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Paul M. Salisbury is an associate attorney with our Camarillo office. He has been practicing exclusively workers' compensation defense since 1980. Mr. Salisbury earned his Undergraduate Degree from UCLA in 1976 before earning his Juris Doctorate Degree from Whittier College School of Law in 1979. He was born and raised in Syracuse, New York.


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Workers' Compensation Daily News for Sep 24, 2017

S.F. Based Zenefits "Rebrands" After Insurance License Violations
Fri, 22 Sep 2017 05:29:10 - Pacific Time
A 2013 start-up, Zenefits is a San Francisco based company whose business model was to provide online HR services to businesses and then encourage those same businesses to use Zenefits as an insurance broker selling lines of insurance needed by HR departments.

The company was started by funding from well known gurus such as David Sacks who made his first fortune as an early executive at PayPal, then a second as the co-founder of Yammer, a social network for businesses, which he sold to Microsoft in 2012 for $1.2 billion. He then became an early investor in Uber and SpaceX.

Zenefits launched in April 2013 through startup incubator Y Combinator. Within eight months it was on track to make about $1 million in recurring annual revenue. It moved into a highrise in San Francisco’s SoMa district and expanded from fewer than 20 people to roughly 500, many on the sales side. By the end of 2014, Zenefits hit it’s $20 million recurring revenue goal and was making good on its promises to shake up the insurance brokerage business.

Soon, Zenefits ran into snags. The Utah Insurance Department banned it from operating in the state because the agency considered the free HR software to be in violation of a law against offering rebates to customers. Still, Zenefits kept growing. By the middle of 2015 it was serving 14,000 businesses and in the process of hiring more than 1,000 additional employees.

But in Novermber 2016 the California Department of Insurance announced that the enforcement action taken against Zenefits for multiple insurance broker license violations resulted in a $7 million penalty.

Zenefits was charged with allowing unlicensed employees to transact insurance and circumventing insurance agent education requirements. This was the largest penalty assessed by any commissioner against Zenefits and one of the largest penalties for licensing violations ever assessed in the California department's history.

Shortly after the California investigation into Zenefits’ business practices and compliance began, the company announced publicly that they were not complying with insurance laws and regulations, which was followed by the resignation of Zenefits’ CEO, Parker Conrad.

The 2016 settlement agreement obtained by the California insurance commissioner included a $3 million penalty for licensing violations, including allowing unlicensed employees to transact insurance, a $4 million penalty for subverting the pre-licensing education and study-hour requirements for agent and broker licensing, and a $160,000 payment to reimburse the Department of Insurance for investigation and examination expenses.

Zenefits has been investigated and fined in other states for similar compliance issues, including Texas, Massachusetts, Tennessee and Washington. In July 2016 Zenefits reached a settlement with the Tennessee Department of Insurance and Commerce, agreeing to pay a fine of $62,500. And the Texas insurance regulators have fined Zenefits, $550,000 for its past use of unlicensed health insurance brokers. BuzzFeed published a series of articles about Zenefits’ use of unlicensed brokers. And details of how the company devised schemes to circumvent broker licensing laws have been reported by Bloomberg Businessweek.

Jay Fulcher the former CEO of Ooyala and Agile Software was ultimately appointed its new CEO, Since then, Fulcher has been trying to re-orient Zenefits into something that’s seen as compliant and business-friendly - and away from the chaotic culture that it had under the prior CEO Parker Conrad who was shown the door.

Fulcher and the company have come out this week with two big announcements: first, the name isn’t going anywhere while the brand gets a makeover; and second, that it’s getting out of the insurance brokerage business and leaving that up to new partners. By doing that, Zenefits hopes to become an all-in-one HR tool for small businesses while leaving insurance brokerage deals to partners.

Initially, Zenefits will partner with OneDigital, an employee benefits company, as it starts to expand to partner with more regional and local brokers that have the expertise for various companies’ needs. Read More...

DWC Suspends 6 More Providers
Fri, 22 Sep 2017 05:28:36 - Pacific Time
The Division of Workers’ Compensation has suspended six more medical providers from participating in California’s workers’ compensation system, bringing the total number of suspended providers to 38.

