Tag: 2023 News

Milan Cvejic worked for Skyview Capital LLC. He filed a lawsuit against them and others in state court after his termination of employment, claiming causes of action for employment law issues.

His employment agreement with them contained an arbitration clause. Thus Skyview moved to compel arbitration. The trial court granted the motion and stayed proceedings.

The case went before a panel of three arbitrators through the American Arbitration Association under the rules for commercial cases. After at least one continuance, the final hearing on the merits was set to begin August 5, 2021. Skyview had to pay arbitration fees ahead of the hearing. The fees were due June 4, 2021.

On July 7, 2021, Cvejic’s counsel asked the case manager whether Skyview had paid the deposits. On July 8, 2021, the case manager confirmed by email that Skyview had not paid. The manager scheduled a call to address the situation. During the call, Skyview’s counsel reported there was “no further explanation” for his clients’ failure to pay the fees. Cvejic reserved his rights to proceed under the Code of Civil Procedure. The panel stated “[t]he Hearing fees have been requested and the deadline for making the deposits has passed.” It set a new deadline of July 14th for payment of the fees.

Within about an hour of the call, Cvejic’s counsel wrote the panel to say Cvejic was withdrawing from the arbitration under Code of Civil Procedure section 1281.98. The panel chair responded that Cvejic’s request was “premature” – presumably because the deadline was now July 14th. Thereafter the panel ruled section 1281.98 was not in play because Skyview “came into compliance with the Panel’s Orders regarding posting deposits.” Skyview ultimately paid its fee by July 14th.

On July 21, 2021, Cvejic filed in the trial court a section 1281.98 Election to Withdraw from Arbitration. Soon after, he sought ex parte relief, which the court denied due to the absence of emergency. In December 2021, Cvejic refiled his section 1281.98 election, which included a request for sanctions under the statute and a motion to vacate the earlier order staying court proceedings. Skyview opposed the filing. The court’s February 2022 order granted Cvejic’s request to withdraw from arbitration, vacated the order staying proceedings, and awarded Cvejic reasonable expenses under section 1281.99.

The employer appealed the trial court Order. The Court of Appeal affirmed the trial court in the published case of Cvejic v. Seaview Capital LLC – B318880 (June, 2023).

The Legislature enacted section Code of Civil Procedure 1281.98 in 2019 to curb a particular arbitration abuse. The abuse was that a defendant could force a case into arbitration but, once there, could refuse to pay the arbitration fees, thus effectively stalling the matter and stymying the plaintiff’s effort to obtain relief. The Legislature called this “procedural limbo.” (Gallo v. Wood Ranch USA, Inc. (2022) 81 Cal.App.5th 621, 634 (Gallo) [quoting legislative history].) It has also been described as “procedural purgatory.” (Ibid.)

Subdivision (b) of the statute provides employees and consumers with a choice of forum upon breach: They may elect to “[w]ithdraw the claim from arbitration and proceed in a court of appropriate jurisdiction” or “[c]ontinue the arbitration proceeding” should the provider agree to continue. (§ 1281.98, subds. (b)(1) & (2).) The statute also empowers courts to award fees, costs, and sanctions.

After the current fee dispute arose, the Legislature amended both sections section 1281.97 along with section 1281.98 in 2021. The amendments added a new subdivision to section 1281.98 that compelled arbitrators to provide invoices to all parties, specified requirements for these invoices, and clarified the due date for fees.

The new subdivision also includes this new sentence: “Any extension of time for the due date shall be agreed upon by all parties.” (§ 1281.98, subd. (a)(2).) The amendments became effective January 1, 2022.

The Legislature sought a clear rule for determining whether the late payment of a fee by a drafting party constituted a material contract breach.

The Court of Appeal concluded by noting “Skyview’s fees were due June 4, 2021. By July 9th, Skyview had not paid. Skyview was in material breach of the parties’ arbitration agreement. Section 1281.98 entitled Cvejic to withdraw from the arbitration. It is that simple.”

