Tag: 2022 News

Governor Newsom has signed Senate Bill 1242 into law. This bill is the Senate Insurance Committee’s biannual omnibus bill, which includes several changes that are non-controversial, technical, or otherwise classified as code cleanup.

Prior to passage of this law, an insurer that reasonably believes or knows that a fraudulent claim is being made was required to send a form and additional information about the fraudulent claim to the Fraud Division of the Department of Insurance within 60 days after determination by the insurer that the claim appears to be a fraudulent claim.

The new law requires an insurer to send that form and information within 60 days after it that has determined, after the completion of an investigation, that it reasonably suspects or knows an act of insurance fraud may have occurred or might be occurring. The changes to this law seem only to set timing for filing information with the DOI rather than any other substantive change to the obligations of the claim administrator. The language was added to section 1872.4 of the Insurance Code.

Several provisions, taken together, are intended to help insurance agents and brokers identify, and help CDI crack down against, insured insurance fraud.

These include a requirement that agents and brokers who reasonably suspect or know a fraudulent application is being made to report that fact to CDI’s fraud division (if the application has not yet been submitted to an insurance company) or to an insurer’s special investigative unit (if the application has been submitted to the insurance company). This language appears in section 1872.41 of the Insurance Code.

The new law clarifies that these reports do not subject the agent or broker to civil liability, as long as the agent or broker is acting in good faith; and a clarification that an insurer should complete its special investigative unit investigation into suspected fraud before reporting that fraud to CDI.

Effective March 1, 2023, requires the twelve-hour ethics course that is required in connection with the pre-licensing education of specified new license applicants and the three-hour ethics course that is required as a condition of license renewal to each include one hour of study on insurance fraud. These provisions were added to section 1749 of the Insurance Code.

In essence, the new law will bring insurance and agents up to speed in terms of fraud by the insured during the policy application process. In workers’ compensation this is typically premium fraud where the insured incorrectly reports the number or classification of employees to reduce the premium to be paid.

Existing law requires an insurer to include a statement indicating that it is a crime to present false and fraudulent information to obtain or amend insurance coverage on a form it uses for an application, policy changes, or making a claim in connection with an insurance application, contract, or provision of contract for liability insurance, or on a rider attached to that form.

The new law requires that statement to appear on the form, exclusive of schedules attached to the form, or an endorsement separate from the form, if used in connection with an insurance application, contract, or provision of contract. The bill would also make conforming changes.

During the legislative process during the year, the record does not reflect opposition to the bill.

The Hartford is extending its partnership with the Yale Program in Addiction Medicine (Yale-PAM) to provide a newly-developed training on addiction, pain management and stigma to more medical providers who treat injured workers.

The Hartford launched the partnership with Yale School of Medicine following a record level of overdose deaths in the U.S. in 2021. To address the opioid crisis, the company has also supported federal funding for opioid education and treatment programs and advocated for federal and state reforms, such as the adoption of robust medication formularies, mandatory physician and provider education, restrictions on unneeded opioid prescriptions, and improved drug monitoring programs.

Built on 30 years of pioneering research, Yale’s Program in Addiction Medicine is internationally recognized. Known for developing innovative treatment models, training programs and attracting leaders in the field, Yale’s model programs have been replicated nationally and internationally.

The Yale Program in Addiction Medicine works to expand access to and improve the effectiveness of prevention, treatment, and harm reduction services for people with unhealthy substance use and those with addiction. The program operates across four key pillars: Clinical Practice, Research, Education, and Policy.

“Science and empathy are both critical to addressing the ongoing opioid crisis, and the unique training developed as part of our partnership has both,” said The Hartford’s Chairman and CEO Christopher Swift. “By partnering with an internationally recognized leader in evidence-based treatment, we are advancing stigma-free education and compassionate care to help more working Americans return to active, productive lives following an injury.”

David Fiellin, M.D., and Jeanette Tetrault, M.D., F.A.C.P., F.A.S.A.M., led the Yale-PAM team that developed the original curriculum, which helps clinicians better understand opioids and work-related injuries, identify and treat acute pain and chronic pain, and assess substance and opioid use disorders among injured workers.

The Hartford’s Chief Medical Officer Adam Seidner, M.D., served as a consultant to the Yale-PAM team to ensure the curriculum focuses on improving workers’ ability to do their job, preventing chronic pain development through the appropriate management of acute pain, and enabling a safe return to work following a workplace injury.

Leveraging the new curriculum, the Yale-PAM team conducted an in-depth virtual training session for 25 clinicians in June. Participants were highly satisfied with the training, saying it was “comprehensive” and “interactive.” Additionally, a knowledge gain from pre- to post- knowledge assessment scores was noted among participants, who scored on average an 88% on the post-training.

In the coming year, the Yale-PAM team will refine and update the curriculum based on pilot participant feedback, conduct additional virtual and in-person training sessions, and develop train-the-trainer resources so that more instructors can conduct the training.