DWC Acting Administrative Director George Parisotto issued Orders of Suspension against the following providers:

- Jeffrey Campau and Landen Mirallegro of Yorba Linda, co-founders of the medical equipment company Aspen Medical Resources, MRI diagnostic facility Elite Mgmt. LLC dba Elite Diagnostics, and an MRI services company, Regional Medical Services LLC. Campau and Mirallegro pled guilty in Orange County Superior Court on May 5, 2017 to medical insurance fraud for their involvement in an overbilling scheme in which they defrauded insurance companies of more than $70 million. Along with their co-defendant, Campau and Mirallegro agreed to pay over $8 million in restitution to several insurers and self-insured employers, and to voluntarily dismiss liens of nearly $140 million, in the case involving Aspen Medical Resources.

- Simon Hong of Brea, a medical clinic operator who on October 19, 2016 was found guilty by a federal jury in Orange County of 19 counts of health care fraud, illegal kickbacks, and identity theft involving the Medicare program.

- Chi Hong Yang of San Gabriel, who pled guilty in Kern County Superior Court on August 2, 2013 to conspiracy to commit insurance fraud, involving among other things billing and obtaining payment for services not provided. Yang surrendered his physician’s and surgeon’s certificate earlier this year.

- Rafael U. Chavez of Rancho Cucamonga, due to revocation of his certification as a Physician Assistant by the Physician Assistant Board of California on June 19, 2014.

- Wendell Wenneker of Napa, whose physician’s and surgeon’s certificate was revoked on June 2, 2017 by the Medical Board of California.

The Department of Industrial Relation’s fraud prevention efforts are posted online, including frequently updated lists for physicians, practitioners, and providers who have been issued notices of suspension, and those who have been suspended pursuant to Labor Code §139.21(a)(1).

The department recently added a new web page with information on lien consolidations and the Special Adjudication Unit. Read More...

Take Nothing in Comp Psyche Case Binding in FEHA Claim
Thu, 21 Sep 2017 04:23:45 - Pacific Time
Three Laotian correctional officers, Va Ly, Travis Herr and Pao Yang, were allegedly subjected to racial and national origin discrimination, harassment and retaliation by their employer, the County of Fresno, and its employees. The three filed suit against the County pursuant to the Fair Employment and Housing Act (FEHA), Government Code section 12900 et seq., while simultaneously pursuing their workers’ compensation remedies.

Prior to commencing the FEHA action, each plaintiff filed a workers’ compensation claim with the Department of Industrial Relations, Workers’ Compensation Appeals Board, for psychiatric injuries arising from the discrimination, harassment and retaliation.

Ly testified in the workers' compensation case that he was subjected to racial discrimination and harassment when his requests to swap shifts with other officers were denied; he was moved out of his regular assignment and repeatedly reassigned to the main jail; and his sergeant, referred to him as "the Swap King," which led to teasing by other officers. WCJ Geoffrey H. Sims found the denial of Ly’s swap request "as not a discriminatory action and was made as a good faith personnel action,"and the reassignments were due to business necessity and were not discriminatory actions and ordered that Ly take nothing by way of his application.

In Herr's case, WCJ Thomas J. Heslin issued his decision, in which he found Herr did not sustain industrial injury to his psyche and ordered that he take nothing as a result of his claim. In response to a petition for reconsideration, the WCAB found that the actions of Herr’s supervisors "were good faith personnel actions" that "were taken in order to provide for the best and most effective staffing at the jail."

In the Yang case, WCJ Dominic E. Marcelli issued his decision, in which he found Yang did not sustain "a compensable industrial injury to his psyche" and ordered he take nothing by way of his application. Marcelli determined the County’s actions were "lawful, non-discriminatory and done in good faith." Yang filed a petition for reconsideration, which the WCAB dismissed as untimely.

The County moved for summary judgment of the new civil FEHA case based on the doctrines of res judicata and collateral estoppel, arguing the workers’ compensation decisions barred plaintiffs’ FEHA claims. The trial court granted summary judgment. The court of appeal affirmed in the unpublished case of Va Li et.al.v County of Fresno.

