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Tag: 2022 News

Major California Employer Places Employee Well Being First

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Cisco Systems, Inc., commonly known as Cisco, is an American-based multinational technology conglomerate corporation headquartered in San Jose, California. Cisco total number of employees in 2021 was 79,500, a 2.58% increase from 2020.

And the California tech giant says it has been determined to monitor the mental health of its nearly 80,000 employees during all the current national and international turmoil.

That’s why Chairman and CEO Chuck Robbins, as well as head of HR Francine Katsoudas, ordered a team of company researchers to create and validate a measure of employee well-being. Representatives of the team shared their process and findings in a presentation at the Workhuman Live conference in Atlanta.

“Focusing on people first has always been our way” according to a post by Katsoudas on the Company blog. COVID-19 tested Cisco’s resolve to be compassionate, understanding, and responsive to the challenges and crises.

She highlighted some of the tools and strategies used at Cisco:

– – Virtual Fitness – Employees and their families can participate in virtual fitness classes and training tailored to their needs.
– – Extending EAP into the community – Our U.S. employees can share a free emotional crisis and support help line with friends and family who don’t have access to resources. We hope this helps to manage the stress and anxiety related to challenges such as COVID-19 and socio-economic issues. And, we appreciate our partners who are helping to offer this service.
– – Telemental Health – As we work to support mental health while reducing the stigma surrounding it, we’ll make it easier for people to find mental health professionals by offering solutions that remove the geographical and physical barriers that prevent access.
– – Rethink – This digital platform helps to support parents of children with a learning, social, behavioral challenge, or a developmental disability. Rethink offers resources and practical advice, along with 1:1 advice with personal phone consultations.
– – Benefits Advisor – Combining both technology and personalized coaching, this solution will help employees make holistically sound decisions regarding their personal health and financial well-being.
– – Chronic Condition Management – Those living with musculoskeletal issues, substance abuse, and diabetes can access digital resources to deepen their understanding and improve their outcomes.

An earlier this year, Cisco published a study showing that hybrid working has helped improve employee wellbeing, work-life balance, and performance across the world.

Cisco’s “Employees are ready for hybrid work, are you?” study found that six in 10 (61%) employees believe that quality of work has improved. A similar number (60%)felt that their productivity has enhanced. Three-quarters of employees (76%) also feel their role can now be performed just as successfully remotely as in the office.

However, the survey of 28,000 employees from 27 countries reveals that only one in four think that their company is ‘very prepared’ for a hybrid work future.

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Attorney General Lawsuit Says CVS Health Abuses its Market Power

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The New York Attorney General filed an antitrust lawsuit in a state court in Manhattan last Thursday against CVS Health Corp., saying it forced hospitals that serve the state’s low-income patients to pay millions of dollars for exclusive access to discounted prescription drugs.

The Attorney General claims that CVS did not allow New York safety net hospitals and clinics to use the company of their choice to obtain subsidies on prescriptions filled at CVS pharmacies through the 340B federal program. This program allows safety net hospitals and clinics to purchase certain drugs at a discount from pharmaceutical companies and use the savings for patient care. Safety net health care providers in New York obtain substantial savings from the 340B program, which are critical to their viability and to the health of the surrounding community. To realize the benefits of the 340B program, safety net hospitals and clinics must contract with the pharmacies that are used by their patients. Under the CVS scheme, thousands of safety net health care providers across the state were only allowed to use Wellpartner to process claims filled at CVS retail and specialty pharmacies, forcing them to incur millions of dollars in additional costs to hire and train staff and change their data systems to align with Wellpartner’s system.

The lawsuit alleges that New York patients were the ultimate victims of CVS’s unfair practice, which siphoned off critical federal funding from safety net health care providers that could have used the funds to improve access to health care for the neediest New Yorkers – including New Yorkers without health insurance or an ability to pay for health care.

