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Barack Obama, I Have A Bone To Pick With You

Monday, February 13th, 2017

Dear Mr. Former President,

I’m writing about the Patient Protection and Affordable Care Act, which you signed into law six years, ten months and twenty-one days ago. That’s 2,519 days. Nearly seven years. Didn’t take but about two hours to become ObamaCare.

The law has saved lives and money, a lot of both. It’s allowed nearly 20 million people to become insured, most of them poor. Those people were able to get that insurance because the law helped them pay for it. The Medicare Hospital Insurance Trust Fund, which in the year before the law’s passage was projected to run out of money right about NOW, is good for another 12 years as of today, according to Medicare’s actuaries as reported by the Kaiser Family Foundation.

No lifetime caps, no pre-existing condition denials, kids on the plan until age 26, free preventive care, donut hole gone, I could go on.

But you, sir, and your administration made a mess of what came after. Consider:

  • You did such a wonderful job of selling the ACA to the American public, that you got waxed in the 2010 mid-term elections. You lost the House big time, 63 seats, and also the super-majority in the Senate, six seats;
  • You had three and a half years to get Healthcare.gov ready, and what happened on 1 October 2013? A system crash that took months to fix. You were warned 18 times prior to scheduled launch that the project was mismanaged and in deep doo-doo, but your team did nothing;
  • You let a clever-as-a-fox, but dumb-as-a-doorpost former Governor of Alaska, of all places, get away with introducing Death Panels into the conversation, and to this day 29% of Americans still believe that lie;
  • You sat by and watched the House of Representatives vote 54 times to defund, delay or outright repeal the law you signed;
  • I could go on.

But it’s your failure to educate the American people and your failure to get down and fight for your signature legislation that bothers me the most. Maybe you should have demanded to get your cell phone back and taken to Twitter like the two-year-old who now sleeps in your used-to-be bedroom. Anything would have been better than the cerebral, thoughtful argument you brought to the battle. Right up there with the old knife to a gunfight thing.

And that is such a shame, because, sure, the law has flaws, but you could have fixed them if you’d been willing to approach the job like Lyndon Johnson, or even Harry Truman. But perhaps that kind of street fighting was beyond the Constitutional Lawyer, the Editor of the Harvard Law Review.

Obamacare had the potential, with a few tweaks here and there, to be a monumental achievement. Instead, it has had a tortured existence and may yet prove to be the only death panel victim.

But, wait. Hold on. Here’s a thought: It is looking more and more as if the Republicans, who now control all three branches of government (well, maybe not the Executive, after all) have become the dog that caught the bus. They do not appear to have a clue. For example, last Thursday the highly-respected Bob Laszewski wrote in his blog, “the repeal part is still on track to occur this spring, … likely in March.” But just the day before, the two-year-old with the Twitter account, who thrasonically said he’d repeal Obamacare on Day 1, told Bill O’Reilly we may not see any changes until sometime in 2018 (but they’ll be beautiful when they happen, really beautiful).

Here’s another thought: Maybe when the public actually begins to realize what it’s about to lose things will begin to change. Maybe when the 35% of Americans who still think Obamacare and the Affordable Care Act are different laws realize they are in danger of losing the Obamacare they hate as well as the Affordable Care Act they love, things will begin to change.

One can only “hope.”

Sincerely,

Tom

P.S. We miss you.

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The Bike Helmet Battle: Some Things never Change

Monday, August 29th, 2016

It’s been ten years since the Insider wrote a word about motorcycle and bicycle helmets. Shame on us. This Post provides a ten-year update and connects helmet use to workers’ compensation.

To review the bidding:

We “tackled” motorcycle helmets after Ben Roethlisberger, quarterback of the Pittsburgh Steelers (who, at the time, were reigning Super Bowl champions), had been seriously injured when, sans helmet, he drove head on into the side of a Chrysler New Yorker making a left turn in front of him in downtown Pittsburgh. Big Ben suffered serious facial and head injuries. He could easily have been killed. We ended that Post with this:

As a diehard New England Patriot fan, I really want to see Ben Roethlisberger on the field challenging my team for all he’s worth. So, I hope he makes a miraculously speedy recovery and is his old self by the start of training camp. But what would be really great, better than any football game, is if Big Ben, as soon as he’s sitting up and able to mouth coherent speech, were to make a big-time television public service announcement. A TV spot in which he would tell every kid and every football fan in America that he was wrong, that he was stupid, that he is not immortal and that he will never, ever again ride a motorcycle without wearing the best helmet made in the universe.

