Workers' Compensation Daily News for Aug 01, 2015
Is There Any End to Drug Maker Corruption?
Thu, 30 Jul 2015 07:03:35 - Pacific Time
In 2012 the US Justice Department announced that drugmaker GlaxoSmithKline agreed to plead guilty and to pay $3 billion to resolve its criminal and civil liability arising from the company’s unlawful promotion of certain prescription drugs, its failure to report certain safety data, and its civil liability for alleged false price reporting practices. The resolution is the largest health care fraud settlement in U.S. history and the largest payment ever by a drug company.
But that was not the end of trouble for the global health care giant. Reuters Health reports it was then fined a record 3 billion yuan ($483 million) for corruption in China last year and is examining possible staff misconduct elsewhere, faces new allegations of bribery in Romania.
GSK confirmed it was looking into the latest claims of improper payments set out in a whistleblower's email sent to its top management on Monday. A copy of the email was seen by Reuters. The company is already probing alleged bribery in Poland, the United Arab Emirates, Lebanon, Jordan, Syria and Iraq.
The latest allegations say GSK paid Romanian doctors hundreds, and in one cases thousands, of euros between 2009 and 2012 for prescribing its medicines, including prostate treatments Avodart and Duodart and Parkinson's disease drug Requip. According to the email, the doctors were notionally paid for speaking engagements, but in three out of six cases, including the most highly paid one, they did not give any speech. The other three medics gave only one speech each, despite receiving multiple payments.
GSK also provided doctors with many international trips and made payments to them under the guise of participation in advisory boards, the email said.
The China scandal, which involved alleged bribes totaling hundreds of millions of dollars, hit GSK's sales in the country, although Chief Executive Andrew Witty, reporting quarterly results on Wednesday, said its Chinese business was stabilizing.
The sender of the Romania email said its contents would be passed on to the U.S. Department of Justice and the Securities and Exchange Commission (SEC), which are investigating GSK for possible breaches of the Foreign Corrupt Practices Act. An SEC program provides cash incentives for whistleblowers to report corporate malpractice. Read More...
WCIRB Reports Comp Costs Are Climbing
Thu, 30 Jul 2015 07:03:30 - Pacific Time
Three years after one of the Legislature’s periodic reforms of California’s system of compensating workers for job-related injuries and illnesses, costs to employers are climbing, the Workers’ Compensation Insurance Rating Bureau says in a new report.
The 2012 reforms have saved billions of dollars, the WCIRB report says, but total medical costs have continued to increase, with the average medical benefit per claim 90 percent above the national median. Changes in medical care protocols have been a source of political friction ever since the reform bill was passed over the objections of medical providers and attorneys who represent injured workers.
The WCIRB report says that despite steps to curtail costs, total premiums paid to workers’ compensation insurers hit $16.5 billion in 2014, up from $14.8 billion the year before and 27 percent of all such premiums in the nation. It pointed out, however, that the premium jump reflected not only higher rates being charged by insurers to compensate for rising costs, but increases in the number of Californians on payrolls as the state recovered from recession. Premiums dropped to as low as $8.8 billion in 2009 - the depths of the Great Recession - before beginning to rise again, leading to the 2012 legislation.
Overall, California employers, the report said, are paying an average of $3.07 in insurance premiums for every $100 of payroll, less than half of the high-water mark of $6.29 in 2003, but up from $2.94 in 2014 and a sharp jump from the lowest recent level, $2.10 in 2009. California has, by far, the highest costs in relation to payroll of any state, the report notes, almost twice the national average.
Employers in the transportation and utility industries pay the highest premiums, an average of $14.28 per $100 of payroll, due to their high accident ratios, followed by construction at $12.95. The lowest average premium, just 84 cents per $100, is paid for office clerical workers.
Medical treatment is the largest single cost factor in the system, pegged at $6.6 billion, followed by cash benefits to disabled workers at $4.5 billion. Read More...
CalChamber Says Ten 2015 "Job Killer" Bills Remain
Wed, 29 Jul 2015 09:32:06 - Pacific Time
Each year the California Chamber of Commerce releases a list of "job killer" bills to identify legislation that will decimate economic and job growth in California. The CalChamber tracks the bills throughout the rest of the legislative session and works to educate legislators about the serious consequences these bills will have on the state. The 2015 session will soon close, so what remains of the 2015 "job killer" list of proposed legislation.