“The statute does not empower an arbitrator to cure a party’s missed payment. There is no escape hatch for companies that may have an arbitrator’s favor. Nor is there a hatch for an arbitrator eager to keep hold of a matter. As the trial court observed, ‘If . . . the drafting party were permitted numerous continuances for failure to pay arbitration fees, therefore delaying the proceedings, C.C.P. section 1281.98 would have no meaning, force, or effect.’ ”

California passed Assembly Bill 112 – the Distressed Hospital Loan Program – as an emergency statute in May 2023. The program provides interest-free loans to not-for-profit and public hospitals in significant financial distress, as well as to governmental entities representing a closed hospital. The goal of the program is to prevent hospital closures and to help hospitals stay afloat while they work to improve their financial health. The law appropriated $150 million for the loan program.

Legislators and hospital administrators have acknowledged a loan program is only a stop-gap for a number of hospitals that for months have warned of their precarious fiscal situations. Legislators fast-tracked action following the closure of Madera Community Hospital at the start of this year, which left San Joaquin Valley county of 160,000 people without a local emergency room.

Since then, another hospital, Beverly Hospital in the city of Montebello, has filed for bankruptcy.

In legislative hearings leading to passage of this program, lawmakers asked why the state wasn’t conducting its own analysis of hospitals’ current situation so that the Legislature knows exactly which hospitals are in immediate need of relief.

“We don’t know how many hospitals, we don’t know which hospitals. We don’t know which areas those hospitals are (in), we don’t know anything. And now we’re asked to approve $150 million to be doled out without access to plans, without access to the finances that would give us the evidence to feel comfortable with this,” said Sen. Maria Elena Durazo, a Los Angeles Democrat, during a Senate budget committee hearing

According to a report by Inewsource.com sixteen facilities have applied so far for the newly created Loan Program which has a deadline for applications by the end of July.

The Madera Community Hospital, which shut down earlier this year but could reopen under new owners, has requested $80 million alone.

El Centro Regional Medical Center, Imperial County’s largest hospital, is seeking a $40 million state loan in its latest attempt to keep it’s doors open. El Centro Regional board members voted to apply for the program late last month. CEO Pablo Velez, who took over the hospital in April, confirmed to inewsource last week that its application remains under review.

A city-owned, 161-bed facility, El Centro Regional has been struggling with rising costs and declining revenues since the COVID-19 pandemic. The hospital already received a separate $5 million loan from the state earlier this year, and its latest audit raised “substantial doubt” about whether it can continue operating because it lacked recurring income sufficient to meet operating costs and its debt payments.

Board members also delayed adopting a new budget, saying it needed to “confirm the applicability of the current budget” before passing a new spending plan. The latest proposed budget, set to be considered this week, projects a nearly $10 million net deficit. The latest finance report showed El Centro Regional had fewer than 20 days cash on hand.

Officials have hinted at dire consequences if either of the two hospitals in Imperial County were to close. Pioneers Memorial in Brawley has also faced financial problems, though not as severe as that of El Centro Regional. Residents in the county, one of the poorest in the state, would be forced to travel some two hours away if those facilities weren’t available.

A report commissioned by the California Hospital Association earlier this year found that one-in-five hospitals is at risk of closing. More than half are operating at a loss.

These include: Kaweah Health Medical Center in Visalia, MLK Jr. Community Hospital in Los Angeles, Hazel Hawkins Memorial Hospital in Hollister, Sierra View Medical Center in Porterville and Mad River Community Hospital in Humboldt County, all of which have reports of financial stress.

With eyes on the upcoming fiscal year, the California Hospital Association has asked the state for $1.5 billion in one-time relief, a tough request in a deficit year. But Senate Democrats are in support, proposing that hospitals get $400 million annually for four years that would come with requirements and conditions, according to their budget proposal that is to be finalized this summer.

Fernando Yanes claimed injury to his left knee while employed as a respiratory therapist by defendant Valley Children’s Hospital on October 24, 2021. The employer admitted injury arising out of and in the course of employment, but contested the nature and extent of the injury.

On January 20, 2022, Yanes, as an unrepresented worker, requested a panel of orthopedic Qualified Medical Evaluators, pursuant to Labor Code section 4062.1. On January 27, 2022, the Division of Workers’ Compensation (DWC) Medical Unit issued panel no. 2802519. Yanes however did not have an evaluation as a result of that panel.