An employee who claims to have been discriminated against or harassed in the workplace has a choice of remedies: a claim may be made under the FEHA or under workers’ compensation. Here, plaintiffs elected to pursue both remedies. The workers’ compensation claims were resolved first, in the County’s favor.

The case is analogous to Busick v. Workmen’s Comp. Appeals Bd. (1972) 7 Cal.3d 967, 973-974. There, the petitioner was shot by her former employer when she was picking up her final paycheck. She filed both a workers’ compensation claim on the theory that her injury arose out of and in the course of her employment, and a superior court action for assault and battery. (Id. at p. 971.) The superior court action was resolved before the workers’ compensation case was final, with the court finding in her favor and awarding her damages.

The subsequent workers’ compensation decision which denied her compensation because the injury did not arise out of the course and scope of her employment. The Supreme Court concluded res judicata barred the workers’ compensation action. The Court concluded the workers’ compensation proceeding was brought on the same cause of action as in the superior court case, since in the latter, petitioner sought "redress for injuries suffered from one tortious act, the shooting incident. . . . Violation of one primary right in the [workers’ compensation] case constitutes a single cause of action even though two mutually exclusive remedies are available." (Busick, supra, 7 Cal.3d at p. 975.)

In sum, plaintiffs had one primary right: their right to recover for an injury caused by discrimination, harassment and retaliation in the workplace. Two alternate forums were available to them to redress the injury. Plaintiffs proceeded first with their workers’ compensation remedy, even though the standard for recovery under FEHA may be broader. The workers’ compensation decisions are now final and binding. When two tribunals have jurisdiction and neither party objects to the jurisdiction of one or the other, then the first final judgment from one of the tribunals becomes conclusive and renders the same issue res judicata in the other court. (Busick, supra, 7 Cal.3d at p. 977.) Read More...

DWC Adjusts Hospital Outpatient -Ambulatory Surgical Centers OMFS
Thu, 21 Sep 2017 04:23:25 - Pacific Time
The Division of Workers’ Compensation (DWC) has posted an order adjusting the Hospital Outpatient Departments and Ambulatory Surgical Centers section of the Official Medical Fee Schedule (OMFS) to conform to changes in the Medicare payment system as required by Labor Code section 5307.1.

The Hospital Outpatient Departments and Ambulatory Surgical Centers fee schedule update Order adopts the following Medicare changes:

- The Centers for Medicare & Medicaid Services (CMS) Medicare Hospital Outpatient Prospective Payment System (HOPPS) October 1, 2017 Addendum A [Zip] quarterly update

- The Centers for Medicare & Medicaid Services (CMS) Medicare Hospital Outpatient Prospective Payment System (HOPPS) October 1, 2017 Addendum B [Zip] quarterly update

- The Centers for Medicare & Medicaid Services (CMS) Ambulatory Surgical Center Payment System, October 2017 ASC Approved HCPCS Code and Payment Rates [zip], Column A entitled "HCPCS Code" of "Oct 2017 ASC AA" and Column A entitled "HCPCS Code" of "Oct 2017 ASC EE"

The order adopting the OMFS adjustments is effective for services rendered on or after October 1, 2017 and is posted on the DWC website. Read More...

Orthopedic QME Fraudulent Concealment Case Dismissed
Wed, 20 Sep 2017 04:28:20 - Pacific Time
A California federal judge dismissed a fraud claim in a medical malpractice suit accusing a QME orthopedic surgeon of botching a man’s knee replacement surgery and fraudulently concealing an infection, saying there is no evidence that the doctor knew about the infection.

Before commencement of a jury trial, Law360 reports that U.S. Magistrate Judge Jacqueline Scott Corley granted partial summary judgment in favor of QME Dr. David Jupina and his practice group, Tri Valley Orthopedics & Sports Medicine Group Inc., in a suit brought by William Denis McCann accusing the health care providers of botching his total knee replacement surgery which purportedly resulted in a bacterial infection that ultimately required corrective surgery and replacement of the artificial joint.

The judge said McCann’s fraudulent concealment claim fails since the patient didn’t prove that Jupina knew that McCann had a deep tissue infection, only that he had a superficial infection that was treated with antibiotics.