That didn’t happen. Quite the opposite, actually. For when media asked Mr. Super Bowl Superman if he would continue riding his bike (well, make that his new bike) and, if so, would he wear a helmet, he said “Yes” to the first and “No” to the second. It was at that moment that I knew we had lost the motorcycle helmet game in America.

With respect to bicycle helmets we reported on a New York City study (unfortunately no longer available) analyzing the 225 bicycle accident deaths that occurred over the most recent ten year period in the City. The study provided compelling evidence of life-saving properties of bicycle helmets. This from that Post:

  • Almost three-quarters of fatal crashes (74%) involved a head injury.
  • Nearly all bicyclists who died (97%) were not wearing a helmet.
  • Helmet use among those bicyclists with serious injuries was low (13%), but it was even lower among bicyclists killed (3%).
  • Only one fatal crash with a motor vehicle occurred when a bicyclist was in a marked bike lane.
  • Nearly all bicyclist deaths (92%) occurred as a result of crashes with motor vehicles.
  • Large vehicles (trucks, buses) were involved in almost one-third (32%) of fatal crashes, but they make up approximately 15% of vehicles on NYC roadways.
  • Most fatal crashes (89%) occurred at or near intersections.
  • Nearly all (94%) fatalities involved human error.
  • Most bicyclists who died were males (91%), and men aged 45–54 had the highest death rate (8.1 per million) of any age group.

So, where are we now?

According to the Insurance Institute for Highway Safety:

Currently, 19 states and the District of Columbia have laws requiring all motorcyclists to wear a helmet, known as universal helmet laws (Insider Note: in 2006, it was 20 states and the District of Columbia). Laws requiring only some motorcyclists to wear a helmet are in place in 28 states. There is no motorcycle helmet use law in three states (Illinois, Iowa and New Hampshire).

Regarding bicycles helmets, no state requires an adult to wear one, although 21 states and the District of Columbia require young riders to wear them.

Now, into this cranial hodgepodge of helmet laws ride researchers from the University of Arizona. Writing in the American Journal of Surgery, they report on their study, the largest ever done regarding the efficacy of bicycle helmets. This from the study’s Abstract:

Methods

We performed analysis of the 2012 NTDB abstracted information of all patients with an intracranial hemorrhage after bicycle related accidents. Regression analysis was performed.

Results

A total of 6,267 patients were included. 25.1%(n=1,573) of bicycle riders were helmeted. Overall 52.4%(n=3,284) patients had severe TBI (Traumatic Brain Injury), and the mortality rate was 2.8%(n=176). Helmeted bicycle riders had 51% reduced odds of severe TBI (0.49 [0.43-0.55]; p<0.001) and 44% reduced odds of mortality (0.56; 95% CI, 0.34-0.78; p=0.010). Helmet use also reduced the odds of facial fractures by 31%(0.69; 95% CI, 0.58-0.81; p<0.001).

Conclusion

Bicycle helmet use provides protection against severe TBI, reduces facial fractures, and saves lives even after sustaining an intracranial hemorrhage.

The good news from this study? In a bicycle accident you are more than 50% less likely to sustain a TBI, 44% less likely to die and 31% less likely sustain a facial fracture if you are wearing a helmet (Insider Note: Ask Ben Roethlisberger to describe the pain of a facial fracture).

The bad news? Despite the good news only 25% of bicyclists wear helmets. In ten years nothing has changed.

Does this have anything to do with workers’ compensation? According to Bureau of Labor Statistics data, if you’re one of the more than 73,000 bicycle messengers and couriers in the U.S. it might. And if you’re one of the more than 12,000 that navigate streets in southern California or one of the more than 5,000 that zip through Midtown Manhattan, or one of the 1,400 dodging traffic in Chicago’s Loop it might. Because, while all states require employers to provide helmets to their bicyclist employees, and while most states require employers to provide training that includes the benefits of helmets, no state requires the bicyclist to wear them. However, both New York City and Chicago have enacted local laws requiring employers to provide working cyclists helmets meeting either A.N.S.I. or Snell standards and further require the cyclists to wear them.  Although in the case of NYC, someone might want to pass the requirement on to the messenger and courier companies, the largest of which told me wearing a helmet is “totally up to the rider’s discretion.”