On March 3, 2022, Yanes retained legal counsel. On March 7, 2022, his counsel requested a replacement panel in the specialty of chiropractic medicine. In response, on March 21, 2022, the DWC Medical Unit issued QME panel no. 2839682, in the specialty of chiropractic medicine. On March 31, 2022, the employer objected to panel no. 2389682 on the grounds that the panel request letter was procedurally deficient.

On April 13, 2022, the parties proceeded to trial on issues of the validity of the Replacement Panel Request pursuant to Labor Code Section 4062.2 and Romero v. Costco Wholesale (2007) 72 Cal.Comp.Cases 824 [2007 Cal. Wrk. Comp. LEXIS 168] (Romero), and whether the defendant was entitled to a new panel in orthopedic surgery, and whether substantial justice required the parties to restart the panel QME process under section 4062.2.1

The WCJ issued the F&O, invalidating the chiropractic panel 2839682, and determining that defendant was not entitled to a new panel of QMEs in orthopedic surgery, and directing the parties to obtain a new panel of QMEs pursuant to section 4062.2.

The WCAB granted a Petition for Removal filed by Yanes, and substituted new Findings of Fact that QME chiropractic Panel No. 2389682 was valid, and rescind the order that the parties obtain a new panel of QMEs. in the case of Yanes v Valley Children’s Hospital ADJ15870256 (May 2023).

Applicant’s Petition for Removal argued that the WCJ’s decision was inconsistent with the significant panel decision in Romero, and subsequent jurisprudence applying Romero. Applicant asserts that under Romero, the parties are not required to “start all over and submit a new objection letter to that which has already been objected to in the first place when the original unrepresented Panel was requested.”  Applicant also argues that he was entitled to obtain a new panel of QMEs after obtaining legal representation because the “evaluation” process described in section 4062.2(a) is separate and distinct from the process for obtaining a panel.

Defendant’s Answer argued that Romero and the subsequent panel decisions cited by applicant “do not specifically address the procedural requirements for obtaining a new panel under Romero and in compliance with the provision set forth in Labor Code §4062.2(b).”

The parties, while applicant was unrepresented, identified a medical dispute, and initiated the QME evaluation process. Defendant accepted liability for the left knee only, and liability was denied for left knee ACL findings and need for surgery. Once the parties have identified a medical dispute, the procedure for obtaining a panel of QMEs where applicant is not represented is governed by Labor Code section 4062.1. The parties at this point satisfied the procedure for obtaining a panel, and the DWC Medical Unit issued panel no. 2802519. The parties did not dispute that this panel was valid when originally issued, and that applicant never attended a QME evaluation with any of the physicians from that panel.

In Romero the WCAB panel noted that “because applicant had not attended and participated in the examination by the panel QME when she changed from being not represented by an attorney to being represented, she had not ‘received’ a comprehensive medical-legal evaluation pursuant to section 4062.1 and is, therefore, not precluded from requesting a new QME panel pursuant to section 4062.2.“

Similarly, in City of Tracy v. Workers’ Comp. Appeals Bd. (Luckhardt) (2019) 84 Cal.Comp.Cases 838 [2019 Cal. Wrk. Comp. LEXIS 73] (Luckhardt), the parties satisfied the prerequisites to obtaining a QME panel in orthopedic surgery while applicant was unrepresented. Following issuance of the panel, but prior to any QME evaluation, applicant retained counsel. Applicant’s counsel then requested and received a new panel of QMEs in pain management, pursuant to Romero. The WCAB affirmed the WCJ’s determination that while the parties had completed the process necessary to obtaining a QME while applicant was unrepresented, the applicant had not yet received a comprehensive medical-legal evaluation by a QME, and was thus entitled to a new panel of QMEs under section 4062.2. (Id. at 840-841.)

Applicant’s request for a new panel of QMEs on March 7, 2022 was made only after the parties had identified the medical dispute that required a QME evaluation, and had taken the appropriate steps to obtain a valid panel of QMEs. The parties were not thereafter required to reinitiate a dispute resolution process that was already underway and had appropriately resulted in the issuance of a prior panel.

