When looking for cutting edge activities in workers comp abuse, it’s a good idea to start in California, where key stakeholders occasionally function like pirates in the Gulf of Aden. We have frequently focused on the burgeoning costs of opioids in the workers comp system. As we learned at the Workers Comp Research Institute conference last November, too many doctors who prescribe opioids have no idea what they are doing, no idea how to manage opioid-based treatment and no clue about the potential for harm.
In the entrepreneurial free-for-all that is California, we see the latest trend in opioid abuse: turning the “best practice” of drug testing into an opportunity to milk the system. (The details are available in Greg Jones’s article at WorkComp Central – subscription required.)
Here’s how it works: doctors who tend to over-prescribe opioids are jumping on the drug testing bandwagon: either through their own testing, or through contracted services, they are able to parlay a simple $200 drug test into a bill for $1,700 or even $3,000. The labs are playing with billing codes, performing the less expensive qualitative tests but charging for the more expensive quantitative tests. It’s a clever scam: first over-prescribe, then drug test and over-bill.
The WorkCompCentral article quotes Howard Appel, president of Millennium Laboratories of San Diego: “I’m offended when workers’ comp is paying $3,000 for a drug test that cost $200.” Appel’s company operates under a “responsibility pledge” where explicit ethical standards are used for drug testing and billing.
Genuine Best Practices
We remind Insider readers of the best practices that should accompany virtually any prescription for opioids:
1. Above all, use opioids sparingly; most prescriptions for opioids in the comp system are unnecessary, ill-advised and poorly managed.
2. Virtually all injured workers prescribed opioids should be evaluated for dependency issues prior to beginning an opioid regimen, drug tested prior to receiving opioids and throughout the course of treatment. Without these pre-conditions, opioid use is full of uncertainty and fraught with danger.
3. Ideally, opioids should come with a written contract and a User’s Manual. Workers should be tested on their knowledge of the benefits and the risks.
Note that drug testing is a necessary component of the treatment protocol. The problem in California – and probably elsewhere – is that drug testing is of little value where opioids have been mis-prescribed in the first place. Under best practices, opioids are a last resort, rarely used and carefully managed. Under California scheming, they are over-prescribed, over-monitored and over-billed. All of which goes to show that you don’t need a fishing boat and a few automatic rifles to become a pirate. A nice white coat and a plastic cup can work just as well.
Posts Tagged ‘fraud’
Cost Containment Piracy
Monday, April 23rd, 2012Pennsylvania: Crime Wave in a Bureaucracy
Wednesday, March 21st, 2012The Insider does not normally think of state workers comp insurance funds as hubs of criminal activity, but then again, we haven’t been to Scranton lately. James McDonnell, 53, is a supervisor in the State Workers’ Insurance Fund (SWIF). He makes about $51,000 a year – at least, that’s his declared income. He has apparently been pulling in a whole lot more than that. He was arrested this week for running a kickback scheme involving premium discounts for Pennsylvania employers. In exchange for (undocumented) discounts in premiums owed, McDonnell secured cash kickbacks of one third to one half the discount. Between 1999 and 2011, McDonnell and his wife pulled in at least $80,000.
WorkCompCentral (subscription required) offers additional background on this case, including PDFs of the criminal indictment. McDonnell offered premium discounts to individual employers, in one case, a roofer, whose premiums, instead of going up $50K, came down $10K. He then insisted that the roofer join one of the three staffing firms with whom he did business. In exchange for steering clients their way, these firms paid McDonnell a relatively modest 1% commission, in addition to paying him substantial cash kickbacks on the premium discounts. In honor of family values, McDonnell’s wife was given several jobs which apparently did not require that she perform any work.
Kickbacks and Harassment
McDonnell must have been a busy man, systematically exploiting his position with SWIF, but he allegedly found time to harass a fellow fund employee. Last September he was accused of “making sexual advances on the employee, identified only as Jane Doe, such as asking her to lick a piece of Twizzlers candy taken from her work desk before he ate it and telling her to bend over and pick up a time sheet he dropped to the ground.” Would you be shocked to learn that the fund did not take these accusations seriously?