As of 2021, there were more than 4,440 safety net health care providers enrolled in the 340B program across New York, which include Federally Qualified Health Centers (FQHCs), critical access hospitals, Ryan White HIV/AIDS Program grantees, rural referral centers, sole community hospitals, black lung clinics, community health centers, family planning clinics, and tuberculosis clinics. These facilities primarily treat low-income patients and rely on 340B savings to fund patient care services to underserved and vulnerable populations.

Safety net health care providers bear full legal responsibility for keeping records and may only collect 340B revenues on certain prescriptions, including patient prescriptions for medications used to treat HIV/AIDS and hepatitis C. Most safety net providers contract with a third-party administrator, or TPA, to administer their 340B programs. The TPAs confirm eligibility for each transaction and keep detailed records, as required by the federal 340B program rules.

In 2017, CVS acquired a TPA, Wellpartner, and began requiring New York hospitals to use Wellpartner rather than another TPA. The Office of the Attorney General’s (OAG) investigation found CVS pharmacies did not contract with hospitals that do not use Wellpartner as their TPA, a violation of New York’s antitrust laws. Since there was no contract, the hospitals and clinics were unable to collect 340B funds that were rightfully theirs. Hospitals and clinics had little choice – they either had to go along with CVS’s self-serving scheme, or simply forgo the benefits to which they were otherwise entitled under the 340B program.

The OAG found that CVS’s plan was to leverage the strength of its retail pharmacy network in New York to force hospitals to use Wellpartner, rather than any other TPA. Many hospitals objected because they were already using other TPAs.

The lawsuit alleges that CVS’s actions undermined the goal of the 340B program and hurt the financial condition of safety net health care providers. CVS required health care providers to transition at a significant cost to Wellpartner if the hospitals wanted to obtain 340B revenues from prescriptions filled at CVS pharmacies. Many hospitals switched to Wellpartner for all their 340B needs because it was not practical or economical to pay for two TPAs. In addition, CVS knew that the 340B program rules do not allow hospitals to steer patients away from certain pharmacies, so health care providers had no choice in practice — if they didn’t go along with CVS’s tying scheme, they simply couldn’t collect 340B savings for patients who choose to go to CVS pharmacies.

Through her lawsuit, the Attorney General is seeking injunctive relief, equitable monetary relief for the lost revenue and additional costs safety net health care providers were forced to incur, and civil penalties for CVS’s unfair and illegal business practices. In addition, the Attorney General seeks to require CVS to inform all safety net health care providers that they are not required to exclusively use Wellpartner.

“These allegations are without merit and we will defend ourselves vigorously,” CVS said in a statement.

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Settlement of Individual Suit Does Not Bar Employee’s New PAGA Suit

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Christina Howitson worked for Evans Hotels, LLC and The Lodge at Torrey Pines Partnership, L.P. as a room service server at The Lodge at Torrey Pines for about one month, between April and May 2019.

On March 26, 2020, Howitson served the California Labor and Workforce Development Agency (LWDA) with notice of her intention to file a Private Attorneys General Act (PAGA) action against Evans Hotels for violations of the Labor Code. The required 65-day statutory waiting period ended on June 1, 2020 without any response by LWDA.

On May 26, 2020, Howitson filed a lawsuit – an individual and putative class action lawsuit against Evans Hotels. This first Lawsuit did not include any PAGA claims, instead asserting 10 causes of action based on myriad alleged violations of the Labor Code and unfair competition laws

On June 15, 2020 Evans Hotels served Howitson with an arbitration demand and an offer to compromise for $1,500 plus attorney fees pursuant to Code of Civil Procedure section 998. On July 20, 2020, Howitson accepted the 998 Offer. The 998 Offer in part provided, “Judgment is to be entered in favor of Plaintiff . . . in her individual capacity..” .) The trial court entered judgment for Howitson “in her individual capacity.”

About 10 days after accepting the 998 Offer, Howitson filed the instant PAGA action against Evans Hotels “based on the same factual predicates as the first lawsuit. Evans Hotels demurred, alleging claim preclusion (i.e., res judicata) barred this second lawsuit as a result of the judgment in the first Lawsuit. The trial court sustained the demurrer without leave to amend. The Court of Appeal reversed in the published case of Howitson v Evans Hotels D078894 (July 2022).