The WCAB further noted that “requiring the parties to repeat the procedural steps necessary to obtaining a panel of QMEs once applicant obtains counsel is inconsistent with our constitutional mandate to “accomplish substantial justice in all cases expeditiously, inexpensively, and without incumbrance of any character.” (Cal. Const., art. XIV, § 4.)”

Thus the panel was persuaded that “the decision of the WCJ to invalidate panel no. 2839682 will result in significant prejudice or irreparable harm.”

The federal Hospital Price Transparency Rule, which took effect on January 1, 2021, requires hospitals to post all prices online, easily accessible and searchable, in the form of (1) a single machine-readable standard charges file pricing for all items, services, and drugs by all payers and all plans, the de-identified minimum and maximum negotiated rates, and all discounted cash prices, as well as (2) prices for the 300 most common shoppable services either as a consumer-friendly standard charges display listing actual prices or, alternatively, as a price estimator tool.

Combined with requirements for disclosure of systemwide prices and historical claims in the Transparency in Coverage Rule and the Consolidated Appropriations Act of 2021 respectively, the Hospital Price Transparency Rule is intended to empower healthcare consumers – patients, employers, and unions as purchasers – with ease of access to compare prices.

The nonprofit Patient Rights Advocate (PRA) released its fifth semi-annual report, which found that only 36 percent of 2,000 surveyed hospitals were in complete compliance with the rule.

Its latest review was published on July 20, 2023, two and a half years after the Hospital Price Transparency Rule took effect. It analyzed the websites of 2,000 U.S. hospitals and found only 36% of them (721) to be fully compliant with all requirements of the rule.

Although the majority of hospitals have posted files, the widescale noncompliance of 64% of hospitals is due to most hospitals’ files being incomplete or not having prices clearly associated with both payer and plan.

In this report, 69 of the hospitals reviewed had no usable standard charges file.

Compliance varied widely among the largest hospital systems it reviewed.

– – None (0%) of the hospitals it reviewed which were owned by HCA Healthcare, Tenet Healthcare, Providence, Avera Health, UPMC, Baylor Scott & White Health, and Mercy were found to be fully compliant.
– – Consistent with prior reports, none of the hospitals owned by the largest hospital system in the country, HCA Healthcare, were found to be in full compliance, with a significant amount of its hospitals posting illegible, nonconforming files.
– – Substantial improvements since its last report include: 88% of hospitals owned by CommonSpirit Health, 97% of hospitals owned by Community Health Systems, and 98% of hospitals owned by Kaiser Permanente were found to be in full compliance.

The Health and Human Services (HHS) Department’s Centers for Medicare and Medicaid Services (CMS) are responsible for enforcing the rule. In June of 2022 (eighteen months after the rule’s inception), CMS imposed its first two civil monetary penalties (CMPs) on hospitals for not complying with the rule.

Both hospitals immediately came into compliance with exemplary files to date.

In February of 2023, CMS acknowledged in a blog post that 30% of hospitals (approximately 1,800) were still noncompliant. Yet, in April of 2023, only two more hospitals were fined. Both were still found to be noncompliant in this review.

As of the time of this report, a total of four hospitals have been penalized, 0.2% of the hospitals that CMS recognized as noncompliant. Clearly, CMS is not strongly enforcing the rule.

“Unfortunately, our findings show that the majority of hospitals across the country are still failing to comply with the Hospital Price Transparency Rule,” said Cynthia Fisher, Founder and Chairman of PatientsRightsAdvocate.org.

“When hospitals hide behind estimates or don’t post all real prices, they are leaving consumers in the dark. Making all actual prices available upfront will empower patients, employers, and unions to choose the best care at prices they know they can afford, and protect all Americans from overcharges, errors, and fraud.”

Robert Irving Slater was admitted to practice law in California since 1975. He was a solo practitioner who had handled workers’ compensation cases since at least the late 1990’s.

USA Photocopy, located in Santa Ana, provided attorney services, including photocopying and sending subpoenas for records for workers’ compensation cases. The company would then bill insurance carriers for its services. During the relevant time period, Edgar Gonzalez was the owner of USA Photocopy and Enrique Villagomez was the manager.