There may well be slow days at a typical state fund, but McDonnell sure knew how to make time fly. That skill will come in handy when and if he finds himself doing time in a bureaucracy of a different sort altogether.
Comp fraud takes many forms and encompasses opportunities for each and every stakeholder in the system: doctors, lawyers, insurers, state bureaucrats, business people, workers and, I suppose, even consultants. Today’s little saga of greed arises from the midst of a state bureaucracy. But no matter where the crime originates, the result is the same: higher costs for the vast majority of people who play by the rules.
A Window Into Fraud
Monday, February 13th, 2012A couple of years ago we blogged the performance incentive program at Smurfit-Stone Container Corporation in California. The performance numbers were stellar, but not necessarily because the work was performed safely. Instead, the company conspired with local medical providers to secure limited treatment outside of the workers comp system. Two supervisors pled no contest in conspiring to deny comp benefits to injured workers.
With the recent conviction of chiropractor Robert Schreiner, we see into the black box of the conspiracy. Workers complaining of work-related problems were referred to doctors like Schreiner – giving rise, alas, to a new and ominous definition of provider network. In one instance a worker complained about a neck and shoulder injury. Schreiner denied that the problem was work related, saying that it was caused by carrying a back pack as a child. He provided a handful of treatments and then encouraged the worker to file the claim under his health plan to continue treatments. When the worker persisted and filed a comp claim, he was fired.
Schreiner is headed to jail to serve a mostly symbolic sentence of 30 days, to be followed by three years of probation. Perhaps he can provide some adjustments to his fellow inmates. Confined spaces sure can mess up the spine.
Faking Safety
Smurfit-Stone was bought out last year by RockTenn. You can still read about the company in Wikipedia. Here is the (unattributed) description of the company’s safety program:
Smurfit-Stone has been an industry leader in safety performance since 2001 [NOTE: the conspiracy to under-report claims began in 1999!]. In 2007, Smurfit-Stone’s U.S. operations had an OSHA recordable case rate of 1.05, the best in company and industry history. This represents an 84 percent improvement in the company’s recordable case rate since the implementation of Smurfit-Stone’s SAFE process in 1995.The SAFE process, which stands for Smurfit-Stone Accident-Free Environment, promotes five core beliefs:
1.All injuries are preventable
2.Safety is everyone’s responsibility
3.Working safely is a condition of employment
4.Training employees to work safely is essential
5.Safety is good business
As litigation has proven, Smurfit-Stone’s low OSHA case rate has less to do with safety than with a conspiracy to under-report claims. Perhaps the SAFE program stood for something else: Screw All Forsaken Employees. Aggressive safety goals are a good business practice; circumventing the workers comp system is not just a bad practice, it’s illegal. Just ask Robert Schreiber.
Holiday Health Wonk Review, news notes, and holiday humor
Thursday, December 22nd, 2011Gary Schwitzer makes his hosting debut with Unwrapping early presents, wrapping up ’11 Health Wonk Review series. Gary is the publisher of the excellent HealthNewsReview.org and its associated Health News Watchdog blog – take a look around while you are there.
Absence Management – The Disability Management Employers Coalition and Liberty Mutual recently released a set of best practice for absence management and easing the transition back to work after a disability leave. Download a whitepaper on Best Practices in Return to Work or view Taming the Intermittent Beast, a one-hour webinar on managing intermittent leave.
Support a good guy – Joe Paduda explains why you should join the Friends of Sandy Blunt on LinkedIn.
Desperate Housewives – Reality just got a little harsher for a would-be reality TV star caught in a huge California workers comp scam, She and her husband were charged with $30 million in premium fraud. “The couple gained notoriety in 2010 after fraud investigators raided several properties they owned and found luxury cars including a Bentley, two Ferraris, $500,000 in jewelry and $51,000 in cash. They also found an application for Kile to appear on the television show.”