This case (1) involves the legal issue of whether an employee who settles individual claims against the employer for alleged Labor Code violations is subsequently barred by claim preclusion from bringing a PAGA enforcement action against the employer for the same Labor Code violations when, prior to settlement, the employee could have added the PAGA claims to the existing action; and (2) requires the application of claim preclusion principles.
Claim preclusion applies to “matters which were raised or could have been raised, on matters litigated or litigatable in the prior action.”

Three requirements must be met. First, the second lawsuit must involve the same “cause of action” as the first lawsuit. Second, there must have been a final judgment on the merits in the prior litigation. Third, the parties in the second lawsuit must be the same (or in privity with) the parties to the first lawsuit.

Here the “harm suffered” by Howitson in the first lawsuit is not the same harm as that suffered by the state in the second lawsuit. Damages in the first case are intended to be compensatory, to make one whole. Accordingly, there must be an injury to compensate. On the other hand, Civil penalties, like punitive damages in the second case, are intended to punish the wrongdoer and to deter future misconduct.

Because the two actions involve different claims for different harms and because the state, against whom the defense is raised, was neither a party in the prior action nor in privity with the employee, the Court of Appeal conclude the requirements for claim preclusion are not met in this case.

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Teva Resolves Nationwide Opioid Cases – Including California – for $4.25B

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Teva, an Israel-based drug manufacturer, makes Actiq and Fentora, which are branded fentanyl products for cancer pain, and a number of generic opioids including oxycodone. Teva has reached an agreement in principle with the working group of States’ Attorneys General, counsel for Native American Tribes, and plaintiffs’ lawyers representing the States and subdivisions, on the primary financial terms of a nationwide opioids settlement.

The California Attorney General also said that an agreement in principle on key financial terms with opioid manufacturer Teva. The agreement would provide up to $4.25 billion to participating states and local governments to address the opioid crisis. While critical details of the settlement remain the subject of ongoing negotiations, Teva disclosed the agreement Tuesday ahead of its earnings announcement Wednesday.

States alleged that Teva:

– – Promoted potent, rapid-onset fentanyl products for use by non-cancer patients;
– – Deceptively marketed opioids by downplaying the risk of addiction and overstating their benefits, including encouraging the myth that signs of addiction are actually “pseudoaddiction” treated by prescribing more opioids; and
– – Failed to comply with suspicious order monitoring requirements along with its distributor, Anda.

The parties have agreed on the following financial terms:

– – Teva will pay a maximum of $4.25 billion in monetary payments over 13 years. This figure includes amounts Teva has already agreed to pay under settlements with individual states, funds for participating states and local governments, and the $240 million of monetary payments in lieu of product described below.
– – As part of the financial term, Teva will provide up to $1.2 billion in generic naloxone (valued at Wholesale Acquisition Cost or WAC) over a 10-year period or $240 million of cash in lieu of product, at each state’s election. Naloxone is used to counteract overdoses.
– – The settlement will build on the existing framework that states and subdivisions have created through other recent opioid settlements.

States, localities and tribes must ratify the proposed settlement, and a final settlement remains contingent on agreement on critical business practice changes and transparency requirements. The agreement is also contingent upon final documentation among the working group and Teva, and reaching the thresholds for participation that will be set forth in the final agreement.

The agreement is also contingent upon Teva reaching an agreement with Allergan with respect to any indemnification obligations, and Allergan reaching a nationwide opioids settlement.

There are no remaining trials currently scheduled against Teva in 2022, with the possible exception of the relief phase of the trial in the New York opioids litigation; additionally, Teva, New York State, and its subdivisions are engaged in ongoing settlement negotiations.