"Based on the record before the court, no reasonable trier of fact could find that Dr. Jupina knew plaintiff had a deep tissue infection," Judge Corley wrote in a six-page order. "No test result told Dr. Jupina that plaintiff had a deep tissue infection; - No expert has opined that based on what Dr. Jupina observed he had to know that plaintiff had an infection despite not having any test results."

A fraudulent concealment claim requires that the doctor has a duty to disclose certain facts, and the judge said the claim fails without evidence the doctor had knowledge of those facts.

"A duty cannot arise when the fact is not actually known to the defendant," she said.

Judge Corley said the fact that Jupina referred McCann to another doctor for a second opinion and informed the patient he didn’t know what was wrong with his knee undermines McCann’s argument that the doctor knew he had a deep tissue infection and wanted to hide that fact from the patient.

The suit was filed in June 2016 and seeks more than $500,000 in damages. A jury trial is set for November on the remaining claims, according to court records. The case is William Denis McCann v. David Jupina et al., case number 3:16-cv-03244, in the U.S. District Court for the Northern District of California.

Dr. Jupina joined the Tri-Valley Orthopedic group in 1998. He is currently team physician for local Foothill High School athletes, and Orthopedic Surgery Consultant to the Federal Correctional Institution in Dublin, CA. He performs surgery at ValleyCare Hospital, San Ramon Regional Medical Center, Hacienda Surgery Center and Pleasanton Surgery Center.

The DWC lists him as a QME with offices in ten locations in Northern California Read More...

Feds Wrap up Drug Cases Against Fountain Valley Clinic
Wed, 20 Sep 2017 04:27:59 - Pacific Time
A federal jury has convicted a physician assistant who worked at a Fountain Valley medical clinic on federal drug trafficking charges for writing prescriptions for dangerous and addictive narcotics without a medical purpose.

Kaitlyn Phuong Nguyen, 32, of San Jose, California, was found guilty yesterday of 10 counts related to the illegal distribution of oxycodone, methadone and alprazolam. The trial jury heard evidence that four “patients” died of drug overdoses after obtaining prescriptions from Nguyen.

On the eve of Nguyen’s trial last week, the doctor who oversaw the clinic was sentenced to 70 months in prison after pleading guilty to two counts of illegal distribution of a controlled substance by a practitioner.

When he pleaded guilty earlier this year, Dr. Victor Boon Huat Siew admitted illegally prescribing oxycodone, methadone and alprazolam from his clinic from the beginning of 2009 through early 2015.

Siew, 66, of Laguna Beach, was sentenced by United States District Judge James V. Selna, who presided over Nguyen’s trial.

According to court documents and evidence presented during Nguyen’s trial, Siew and Nguyen issued prescriptions without a medical purpose in exchange for cash and insurance payments. "Many of the patients.... had ‘red flags’ in their patient files, indicating that they were abusing their pain medication and should not have been given prescriptions," according to a brief filed in relation to Nguyen’s trial.

Nguyen, who worked at the clinic in 2012, performed only cursory examinations on most "patients" prior to prescribing them narcotics. "Despite having a license to write prescriptions herself, defendant [Nguyen] usually used a prescription pad pre-signed by Siew (which was not a lawful practice) to prescribe addictive substances such as oxycodone, methadone and alprazolam," according to the trial brief.

The most common drugs prescribed by Siew and his employees were oxycodone (best known under the brand name OxyContin), methadone (a synthetic opioid often used as a treatment for addiction to opioids such as heroin), and alprazolam (sold primarily under the brand name Xanax).

The jury found Nguyen guilty of conspiring to distribute controlled substances and nine counts of distribution of controlled substances. As a result of yesterday’s convictions, Nguyen will face a statutory maximum penalty of 140 years in federal prison when she is sentenced by Judge Selna on January 22.

A third defendant in the case - physician assistant Thanh Nha T. Pham, 31, of Fountain Valley, pleaded guilty to conspiracy to distribute controlled substances and is scheduled to be sentenced by Judge Selna on January 29.

