Tag: 2023 News

It is interesting how so many people carefully shop for an investigate their next appliance or television purchase, but how so few can tell you even the brand of hip or knee replacement that a surgeon placed inside their body. It is as though the brand of implantable device does not matter, and their seems to be an assumption that they are all the same.

A bad choice certainly has consequences, to the person who must undergo another painful surgery, and for the third party payor – such as a workers’ compensation claim administrator – who must pay tens of thousands of dollars in medical costs to remedy the situation.

The current litigation against Exactech is an excellent illustrative example. Exactech’s fortunes started to take off in 1994, when it inked a major deal to license and market the Optetrak knee implant based on designs by surgeons and engineers at the prestigious Hospital for Special Surgery in New York City. That alliance won Exactech instant credibility in the fiercely competitive device industry.

Exactech was first introduced in 2006. It is made of titanium and a plastic called polyethylene. The Optetrak implant was designed to be more durable and longer-lasting than other total knee replacement (TKR) implants. Building on that goodwill, Exactech’s sales shot past $124 million in 2007, about half generated by the Optetrak knee system.

The US Food and Drug Administration issued a number of safety warnings about the Optetrak implant. In 2012, the FDA issued a Class I recall of the Optetrak implant, which is the most serious type of recall. The recall was issued due to concerns about early failure of the implant.

In 2015, the FDA issued a Class II recall of the Optetrak implant due to concerns about loosening and osteolysis. The recall was issued after the FDA received reports of a number of patients who had experienced loosening and osteolysis of their Optetrak implants.

There are a number of class action lawsuits pending against the manufacturers of the Optetrak knee implant. These lawsuits allege that the implant is defective and has caused serious injuries to patients.The first class action lawsuit against the manufacturers of the Optetrak knee implant was filed in 2012. This lawsuit was filed on behalf of patients who had experienced early failure of their implants. Since then, a number of other class action lawsuits have been filed against the manufacturers of the Optetrak knee implant.

KFF Health News just featured a report on this problem, and what went wrong. It reports that there were ” years of warnings and doubts about the durability of the Optetrak, according to whistleblowers – one whistleblower called it an “open secret” inside the company. Notably, there were concerns about the fragility of a finned tibial tray, one of the four pieces of the knee replacement that fits into the shin bone, according to the whistleblower lawsuit.

Whistleblower Manuel Fuentes, a former Exactech senior product manager, testified in a deposition that pulling the product off the market around 2008 “would have been the ethical and moral thing to do.”

Exactech discussed the loosening problem in an internal memo that said between 2006 and 2009 the company “began to get some negative feedback” about the Optetrak “that was at times confounding and difficult to process,” court records show.The discouraging reports ranged from complaints of early revisions from at least 10 U.S. surgeons and surgery practices in several of the more than 30 countries where Exactech sold the implant, court records show.

The results did little to dim Exactech’s prospects. From 1994 through April 2022, Exactech sold 58,763 Optetrak devices with finned trays for use by 514 surgeons nationwide, according to an affidavit by a company official.

While 95% of artificial knees should last at least a decade, surgeons had to pull out and replace many Optetrak components – a complex operation known as revision surgery – much sooner, according to allegations in patient lawsuits.

The Food and Drug Administration runs a massive, public, searchable databank called MAUDE “Manufacturer and User Facility Device Experience” to warn the public of dangers linked to medical devices and drugs. This tool might be a good start for a due diligence investigation by a Claims Administrator to ascertain the track record of orthopedic devices.

Manufacturers must advise the FDA when they learn their device may have caused or contributed to a death or serious injury, or malfunctioned in a way that might recur and cause harm.Those reports must be submitted within 30 days unless a special exemption is granted.

But court and government records show that reports of adverse reactions tied to Exactech’s implant sometimes took years to show up in the government database — if they were reported at all.

As National Whistleblower Day approaches, a bipartisan group of senators, led by Sen. Chuck Grassley (R-Iowa), introduced the False Claims Amendments Act of 2023 to beef up the government’s most potent tool to fight fraud. The bill ensures those who knowingly defraud the government cannot escape liability in cases where the government has made recurring payments on a fraudulent claim. The bill is cosponsored by Sens. Dick Durbin (D-Ill.), John Kennedy (R-La.) and Roger Wicker (R-Miss.).

“The False Claims Act continues to be the single greatest tool in the fight against fraud, returning $72 billion to the taxpayer since my update to the statute in 1986. Unfortunately, flawed court interpretations have created loopholes for fraudsters to avoid accountability even when their fraud is obvious and undisputed. Taxpayers deserve better than this sort of legal gymnastics. Our bipartisan bill clarifies our original intent to hold those accountable when they bilk the taxpayer,” Grassley said.

‘We must ensure that our government uses taxpayer dollars wisely and efficiently. This bill would do just that by strengthening the False Claims Act – a tool used by the federal government to fight fraud and recoup lost taxpayer dollars. I’m thankful for this bipartisan cooperation to help fight fraud, waste, and abuse, and I’ll work to help this bill move swiftly through the Senate,’ Durbin said.