The negotiations are being led by the following states: California, Illinois, Iowa, Massachusetts, New York, North Carolina, Pennsylvania, Tennessee, Texas, Vermont, Virginia, and Wisconsin. While New York is among the 12 states that negotiated this proposed settlement framework, Teva and New York are still engaged in further negotiations.

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Court Reviews Employer’s Requirement to “Provide” Employees Seating

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In California, Section 14 of the Industrial Welfare Commission wage order No. 7-2001, provides that an employee is entitled to use a seat while working if the nature of the work reasonably permits the use of a seat. An employer is required, in that circumstance, to provide the employee with a suitable seat.

Monica Meda worked as a sales associate for about six months at an AutoZone auto parts store operated by AutoZoners. She assisted customers at the parts counter by answering questions and locating parts. She also operated the cash register, cleaned the store, moved merchandise around the store, and stocked shelves.

After she resigned from her position, plaintiff filed the present suit asserting one claim under the Labor Code Private Attorneys General Act of 2004. She asserts AutoZoners failed to provide suitable seating to employees at the cashier and parts counter workstations, as to which some or all of the work required could be performed while sitting.

AutoZoners moved for summary judgment, arguing plaintiff lacked standing to bring a representative action under PAGA because she was not aggrieved by AutoZoners’s seating policy. Specifically, AutoZoners contends it satisfied the seating requirement by making two chairs available to its associates. The chairs were not placed at the cashier or parts counter workstations but were in, or just outside, the manager’s office.

In opposition to the summary judgment motion, Meda contended AutoZoners did not “provide” seating as required because no one told her chairs were available for use at the front counter workstations, she never saw anyone else use a chair at those workstations, and she was only given the option to use a chair as an accommodation after an on-the-job injury.

The trial court agreed with AutoZoners, granted the motion, and entered judgment accordingly. The Court of Appeal reversed in the published decision of Meda v Autozoners – B311398 (July 2022)

No published California authority has considered what steps should be taken by an employer to “provide” suitable seating within the meaning of the wage order seating requirement.

The Court of Appeal concluded in this case of first impression “that where an employer has not expressly advised its employees that they may use a seat during their work and has not provided a seat at a workstation, the inquiry as to whether an employer has “provided” suitable seating may be fact-intensive and may involve a multitude of job and workplace-specific factors.”

“Accordingly, resolution of the issue at the summary judgment stage may be inappropriate, as it was here.”

“Because the undisputed facts create a triable issue of material fact as to whether AutoZoners “provided” suitable seating to its customer service employees at the front of the store by placing seats at other workstations in a separate area of the store, we conclude the court erred in granting the motion for summary judgment.”

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WCIRB Publishes 2022 Quarterly Experience Report

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The Workers’ Compensation Insurance Rating Bureau of California has released its Quarterly Experience Report. This report is an update on California statewide insurer experience valued as of March 31, 2022.

Written premium for 2021 was 1.4% below that for 2020 and is the lowest since 2012. Premium declined sharply beginning in the second quarter of 2020 due to the economic downturn resulting from the pandemic. The modest decrease in written premium for 2021 was driven by continued insurer rate decreases offsetting growth in employer payroll.

However written premium for the first quarter of 2022 is 22% above that for the first quarter of 2021 and 5% above that for the first quarter of 2020 (which was pre-pandemic).

The average charged rate for the first quarter of 2022 is 3% below that of 2021 and is the lowest in decades. In the September 1, 2022 filing, the WCIRB proposed an average 7.6% increase in advisory pure premium rates. Nonetheless, in the Decision on the Filing, the Insurance Commissioner did not approve any change in the average advisory pure premium rate.

The projected loss ratio for 2021, including COVID-19 claims, is 5 points above that for 2020 and 11 points above that for 2019. Projected loss ratios have been growing steadily since 2016.

The projected combined ratio for 2021, including COVID-19 claims, is 7 points higher than in 2020 and 33 points higher than the low point in 2016. Excluding COVID-19 claims, the projected combined ratio for 2021 is 110% and the projected ratio for 2020 is 99%, which are still higher than recent prior years.