“We are grateful for The Hartford’s unrestricted gift to support the development of a new unique educational resource that will help address the deadly opioid crisis,” said Dr. Fiellin. “With ongoing support, we will reach more clinicians with the new curriculum and help countless U.S. workers who have experienced injuries with evidence-based treatment approaches with a goal of return to work.”

A federal jury convicted the president of a Silicon Valley-based medical technology company of participating in a scheme to mislead investors, commit health care fraud, and pay illegal kickbacks in connection with the submission of over $77 million in false and fraudulent claims for COVID-19 and allergy testing.

59 year old Mark Schena, who lives in Los Altos, California, served as the president of Arrayit Corporation. According to court documents and evidence presented at trial, Schena engaged in a scheme to defraud Arrayit’s investors by claiming that he had invented revolutionary technology to test for virtually any disease using only a few drops of blood.

In meetings with investors, Schena and his publicist claimed that Schena was the “father of microarray technology” and falsely stated that he was on the shortlist for the Nobel Prize. The evidence at trial showed that Schena also falsely represented to investors that Arrayit could be valued at $4.5 billion based on purported revenues of $80 million per year.

The evidence at trial showed that Schena, among other things, failed to release Arrayit’s SEC-required financial disclosures and concealed that Arrayit was on the verge of bankruptcy. Schena lulled investors who were concerned that the company was a “scam” by inviting them to private meetings and issuing false press releases and tweets stating that Arrayit had entered into lucrative partnerships with companies, government agencies, and public institutions, including a children’s hospital and a major California health care provider.

Schena also orchestrated an illegal kickback and health care fraud scheme that involved submitting fraudulent claims to Medicare and private insurance for unnecessary allergy testing. Arrayit ran allergy screening tests on every patient for 120 different allergens (ranging from hornet stings to codfish) regardless of medical necessity.

In order to obtain patient blood specimens, Schena paid kickbacks to marketers in violation of the Eliminating Kickbacks in Recovery Act and orchestrated a deceptive marketing plan that falsely claimed that the Arrayit test was highly accurate in diagnosing allergies, when it was not, in fact, a diagnostic test. Arrayit billed more per patient to Medicare for blood-based allergy testing than any other laboratory in the United States, the evidence at trial showed, and billed some commercial insurers over $10,000 per test.

In early 2020, Arrayit’s allergy testing business declined because the COVID-19 pandemic and stay-at-home orders reduced demand for allergy testing. Schena then falsely announced that Arrayit “had a test for COVID-19” based on Arrayit’s blood testing technology, before developing such a test.

Seeking to capitalize on the nationwide shortage of COVID-19 testing, Schena orchestrated a deceptive marketing scheme that falsely claimed that Dr. Anthony Fauci and other prominent government officials had mandated testing for COVID-19 and allergies at the same time and required that patients receiving the Arrayit COVID-19 test also be tested for allergies.

Schena also falsely claimed that the Arrayit COVID-19 test was more accurate than a PCR test for diagnosing COVID-19 infections, while concealing from investors and patients taking the test that the Food and Drug Administration had informed him that the Arrayit test was not accurate enough to receive an Emergency Use Authorization for use in the United States.

Schena was convicted of one count of conspiracy to commit health care fraud and conspiracy to commit wire fraud, two counts of health care fraud, one count of conspiracy to pay kickbacks, two counts of payment of kickbacks, and three counts of securities fraud.

He is scheduled to be sentenced on Jan. 30, 2023 and faces a maximum penalty 20 years imprisonment for the conspiracy to commit health care fraud and conspiracy to commit wire fraud; 10 years of imprisonment for each count of health care fraud; five years imprisonment for conspiracy to pay kickbacks; 10 years imprisonment for each count of payment of kickbacks; and 20 years imprisonment for each count of securities fraud.

Attorney Camille Vasquez has found her next Hollywood client. She became a household name while successfully defending Johnny Depp in his defamation trial against ex-wife Amber Heard last June. According to the report in the New York Post, she now has signed on to represent “Yellowstone” actress Q’orianka Kilcher in her California Worker’s Compensation fraud case.

Vasquez,confirmed the news on Wednesday, saying she was “determined to defend” Kilcher who – ironically – plays attorney Angela Blue Thunder on the hit Paramount streaming series.Vasquez will take on the case alongside attorney Steve Cook, another partner at her firm, Brown Rudnick.

Brown Rudnick is an international law firm with roots in post-war 1940s Boston and New York City. Vasquez joined Brown Rudnick’s Orange County office in 2018 as an associate in the Litigation & Arbitration practice. She has more than 10 years of experience as a trial lawyer in high-stakes disputes, including defamation cases, contract disputes, business-related torts and employment-related claims.

She was a key member of the litigation team that won the jury verdict on June 1, 2022 for actor Johnny Depp. On June 7, her firm announced that she had been elevated to partner in the firm.

Steve Cook heads the firm’s White Collar Defense, Investigations & Compliance Practice Group. He is a former federal prosecutor and experienced trial lawyer who advises corporate and individual clients on complex civil and criminal matters, internal corporate investigations, grand jury investigations, and regulatory compliance matters.