As of July 17, the deadline for bills to pass policy committees and move to the floor, seven Senate job killer bills and two Assembly job killer bills remain active. One "job killer" bill is already on its way to the Governor. Surprisingly, none of them pertain to workers' compensation.
AB 359 has been sent to the Governor for signature. The proposed law alters the employment relationship by requiring any successor grocery employer to retain employees of the former grocery employer for 90 days and continue to offer continued employment unless the employees’ performance during the 90-day period was unsatisfactory. The law was supported in part by A 2014 study by the Food Labor Research Center at U.C. Berkeley (commissioned by the United Food and Commercial Workers) titled, "Shelved: How Wages and Working Conditions for California's Food Retail Workers Have Declined as the Industry has Thrived,"
Other labor related bills that are still alive, but not passed include SB 3 which would increase the minimum wage by $3.00 over the next two and a half years with automatic increases tied to inflation.
Also pending is SB 406 which would significantly expand the California Family Rights Act by reducing the employee threshold from 50 to at least 25 employees and expanding the family members for whom leave may be taken, which will provide a California-only, separate 12 week protected leave of absence for both small and large employers to administer.
AB 465 would preclude mandatory employment arbitration agreements. The CalChamber says the proposed law is likely pre-empted by the Federal Arbitration Act even if passed.
The remaining seven "job killer bills" are not directly related to employment law issues, but nonetheless are targeted by the CalChamber for driving up costs. There should be no workers' compensation surprises as was the case in August 2013 with SB 863. But then again, the industry did not know SB 863 was in the pipeline until the very last week. Read More...
CWCI Relocates to Oakland Next Month
Wed, 29 Jul 2015 09:31:59 - Pacific Time
The California Workers’ Compensation Institute (CWCI) is moving to a new office in Oakland next month.
CWCI will be moving in late August, relocating to newly remodeled space at 1333 Broadway, Suite 510, Oakland, 94612. The new suite of offices is directly upstairs from the 12th Street/City Center BART station, and is across City Center Plaza from the Institute’s current location at 1111 Broadway.
"The new offices offer a more efficient and flexible floorplan," according to CWCI President Alex Swedlow. "Given the influx of businesses into downtown Oakland, we are very pleased to have secured space at City Center, which is convenient, easily accessible, and which has become a hub for many key organizations within our industry."
Besides CWCI, the Department of Industrial Relations, the Division of Workers’ Compensation, the Workers’ Compensation Appeals Board District Office, the Workers’ Compensation Insurance Rating Bureau, and the Commission on Health and Safety and Workers’ Compensation are all now located within walking distance of the Oakland City Center.
The Institute will retain its current phone number, (510) 251-9470, following the move. Read More...
DWC Reports "Impressive" Progress on SB 863 Goals
Tue, 28 Jul 2015 11:17:51 - Pacific Time
The DWC has posted a new report this month on progress implementing SB 863. "This report confirms that the reforms are on track. Employer costs are under control and injured worker benefits are increasing," said Labor and Workforce Development Secretary David M. Lanier. "While there is ongoing work to reduce delays and improve the system - overall the progress is impressive."
The report concludes that workers’ compensation costs for employers have dropped. In May 2015, the Department of Insurance adopted advisory pure premium rates for July 1, 2015, which on average are five percent less than the industry average for filed pure premium rates as of Jan. 1, 2015, and 10.2 percent less than the average of the approved Jan. 1, 2015 rates.
Benefits for injured workers have also increased. Prior to the reform legislation, the minimum weekly benefit payment for people with permanent disabilities was $130, and the maximum was $270. The new minimum weekly PD benefit is $160, and the maximum is $290. Also, the Return-to-Work-Supplement Program - which provides a one-time $5,000 supplement to eligible injured workers - became effective in April 2015. As of June 30th, DIR had issued 434 checks totaling over $2 million.