Combined ratios have been growing in California due to insurer rate decreases and modest growth in average claim severities.

Indemnity claims had been settling quicker through the first quarter of 2020, primarily driven by the reforms of SB 863 and SB 1160. Average claim closing rates have plateaued in 2021 and 2022 but remain lower than the immediate pre-pandemic period.

Cumulative trauma (CT) claim rates increased through 2016 to be 80% above the 2005 level. CT claim rates were relatively consistent from 2016 through 2019. Preliminary data shows a sharp increase in CT claim rates in 2020, likely driven by shifts in claim patterns during the pandemic period. In particular, the 2020 increase in CT claim rates is largest in industry sectors that had the largest job losses in 2020.

Projected total claim severity for 2021, excluding COVID-19 claims, is 1% below 2020 but 12% above 2017. Following several years of flat indemnity severities, the projected indemnity severity for 2021 is 2% higher than 2020 and 19% higher than 2017. Recent growth in indemnity claim severities has been in part driven by higher-than-typical average wage inflation over the last two years.

The full WCIRB Quarterly Experience Report – As of March 31, 2022 is in the Research section of the WCIRB website.

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Right to Arbitrate Ends When Employer Fails to Timely Pay Fees

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In 2015, Wood Ranch USA, Inc. hired Sunny Gallo to work as a server for its chain of restaurants.

As a condition of her employment with Wood Ranch, she was required to sign an arbitration agreement and to agree to the terms of the employee handbook. The employee handbook reinforces the parties’ agreement that they will look to the California Arbitration Act, including its “procedural provisions,” ‘to conduct the arbitration and any pre-arbitration activities.”

Her employment was terminated in March 2018. In January 2020, she sued Wood Ranch for compensatory and punitive damages on nine different causes of action based upon alleged discrimination and harassment on the basis of gender and religion.

Wood Ranch moved to compel arbitration. The trial court in July 2020 granted the motion and stayed the pending court proceedings. The agreed upon arbitrator was affiliated with the American Arbitration Association (AAA). Both parties were asked to pay necessary fees which Gallo paid, but the November 4 due date came and went without any payment from Wood Ranch.

AAA extended the payment time to December 4, 2020 warning that the arbitration would be closed if not paid on time. On December 10, 2020 Wood Ranch paid the $1,900 fee which was two days late.

On December 16, 2020, plaintiff filed a motion to vacate the trial court’s prior order compelling arbitration, which was granted. The court ruled that Code of Civil Procedure sections 1281.97 and 1281.99 were not preempted by the Federal Arbitration Act.

Wood Ranch appealed. The Court of Appeal affirmed the trial court in the published case of Gallo v Wood Ranch USA Inc., B311067 (July 2022).

In 1961, the California Legislature enacted the California Arbitration Act (CAA) (§ 1280 et seq.) as a way to protect the right of private parties to resolve their disputes through the “efficient, streamlined procedures” of arbitration.

Perceiving that employees and consumers were being placed in a “procedural limbo” when they were forced to sign arbitration agreements by entities who subsequently refused to pay the necessary fees to allow the arbitrations to move forward, in 2019 the California Legislature enacted Code of Civil Procedure sections 1281.97, 1281.98 and 1281.99.

These provisions obligate a company or business who drafts an arbitration agreement to pay its share of arbitration fees by no later than 30 days after the date they are due, and specify that the failure to do so constitutes a “material breach of the arbitration agreement” that gives the employee or consumer, in addition to a mandatory award of attorney fees and costs related to the breach as well as other discretionary sanctions, the options of either (1) continuing in arbitration with the company or business paying attorney fees and costs related to the arbitration as a whole or (2) withdrawing from arbitration and resuming the litigation in a judicial forum.

This appeal presented a question of first impression: Are these provisions preempted by the Federal Arbitration Act (FAA) (9 U.S.C. § 1 et seq.)?

