Tag: 2025 News

On June 16, 2022, Scott McNalley filed an application for adjudication, alleging that he sustained cumulative injury to his neck, back and foot while employed as a foreman by Taft Electric Company during the period of November 12, 2020 through November 12, 2021.

Taft Electric Company filed a petition for dismissal, alleging that the “parties were subject to the terms and conditions of the collectively bargained [ADR] agreement,” that, “although jurisdiction is conferred upon the Appeals Board by Labor Code Section 3201.5, all parties preserve their rights by following the alternative system procedures,” and that dismissal of the application for adjudication was therefore warranted.

The WCJ granted the petition for dismissal, stating that the claim was dismissed with prejudice on the grounds that the alleged ADR agreement established that “the WCAB lacks jurisdiction.” The order states that “timely objection within 10 days of service showing good cause voids the order.” On October 4, 2022, defendant’s attorney filed a proof of service of the order upon applicant and applicant’s attorney.

On August 21, 2023, McNalley filed a petition to have his claim removed from ADR and proceed with his claim at the WCAB. On April 17, 2024, the parties appeared for a mandatory settlement conference on the issue of the petition. The WCJ advised that he would issue a formal order denying McNalley’s petition, and he ordered the case off calendar. On November 8, 2024, the WCJ issued the Order.

McNalley Petitioned for Reconsideration of the “Order Denying Applicant’s Petition to Remove Claim from Alternative Dispute Resolution (ADR) and Affirming Previous Order Dismissing Case for Lack of Jurisdiction” issued on November 8, 2024, wherein the workers’ compensation administrative law judge (WCJ) denied applicant’s petition to remove his case from ADR and proceed before the WCAB and that the previous order dismissing the case for lack of WCAB remains in effect.”

His Petition was granted in the panel decision of McNalley v Taft Electric Company -ADJ16306548 (February 2025).

“Here, the record reveals that the WCJ granted the Petition for Dismissal without holding a settlement conference, framing the issues for trial, or holding a hearing in violation of Labor Code section 5502(d)(2). Applicant’s petition essentially sought to set aside the September 19, 2022 order dismissing the case for lack of jurisdiction. The result of this process was the Order served to terminate applicant’s case in a manner akin to summary judgment. However, pursuant to WCAB Rule 10515, summary judgment proceedings are not permitted in the workers’ compensation system and contested matters are to be tried by way of hearing on the record. (Cal. Code Regs., tit. 8, § 10515.)”

The WCAB panel noted that decisions of the Appeals Board “must be based on admitted evidence in the record.” (Hamilton v. Lockheed Corporation (Hamilton) (2001) 66 Cal.Comp.Cases 473, 476 (Appeals Board en banc).) Furthermore, decisions of the Appeals Board must be supported by substantial evidence. (Lab. Code, §§ 5903, 5952(d); Lamb v. Workmen’s Comp. Appeals Bd. (1974) 11 Cal.3d 274 [39 Cal.Comp.Cases 310]; Garza v. Workmen’s Comp. Appeals Bd. (1970) 3 Cal.3d 312 [35 Cal.Comp.Cases 500]; LeVesque v. Workmen’s Comp. Appeals Bd. (1970) 1 Cal.3d 627 [35 Cal.Comp.Cases 16].)

“We observe that “self destruct” orders such as the one here illustrate why use of this type of notice and order is disfavored. Whether good cause is presented is an issue of fact that requires a record, and because the moment that the order becomes “void” is dependent on whether and when a good cause objection is filed, it makes it difficult to determine exactly when or if the order is void.”

“Because the September 19, 2022 order dismissing the case and the November 8, 2024 Order were issued without a hearing, we are persuaded that the orders violate applicant’s right of due process. Accordingly, we will rescind the Order and return the matter to the trial level so that the record may be developed on the parties’ respective contentions regarding the enforceability of the ADR agreement.”

Blue Cross of California d/b/a Anthem Blue Cross is a California Stock Corporation with its principal place of business in Woodland Hills, California. Anthem sells health insurance and related administrative services to California employers, individuals, and families.

AA Insurance Advocacy, Inc. is a California-based company that was incorporated on May 21, 20212. The company is registered as a California Stock Corporation and is currently active. The principal address for the company is 1421 Ambassador Street, Unit #212, Los Angeles, CA 900352. Alanna Apfel is listed as the Chief Executive Officer, Chief Financial Officer, Director, and Secretary of the company. She is an insurance patient advocate who helps patients with employer-sponsored PPO insurance negotiate with insurance companies to cover their out-of-pocket mental health therapy costs or services provided by out-of-network therapists.