SB 863 also created an Independent Medical Review (IMR) program, in which physicians use evidence to determine the necessity of requested treatments. "The progress made since the passage of SB 863, which allows medical - rather than legal - experts to make medical decisions, is very encouraging," said DIR Director Christine Baker. Additional key findings of the report include:
1) IMR decisions are being issued well within the 30-day statutory time frame from receipt of medical records.
2) Lien filings are a big factor in the reduction in overall costs. The report shows that lien filings have decreased by approximately 60 percent since the passage of SB 863. A retrospective evaluation report of SB 863 cost monitoring completed last November by the WCIRB estimated savings of $690 million due to the reduction in lien filings.
3) Commitment to evidence-based medicine is also demonstrated through recent adjustments to the Medical Treatment Utilization Schedule (MTUS). The MTUS is a set of guidelines for appropriate medical care based on high-quality, unbiased scientific studies. However, the system allows for exceptions when treatment can be based on guidance other than the MTUS.
SB 863’s revisions to the MPN program went into effect on August 27, 2014. More of these networks have been approved, and they are also now more accountable to DWC. Physician listings must be updated quarterly, and if a provider leaves the network, they are required to give 45 days’ notice. Furthermore, the revised access standards require an MPN to have at least three available physicians from which injured workers can choose.
On April 13, 2015, DIR launched the Return-to-Work Supplement Program (RTWSP) for injured workers. This $120 million per year fund, which provides an additional $5,000 to each eligible injured worker who has a disproportionate loss of earnings, is an important component of the workers’ compensation reforms in SB 863. As of June 30, 2015, DIR made supplemental payments totaling $2,170,000 to injured workers. DIR received 508 applications for the one-time payment of $5,000 by that date, with 454 application reviews completed, and the remaining 54 applications under review. Of the 454 applications reviewed, 388 applications were deemed eligible, and 66 were denied, either because the person was injured before Jan. 1, 2013, or the application filed was incomplete or a duplicate. Read More...
Study Says Drugmakers Fail to Report Side Effects to FDA
Tue, 28 Jul 2015 11:17:44 - Pacific Time
A new study published in the JAMA claims that drug companies fail to report roughly one in 10 serious and unexpected medication side effects to the U.S. Food and Drug Administration (FDA) within a 15-day window specified by federal regulations. Drug manufacturers are also less likely to disclose serious adverse events within this window when patient deaths are involved than when complications aren’t fatal, according to an analysis of 1.6 million side effect reports to the FDA from 2004 to 2014.
"Timely reporting of adverse drug events is critical for ensuring patient safety," said senior study author Pinar Karaca-Mandic, a researcher at the University of Minnesota School of Public Health in Minneapolis. "Ours is the first study to empirically examine the extent of delays in reporting," she told Reuters Health by email.
Under U.S. regulations, when drug manufacturers become aware of serious complications linked to patient deaths, hospitalizations, disabilities, birth defects or previously unknown side effects, they are supposed to disclose these issues to the FDA more quickly than they would for minor problems or complications already described on medication labels, the researchers note in JAMA Internal Medicine.
Overall, 160,383 serious adverse events, or 10 percent of reports, were not disclosed by companies within 15 days - including nearly 40,500 reports involving patient deaths. About 91 percent of the nonfatal complications were reported within 15 days, compared with 88 percent of cases involving patient deaths. It’s possible that the study underestimates reporting delays, and that encouraging clinicians to report side effect directly to the FDA instead of to manufacturers might ease delays, the researchers suggest.
FDA spokesman Christopher Kelly declined to comment on the study, citing a lack of opportunity to review the findings.
The FDA has the ability to suspend drug sales or withdraw approval for unsafe medications, a tool that might also be deployed when companies fail to report serious side effects in a timely fashion. Doctors also need to disclose known side effects to patients, a step that’s often skipped when patients are being recruited for trials, a separate study in the journal points out. About one third of FDA-approved drugs carry what’s known as a black box warning, highlighting side effects that may be fatal or cause serious illness or disability. Read More...
Costa Mesa Cop Charged With Comp Fraud
Mon, 27 Jul 2015 08:25:51 - Pacific Time
A criminal complaint has been filed by the Orange County District attorney against a Costa Mesa Police Department (CMPD) officer for allegedly committing insurance fraud by presenting a false insurance claim and making false material statements related to the claim.