The court of appeal held that they are not because the procedures they prescribe further – rather than frustrate – the objectives of the FAA to honor the parties’ intent to arbitrate and to preserve arbitration as a speedy and effective alternative forum for resolving disputes.

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Hanover Launches Wearable Sensor Program to Reduce Injuries

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The Hanover Insurance Group, Inc. announced the launch of its Hanover i-on Sensor Program, which offers a robust set of technology-based services to help business and organization owners prevent workplace injuries, property damage, theft, and other losses.

The IoT technology solutions enable business leaders to monitor facilities, property, and employee safety to proactively manage risk. The Hanover i-on Sensor Program offers businesses solutions from expert partners for an array of risks, including:

– – Hanover i-on Sensors for Property – Undetected water leaks can quickly cause extensive damage. This program provides water sensors that leverage the power of technology to monitor water flow and alert our customers to leaks quickly, helping to minimize damage to property and business.
– – Hanover i-on Fleet Telematics – Understanding how drivers operate corporate vehicles can help prevent significant damage and eliminate the impact of shipping delays or repair costs from minor accidents. The telematics program leverages app-based technology to monitor drivers, helping combat distracted driving and identify risky driver behaviors to help prevent accidents and manage fleet safety.
– – Hanover i-on Workplace Ergonomics – Preventing workplace injuries keeps workers on the job and reduces exposure to workers’ compensation claims. Wearable sensors can help assess the risks of manual handling injuries to businesses and identify solutions using sensor technology and data insights.
– – Hanover i-on Heavy Equipment Tracking – Stolen or lost equipment can cause project delays and costly replacement expenses. The sensor-assisted asset tracking capability helps locate stolen heavy equipment so you can be sure these costly tools are in the right place at the right time

Manual handling injuries are a major cause of injury in the workplace, sidelining workers and production and resulting in workers’ comp claims. Many of those injuries are preventable. As part of the Hanover i-on Workplace Ergonomics Program, Risk Solutions has partnered with dorsaVi to help evaluate the risks of those injuries and find solutions using sensor technology and data insights with their ViSafe program.

The program takes advantage of state-of-the-art technology to help evaluate material handling situations “to be sure they aren’t an injury waiting to happen – and correct the situation if they are.”

ViSafe uses medical-grade wearable movement and muscle activity sensors, software and sophisticated algorithms, to provide objective and actionable data that profiles the movement risk of jobs, and the tasks within those jobs. Wearable sensors placed on low back and shoulders evaluate specific material handling tasks and send data to the myViSafe program, accessible on an iPhone or iPad. The program evaluates whether the employee is at risk of injury and recommends safer techniques to perform the task.

Data gathered and shared with employees at risk helps employers engage with staff on safe work practices, a firm step toward cooperation and improvement. Information gathered can also be used to evaluate tasks for return-to-work programs.

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Self-Insured Total Incurred Losses Increased 13.1% Last Year

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Workers’ compensation claim frequency among California’s private self-insured employers hit the highest level since 2007 last year as both medical-only and indemnity claim volume rose according to a California Workers’ Compensation Institute (CWCI) review of initial data from the state Office of Self-Insurance Plans (OSIP).

OSIP’s annual summary of private self-insured data, issued this July, is the first snapshot of California private, self-insured claims experience for cases reported in 2021.

It includes the total number of covered employees, medical-only and indemnity claim counts, and total paid and incurred losses on those claims through the end of the year. The latest summary reflects the experience of private self-insured employers who covered 2.39 million California employees last year (vs. 2.34 million in the 2020 initial report) and who reported 93,430 claims in 2021, 8% more than the 86,503 claims noted in the 2019 initial report.

The breakdown by claim type shows private self-insured employers reported 48,766 medical-only claims in 2021 (up 11.4% from 43,799 in 2020, the first year of the pandemic), though that was still 5.7% below the pre-pandemic total of 51,545 claims in 2019).