According to a Civil Complaint filed on February 3, 2025 in the Los Angeles County Superior Court, Anthem alleges that Apfel and her Corporation submitted “fraudulent claims for out-of-network healthcare services that were misrepresented, inflated, or never provided at all.” Anthem further alleges that “This scheme was carried out by Alanna Apfel, on her own behalf and through AA Insurance Advocacy, Inc., an entity through which she presents herself to Anthem members and the public as an “insurance advocate” that will negotiate with Anthem (and other insurers) to maximize reimbursement for certain out-of-network medical expenses.”

To date, Anthem alleges it “has already identified more than $7.6 million dollars in payments that were directly caused by Ms. Apfel’s fraudulent requests for out-of-network authorizations and/or submission of claims on behalf of more than 480 Anthem members.” And it further alleges that this “figure is highly conservative, with the true amount of loss expected to grow dramatically as Anthem continues its investigation.” Anthem provided details in the allegations of its lawsuit.

“In reality, Ms. Apfel generates additional reimbursement not through advocacy, but rather by falsely seeking out-of-network authorizations and creating sham out-of-network medical claims for healthcare services. She then submits those claims to Anthem to obtain reimbursement payments to her member-clients for services never rendered or which are far in excess of what the healthcare providers actually charged and the members actually paid for.” Anthem further alleges that “Ms. Apfel then charges Anthem members a fee for her “services,” typically based on a percentage of these inflated reimbursements as a kickback for submitting the falsified claims on the members’ behalf.”

“Ms. Apfel typically starts with a request for a “network exception” for the member: a way for the member to see an out-of-network provider so that, in theory, the member can receive reimbursement from Anthem for the full out-of-pocket costs supposedly paid to the provider by the member for that authorized, out-of-network care.”  Anthem then claims that when “Anthem, predictably, is unable to identify an appropriate in-network provider satisfying Ms. Apfel’s numerous requirements, it will authorize the out-of-network referral and provide the member with a network exception which requires Anthem to reimburse the member for the actual out-of-pocket costs paid to that out-of-network provider.”

“Ms. Apfel’s and Defendants’ “advocacy” was designed to fraudulently intervene and capitalize on this out-of-network reimbursement process by, depending on the case, grossly inflating or completely fabricating services supposedly rendered by the out-of-network provider and paid for by the member. This caused, and continues to cause, Anthem to pay out millions of dollars to reimburse members for costs they never actually incurred.”

Anthem provided several examples of the alleged fraudulent scheme, all involving inflated schemes for psychotherapy with various mental health practitioners. In one example, “Anthem member K.S. retained Ms. Apfel to obtain reimbursement for treatment from out-of-network provider Dr. Joseph Whitcomb, PsyD, LMFT, a provider who had previously treated K.S.”

“Based on Ms. Apfel’s representations, Anthem authorized an out-of-network referral/network exception for K.S., in good faith, to treat with Dr. Whitcomb for in-office treatment from May 1, 2023 through April 29, 2024. On or about January 9, 2024, Anthem renewed the authorization for in-office treatment from Dr. Whitcomb from January 1, 2024 through December 31, 2024.”

“Dr. Whitcomb, however, could not have treated K.S. during this timeframe because he had moved to Europe years earlier in 2021, shortly after K.S. had originally stopped treating with him.” Anthem alleges that “Apfel submitted a claim for reimbursement on behalf of K.S. which included a fraudulent bill Ms. Apfel had created purporting to show that, in March 2024, K.S. had received 17 sessions of psychotherapy from Dr. Whitcomb at a cost of $675 per session, and that K.S. had paid Dr. Whitcomb $11,475 for this period.”

Further, Anthem alleges “Dr. Whitcomb died suddenly on May 18, 2024 while in Europe. Roughly one month after his death, on June 16, 2024, Ms. Apfel submitted a claim for reimbursement on behalf of K.S. which included a fraudulent bill Ms. Apfel had created showing that, in May 2024, K.S. supposedly had received 23 sessions of psychotherapy from Dr. Whitcomb at a cost of $995 per session, including 10 sessions that purportedly occurred after Dr. Whitcomb’s May 18, 2024 death, and that K.S. had paid Dr. Whitcomb $22,885 for this period.”

No answer or other responsive document has been filed in the Superior Court by any defendants as of the date of this report.

On October 7, 2019, California Governor Gavin Newsom signed Assembly Bill 824 (“AB 824”) into law. AB 824 creates a presumption that “reverse payment” settlement agreements regarding patent infringement claims between brand-name and generic pharmaceutical companies are anticompetitive and unlawful.