Ryan Patrick Natividad, 30, Corona, is charged with one felony count of insurance fraud and one felony count of making a fraudulent statement. If convicted, Natividad faces a maximum sentence of six years in jail. He was expected to be arraigned last Friday in Department C-55, Central Justice Center, Santa Ana.
On Sept. 23, 2014, Natividad is accused of reporting a work-related injury to his employer CMPD. Natividad is accused of falsely claiming earlier in the day, he had struck his fist against a wall when attempting to prevent an arrestee from stumbling into the wall while escorting the arrestee from the patrol vehicle into jail. Natividad is accused of filing a fraudulent workers’ compensation claim. He was subsequently directed by CMPD to seek immediate medical attention.
The City of Costa Mesa internally investigated Natividad’s workers’ compensation claim and uncovered evidence contradicting Natividad’s account of how and when the injury occurred.
Deputy District Attorney Noor Hasan of the Insurance Fraud Unit is prosecuting this case. Read More...
Another Big Merger - Anthem Buys Cigna for $48 Billion
Mon, 27 Jul 2015 08:25:43 - Pacific Time
Two more of the nation’s biggest health insurers are moving to merge, raising the possibility of a potential fight with antitrust regulators. Anthem said on Friday that it had agreed to buy Cigna for $48.3 billion, finally striking a deal after a nearly yearlong pursuit. Buying its rival, Anthem intends to create a new giant in the sector, gaining greater scale and considerably cutting costs.
But the proposed transaction, coming three weeks after Aetna said it would to buy Humana for $37 billion, could shrink the number of major companies in the health insurance industry from five to just three. And that could mean fewer options and higher rates for consumers and the employers that provide health insurance.
The question now is whether government officials will allow that level of consolidation to pass. The United States Department of Justice and the Federal Trade Commission have become more assertive about challenging merger combinations in recent years, analysts and industry experts have noted.
Together, Anthem, which runs Blue Cross plans in 14 states, and Cigna, which offers insurance plans through employers, would have around $115 billion in revenue. Cigna also has 24 million behavioral health customers, nearly 14 million dental care members, eight million pharmacy benefit plan members and 1.5 million Medicare Part D pharmacy customers.
Peter V. Lee, the executive director of California’s health benefit exchange, said the mergers of health plans could counterbalance the growing power of health care providers. "I am far more concerned about the consolidation of hospital and physician groups than the consolidation of health plans," Mr. Lee said. Read More...
WCAB "Insouciant" Deferral of PERS Issue in Death Case Reversed
Fri, 24 Jul 2015 08:40:48 - Pacific Time
In 2011 Gregory Thompson, was working at High Desert State Prison as a guard. An inmate stabbed him eight times. He was awarded workers compensation benefits. As a result of his injuries, he accepted a medical demotion to an entry-level computer analyst position in the information technology department of the prison’s medical unit, forfeiting his peace officer status. He had a troubled relationship with his supervisor, who told him he was not passing probation.
In March 2013, he committed suicide by means of a self-inflicted gunshot wound. The widow filed her application for workers’ compensation death benefits in April 2013. The Department did not contest the finding that the death of Gregory Thompson was causally related to the industrial injury.
In August 2013, she petitioned for a finding of fact pursuant to GC 21537 that the death was industrial, qualifying her for a PERS special death benefit for peace officers. Labor Code section 4708 expressly provides that the PERS Board "shall be joined as a defendant, and the [WCAB] shall determine whether the death resulted from injury.A surviving dependent is precluded from seeking the workers’ compensation death benefit in lieu of the PERS special death benefit. (Gov. Code, § 21542). Nevertheless, the WCJ never joined the PERS Board as a defendant.
At the conclusion of the WCAB trial, the widow testified she was indeed receiving PERS death benefits. Yet the decision did not include any findings on the petition for finding of fact pursuant to section 21537. It simply awarded a workers’ compensation death benefit of $250,000 and set legal fees at $30,000. The employer's petition for reconsideration was denied with the WCAB simply saying the PERS issue "is not before us on reconsideration. CalPERS will determine the issue of any duplicate payments."