For now, we’re left with a mish-mash. Things are pretty much as they were back in 2006, along with the helmetless rider’s continuing mantra: “It’s all about the freedom of personal choice.” That may be true, but society, that’s you, I and everyone else, doesn’t have a choice about sending EMT Rescue Units to the scenes of cycle accidents and caring for those who sustain serious injury or death in the “Live Free Or Die” game.

 

 

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2016 White Paper Evaluates Commonwealth Care Alliance

Monday, July 18th, 2016

In April, 2016, I authored a post about Commonwealth Care Alliance (CCA), a Massachusetts HMO dedicated to serving the Dual Eligible population. Duals qualify for both Medicare and Medicaid, and CCA has been the nation’s incubator for how to do that. The Boston-based HMO operates a Senior Care Option plan for Duals over the age of 65 and an Affordable Care Act demonstration project, called One Care, for Duals younger than 65. I’ve been a CCA Director since its inception in late 2003.

Now, with the support of the Robert Wood Johnson Foundation, JSI Research & Training, Inc., has published an extensive evaluation of CCA’s visionary and groundbreaking efforts to treat the nation’s sickest of the sick and poorest of the poor.

In JSI’s words:

The provisions in the ACA were designed to achieve the Institute of Health Improvement’s Triple Aim of improving patient experience of care and the health of populations while reducing the overall cost of health care.

The 22-page White Paper’s thrust centers around CCA’s “Social ACO” model of care. JSI describes the Social ACO approach this way:

These approaches are based on the idea that improving health and cost outcomes of vulnerable populations will necessitate incorporating health, behavioral health, and social services into the ACO model. Social ACOs serve populations with complex and often unmet social and economic needs that impact health outcomes and health system utilization, including needs related to housing, food security and nutrition, legal assistance, employment support, and/or enrollment assistance.

As I noted in April, Duals represent only 4% of the nation’s population, but consume 34% of its health care dollars. They present a societal problem begging for a solution. The Affordable Care Act offers revolutionary innovators like CCA the chance to prove their worth. So far, as the JSI paper suggests, CCA’s approach is spot on. Here’s JSI’s conclusion:

As a pioneer of the social ACO approach, its (CCA’s) story offers insights into the factors and processes that promote successful realization of the Triple Aim for other emerging ACOs focused on complex patient populations.

Payment and delivery reform promises to transform care for the nation’s most vulnerable citizens. This is needed more than ever given rising healthcare costs and continued fragmentation of the care system. CCA’s social ACO model represents one approach to caring for some of the highest risk populations, though even this approach has had to be adapted extensively for the dual-eligible population under 65. Given its longevity of refining a care model, a global capitation payment model and a culture of innovation to care for high-risk, vulnerable populations, CCA’s experience is relevant to any provider organization seeking to transform care for high-risk populations.

Achieving the Triple Aim of improving the health of America’s dual population while lowering the cost of doing so is a rabbit-out-of-the-hat trick of the first order, but, at least to this point, Commonwealth Care Alliance seems to be onto something that will do just that.

One final thought: On the eve of our two presidential conventions, it would be nice if, at some point in all the bloviation, a cogent discussion regarding health care were to be had. And I’m talking about something other than, “On Day 1 we’re going to repeal Obamacare.”

But I wouldn’t bet on that happening. Would you?

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It’s Been A Bumpy Ride Since 1972

Tuesday, June 14th, 2016

In its report to President Nixon, the 1972 National Commission on State Workmen’s Compensation Laws, created by the Occupational Safety and Health Act of 1970, concluded that workers’ compensation laws and benefits were vastly disparate among the states. Benefits in one state might be generous, while across the nearest border they’d be parsimonious.