Reverse payment settlement agreements arise primarily – if not exclusively – in the context of pharmaceutical drug regulations and suits brought under the statutory provisions of the Drug Price Competition and Patent Term Restoration Act of 1984, commonly referred to as the Hatch-Waxman Act.

Under the Hatch-Waxman Act, once a brand-name company has submitted a new prescription drug to the U.S. Food and Drug Administration (“FDA”) and gained approval to market it, a manufacturer of a generic drug with the same active ingredients that is biologically equivalent to the approved brand-name drug can gain approval to market the generic through an abbreviated FDA process.

The New Drug Application (“NDA”) process to which new prescription drugs are subject is long, comprehensive, and expensive, whereas the Abbreviated New Drug Application (“ANDA”) process to which generic drugs are subject is substantially less expensive and requires far less testing.

In order to gain approval through the FDA, the generic company must file an ANDA. As part of this application, the generic company must assure the FDA that its drug will not infringe on any patents owned by the brand-name company. The brand-name company can and often does bring suit against the generic drug manufacturer over patent rights.

Settlements of the resulting lawsuits sometimes include reverse payments in which the plaintiff, the brand-name company, pays the defendant, the infringing generic company, a sum of money for the promise that the generic company will keep its drug off the market for an agreed-upon length of time. These have become known as “pay-for-delay” agreements in the drug industry.

AB 824 targets these types of settlements. According to the State, AB 824 closes this loophole in the Hatch-Waxman Act and ensures a brand-name company cannot continue to enforce an otherwise weak patent against generic companies through these reverse payment settlement agreements. AB 824 imposes a presumption that a settlement agreement involving a brand-name company compensating the generic company for keeping its drug off the market is anticompetitive under California antitrust law.

A nonprofit, voluntary association comprised of the leading manufacturers and distributors of generic and biosimilar medicines, manufacturers and distributors of bulk active pharmaceutical ingredients, and suppliers of other goods and services to the generic and biosimilar pharmaceutical industry, filed a federal lawsuit in an attempt to invalidate AB 824 in the case of Association for Accessible Medicines v Bonta – 2:20-cv-01708-TLN-SCR.

On September 15, 2023, the State of California and Plaintiff Association-for-Accessible-Medicines filed motions for summary judgment. The State argued the participation of each of Plaintiff’s members is necessary to establish associational standing and all of Plaintiff’s claims fail on the merits. Plaintiff argued there are no genuine disputes of fact regarding its standing and that it succeeds on the merits of its dormant Commerce Clause claim.

On February 12, 2025 the motions were granted in part and denied in part. The Court converted “the current preliminary injunction into a permanent injunction. The State may enforce the provisions of AB 824 with respect to settlement agreements negotiated, completed, or entered into within California’s borders. The injunction bars the Attorney General of the State of California, as well as the Attorney General’s officers, agents, employees, attorneys, and all persons in active concert or participation with them from implementing or enforcing AB 824 against Plaintiff, its member entities, or their agents and licensees, with the exception of settlement agreements negotiated, completed, or entered into within California’s borders.”

Ordering the insurance companies’ FAIR Plan to continue swiftly paying claims to Southern California wildfire survivors, Insurance Commissioner Ricardo Lara today took action to maintain its solid financial footing. The FAIR Plan, an insurance safety net that the state requires insurance companies to operate, requested the Commissioner’s approval for $1 billion in additional funds from its member companies and also released detailed data about its claims paid to wildfire survivors.

Commissioner Lara approved the FAIR Plan’s request – known as an “assessment” – for the funding necessary to continue meeting its obligations to Californians. The fee will be divided among insurers based on their market share. The $1 billion assessment is the largest since the FAIR Plan was created in 1968, and the first time since the 1994 Northridge earthquake. State regulations allow insurers to pass along as much as half the cost of the assessment to customers, in the form of higher charges. Insurers must absorb the other half.

Additional key actions include:

– – Directing the FAIR Plan to hire additional staff needed to process and pay claims fairly, fully, and quickly.
– – Requiring the FAIR Plan to utilize all available funds, including reserves and reinsurance funds.
– – Protecting consumers from bearing the full cost of an assessment, with insurance companies responsible for half the assessment under an agreement reached last year. Subject to the Commissioner’s prior approval under Proposition 103, insurance companies may issue a temporary supplemental fee as a percentage of the policy premium and cannot pass assessment costs on to consumers in future rates.
– – Maintaining a healthy FAIR Plan reserve fund for future claims as the summer wildfire season approaches.
– – Requiring the FAIR Plan to comply with all laws applicable to other insurance companies, including advance payments for living expenses and personal property without the need for an inventory.

