued by Governor Gavin Newsom as millions of freshly unemployed workers filed for first-time benefits. A massive backlog of pending claims followed, leaving hundreds of thousands without income for months.

Criticism flew at the department from every angle, including during emergency legislative sessions last summer.

“I am embarrassed,” said state Assemblymember Tom Lackey last July. “I don’t think government has ever looked more broken than it has right now.

While Newsom appointed a task force and new leadership to rescue the department, a new, more embarrassing crisis emerged in the fall.

Acting on tips from employees within California jails and prisons, investigators uncovered a massive unemployment fraud scheme being perpetuated by inmates.

According to local and federal prosecutors, at least 35,000 California inmates filed for unemployment from March through August. Benefits were not only sent to death row inmates, but applicants such as “Poopy Britches” and “Dianne Feinstein.”

“Quite frankly, the inmates are mocking us,” said one district attorney.

The next month, police busted a ring in Beverly Hills during which 44 people were arrested and more than $2.5 million in unemployment benefits in the form of pre-loaded debit cards were seized. Police said many of the people arrested were from out of state and traveled to California to collect the fraudulent cards and used them to rent luxury cars, lease short-term rentals and buy high-end items.

The full extent of the fraud is still undetermined, but investigators say it’s likely the state paid out over $8 billion in fraudulent claims since last March. In an attempt to get a handle on the fraud, the department was forced for a stretch to suspend payments to any new applicants.

Nearly a year after the first statewide lockdown and despite promises from Newsom that it would be cleared by the end of the month, the department’s backlog has swelled in recent weeks to over 800,000 cases.

Fresno Construction Worker Charged With Comp Fraud

Jose Zepeda, 45, of Fresno, self-surrendered on multiple felony counts of insurance fraud and attempted perjury after filing a workers’ compensation insurance claim and allegedly misleading the insurance carrier regarding his employment status in order to collect disability benefits he was not entitled to receive.

An investigation by the Department of Insurance revealed Zepeda was injured in August 2017, while employed by a local construction company. Zepeda began collecting disability benefits because his employer could not accommodate his work restrictions. The insurance company handling Zepeda’s workers’ compensation claim instructed him to notify them if he found new employment because that would affect the benefits he was receiving.

In July 2018, surveillance footage showed Zepeda regularly commuting to and from another construction company as an apparent employee. He was later asked by a claims adjuster, and in a deposition, if he found new employment. He told the claims adjuster he had not found new employment and responded in the deposition that he only worked for the new employer for one week in May 2018.

Subpoenaed employment records revealed Zepeda began working for his new employer in April 2018 and was still employed there at the time of the subpoena in March 2019. His actions allowed him to collect over $17,278 in disability benefits he was not entitled to receive.

Zepeda self-surrendered to the Fresno County Jail and is scheduled to be arraigned on March 15, 2021. The Fresno County District Attorney’s Office is prosecuting this case.

NCCI Economic Briefing Shows Slow Comp Premium Growth

The National Counsel on Compensation Insurance just published it’s Quarterly Economics Briefing for the fourth quarter of 2020.

The Big Four service sectors – Leisure and Hospitality; Retail Trade; Professional, Business, and Other Services; and Education and Health Services – account for about four out of five lost jobs. In general, the Big Four service sectors are characterized by high physical proximity, low essentiality, or both. Physical proximity refers to the degree of interpersonal contact among workers or between workers and customers, and essentiality refers to the degree to which a service is non-discretionary and cannot be postponed.

The Leisure and Hospitality sector continues be hardest hit, with two out of five lost jobs coming from this sector alone. Restaurants lost employment from October to December following six consecutive months of employment increases. One-half of restaurant operators expect staffing levels to decline from December through February.

Employment recovery stalled during the fourth quarter, including a reversal in December following a massive pandemic resurgence. As the coronavirus recession persists, stresses for households and businesses have increased.

Small businesses contribute a big share of US jobs. One-quarter of US workers are employed at firms with fewer than 50 employees, one-half at firms with fewer than 500 employees. Small businesses also contribute to workers compensation premium in greater proportion relative to their employment because they are less likely than large businesses to self-insure and more likely to purchase non-deductible policies.

The coronavirus recession has been hard on small businesses, especially those in service sectors most impacted by reduced demand. A US Census survey from early December found that the 31% of US small businesses had experienced a “large negative” pandemic effect; for small businesses in various Big Four service sectors, this percentage ranged from 30% to nearly 70%.

The coronavirus pandemic galvanized remote work. While only 6% of the workforce was full-time remote before the pandemic, an estimated 24% worked from home in December. Several surveys conducted during 2020 found that most workers able to work from home would like to continue to do so after the pandemic, at least part-time.

Employer acceptance of remote work also increased during the pandemic. However, a review of recent research concludes that 60% or more of US workers cannot work remotely. As a general observation, occupations most easily adapted to remote settings involve tasks that can be performed on a computer, the internet, or by telephone.

It is increasingly clear that the post-COVID economy will be different than the pre-COVID economy. Changes affecting labor markets are also likely to affect workers compensation in a number of ways. The slowing rate of job recovery and increasing share of permanent layoffs at year-end 2020 suggests that US employment, and hence total workers compensation premium, is likely to recover more slowly during 2021 than during the summer and fall of 2020.