Although Commission members differed on some points, they unanimously agreed parity among the states was highly desirable. They also recognized that to achieve this goal federal preemption as well as federal minimum standards were impractical for two reasons. First, the federal government had not demonstrated it was capable of successfully undertaking such an effort and, second, entrenched vested interests would fight to the death to preserve the status quo (I wonder what the members would say about today’s vested interests’ clawhold on the system?).

Consequently, in its report, the Commission made 84 coverage and benefit recommendations to the states, 19 of which it termed “essential” in order to establish an adequate workers’ compensation law. In the thirty-year period between 1972 and 2002, the states adopted an average of 12.9 of the 19 recommendations, or about 67% of them. The nationwide workers’ compensation crisis of the late 1980s and early 1990s put the brakes on any movement to adopt more of the recommendations.

In the recent past, workers’ compensation reform has percolated again, only this time in the opposite direction. For example, the October, 2015, Propublica/National Public Radio series, echoing back 43 years to 1972, once again threw a stark light on the continuing lack of uniformity in state benefits. In a kind of circle-the-wagons, and if that doesn’t work, head-to-the-bunker reaction, the series was roundly and caustically criticized by members of the workers’ compensation industry. But, as John Adams said in his summation when courageously defending British soldiers following the Boston Massacre, “Facts are stubborn things.” And one, inescapable fact is that in terms of the generosity of workers’ compensation benefits, in 2016 it matters greatly in which state an injury occurs.

Then there’s opt-out. Given the complexity and bureaucracy of the workers’ compensation system, I certainly cannot blame employers for saying, “We want out.” However, if employers are allowed to create their own systems, what happens, as I’ve written before, “down the street, around the corner at Kenny’s Citgo when one of Kenny’s five employees is injured on the job?”

And now, in a little uphill blowback, the Florida Supreme Court has ruled it is unconstitutional to cut off temporary total disability benefits at 104 weeks to a worker who remains totally disabled and unable to work and has not reached maximum medical improvement. This harkens back to the 1972 Commission’s Recommendation 3.17, which said total disability payments should be paid for the duration of the disability without regard for dollar amount or time. It will be interesting indeed to see how Florida deals with this ruling. It is a serious setback for employers.

I have to admit a nationwide lack of uniform benefits makes no sense to me. I just don’t get it. The 1972 Commission also had a remedy for this. It recommended, “that compliance with these recommendations should be evaluated July 1, 1975, and, if necessary, Congress, with no further delay in the effective date, should guarantee compliance.” Well, that never happened did it?

So, where are we?

We’ve advanced some distance, but, as John Burton, the Chair of the 1972 Commission, suggests, if we continue to advance at this rate, the 19 essential recommendations will be law throughout the land sometime in the 23rd century.

As with everything else in business, this all comes down to money.

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John Geaney: Setting A High Bar For New Jersey’s Bar

Thursday, April 14th, 2016

John Geaney’s been a friend for years. And why not? He’s a Holy Cross and Boston College Law School grad, as well as a Red Sox fan. So, in a way we’re Boston Brothers.

But that’s not important. What is important is that John Geaney is recognized as the pre-eminent New Jersey attorney focusing on workers’ compensation. He heads the workers’ compensation practice for Capehart Scatchard, one of New Jersey’s foremost law firms. There are nearly 40 attorneys in John’s practice department.

John is the author of “Geaney’s New Jersey Workers’ Compensation Manual for Practitioners, Adjusters, and Employers,” and updates it annually. If you have anything to do with workers’ compensation in New Jersey, you need to have John Geaney’s Manual.

In addition to representing a great number of New Jersey’s premier employers, writing a Lexis Nexis Top Blog (a really good one!) and creating the aforementioned Manual, John, teaming with Millennium Seminars, puts on three seminars each year for New Jersey professionals specializing in workers’ compensation.

I’m writing this from today’s seminar in Mount Laurel. I’m attending with Richard Filippone and Mary Ann Kezmarsky, founders of Work Comp Psych Net, a seminar exhibitor and a Lynch Ryan client.

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There more than 100 New Jersey workers’ comp pros here, and all of them are highly engaged. Moreover, Geaney’s seminars are always fully subscribed. Attendees keep coming back, and that doesn’t happen by chance. Geaney is charismatic on the podium. The presenters are interesting, articulate and well-regarded. It’s considered a high compliment to be invited to present here.