Indemnity claim volume, on the other hand, increased in both of the last two years, climbing from 34,307 claims in 2019 to 42,724 claims in 2020, then climbing to 44,664 claims last year. The latest claim count translates to an overall frequency rate of 3.92 claims (2.05 medical-only and 1.87 indemnity) per 100 private self-insured employees, the highest combined rate since 2007, with indemnity claim frequency reaching the highest level in at least 15 years.

The increase in claim volume and claim frequency helped drive up first report total paid and incurred losses.

The OSIP data show paid losses on the 2021 private self-insured claims through the fourth quarter totaled $314.8 million, 17.3% more than the first report total for 2020, as total paid indemnity (primarily temporary disability payments) climbed by $22.2 million (16.3%) to $158.7 million, and total paid medical increased by $24.3 million (18.4%) to $156.1 million.

Meanwhile, total incurred losses (paid benefits plus reserves for future payments) rose to $839.8 million, up $97.4 million, or 13.1% from the comparable 2020 figure, as total incurred indemnity at the first report increased by $36.8 million (12.0%) to $342.6 million and total incurred medical increased by $60.6 million (13.9%) to $497.2 million.

Aside from the higher claim volume, increases in the average paid and incurred losses at the first report also contributed to the growth in total paid and incurred losses, as both hit all-time highs in 2021, increasing to $3,370 and $8,988 respectively.

OSIP’s summary of private self-insured’s calendar year 2021 data, follows the December 2021 release of public self-insured claims data for fiscal year 2020/2021. OSIP private and public self-insured claim summaries from the past 20 years are posted at http://www.dir.ca.gov/SIP/StatewideTotals.html. CWCI members and subscribers may log on to the Communications section of the CWCI website www.cwci.org to view a summary Bulletin with more details, analyses, and graphics.

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Home Health Care Owner to Serve 18 Months for Kickback Scheme

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U.S. District Judge Troy L. Nunley sentenced Liana Karapetyan, 42, of El Dorado Hills, to 18 months in prison for one count of conspiracy to commit health care fraud and one count of conspiracy to pay and receive health care kickbacks.

According to court documents, Karapetyan and her husband, Akop Atoyan, owned and controlled home health care and hospice agencies in the greater Sacramento area: ANG Health Care Inc., Excel Home Healthcare Inc., and Excel Hospice Inc.

On behalf of the agencies, Karapetyan and Atoyan certified to Medicare that they would not pay kickbacks in exchange for Medicare beneficiary referrals to the agencies.

Despite their certifications, from at least July 2015 through April 2019, Karapetyan and Atoyan paid and directed others to pay kickbacks to multiple individuals for beneficiary referrals, including employees of health care facilities, as well as employees’ spouses.

The kickback recipients included John Eby, a registered nurse who worked for a hospital in Sacramento; Anita Vijay, the director of social services at a skilled nursing and assisted living facility in Sacramento; Jai Vijay, Anita Vijay’s husband; and Mariela Panganiban, the director of social services at a skilled nursing facility in Roseville.

In total, Karapetyan, Atoyan, and others caused the agencies to submit over 8,000 claims to Medicare for the cost of home health care and hospice services.

Based on those claims, Medicare paid the agencies approximately $31 million. Of that amount, Medicare paid the agencies at least $2 million for services purportedly provided to beneficiaries referred in exchange for kickbacks paid to, among others, Eby, Anita Vijay, Jai Vijay, and Panganiban. Because the agencies obtained the beneficiary referrals by paying kickbacks, the agencies should not have received any Medicare reimbursement.

This case was the product of an investigation by the Federal Bureau of Investigation and the Department of Health and Human Services’ Office of Inspector General. Assistant U.S. Attorney Matthew Thuesen prosecuted the case.

In separate cases, Atoyan, Eby, Jai Vijay, Anita Vijay, and Panganiban pleaded guilty for their roles in the kickback scheme.. As part of his guilty plea, Akop Atoyan agreed to pay $2,525,363 in restitution to the U.S. Department of Health and Human Services. He also agreed to forfeit that same amount to the United States.

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