Going and coming – Injuries that occur while traveling to and from work generally are not compensable. There are several common exceptions to this “going and coming” rule – if an employer provides transportation, if traveling is part of the normal course and scope of an employee’s job (such as a salesperson), or if the employee is on a “special mission” for the employer. Risk and Insurance reports on a recent benefit denial by the New Jersey Superior Court, Appellate Division in a case where a company president was invoking the “special mission” exception for an injury that occurred during an early trip to work for a special meeting. In denying the appeal, the court reasoned that the exception did not apply because the president was not required to be away from the restaurant’s usual place of business and he did not have “identifiable time and space limits on his employment.”
Up in smoke – Roberto Ceniceros posts about a denied claim involving a landscaper injured after a fall from a tree. Ceniceros notes that, “A urine sample taken at the hospital the day after the Tennessee man fell showed he had an intoxicant level 50 times beyond the threshold for a positive result, leading a doctor to describe him as a chronic pot user.” The court concluded that while the employee was not guilty of willful misconduct, his intoxication was a proximate cause of the injuries.
Hope for PTSD relief? – Wired has an interesting article on a how the Navy is testing neck injections to relieve PTSD. The unorthodox procedure, which is called stellate-ganglion block (SGB), has secured immediate relief for some PTSD sufferers.
NYWCB Web change – Effective December 20, the New York State Workers’ Compensation Board (WCB) updated its website to use the standard “ny.gov” domain naming convention – the new web address is www.wcb.ny.gov. WorkersCompensation.com has more detail about related email changes.
On the lighter side: Holiday roundup
In honor of the holiday season, we’ve put together a grab bag of some fun holiday links. We wish all our friends the best for the season!
- Risk Managers Find Santa Exposed, Urge $1 Billion Coverage Plan
- Straight No Chaser: The 12 Days of Christmas
- I Got a Feeling, Hanukkah style
- Portable North Pole – Create a personalized video from Santa Claus for your children, friends, family members or colleagues
- Make a Flake
- Singing Christmas Hedgehogs – a cute interactive feature which shows that the holiday season is hard on hedgehogs!
- Tesla Christmas Tree – impressive, but don’t try this at home!
- Gallery of Unfortunate Christmas Cards
- Don’t Sue Me Santa Clause
Health Wonkery and other news of note
Thursday, October 13th, 2011Health Wonkery – Christopher Fleming hosts Health Wonk Review Unadorned at the Health Affairs Blog. Check out the latest from the best of the health policy bloggers. And if healthcare is of concern to you, Health Affairs should be a regular read!
Bad behavior – When it comes to bad behavior, we are equal opportunity finger pointers. We’ve seen fraudulent employees. We’ve seen terrible bosses. We’ve seen bad brokers, bad insurers, and quack docs. Fraud is a game everyone can play and no one has a corner on the stupidity market. Among the recent crop of losers, we start with a post from HR Web Cafe about a mean-spirited employer who got a smackdown from a labor judge for a rather unusual contest he used to “motivate” his workers to better performance. And also on the employer side of the house, we have a classic case of premium fraud by a California tree trimming business that failed to pay workers comp premiums, under-reported payroll by more than $2 million, and failed to pay taxes. On the employee side, Roberto Ceniceros tells the story of nightmare employees who let rage over a small thing turn into a tragic event.
Spying on Employees – Employment law attorney Heather Bussing offers some useful guidelines on employee privacy and what employers can monitor. This is a really good overview. We encourage reading the entire article. Here’s some of her take-aways: “If the employer owns the system, hardware or both, the employer can monitor employees’ use of it, including personal files and communications.
If the employee owns the system and hardware, the employer’s ability to view and obtain personal files depends on the whether the employee is using it at work, whether the employer has a legitimate interest in viewing the communication, what the state’s laws and employer’s policies are, and what the employee’s objective expectations of privacy are.”
Repackaged Drugs – Joe Paduda has been in the forefront of a crusade against the practice of repackaged drugs, which has been promoted as a convenience for patients, but in practice is a costly work around for fee schedules. This is one of those under-the-radar issues that many employers may not see, but in states where the practice is allowed, it is costing big bucks. Joe first talked about the practice in 2006, and has been regularly posting updates. He brings you the latest from the eye of the storm: Is Florida finally going to fix its (repackaged) drug problem?