Around the nation, most states have one, perhaps two, people who set the professional standard for everyone else in their state. In New Jersey, that person is John Geaney.

 

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What life was like for U.S. workers in 1915

Wednesday, February 24th, 2016

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To commemorate its centennial, editors at the Monthly Labor Review have produced an excellent and fascinating report on The life of American workers in 1915 and the progress we have seen in the workplace since then. We think it’s worth your time to check it out!

The context of the era is first established with a list of news events that were occurring at the time: a bill to give women the right to vote was rejected; labor leader Joe Hill was charged with murder, a charge that would lead to his execution; Alexander Graham Bell made his famous call to Thomas Watson in San Francisco, Typhoid Mary was arrested, Einstein formulated his theory of general relativity -these and several other key events shaped the era.

The report goes on to discuss the demographics of the day and paint a portrait of daily life with many interesting facts about daily life ranging from where and how people lived (mortgages typically ranged from 5 to 7 years, but required 40-50% down) to how they commuted to work each day (streetcar, by foot or by horse) , what they typically ate for breakfast (corn flakes and puffed wheat cereals), what they wore for work clothing, how many hours they worked, what an average worker was paid ($687 a year), how they spent their leisure time, and more. It’s a fascinating and well-researched historical document.

For our purposes, we were most interested in work conditions and safety. Here’s one excerpt:

Although working in mines was notoriously dangerous, mill work could also be quite hazardous. BLS reported about 23,000 industrial deaths in 1913 among a workforce of 38 million, equivalent to a rate of 61 deaths per 100,000 workers. In contrast, the most recent data on overall occupational fatalities show a rate of 3.3 deaths per 100,000 workers. Regarding on-the-job safety, Green notes, “There was virtually no regulation, no insurance, and no company fear of a lawsuit when someone was injured or killed.” Frances Perkins, who went on to become the first Secretary of Labor (1933–45), lobbied for better working conditions and hours in 1910 as head of the New York Consumers League. After witnessing the 1911 Triangle Shirtwaist Factory fire, which caused the death of 146 mainly young, immigrant female garment workers in New York’s Greenwich Village, Perkins left her job to become the head of the Committee on Public Safety, where she became an even stronger advocate for workplace safety. From 1911 to 1913, the New York State legislature passed 60 new safety laws recommended by the committee. Workplaces have become safer, and technology has been used in place of workers for some especially dangerous tasks.

In addition to this excellent article, there are a few noteworthy accompanying reports and articles in the sidebar, as well. Occupational changes during the 20th century charts how farmers, craftsmen, laborers and private household workers gave way to professional, managerial and service workers over the course of the century. Labor law highlights, 1915–2015 runs through legislation and trends that improved the worker’s lot – ranging from legislation that regulated child labor to laws prohibiting discriminatory practices for women and minorities. Two key legal initiatives were the introduction and adoption of workers compensation laws and workplace safety initiatives being legislated in 1970 with the passage of the birth of the Occupational Safety and Health Act (OSHA).

 Theodore Roosevelt, arguing in favor of workers’ compensation (then known as workmen’s compensation) laws in 1913, offered the story of an injured worker that summed up the legal recourse available for workplace injuries at the time. A woman’s arm was ripped off by the uncovered gears of a grinding machine. She had complained earlier to her employer that state law required the gears be covered. Her employer responded that she could either do her job or leave. Under the prevailing common-law rules of negligence, because she continued working she had assumed the risk of the dangerous condition and was not entitled to compensation for her injury.

As the example illustrates, common-law negligence was not ideal for handling workplace injuries. Workers who noticed hazards could either “assume the risk” and continue working, or leave work; they were powerless to change the condition. Employers were at risk as well: they were vulnerable to negligence suits that could yield large, unanticipated awards for injured workers. Workers’ compensation, where employers insure against the cost of workplace injuries and workers have defined benefits in the case of injury, significantly reduced the risk for both parties.

Our brief excepts don’t do these report justice. Kudos to all the people who produced these great documents and congratulations on 100 years of reporting on the American workplace!