The False Claims Act empowers the government – often with the help of whistleblowers – to recover taxpayer dollars lost to fraud from entities that defraud the government. The U.S. Supreme Court flawed ruling in United Health Services v. United States ex rel. Escobar has resulted in entities claiming that their obvious fraud was not material simply because the government continued payment.

The False Claims Amendments Act of 2023 makes clear that the government’s continued payment on a fraudulent claim is not dispositive evidence that the fraud was not material if the government shows other reasons exist for the payment. It also clarifies that the False Claims Act’s whistleblower anti-retaliation provision applies to post-employment retaliation, and requires a GAO study on the benefits and challenges of enforcement efforts and amounts recovered under the False Claims Act.

“Taxpayers Against Fraud applauds Senator Grassley’s continued strong support of the False Claims Act,” said Taxpayers Against Fraud President & CEO Jeb White. “The Senator is a consistent champion of Lincoln’s Law, which saves taxpayers billions of dollars every year. Regularly updating and modernizing the law ensures our federal anti-fraud statutes can meet the challenges created by today’s fraudsters who seek to steal and misuse taxpayer funds. We appreciate Senator Grassley’s tenacious leadership and look forward to full congressional passage of this bipartisan legislation.”

In 1986, Grassley led the successful effort to update the False Claims Act, which allows the government to recover taxpayer dollars from entities that defrauded federal agencies. A key provision in that update, known as qui tam, allows whistleblowers to bring suits against alleged fraudsters on behalf of the government and share in any recoveries. That provision is credited with more than two-thirds of all False Claims Act recoveries since 1987.

In February, the Justice Department announced the successful recovery of over $2.2 billion through False Claims Act cases that would have otherwise been lost to fraud in FY2022. More $1.9 billion of those claims were recovered through Grassley’s qui tam provision. A total of more than $72 billion in taxpayer money has been recovered since the 1986 update to the law.

In March 2020, because of the reduction in business caused by the COVID-19 pandemic, Hyatt decided to furlough or temporarily lay off over 7,000 employees.

Plaintiffs, Karen Hartstein filed a class action complaint in Los Angeles County Superior Court on behalf of a putative class of California Hyatt employees, asserting claims under California law for failure to pay all wages upon discharge,waiting time penalties, failure to furnish accurate wage statements, unfair business practices, and enforcement under the Private Attorneys General Act (“PAGA”). Hyatt removed the action to federal court.

The district court granted Hyatt’s motion for summary judgment, denied Plaintiff’s motion for partial summary judgment, and dismissed the action with prejudice. The district court concluded that the March 2020 furlough of Hyatt’s employees was not a termination within the meaning of Labor Code § 227.3 because there was not a complete severance of the employer-employee relationship.

The court also rejected Plaintiff’s claim that the value of the complimentary hotel rooms class members were eligible to receive constituted wages they should have received upon discharge. And because it concluded that Hyatt was not required to pay the accrued vacation in March 2020, the district court declined to address whether Hyatt was liable for waiting time penalties under § 203 and whether Hyatt had a good faith dispute about the payments.

The 9th Circuit Court of Appeals reversed as to the vacation pay claim, and affirmed the dismissal of the value of the hotel room claims in the published case of Harstein v Hyatt Corporation -22-55276 (September 2023).

Hyatt did not contest that it was required to pay its employees their accrued vacation pay when the employees were discharged. The question is when the employees were discharged within the meaning of California’s prompt payment provisions. Plaintiff argues that the indefinite layoff in March 2020 was a “discharge” within the meaning of Labor Code § 201(a), triggering Hyatt’s obligation to pay accrued vacation pay. Hyatt contends that it was not required to pay accrued vacation pay until June 2020, when employees were formally terminated.

Section 201 does not define “discharge.” The question accordingly is whether a temporary layoff, with no specified return date, is a discharge for purposes of § 201. “We have not found, and the parties have not cited, any caselaw that addresses this question. However, the California Division of Labor Standards Enforcement (‘DLSE’) has answered the question explicitly.”

The DLSE is the state agency empowered to enforce California’s labor laws. In Opinion Letter 1996.05.30, the DLSE addressed an employer’s question “regarding the obligation of an employer to pay wages due at the time of a ‘temporary layoff.” The DLSE replied that, “if an employee is laid off without a specific return date within the normal pay period, the wages earned to and including the lay off date are due and payable in accordance with Section 201.”

The DLSE cited Campos v. Employment Development Department, 183 Cal. Rptr. 637 (Ct. App. 1982), which addressed “whether workers on indefinite layoff are disqualified from receiving unemployment benefits when they refuse to accept recall offers in the course of a trade dispute.” Campos concluded that, “where the employees have no contractual right to recall within any specified time period, the better approach is to treat such layoffs as indefinite, thereby terminating any employment relationship.”

Thus the Court of Appeals concluded that the prompt payment provisions of the California Labor Code required Hyatt to pay Plaintiffs their accrued vacation pay in March 2020. It therefore reversed the district court’s grant of summary judgment to Hyatt as to the vacation pay claim and remand for the district court to consider whether Hyatt acted willfully in failing to comply with the prompt payment provisions.