The Court of Appeal had a difficult time determining from the WCAB record exactly what happened to the PERS issue. It nonetheless reversed in the published opinion of Department of Corrections and Rehabilitation v WCAB (Thompson).
The Court of Appeal concluded "These statutory directives would seem to be straightforward. Indeed, we have not found a case, treatise, or encyclopedia on this issue that suggests there is any alternative procedure to the two boards making a joint calculation of workers’ compensation and PERS death benefits in a single proceeding after the WCAB resolves the issue of industrial causation for a death."
"As a result of the WCAB’s insouciant deferral of the computation issue to the PERS Board, its order awarding the full workers’ compensation death benefit to the widow - without crediting the PERS special death benefit against it - is accordingly unauthorized under Labor Code section 4707 and cannot stand." Read More...
Jury Convicts Security Officer for Faking Claim
Fri, 24 Jul 2015 08:40:42 - Pacific Time
An Oroville man faces up to five years in prison after he was convicted on charges of workers’ compensation fraud.
Howard William Neel, 59, was convicted by a jury in Butte County Superior Court Tuesday on five felony counts of workers’ compensation fraud stemming from an incident in 2009, according to a press release issued by the Butte County District Attorney’s Office.
On Dec. 12, 2009, Neel was working for an area security company and putting gas in his company-assigned Ford Crown Victoria when another vehicle slightly backed into the car. Neel claimed he was knocked down in the incident and suffered back, neck and leg pain. He was subsequently taken off work.
Surveillance footage of the incident revealed that Neel was not knocked down and showed him walking normally, only beginning to limp when he was seen by the other person involved in the fender-bender.
"Neel was seen by a variety of doctors during the course of his treatment under his employer’s workers’ compensation insurance and he repeatedly denied any back, neck or leg injuries prior to the December 2009 ‘accident’," according to the release. "However, an investigation later determined he had suffered the same type of back injury he was now claiming while lifting boxes 10 years prior, which was also treated under the workers’ compensation system."
Prosecutors also showed that when Neel returned to work Dec. 30, 2009, he claimed to be injured after slipping to his knees after walking over a wet planter, according to the release. He later reported to a workers’ compensation doctor that he fell on his back and shoulder. Photos taken on the day of the slip and fall allegedly showed otherwise. They showed mud on Neel’s trousers but not on his back or shoulder.
Neel also reportedly used a cane when he visited doctors, but undercover surveillance showed that he didn’t use a cane when he worked around his house or with his horses.
Neel is scheduled to be sentenced Sept. 24, and he also faces between $100,000 and $200,000 in restitution. Read More...
Past Week News Archive
DEA Illegally Pays Millions in Comp Benefits to Informants: Thu, 23 Jul 2015 06:21:53 - Pacific Time: Read More...
Researcher Seek "Synthetic" Cannabis Pain Relief Without Euphoric High: Thu, 23 Jul 2015 06:21:46 - Pacific Time: Read More...
UCLA Health Computers Hacked: Wed, 22 Jul 2015 08:25:34 - Pacific Time: Read More...
Colorado Says No! to Cannabis for PTSD: Wed, 22 Jul 2015 08:25:27 - Pacific Time: Read More...
DWC Ends Paper QME Panel Requests on September 3: Tue, 21 Jul 2015 08:26:17 - Pacific Time: Read More...
Tujunga Man Gets 15 Years For Prescription Drug Conspiracy: Tue, 21 Jul 2015 08:26:12 - Pacific Time: Read More...
DWC Gets Tougher On Opoids In Proposed Guideline: Mon, 20 Jul 2015 10:01:05 - Pacific Time: Read More...
DWC Posts New Regs on ICD-10 Transition: Mon, 20 Jul 2015 10:01:00 - Pacific Time: Read More...
Cheerleaders Cheer Over New Labor Law: Fri, 17 Jul 2015 08:19:35 - Pacific Time: Read More...
Fear of Being Fired Adversely Effects Claim Outcomes: Fri, 17 Jul 2015 08:19:30 - Pacific Time: Read More...