OSHA – OSHA has recently issued Nail Gun Safety – A Guide for Construction Contactors. OSHA says that nail gun injuries are responsible for approximately 37,000 emergency room visits annually. “These injuries occur as a result of unintended nail discharge; nails that bounce off a hard surface or miss the work piece and become airborne; and disabling the gun’s safety features, among other causes. Injury prevention is possible if contractors take steps such as using full sequential trigger nail guns; establishing nail gun work procedures; and providing workers with personal protective equipment.”
Child Workers – Celest Monforton gets the bureaucratic runaround when she tries to find out why child labor regulations were delayed by the White House’s Office of Management and Budget. A Labor Department update to the 40-year old regulations were stalled for 9 months – meanwhile, two teens lost legs in a grain auger accident, precisely the type of event that made such an update to regulations imperative.
Excess Loss Development – NCCI had released a new research report on Workers Compensation Excess Loss Development. They note that, “Large loss and excess development is relevant to calculating excess loss factors used in retrospective rating.”
News Briefs
- Tracking Prescriptions with Technology
- What You Need to Know About the Workers’ Comp and FMLA, ADA, and HIPAA
- Disaster Planning for Any Business
- Driver survey shows heavy cellphone use
- Texting While Driving Game – gauge your distraction
- 5 Reasons You Must get the Employee’s Explanation
- Macaroni insurance?
Cavalcade of Risk & other news briefs
Wednesday, August 24th, 2011Nina Kallen hosts this week’s Cavalcade of Risk at Insurance Coverage Law in Massachusetts – check it out.
Other noteworthy new briefs:
Business Insurance has had a complete online overhaul – here’s a guide to the new BusinessInsurance.com
HealthLawProf Blog covers the intersection of pharmaceuticals and online media in a pair of recent posts worth checking out: Social Media and Drug Promotion and Do No Evil: Googling Canadian Drug Imports.
Roberto Ceniceros: Top 20 largest workers comp insurers
Dave DePaolo: The 5 Stages of Work Comp Death
Jon Gelman: What to Do During an Earthquake
Joe Paduda: Work comp claim reserves – not good, but not too bad either
Claims Journal: “Fraud Dog” to Bring Insurance Fraud Cases to Reality TV
MEMIC Safety Blog: The Bite Stuff: Dogs not always a worker’s best friend
Safety Daily Advisor: Are Your Exit Routes OSHA Compliant?
New York Times, Room for Debate: Could Farms Survive Without Illegal Labor?
Cavalcade of Risk and some quick links
Thursday, May 7th, 2009Joe Kristan is hosting the latest edition of Cavalcade of Risk at his Tax Update Blog. Unsurprisingly, swine flu is a common themes in this issue – but there’s a grab bag of other risk-related topics, too – check it out!
Other links of note:
May is Electrical Safety month. OSHA resources on electrical safety
Does a focus on employee wellness pay off? The Wellness Calculator will help you to evaluate potential savings.
NIOSH: Safety and Health in the Horse Racing Industry.
Dissecting Fraud – a podcast from Legal Talk Network. Host Alan S. Pierce discusses employer fraud with his guest Attorney Michael I. Fish.
Various newsfeeds on Swine Flu – a good resource to keep you up to date on any developments.
Cavalcade of Risk #66 and sundry workers comp news notes
Wednesday, December 3rd, 2008Cavalcade of Risk #66 is posted at Political Calculations, where the blogger who goes under the alias of Ironman takes an innovative approach by offering two editions with all posts presented in a grid-like format, applying a blog post rating system. See Investment Grade and Kit and Caboodle versions for this week’s entries.
State cost variations – Risk & Insurance looked at variations in state workers comp costs for employers in all 50 states and determined that in this regard, Arizona is the most favorable place for employers. Other states with low workers’ comp costs include Arkansas, Indiana, Virginia, North Dakota and South Dakota. Michael Keating reports on survey results and discusses various structural factors within a state system that contribute to workers compensation costs. Note: my colleague Jon Coppelman was quoted in the article.
