Tag: 2022 News

With hours left to either sign or veto a stack of bills before they automatically become law on the last day of September, Governor Gavin Newsom plowed through more than 150 bills that were left to review. Now that the legislative year has ended, here are some highlights of his decisions to approve or veto proposed law that effect California employers. It is recommended that the entire law be reviewed by use of the provided link, instead of relying on the summary provided below.

After declaring that “Insurance fraud is rampant in the state, amounting to billions of dollars in damages annually, particularly within workers’ compensation insurance” the legislature passed and the Governor signed AB 1681. Existing law passed in 2010, Section 1879.1 of the Insurance Code, empowers the Insurance Commissioner to convene investigative debriefings with insurance carriers as a tool to fight fraud. This new law authorizes self-insured employers, including public entities that are self-insured employers, and district attorneys to participate in those debriefings if they are convened.

AB 1751 was signed, and extends the existing COVID-19 workers’ compensation injury presumptions set to expire on January 1, 2023 until January 1, 2024. It also expands the provisions applicable to firefighters and police officers to include active firefighting members of a fire department at the State Department of State Hospitals, the State Department of Developmental Services, the Military Department, and the Department of Veterans Affairs and to officers of a state hospital under the jurisdiction of the State Department of State Hospitals and the State Department of Developmental Services.

Newsom also approved SB 1127 which changes workers’ compensation injury presumptions. Under this new law, specified firefighters and peace officers who are claiming illness or injury related to cancer, will have an increase the number of compensable weeks to 240 without limitation as to time from the date of injury.

And under this law employers face higher penalties for delay. If liability for an injury has been unreasonably rejected for specified claims of injury or illness, including hernia, heart trouble, pneumonia, or tuberculosis, among others, for a specified member of law enforcement or a specified first responder, the amount of the penalty will be 5 times the amount of the benefits unreasonably delayed due to the rejection of liability. The bill would limit the penalty to no more than $50,000. The bill would apply this provision to all injuries, without regard to whether the injury occurs before, on, or after the operative date of the bill.

However Newsom vetoed AB 334, a law that would have created a presumption of injury for skin cancer for peace officers and life guards. In his veto message he said “A presumption is not required for an occupational disease to be compensable. Such presumptions should be provided sparingly and should be based on the unique hazards or proven difficulty of establishing a direct relationship between a disease or injury and the employee1 s work. Although well-intentioned, the need for the presumption envisioned by this bill is not supported by clear and compelling evidence.”

He also vetoed SB 284 that would expand the existing rebuttable presumption for PTSD injury to additional classes of active firefighting members and peace officers, and adds public safety dispatchers, public safety telecom and emergency response communication employees to those who qualify for the presumption. The veto message said that “Expanding coverage of the PTSD injury presumption to significant classes of employees before any studies have been conducted on the existing class for whom the presumption is temporarily in place could set a dangerous precedent that has the potential to destabilize the workers’ compensation system going forward , as stakeholders push for similarly unsubstantiated presumptions.”

And in employment law, the Governor approved AB 152 extending COVID-19 supplemental paid sick leave (SPSL) through the end of 2022. It will also set up a program to provide grants of up to $50,000 to qualified small businesses to cover costs incurred for COVID-19 SPSL. The law takes effect immediately, extending the SPSL, which was previously set to expire on September 30, 2022.

Also approved is AB 1041 which expands the class of people for whom an employee may take family leave to care for to include a designated person. A “designated person” means any individual related by blood or whose association with the employee is the equivalent of a family relationship, who is identified at the time the employee requests the leave. An employer is authorized to limit an employee to one designated person per 12-month period.

The approval of AB 1601 made some changes to the “California Worker Adjustment and Retraining Act” or “Cal/WARN Act.” The amended law authorizes the Labor Commissioner to enforce certain notice requirements concerning a mass layoff, relocation, or termination of employees, including call center employees. The bill would grant the Labor Commissioner the authority to investigate an alleged violation, order appropriate temporary relief to mitigate a violation pending completion of a full investigation or hearing, and issue a citation in accordance with certain procedures.