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Fifty States, Fifty Different Laws: A Peter Rousmaniere Analysis

Monday, February 1st, 2016

According to the Bureau of Labor Statistics’ (BLS) Consumer Price Index calculator, what you bought for $100 in 1973 would today cost $533.82. Despite this, during that same period wage growth for the median hourly worker grew by less that 4%. 

Moreover, as the following chart from the Economic Policy Institute (EPI) shows, while wages flattened out after 1973, productivity continued to increase at a steady pace through 2010.

Everything seems to be going up across America except hourly compensation. That helps explain why our recent economic high hard one to the head, known as The Great Recession, has left so many families living paycheck to paycheck, one crisis away from living under a bridge. It also illuminates why the indemnity and medical benefits of workers’ compensation are critical to economic survival following a work injury.

In 2015, ProPublica and NPR published a series of exposès that showed widespread disparity in the way the various states deal with work injuries. Workers’ comp professionals didn’t like the series much, complaining en masse that it was biased, agenda-driven and just plain wrong. Silly me, I thought the series actually made some important points, especially around the level of compensation for loss of function.

Into this battle now rides Peter Rousmaniere, friend, colleague, Harvard MBA, WorkCompCentral columnist and all-around deep thinker.

Mr. Rousmaniere spent a good portion of 2015 researching the economic consequences to injured workers with respect to how the different state workers’ compensation laws deal with the early days of a work injury. He illustrates his findings in The Uncompensated Worker: The Financial Impact of Workers’ Comp on Injured Workers & Their Families, published as a workcompcentral special report.

In the Uncompensated Worker, Peter Rousmaniere creates the metaphorical Tim, a New York electrician earning the median wage for New York electricians. He then goes really deep into the take home pay hit Tim experiences following a work injury. He shows how Tim will always suffer earnings losses while injured regardless of how long he’s out of work, and he does it by considering the waiting period (the number of calendar days between the injury and when indemnity payments will begin), the “shortfall” (“The difference between a workers’ after-tax take-home pay and the amount of the replacement wages”), the “retroactive” calculation (the number of days an injured worker has to lose from work before being paid indemnity for the waiting period) and the maximum weekly benefit cap.

Here’s how Rousmaniere describes what happens to Tim if he misses three, six or ten days due to the injury:

While Tim’s 6% shortfall may not seem unreasonable, additional deductions further reduce his replacement wages. First, there’s a waiting period during which a worker receives nothing, a retroactive period (in most states) and a maximum weekly benefit cap. The amount Tim actually receives depends on the number of days he missed work. We can correlate work and calendar days for Tim by looking at a calendar and figuring his first lost work day on a Monday. If Tim misses three days of work, he receives nothing; losing six days of work yields close to one work day of replacement wages, and losing 10 work days yields five work days (seven calendar days) of replacement wages.

With that New York backdrop, Rousmaniere then shows how Tim would fare in each of the other states. But he goes even farther. Drawing from Economic Policy Institute estimates, which create basic monthly household budgets based on household size and location “to attain a modest yet adequate standard of living,” he builds an EPI-estimated monthly basic budget for Tim and his family of four. He then lays out what happens to the family economy when Tim is out of work due to injury for an extended time, say more than a month. If Tim’s spouse works part-time, the family can’t afford the basic budget in 29 states; if the spouse doesn’t work, they’re under water to the tune of $2,200 a month in every state.

This is sobering stuff. The 50-state and District of Columbia chart at the end of the report is nearly totally comprised of negative numbers.

Reading the report, I’m left with this: Assume (as most claim adjusters tell me) that well over 90% of injured workers really are injured and want to get back to work as expeditiously as possible. Should those workers suffer economic deprivation simply because they had the misfortune to be injured at work? Does society have an obligation to ensure that families, already perilously close to the edge of the financial cliff, are not booted into the abyss because of that work injury? And, finally, is it time for indemnity and medical benefit parity among the states (for example, if Tim were injured in New Jersey he’d fare considerably better than in New York)?

Peter Rousmaniere has performed a valuable service with The Uncompensated Worker. When (it should not be “if”) you read it, you’ll come away admiring the level of research and detail that went into producing it. I also hope you come away thinking their just might be a better way.