Ohio – another scandal brewing? – According to The Cleveland Plain Dealer, “Federal agents are investigating links between Cuyahoga County Auditor Frank Russo and a politically connected firm that manages medical claims of injured workers and employed Russo’s son, according to subpoenas and interviews.” It’s a complicated story, and apparently part of a larger story on a federal investigation into Cuyahoga County corruption.
The $18 million fraud charge – The CEO and CFO of Staffing Services, a firm based in southern California, are being charged with conspiracy to defraud the State Compensation Insurance Fund of $18 million in premium payments. While news reports aren’t specific as to how, the pair are being charged with providing false information. While we can’t know specifics in this case, such charges often relate to misclassification of employees. The stakes for this type of fraud are high – if convicted, each of the two men face the potential for 20 years in prison and up to $40 million in fines.
Weathering the storm – worth your time: The Financial Crisis & the P/C Insurance Industry: Challenges Amid the Economic Storm – a presentation and analysis by Robert Hartwig of the Insurance Information Institute. This was presented to the Excess/Surplus Lines Claims Association in late September.
Blood-borne disease and healthcare workers – the Centers for Disease Control has recently issued the results of a study showing that health care workers face an increased risk of dying from blood-borne diseases, such as HIV, and related illnesses compared with workers in other fields. The study encompassed data over a 20-year period, including 248,550 deaths from HIV/AIDS, hepatitis B and C, liver cancer and cirrhosis. Researchers were unable to determine how much of the increased risk is related to occupational versus non-occupational exposure.
Health Wonk Review, help for paraplegics, crane safety, PBM shakeups and more
Thursday, July 24th, 2008Health Wonk Review – David Williams has a snappy new edition of Health Wonk Review posted over at Health Business Blog. Because HWR took a little summer hiatus last week, this issue is packed – and it’s all organized in a great format that allows for quick and easy scanning. David’s witty summaries are fun – check it out, it’s a good edition.
Cool development in assistive technology for paraplegics – Radi Kioff is a 40-year-old Israeli who spent the last 20 years in a wheelchair after being shot in the back while serving in the Israel Defense Forces. The video in this post shows him walking and climbing stairs with the help of a light wearable brace called ReWalk, a system designed to help paraplegics regain mobility. The system is undergoing clinical trials in Israel and scheduled to begin US trials in November. It’s great to see such a promising development for those who have suffered spinal chord injuries. (Thanks to Medgadget for the pointer.)
Crane fatalities – rawblogXport points us to the story of an eyewitness account from one of the workers who escaped in last week’s LyondellBasell’s crane collapse that killed 4 workers and injured 7. The article’s sidebar recounts the number of crane accidents so far this year. Celeste Monforton posts more on this and other crane fatalities at The Pump Handle.
PBM shakeup – Joe Paduda has the skinny on PMSI’s recent sale to investment firm HIG. Find more detail in his post PMSI sale – the numbers.
Disgruntled claimant on trial for murder – When you’ve worked in insurance for awhile, you know that a lot of anger and tension can surface around money matters, even more so when things reach a litigation stage. And many a claims manager can cite a litany of stories about angry calls or threats from disgruntled claimants who feel they’d had a raw deal. A story from California today reports on the trial of a claimant who shot and killed his own attorney two years ago. Angus McIntyre was very angry at his workers compensation settlement. He had reportedly threatened and harassed his claims adjuster in e-mails and voice mails on numerous occasions and apparently also held his attorney responsible. One evening he walked into that attorneys office and shot him in the head. Terrible story, and a sad reminder that violent threats must never be taken lightly.
Provider jailed for fraud – It’s 12 months jail time for a New York social worker who double-billed insurance companies to the tune of $102,000 for health care services. A health care provider may bill two insurance companies for the same treatment, but is obligate to disclose the double billing and cannot keep amount beyond 100 percent of the cost of the service. The conviction is not surprising, but I can’t recall too many insurance fraud cases that result in jail time. It’s also a reminder that fraud comes in many flavors – it is not synonymous with “employee.”
Fall protection – Brooks Schuelke posts an overview of fall protection systems at InjuryBoard.com. Falls are one of the most common source of injury and death in construction work. (Related: our prior post on human fall traps)