SB 951 was approved, and will boost leave benefits for lower- and middle-income employees who take time off to care for loved ones. It extends increased wage replacement rates for disability insurance and paid family leave that were to sunset at the end of 2022.

SB 1044 adds a new law that prohibits an employer, in the event of an emergency condition, as defined, from taking or threatening adverse action against any employee for refusing to report to, or leaving, a workplace or worksite within the affected area because the employee has a reasonable belief that the workplace or worksite is unsafe, except as specified.

The Division of Workers’ Compensation (DWC) has issued a notice of public hearing for the adoption of the following: regulation section 46.3 Remote Health Medical-Legal Evaluations and amendments to regulation sections 31.3 Scheduling Appointment with Panel QME, 31.5 QME Replacement Requests and form, 34 Appointment Notification and Cancellation and form 108.

The proposed adoption and amendments to the regulations include but are not limited to the following:

– – Extends the time frame to schedule a medical-legal evaluation by an additional 30 days.
– – Clarifies that the time frame for scheduling an evaluation is for both initial and subsequent evaluations.
– – Updates to allow for electronic service of documents.
– – Provides flexibility if the parties agree so that an initial evaluation can occur at any office listed with the medical director.
– – Deletes reference to Agreed Panel QME to be consistent with Labor Code section 4062.2(c).
– – Provides for a QME or AME to reschedule an evaluation within 60 days of the date of the cancellation unless the parties agree beyond the 60 days.
– – Provides a mechanism for Remote Health Medical-legal evaluations if specific criteria are met.
– – Provides a definition of remote health evaluations and identification of office location when a remote health evaluation is conducted.

The implementation of these regulations is anticipated to reduce delays by providing flexibility in examination location and in scheduling.

Members of the public may attend the in-person public hearing on Tuesday, November 15, 2022 at 12 p.m. at the: Elihu Harris State Office Building – Auditorium – 1515 Clay Street – Oakland, CA 94612.

Written public comments can be submitted via US mail, facsimile transmission (FAX) or by email until the end of the day on Tuesday, November 15, 2022 to the attention of Maureen Gray, Regulations Coordinator -Department of Industrial Relations – P.O. Box 420603 – San Francisco, CA 94142 – Fax: (510) 286-0687 – Email: dwcrules@dir.ca.gov

DWC will consider all public comments. The notice of rulemaking, text of the regulations, and the initial statement of reasons can be found on the DIR website.

The California Department of Insurance announced the arrest of 71 year old Rene Carlos Aguero and 56 year old Gustavo Adolfo Lopez for allegedly submitting fraudulent vocational training vouchers for workers’ compensation claims and failing to provide the training at the for-profit school they run, Computer Institute of Technology (CIT).

Many of the injured workers were Spanish speakers who were asked to sign documents in English, which they did not understand.

Aguero and Lopez were charged with 18 felony counts, including conspiracy, insurance fraud, grand theft and forgery. The fraudulent insurance claims are estimated to reach $1.7 million.

For more than three years Aguero and Lopez submitted fraudulent documents to nine different insurance carriers and billed for services not rendered to recipients of the Supplemental Job Displacement Benefits (SJDB) voucher, valued between $6,000 and $10,000.

Injured workers can use the non-transferable vouchers to pay for educational retraining or skill enhancement at state-approved or accredited schools, according to the Department of Industrial Relations.

Aguero is listed in California Secretary of State records as chief executive officer of CIT’s North Hollywood location, and Lopez as chief executive officer of the school’s location in the city of Bell.

CIT is alleged to have victimized multiple injured workers by enrolling them in vocational rehabilitation courses, using their SJDB voucher and not providing the classes. In addition, CIT failed to refund the injured workers after redeeming their SJDB voucher and not providing the classes for which they were registered to take.