Peter Ayala worked as a “legal investigator performing intake services.” He learned that Villagomez had work in the form of “sign-up services available,” and subsequently had a meeting with Gonzalez and Villagomez at the USA Photocopy office. During the course of the conversation, it was brought up that Ayala would be working directly for one attorney – Robert Irving Slater. After working out a payment structure with Gonzalez and Villagomez, all three of them went to Slater’s office and met with him.

Ayala’s role was to meet with the potential “workers’ compensation client to fill out the intake retainer . . . and also get the retainer signed for the claim.” Ayala would also have the client, with his assistance, complete various forms, including the workers’ compensation appeals board application for adjudication, medical release forms, and fee disclosure forms, among others. With regard to copy services, there was a form signed by clients giving USA Photocopy permission to perform copy services “and the medical release forms as well.” Ayala would return the forms to Slater’s office in digital form, and returned the originals in person approximately every two weeks.

Ayala was told to send an invoice for his services every two weeks to USA Photocopy, which paid him for his services. Ayala had done similar work in the past for approximately 13 attorneys, and this was the first time he would be paid by a party other than an attorney.

Ayala was paid by USA Photocopy as an independent contractor. Between September 2012 and September 2015, Ayala invoiced a total of $196,280.00 to USA Photocopy. Over the six years his relationship with USA Photocopy and defendant lasted, Ayala estimated he performed intake services for about 2,000 clients for defendant, and USA Photocopy was the only copy service used for those clients. Ayala did not perform any service for USA Photocopy other than the services he performed for Slater.

Slater was charged with conspiracy (Pen. Code, § 182, subd. (a)(1), Lab. Code, § 32151 (count 1)); submitting a false and fraudulent claim (Pen. Code, § 549 (count 2)); and 21 counts of insurance fraud based on concealing or failing to disclose information that affects a person’s right to an insurance benefit (Pen. Code, § 550, subd. (b)(3) (counts 3-23)). The complaint also alleged that Slater had engaged in a pattern of related fraudulent conduct involving the taking of more than $100,000.00. A jury convicted Slater on all 23 counts, and also found the enhancement regarding the pattern of fraudulent conduct true.

The court sentenced Slater to serve a total of 183 days, with 182 of those days suspended on the successful completion of two years of supervised probation. Six months of the probation term was to be served with an ankle bracelet. The court also ordered him to pay $356,175.24 in victim restitution in addition to statutory fines and fees.

Slater appealed his conviction. The court of appeal affirmed the trial court in the unpublished case of People v Slater -G061331 (July 2023)

Slater’s sole contention on appeal is that he did not possess the requisite state of mind to violate Labor Code section 3215, which was an element of each of the crimes of which he was convicted with the exception of count 2, submitting a false and fraudulent claim under Penal Code section 549.

Section 3215 states: “Except as otherwise permitted by law, any person acting individually or through his or her employees or agents, who offers, delivers, receives, or accepts any rebate, refund, commission, preference, patronage, dividend, discount or other consideration, whether in the form of money or otherwise, as compensation or inducement for referring clients or patients to perform or obtain services or benefits pursuant to this division, is guilty of a crime.“

In reviewing his opening brief on appeal, the Court noted that he “included nothing that could possibly be interpreted as an even-handed account of the evidence presented. This violates rules 8.204(a)(2)(C) and 8.360(a) of the California Rules of Court.”

“It also violates the principles set forth in Sanghera, supra, 139 Cal.App.4th 1567: ‘Perhaps the most fundamental rule of appellate law is that the judgment challenged on appeal is presumed correct, and it is the appellant’s burden to affirmatively demonstrate error.’ “

The Court went to to say “How does a defendant make such a showing? Perhaps the best way to understand that point is to understand how a defendant does not make such a showing. He does not show the evidence is insufficient by citing only his own evidence, or by arguing about what evidence is not in the record, or by portraying the evidence that is in the record in the light most favorable to himself.”

After the Court of Appeal sad that “Defendant failed these requirements rather spectacularly” it concluded by finding “Even if defendant had adequately briefed this appeal, our own review of the record demonstrates substantial evidence to uphold the verdicts.”