Commissioner Lara claims he finalized the Sustainable Insurance Strategy in 2024 – the largest insurance reform in 30 years – aimed at increasing the issuance of regular insurance policies in higher-risk areas and reducing reliance on the FAIR Plan.

Further underscoring the need for this reform, the most recent FAIR Plan assessments followed the 1993 Kinneloa Fire in Altadena and the Old Topanga Fire in Malibu and Topanga, which affected some of the same areas as the 2025 fires – claiming three lives and destroying nearly 550 structures in those devastating incidents. Previous insurance commissioners approved $260 million, or approximately $563 million in today’s dollars, in assessments for those fires and for the fires following the 1994 Northridge Earthquake.

Commissioner Lara expects to file the Department’s Report of Examination for an ongoing financial examination of the FAIR Plan, including its compliance with recommendations from the Department’s 2022 Operational Assessment Report in coming months. The report called for significant changes in the FAIR Plan’s governance, operations, underwriting and claims handling, risk management, customer service, and financial planning strategies and policies.

Using FAIR Plan data from the Property Insurance Plans Service Office (PIPSO), the AM Best Commentary titled, “California Wildfires: Multiple Credit Negative Impacts for Insurers,” reveals that the number of California FAIR Plan policies rose by 276 percent from 2018 through 2024 (based on fiscal years ending September 30). And the premium attributable to these policies jumped to $1.4 billion in 2024, up more than 15-times higher than the $87.2 million recorded for the California FAIR plan in 2018.

Dario Morales Dominguez was employed by Shield Platinum Protection LLC when he claimed industrial injuries as a result of a cumulative trauma during the period January 1, 2020 through September 1, 2020 to multiple parts of body. His claim was resolved by Compromise and Release and WCJ Joy issued an Order approving the C&R on May 12, 2022.

On December 15, 2022, lien claimant ABC International (ABC) filed a lien for interpreting services rendered to applicant as a result of his claimed injuries.

After several lien conferences, the case was set for lien trial on April 24, 2024 before WCJ Joy. At the lien trial of April 24, 2024, the WCJ continued the matter to another trial date, and issued the following comments and Order on the Minutes:

– – “[P]arties appear unable to resolve lien and as of this dispo, LC’s exhibits are pending population in EAMS.
– – WCJ has concerns re: Defendant and CCR 10880(a)(3)1. Defendant’s claim adjuster and adjuster’s supervisor are to appear in person at next trial to discuss. IT IS SO ORDERED.”

The Defendant Petitioned Removal of the case to the WCAB in response to the Order issued by the workers compensation administrative law judge (WCJ) on April 24, 2024. In that petition the Defendant argued that no good cause exists to compel the personal appearance of the adjuster and the adjuster’s supervisor at an in person trial.

The WCAB granted removal, and rescinded the Order of the WCJ to appear in person, and substitute a new order stating that the claims adjuster and the adjuster’s supervisor must be available by virtual or telephonic appearance at the upcoming trial of this matter in the case of Morales-Dominguez v Shield Platinum Protection LLC -ADJ14175141 (February 2025).

The Petitioner claimed that that an order to appear in person constitutes an undue burden on the adjuster, as it causes a practical hardship, and prevents them from handling other cases that would be impacted by a physical appearance. Petitioner further contended that no monies are due lien claimant as there are unresolved legal issues that prevent settlement, but that the claims adjuster is available either telephonically or by other electronic means, and defendant has complied with WCAB Rule 10880(a).

In response, the WCAB panel noted that “The WCJ has broad authority to issue orders to ensure proper adjudication of each claim, including “any interim, interlocutory and final orders, findings, decisions and awards as may be necessary to the full adjudication of the case.” (Cal. Code Regs., tit. 8, § 10330.) This may include Orders that a party appear at a given hearing, should same be warranted.”

“While the WCJ retains the authority to order the adjuster to appear in person for a hearing for good cause if the circumstances warrant it, consideration should be given as to the subject or the nature of the hearing, as well as the dispute, the relief sought, the utility of the adjuster appearing in person versus appearing by phone, and the practical hardship and burden of having to appear in person, factoring in the distance and nature of the travel required. (Derrick Burford v. Cook Concrete Prods., (board panel decision) 2016 Cal. Wrk. Comp. P.D. LEXIS 1, 8.)”

“Here, while the WCJ may wish to bring the parties together and discuss settlement options or inquire further as to issues in dispute prior to commencing trial, we find an Order for both the adjuster and supervisor to appear in person for that purpose excessive. That same goal may be accomplished by an Order for the adjuster and supervisor to appear at trial by either virtual or telephonic means.”