The investigation by the California Department of Insurance determined that CIT forged injured workers’ signatures on vocational school documents such as CIT enrollment agreements, vouchers, and contracts. In some cases, injured workers were asked to sign blank documents with no explanation. On one occasion, CIT sent an invoice for payment and an enrollment agreement to an insurance carrier with a signature and initials purportedly made by the injured worker, despite the fact the injured worker had died nearly 5 months prior to the date on the enrollment agreement.

Many injured workers were made to believe they were enrolled in a legitimate school, but never received or completed training. Some workers contacted CIT to follow up on their training, but received no help from CIT, including laptops for which CIT invoiced multiple insurance carriers.

On September 9, 2022, the Los Angeles District Attorney’s Office filed felony criminal charges and issued an arrest warrant for Aguero and Lopez.

Aguero’s bail was set at $150,000. His arraignment is scheduled for December 5, 2022. The case is being prosecuted by the Los Angeles County District Attorney’s Office.

The California Attorney General announced the guilty plea of a Southern California doctor, who participated in an illegal prescription scheme that defrauded the state Medi-Cal program of over $20 million.

Over the course of two years, Mohammed El-Nachef, M.D., took part in an illicit drug-prescription operation where he prescribed medically unnecessary HIV medications, anti-psychotics, and opioids to over a thousand Medi-Cal beneficiaries in the Los Angeles and Orange Counties. The medications he authorized were not kept or used by the beneficiaries, but instead diverted to the illicit market for cash.

He was charged in March 2020 with a half-dozen felony counts, including executing a scheme to defraud Medi-Cal, making a fraudulent claim for a health benefit, filing a fraudulent insurance benefit claim, conspiring in the unauthorized practice of medicine and grand theft, with sentencing enhancement allegations for aggravated white- collar crime between $100,000 to $500,000 and aggravated white-collar crime exceeding $500,000.

He was accused of helping “two convicted felons, Steve Fleming and Oscar Abrons, in a scheme to obtain expensive pharmaceuticals that were sold on the illicit market,” according to court papers filed by the state Attorney General’s Office, which was prosecuting the case.

This week El-Nachef pled guilty in the Orange County Superior Court to one count of insurance fraud and one count of aiding and abetting the unauthorized practice of medicine.

As part of his plea, El-Nachef is required to pay $2.3 million in restitution and surrender his medical license. His sentencing is set for August 1, 2023.

El-Nachef served as the prescriber at two clinics: one in Anaheim and the other in Los Angeles. El-Nachef was recruited by individuals who were involved in illegally selling the medications. These individuals solicited Medi-Cal recipients with the promise of cash payments to pose as patients, and in turn, El-Nachef agreed to prescribe these patients the medically unjustified medications. The selected drugs were among those with the highest street value.

The pharmacies billed Medi-Cal for the medications, which would ultimately end up in the hands of the individuals who recruited El-Nachef, who then sold the drugs for cash. For his part, El-Nachef received cash payments for each day he wrote prescriptions.

The California Department of Justice’s DMFEA (Division of Medical Fraud and Elder Abuse) protects Californians by investigating and prosecuting those who defraud the Medi-Cal program as well as those who commit elder abuse. These results are only made possible through the coordination and collaboration of governmental agencies, as well as the critical help from whistleblowers who report incidences of abuse or Medi-Cal fraud at oag.ca.gov/dmfea/reporting.

DMFEA receives 75% of its funding from HHS under a grant award totaling $50,522,020 for federal fiscal year 2021-2022. The remaining 25% is funded by the State of California. The federal fiscal year is defined as October 1, 2021, through September 30, 2022.

At the time of his arrest in 2020 he had stipulated to disciplinary charges filed in 2019 with the California Board of Medicine and had been placed on seven years probation.

The State Bar of California’s Board of Trustees Chair Ruben Duran announced that the State Bar is investigating attorneys Mark John Geragos and Brian Stephen Kabateck in connection with the Armenian Genocide insurance settlement funds from which dispersals were made in the U.S. and France.