He was also a member of the FBI’s Joint Terrorism Task Force, responsible for investigating and prosecuting threats of terrorist activity and terror financing networks.

In a statement given to Fox News, the pair said: “We are determined to defend Ms. Kilcher in this important case which examines the inherent flaws in the disability compensation system. Ms. Kilcher is a well-respected and pioneering actress in Hollywood, and we intend to clear her name.”

Kilcher was last seen in the Season 3 finale of “Yellowstone” back in 2020, with her character mysteriously absent from the fourth season, which aired earlier this year. However, according to some media reports, the starlet will return to screens in the fifth season of the mega-hit, which is set to premiere Nov. 13.

32 year old Q’Orianka Kilcher, who lives in North Hollywood, has been charged with two felony counts of workers’ compensation insurance fraud.

According to the report published by the California Department of insurance, while acting in the movie “Dora and the Lost City of Gold,” Kilcher allegedly injured her neck and right shoulder In October 2018. She saw a doctor a few times that year, but stopped treatment and did not respond to the insurance company handling her claim on behalf of her employer.

A year later, in October 2019, Kilcher contacted the insurance company saying she needed treatment. Kilcher told the doctor handling her claim that she had been offered work since her injury occurred but had been unable to accept it because her neck pain was too severe.

However an investigation found Kilcher had worked as an actress on the television show “Yellowstone” from July 2019 to October 2019, despite her statements to the doctor that she had been unable to work for a year.

It remains to be seen if this worker’s compensation criminal case will have the media attention, and intrigue, of the recently concluded Johnny Depp case. Kilcher appears to have hired a dream team of defense lawyers who are capable of a vigorous defense, and she and her attorneys have announced plans to conduct her case in such a high profile -media worthy- manner.  

On Labor Day, Gavin Newsom signed the Fast Food Standards and Accountability Recovery Act – Assembly Bill 257 – giving the state’s 550,000 fast food workers a seat at the table and bargaining power.

In his signing statement Newsom said the new law “gives hardworking fast-food workers a stronger voice and seat at the table to set fair wages and critical health and safety standards across the industry. I’m proud to sign this legislation on Labor Day when we pay tribute to the workers who keep our state running as we build a stronger, more inclusive economy for all Californians.”

In the process of passing this law, the legislature specifically found that “For years, the fast food sector has been rife with abuse, low pay, few benefits, and minimal job security, with California workers subject to high rates of employment violations, including wage theft, sexual harassment and discrimination, as well as heightened health and safety risks.”

The legislature went on to establish its remedy. This new law will establish the Fast Food Council within the Department of Industrial Relations until January 1, 2029. It will be composed of 10 members to be appointed by the Governor, the Speaker of the Assembly, and the Senate Rules Committee, and would prescribe its powers.

The 10 members include one from the Department of Industrial Relations. Two representatives of fast food restaurant franchisors. two representatives of fast food restaurant franchisees. Two representatives of fast food restaurant employees. Two representatives of advocates for fast food restaurant employees. And one representative from the Governor’s Office of Business and Economic Development.

The code defines a “Fast food chain” to mean “a set of restaurants consisting of 100 or more establishments nationally that share a common brand, or that are characterized by standardized options for decor, marketing, packaging, products, and services.”

The purpose of the council is to establish sectorwide minimum standards on wages, working hours, and other working conditions related to the health, safety, and welfare of, and supplying the necessary cost of proper living to, fast food restaurant workers.

If a conflict exists between council’s standards, rules, or regulations and those issued by another state agency, the standards, rules, or regulations issued by the council would apply to fast food restaurant workers and fast food restaurant franchisees and franchisors, and the conflicting rules or regulations of the other state agency would not have force or effect with respect to these parties.

The Act would except from this application proposed standards within the jurisdiction of the Occupational Safety and Health Standards Board and would prescribe a process for the council to petition the board to adopt, amend, or repeal a standard.

The council must submit a report to the Legislature for a standard, or repeal or amendment of a standard, to become effective, and would specify that a standard, repeal, or amendment shall not take effect before October 15 of the same year.

A fast food restaurant operator is prohibited from discharging or in any manner discriminating or retaliating against any fast food restaurant employee for specified reasons, and would create a cause of action and right to reinstatement for employees in this connection, as well as a presumption of unlawful discrimination and retaliation in certain circumstances.

The law received widespread support from labor unions and worker advocacy organizations, with Mary Kay Henry, the president of the Service Employees International Union (SEIU), arguing that the bill addresses “challenges that workers have faced when trying to change policies by unionizing store by store.”

The law was opposed by franchise owners, fast food companies and the California Restaurant Association. Joe Erlinger, the President of McDonald’s posted an open letter which opposed the law, and he claimed “Economists say it could drive up the cost of eating at a quick service restaurant in California by 20% at a time when Americans already face soaring costs in supermarkets and at gas pumps.”