This case is the result of an investigation by the Drug Enforcement Administration, the Fountain Valley Police Department and the California Department of Justice. The case is being prosecuted by Assistant United States Attorneys Ann Luotto Wolf and Rosalind Wang of the Santa Ana Branch Office. Read More...

Lien Claimants Say Judge Levy was "Seriously Misleading"
Tue, 19 Sep 2017 04:08:43 - Pacific Time
Declarations and brief continue to be filed in federal court for and against imposing a preliminary injunction halting the implementation of newly adopted SB 1160. This new law provides for a stay on lien claims filed by indicted medical providers until after their case has been resolved.

Dr. Eduardo Anguizola who is facing multiple counts of insurance fraud filed by Orange County prosecutors is the lead plaintiff who claims Labor Code 4615 violates the procedural component of the due process clause because it immediately stays all liens without notice or a hearing.

The defendants responded that Section 4615 affords sufficient process because Plaintiffs still have the same rights afforded to them by the workers' compensation scheme generally. The Defense filed a 117 page Declaration of Workers' Compensation Chief Judge Paige Levy that articulated how lien claimants subject to 4615 have rights to due process under the new law, and indeed attached several illustrative cases on the stay law that have been decided by either Removal or Reconsideration by the WCAB.

Essentially she pointed out several panel decisions that have held that any lien claimant who asserts they do not fall subject to the stay have the right to have their argument heard and decided upon filing a DOR on the issue. Any WCJ that had refused to do so was overturned. Judge Levy pointed out the statutory and regulatory provisions that allowed lien claimants to challenge the application of the "automatic stay" to their individual cases.

The plaintiffs were given time to rebut Judge Levy, and filed a brief and many declarations accordingly. They claim these documents "address the seriously misleading declaration of Judge Levy."

They argue "Now, faced with the State-submitted declaration of Paige S. Levy, the Chief Judge of the California Division of Workers’ Compensation, the Court gave the Plaintiffs a fair chance to reveal what is occurring in the California workers’ compensation courts and to address the seriously misleading declaration of Judge Levy."

They say "Judge Levy offers only anecdotal references to a handful of cases to support the State’s claim that workers’ compensation judges are providing due process to claimants affected by Section 4615. Judge Levy’s declaration is wholly refuted by the detailed declarations submitted concurrently with this brief and is contravened by the DIR and WCAB’s own publications, guidelines, procedures, manuals, recent public admissions, website, and press releases."

They further argue that "the regulations providing procedures like Petitions for Reconsideration and Petitions for Removal are inapplicable because they arise only after a Court has issued an order. However, Section 4615 stays are imposed not by judicial orders but by clerical actions performed in a backroom and distributed to WCAB judges, typically by "flagging" the liens on the EAMS system, resulting in their dismissal by operation of law, a situation in which the workers’ compensation court does not hear the matter at all."

Plaintiffs attach numerous declarations by lien claimants who portray the situation for lien claimants quite differently from Judge Levy. One of them was from Attorney Marty Renetzky who started and ran Medical Collection Company for 6 years and 6 medical clinics for Dr. Floyd Cord from 1981 through 1983. He also started and ran Vista Bay Medical Group until 1991, started and ran Golden State Auto Appraisal Company for 7 years, and currently runs Crestview Medical Collections.

He says "American Allied Diagnostics Medical Group, Inc., has taken all steps to appropriately document and pursue its liens. This includes filing liens, paying activation fees and appearing at all relevant hearings." Yet he says its liens ended up on the stayed liens list although they have not been charged with any crime. They were never given official notice of this, and he says they have no procedure to contest this status.

He does not say that any petition for reconsideration or removal has been filed or rejected, so he does not specifically show how Judge Levy was wrong or how the procedure outlined in her declaration does not work for this lien claimant.

Another court hearing is set for September 28, 2017 at 8:30 am. Judge Wu may make is ruling on a preliminary injunction at this next hearing. Read More...

San Diego Deputy Sheriff Charged in Fraud Case
Tue, 19 Sep 2017 04:08:32 - Pacific Time
Prosecutors say a local San Diego sheriff’s deputy, who claimed he had suffered a back injury but may have been seen working out with heavy weights as a gym, has been charged with committing workers compensation insurance fraud resulting in $57,000 in losses.