 

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Kudos And Thanks To Work Comp Central’s Greg Jones

Wednesday, December 9th, 2015

Work Comp Central’s Greg Jones has relentlessly followed and reported on the Michael Drobot case in Southern California, a case that fairly oozes greed and sleaze.

For the uninitiated, Michael Drobot’s Pacific Health Corporation owned two hospitals, Pacific Hospital of Long Beach and Tri-City Regional Medical Center in Hawaiian Gardens. For around 10 years, he paid kickbacks to a number of doctors for referring spinal fusion patients to Pacific Hospital of Long Beach for surgery. In February, 2014, Drobot pleaded guilty to making the kickbacks, which are illegal, and for charging California’s workers’ compensation system, the U.S. Department of Labor and about 150 workers’ compensation insurers somewhere in the vicinity of $500 million dollars for the surgeries over the ten year period. At that time, we wrote about this with Honor Sold, Trust Betrayed: Unbridled Greed in California.

Drobot is also charged with bribing state senator Ron Calderon for his help in easing one of the SB 863 requirements, which we don’t need to go into here. Calderon has pleaded not guilty, and that case is moving through the system.

Throughout this sordid business, Greg Jones has been there, providing a valuable service with his spot-on reporting, most recently last week with his story (subscription required) that a number of the doctors who took the kickbacks, at $15,000 a pop, also had filed “more than 15,000 liens with a total claimed value of $93.8 million.” To get that story, Jones had to wade through what must have been a steamer trunk full of documents.

Personally, I owe a debt of gratitude to Mr. Jones. He found two errors in my post of 30 November, Workers’ Comp Fraud: The Michael Drobot Case Grinds On. I had written that the kickback scheme involved both of the Drobot hospitals. That was wrong. They only happened at Pacific Hospital at Long Beach. Also, I had written that Drobot had pleaded guilty to bribing Calderon. He did not. He is charged with doing it, and both he and Calderon have pleaded not guilty. Before Work Comp Central ran my post, Greg found the errors and made edits to correct them, for which I am grateful.

The Drobot case is complicated and it represents the bottom of the workers’ compensation bird cage. However, the solid reporting of Greg Jones shines an arc light on the sorry mess and will help to improve the system so that in the future the Drobots of the world will think twice about this kind of criminality.

 

 

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Workers’ Comp Fraud: The Drobot Case Grinds On

Monday, November 30th, 2015

In late February, 2014, we wrote about the sordid tale of corruption perpetrated in southern California by Michael Drobot and his gang of thieves. Honor Sold, Trust Betrayed: Unbridled Greed In California describes the astonishing criminality of a large group of highly placed people whose job it was to care for others.

This from our original post:

Suppose you’re a doctor in California with a patient who complains that his back hurts a lot. Suppose further that Michael Drobot, the owner of California’s Pacific Health Corporation, will give you $15,000 if you refer your patient to his Pacific Hospital of Long Beach for lumbar fusion surgery, which may or may not be warranted. And what if Drobot’s Pacific Hospital were hundreds of miles away and that other qualified hospitals that wouldn’t pay you a kickback were much closer. What would you do?

The answer? Many doctors took the money and delivered up their patients to the Drobot surgical mill. Drobot paid the doctors in this scheme somewhere between $25 and $50 million.

Drobot’s two hospitals, Pacific Hospital of Long Beach and Tri-City Regional Medical Center in Hawaiian Gardens, billed thousands of mostly spinal fusion surgeries to California’s workers’ compensation system, the U.S. Department of Labor and workers’ compensation insurers. Over an eight year period, the hospitals were paid more than $500 million.

Drobot pleaded guilty in early 2014 to paying the kickbacks. He also pleaded guilty to bribing state Senator Ron Calderon to the tune of $100,000 for massaging the SB 863 legislation so that the fraud could continue for all of 2013. After his indictment in February, 2014, Calderon pleaded not guilty.

The wheels if justice have ground slowly but exceedingly fine in the nearly two years since. Former U. S. Attorney Andre Birotte, Jr., now a U. S. District Judge in California’s Central District, passed the baton to his replacement U.S. Attorney Eileen M. Decker. Last week Decker announced that Drobot’s CFO, James L. Canedo, and Paul Richard Randall, a “health care marketing recruiter” (he recruited doctors to refer patients in return for the illegal kickbacks) pleaded guilty to fraud, money laundering, conspiracy and other crimes. Also, two orthopedic surgeons, Philip Sobol of Studio City and Mitchell Cohen of Irvine, and Alan Ivar, a Las Vegas chiropractor who used to live in Southern California, have agreed to plead guilty to conspiracy and other charges.