Courthouse News added facts to this investigation. Geragos is best known as a criminal defense lawyer, having represented such celebrity clients as Michael Jackson, Winona Ryder, Chris Brown and Jussie Smollet. Kabateck is a plaintiff’s attorney, having represented a number of surviving families of victims in the Lion Air Flight 610 crash of 2018, and Los Angeles ratepayers in the Department of Water and Power billing scandal. He is also a former president of the LA County Bar Association. Both lawyers are Armenian Americans.

Kabateck, Geragos and a third Armenian American lawyer, Vartkes Yeghiayan, filed two class actions against insurance companies on behalf of families of victims of the Armenian genocide over unpaid life insurance claims. The suits were both for a combined $37.5 million. But as the Los Angeles Times laid out in a lengthy investigation published this past March, numerous victims’ descendants, as well as churches, never got the money they were owed.

Before he died in 2017, Yeghiayan claimed Geragos and Kabateck “had splurged on first-class travel and treated the descendants’ money as ‘petty cash,'” according to the Times.

Geragos and Kabeteck, meanwhile, have blamed others for the misappropriated funds, including Yeghiayan, whom they sued in 2011. In a letter to the Times after the investigation was published, Kabateck wrote, “I have always been deeply saddened that Mr. Yeghiayan and his co-conspirators took money from the decedents of victims of the Armenian genocide, and that is why I worked so hard to reveal their actions and help hold them accountable.”

The State Bar announcement was made pursuant to California Business and Professions Code section 6086.1(b)(2), which authorizes the State Bar’s Board Chair, when warranted for protection of the public and after notice to the licensee, to issue an announcement confirming the fact of an investigation, clarifying the procedural aspects and current status of the investigation, and defending the right of the licensee to a fair hearing. Details of the investigation must remain confidential to comply with statutory limitations on disclosure.

A State Bar investigation seeks to determine whether there is a basis for filing a Notice of Disciplinary Charges. An attorney who is the subject of an investigation has a right to a fair hearing and must be presumed innocent of any misconduct warranting discipline until any charges that might be brought have been proven in a proceeding before the State Bar Court.

“The State Bar is charged with protecting the public,” said Ruben Duran, Board Chair. “Confidence in our ability to do so has unfortunately been shaken in recent times by the Girardi matter and what it represents. Restoring and maintaining the public’s trust in the disciplinary apparatus of this agency is imperative. To that end, it is important to emphasize that the State Bar investigates possible misconduct wherever it might occur. The status of attorneys, or the size of their practice, cannot and will not impact our decisions to investigate misconduct. I want to stress that in and of itself this announcement is not an indication of any misconduct by the attorneys being investigated. Lastly, the State Bar expresses gratitude to the LA Times for its excellent reporting on the distribution of Armenian Genocide settlement funds.”

The State Bar of California is still reeling from the Tom Girardi scandal, in which it was badly implicated. Girardi, another prominent plaintiff’s attorney – and famously married to “Real Housewives of Beverly Hills” star Erika Jayne – has been accused of stealing tens of millions of dollars from his clients, including some families of the Lion Air crash. A Times investigation found that Girardi was, for decades, able to avoid discipline and hide his misdeeds, in part by befriending judges and key figures in the bar association.

In a phone interview, Geragos said he was infuriated by the announcement. “They’re waiving confidentiality on an investigation they haven’t done, in a matter that’s been investigated three times in the last 12 years by both inside and outside counsel,” he said.

In a written statement, Kabateck said: “The undisputed facts are and will always be that an independent third-party appointed, approved, and overseen by the Ccurt (like in any class action) distributed the settlement funds to the class members. Neither Mr. Kabateck nor Mr. Geragos were involved in any decision relating to individual payments to victims, nor were they able to decide, review or influence claims made by class members. We have fully cooperated with multiple prior investigations and inquiries conducted by the state bar and others (all of whom found no wrongdoing).”