According to the story in the San Diego Union Tribune, Matthew Tobolsky, 40, faces 14 counts including insurance fraud, filing a false claim, attempted perjury and failing to disclose information that affects a payment. The charges carry a potential sentence of up to 15 years in custody, which would most likely be served in county jail.

Tobolsky has not yet had an opportunity to enter a plea in the case. He is scheduled to be arraigned in San Diego Superior Court Wednesday afternoon.

According to the District Attorney’s Office, Tobolsky claimed in January that he had injured his back from lifting two five-gallon water bottles. But an investigation, initiated by the Sheriff’s Department, indicated Tobolsky had misrepresented his physical condition and what he could or could not do.

Authorities said Tobolsky told medical professionals that he was suffering from debilitating pain and was unable to do light duty on the job. But the investigation revealed he was able to work out with weights at a gym.

Of the $57,000 in losses, $46,000 was paid directly to the defendant, prosecutors said.

The Sheriff’s Department investigated the case will help from the state Department of Insurance and the District Attorney’s Office’s Insurance Fraud Division. Read More...

Illegally Uninsured L.A. Garment Manufacturers Cited
Mon, 18 Sep 2017 04:43:25 - Pacific Time
The California Labor Commissioner’s Office cited 14 garment manufacturers and contractors $372,135 for labor law and garment registration violations, following inspections of 18 garment manufacturers last month in the Los Angeles area. The businesses cited employ 170 workers in the Los Angeles garment district.

The penalties included $275,835 in fines and stop orders for seven employers operating without workers’ compensation insurance coverage. Fourteen businesses were cited $34,300 for garment regulation violations, including failure to register as a garment manufacturer, display the garment registration or maintain required records. Investigators also confiscated 5,725 illegally manufactured garments with an estimated street value of $103,000 from six of the businesses.

"Garment manufacturers who thwart the law threaten workers’ rights and undermine honest employers in the industry, making it difficult for legitimate businesses to succeed,” said Labor Commissioner Julie A. Su. “These illegal entities should take note: We will shine a light on the underground economy and those who contract with unregistered contractors will also be held accountable."

The Labor Commissioner’s office is also pursuing wage theft investigations on those employers who failed to pay proper wages under the California Labor Code.

The Garment Manufacturing Act of 1980 requires that all industry employers register with the Labor Commissioner and demonstrate adequate character, competency and responsibility, including workers’ compensation insurance coverage. Garment manufacturers who contract with unregistered entities are automatically deemed joint employers of the workers in the contract facility. Clothing confiscated from illegal operations cannot be sold, and will be donated to a non-profit agency that will provide the items to homeless and domestic violence shelters in the Los Angeles area.

The Labor Commissioner also administers a special wage claim adjudication process for garment workers pursuant to California’s AB 633, passed in 1999. This law provides not only an expedited process for garment workers to file wage claims but also provides a wage guarantee where garment manufacturers are responsible for wage theft at their contractors’ facilities.

The Labor Commissioner’s Office, officially known as the Division of Labor Standards Enforcement, is a division of the Department of Industrial Relations (DIR). Among its wide-ranging enforcement responsibilities, the Labor Commissioner’s Office inspects workplaces for wage and hour violations, adjudicates wage claims, investigates retaliation complaints and educates the public on labor laws.

In 2014, Commissioner Su launched the Wage Theft is a Crime multilingual public awareness campaign. The campaign defines wage theft and informs workers of their rights and the resources available to them to recover unpaid wages or report other labor law violations. Employees with work-related questions or complaints may contact DIR’s Call Center in English or Spanish at 844-LABOR-DIR (844-522-6734). Read More...

FDA to Enforce New Compounded Drug Law
Mon, 18 Sep 2017 04:43:15 - Pacific Time
The head of the U.S. Food and Drug Administration said on the agency is working on a new policy that would encourage more compounding pharmacies to register under a law enacted in the wake of a deadly 2012 meningitis outbreak linked to one such company.

FDA Commissioner Scott Gottlieb made the comments in an interview with Reuters as federal prosecutors in Boston prepare for the second criminal trial over contaminated steroids manufactured by the now-defunct New England Compounding Center (NECC).