However, the complimentary hotel rooms Hyatt provided to employees were excludable from the calculation of employees’ regular rate of pay under the Fair Labor Standards Act (FLSA). It therefore affirmed the grant of summary judgment as to the complimentary hotel room claim.

The California Board of Pharmacy (BOP) has listed medication error as the number one violation resulting in a citation in nearly every year within the last several years. According to the Journal of the American Medical Association, 46 percent of adults cannot understand the information listed on their prescription drug labels. Furthermore, the Institute of Medicine of the National Academies indicates that medication errors are among the most common medical errors, harming at least 1.5 million people annually.

Pharmacists working in chain community pharmacies, particularly those co-located with other retail and grocery stores, have historically complained that it is common for a pharmacist to be the only employee assigned to the pharmacy area.

And according to previously conducted surveys, 83% of pharmacists report being left alone during the workday for an average period of four hours. And a high percentage of pharmacists stated that they do not have enough time to fulfill their professional functions to the extent that they believed necessary. These pharmacists have argued that instead of providing their core pharmacy services, much of their time is instead spent performing clerical tasks and performing non-pharmacy activities on behalf of the business.

A new law just signed by Governor Newsom, – Assembly Bill 1286 – is aimed at reducing the estimated 5 million mistakes pharmacists make each year.

According to the Author of AB 1286: “The root cause of medication errors in the community chain setting can be tied to pharmacy working conditions, like insufficient staffing, unsanitary conditions, or lack of autonomy to make clinical decisions in the best interest of the patient. Unfortunately, there is no requirement under current law for pharmacies to track medication errors or to consider the pharmacy working conditions that lead to medication errors.

AB 1286 will establish a first in the nation mandatory reporting of medication errors to allow for robust evaluation of the causes of medication errors. It also gives licensed pharmacy staff autonomy over their working conditions so they can provide better patient care and services for Californians.”

The new law empower the pharmacist-in-charge or pharmacist on duty to report conditions to the Board of Pharmacy (BOP) that present an immediate risk of death, illness, or irreparable harm to patients, personnel, or pharmacy staff.

If store management does not resolve those conditions within 24 hours, the pharmacist-in-charge or pharmacist would be required to notify the BOP. The BOP would then be authorized to issue an order to the pharmacy to immediately cease and desist those pharmacy operations that are affected by the conditions at issue.

This cease and desist order would remain in effect until either the executive officer of the BOP determines that the conditions that presented an immediate risk of death, illness, or irreparable harm to patients, personnel, or pharmacy staff have been abated, or for no more than 30 days, whichever date is earlier.

This new law seeks to improve the state’s understanding of the causes of medication errors by requiring community pharmacies to report all medication errors to an entity approved by the BOP. A community pharmacy or its designated third party would be required to submit the report no later than 14 days following the date of discovery of the error.

Reports would be deemed confidential and not subject to discovery, subpoena, or disclosure pursuant to the California Public Records Act, though the BOP would be authorized to publish deidentified data.

The BOP would not be allowed to subject a community pharmacy to discipline or other enforcement action based solely on the report; however, if the BOP receives other information regarding the medication error, that may serve as basis for enforcement by the BOP.

Bobby Levell Gilbert, Jr., 66 of Santa Ana, and owner of B & J Tree Service, has been charged with 96 felony counts for alleged wage theft, denial of workers’ compensation benefits to employees, workers’ compensation fraud, failure to pay taxes and perjury.

Gilbert’s Office Manager, Bertha Rubi Sanchez, 30 of Anaheim, has also been charged with multiple felonies for her alleged role in committing these crimes. Gilbert and Sanchez’ arraignment was continued until December 13, 2023.

An investigation by the Department of Insurance revealed that Gilbert took advantage of his workers by denying them what they rightfully earned or were entitled to, for his own enrichment. In total, 32 workers were identified that were either denied the wages they had earned through their hard work, or the workers’ compensation benefits they were entitled to when injured on the job, or both.

According to Department Detectives, between October 2013 and August 2021, Gilbert and Sanchez conspired together to underreport payroll to their insurance carriers by approximately $1.3 million. The failure to report employee payroll resulted in the illegal reduction of workers’ compensation insurance premiums, leading to approximately $248,757 in premium owed. The underreported payroll also resulted in an unpaid payroll tax to Employment Development Department of approximately $140,485.

“Workers’ compensation insurance is required by law in order to ensure that injured employees can receive the care they need,” said the California Insurance Commissioner. “Cases like this one are particularly egregious, employees were not only put at great risk, but they were denied their hard earned wages. We remain committed to working with our partners, including the Orange County District Attorney’s Office, Employment Development Department, and the Department of Industrial Relations to ensure employees get the protections they deserve.”

This is a joint investigation with Employment Development Department, Department of Industrial Relations and the Orange County District Attorney’s Office. The Orange County District Attorney’s Office is prosecuting the case.