There will certainly be more to come in this tale of sleaze.

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Blankenship on trial: Potentially precedent setting case re CEO criminal responsibility

Wednesday, October 7th, 2015

A day that many in West Virginia have waited for has come to pass: Don Blankenship, former CEO of Massey Mining, is on trial. Proceedings began on October 1 in Charleston Federal Court and are in the jury selection phase.

Get your popcorn ready for what promises to be a very interesting and potentially precedent setting case. Holding a CEO criminally responsible for charges related to work safety violations is extremely rare. Observers are interested particularly in light of the Justice Department’s new emphasis and directive on prioritizing accountability and prosecution of individuals rather than just corporations. And no one is watching the proceedings with more interest than the families of the 29 miners who lost their lives.

The Charleston Gazette is following the trial closely with Don Blankenship on Trial, a special reporting section that includes day-by-day trial coverage updates and stories, timelines, a list of legal documents, historical articles, videos, maps and more. It also includes photos and profiles of the deceased.

Coverage also includes links to podcasts by West Virginia Public Broadcasting. WVPB has also been reporting on the case, offering an extensive background and podcasts of the trial events. You can find the latest podcast on the link above, or find a roster of the daily podcasts here or at the WVPB site’s dedicated Blankenship Trial page, where other reportage is also available.

The 16 minute Episode One is well worth a listen. WVPB’s Ashton Marra interviews
Howard Birkus, investigative reporter for NPR on coal mining and work safety, and Mike Hissam, Partner of Bailey & Glasser law firm. They set the stage for the trial and talk about its precedent-setting nature. Birkus says that it is “”extraordinarily rare to hold a CEO responsible for criminal or civil violations at their companies” noting that prosecutors need a paper trail, electronic trail or inside people who will testify. Hissom talk about how this case is on the leading edge of the Obama Justice Department’s new guidelines on criminally prosecuting individuals rather than just fining a corporation. They discuss how CEOs are often insulated from decision-making, but that Blankenship is unique and legendary in his micro-managing practices.

For background on the Justice Department’s new focus on criminal prosecutions, see the New York Times: Justice Department Sets Sights on Wall Street Executives. Matt Apuzzo and Ben Protess report on new rules, issued in a memo to federal prosecutors nationwide:

“Though limited in reach, the memo could erase some barriers to prosecuting corporate employees and inject new life into these high-profile investigations. The Justice Department often targets companies themselves and turns its eyes toward individuals only after negotiating a corporate settlement. In many cases, that means the offending employees go unpunished.

The memo, a copy of which was provided to The New York Times, tells civil and criminal investigators to focus on individual employees from the beginning. In settlement negotiations, companies will not be able to obtain credit for cooperating with the government unless they identify employees and turn over evidence against them, “regardless of their position, status or seniority.” Credit for cooperation can save companies billions of dollars in fines and mean the difference between a civil settlement and a criminal charge.”

For background on the case, How we got here offers a history of the case.

The reporting traces Blankenship’s rise to power in the coal mining industry and his influence in the state’s politics on through to the April 2010 Upper Big Branch Mine explosion that claimed the lives of 29 miners. Several investigations revealed ” … a pattern of violations by Massey of key safety standards, including proper mine ventilation, control of the buildup of explosive dust, and maintenance of equipment to prevent sparks that could set off a blast.” To date, four criminal convictions have occurred. Then in November of last year:

“… a federal grand jury meeting in Charleston indicted Blankenship, charging him with four criminal counts. A superseding indictment was later filed that combined two of the counts. Blankenship faces charges that he conspired to violate federal mine safety standards and to hide those violations from government inspectors and that he lied to federal securities regulators about Massey’s safety practices to try to stop the company’s stock prices from plummeting after the disaster.”

More resopurces
See our prior stories on Don Blankenship here

Follow Ken Ward on Twitter

Follow other reporting and commentary on twitter at #Blankenship

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