That meningitis outbreak sickened 778 patients nationwide, including 76 who died, after receiving contaminated steroids, prosecutors said.

After the outbreak, Congress in 2013 passed the Drug Quality and Security Act, which aimed to bring more compounding pharmacies, which make custom medications, under the authority of the FDA rather than state pharmacy boards.

The law created a category of "outsourcing facilities" that could register with the FDA, allowing them to sell products in bulk to hospitals and physician practices without prescriptions for individual patients.

In exchange, those compounders would have to follow federal manufacturing standards and subject themselves to routine inspections. Today, around 70 firms have registered as outsourcing facilities.

According to the American Pharmacists Association, there are about 7,500 pharmacies that specialize in compounding services.

Under the 2013 law, compounders that did not register with the FDA would remain under state oversight, and according to the agency, could only compound drugs based on prescriptions for specific patients.

Gottlieb said that in order to encourage more compounders to register, the FDA would release draft guidance in the next two months reflecting its intention to adjust its enforcement priorities based on the size of registered compounders and the riskiness of their products.

"We’re looking at ways we can provide more of a gradation in our regulatory architecture so we don’t have a one-size-fits-all approach," Gottlieb said.

Pharmacists have long mixed tailored medications for patients based on individual prescriptions. By 2013, the practice had mushroomed, with some pharmacies selling thousands of doses of regularly used mixtures for physicians to keep for future use.

Gottlieb’s comments came ahead of next week’s trial in Boston of Glenn Chin, a former supervisory pharmacist at NECC who is accused of second-degree murder and fraud. He has pleaded not guilty.

NECC’s co-founder, Barry Cadden, was sentenced in June to nine years in prison after he was convicted on racketeering and fraud charges. Prosecutors said he directed the production of drugs in unsanitary and dangerous ways to boost profits.

The FDA has been criticized by groups like the American Pharmacists Association, which has said the federal agency has been overstepping its authority to regulate state-licensed pharmacies.

That criticism has focused on the FDA’s position that the 2013 law requires prescriptions for specific patients, restricting pharmacies from distributing drugs to stock doctors’ offices for their uses, even if allowed under state law.

Gottlieb said he stood by the FDA’s interpretation of the law and that he expected no slowdown in terms of its enforcement.

But he said the new guidance would help address concerns from smaller pharmacies that want to do just that but have resisted registering as outsourcing facilities because of the expense of regulatory compliance.

The draft guidance, he said, would allow smaller firms creating low-risk drugs to be subject to less onerous requirements than larger outsourcing facilities.

Doing so, he said, would help ensure more pharmacies are in compliance with manufacturing standards, potentially creating more access to compounded medications.


Past Week News Archive

First State Adopts Generic Drug Price-Gouging Law: Fri, 15 Sep 2017 09:15:12 - Pacific Time: Read More...

CWCI Study Says IMR Process Tapering Off: Fri, 15 Sep 2017 09:15:06 - Pacific Time: Read More...

Ridesharding Transforms Comp Medical Transportation: Thu, 14 Sep 2017 09:36:51 - Pacific Time: Read More...

CopperPoint Mutual Buys Pacific Comp: Thu, 14 Sep 2017 09:36:46 - Pacific Time: Read More...

CDI Approves WCIRB Regulatory Filing: Wed, 13 Sep 2017 05:45:38 - Pacific Time: Read More...

DWC Makes Adjustments to OMFS: Wed, 13 Sep 2017 05:45:31 - Pacific Time: Read More...

Another High Court to Rule on Comp Marijuana: Tue, 12 Sep 2017 07:58:53 - Pacific Time: Read More...

Generic Drugmakers to Exploit "Tribal Immunity": Tue, 12 Sep 2017 07:58:48 - Pacific Time: Read More...

New MSA Workers’ Compensation Review Contractor (WCRC): Mon, 11 Sep 2017 08:15:46 - Pacific Time: Read More...

Geographic Dimensions of California Opioid Abuse: Mon, 11 Sep 2017 08:15:40 - Pacific Time: Read More...