NWCDN Members regularly post articles and summary judgements in workers’ compensations law in your state.
Select a state from the dropdown menu below to scroll through the state specific archives for updates and opinions on various workers’ compensation laws in your state.
Contact information for NWCDN members is also located on the state specific links in the event you have additional questions or your company is seeking a workers’ compensation lawyer in your state.
Every month we publish a newsletter and, it seems, every month we report a new criminal indictment related to a provider involved in some sort of criminal activity. The latest compound cream scheme involved pain management doctor Adam Gallardo Arredondo of the Texas Anesthesia & Pain Institute. The federal grand jury indictment alleges Dr. Arredondo, a Texas physician, accepted kickbacks from an OK Pharmacy (an Oklahoma compounding pharmacy) for prescribing excessive – allegedly – compound drugs to patients insured under the federal workers’ compensation system and other federal programs. Dr. Arredondo also – allegedly – accepted payments for recruiting other physicians to prescribe compound drugs for the OK Pharmacy.
Maybe next month we won’t have any indictments to report . . . but I wouldn’t count on it.
- Copyright 2018, Stone Loughlin & Swanson, LLP.
Last month we reported on fraud investigations pertaining to healthcare providers and pharmacies. According to a recent Dallas Morning Newsarticle, such investigations are intensifying and expanding. The FBI is conducting raids of medical businesses in the hunt for further proof of illicit kickback arrangements in which doctors refer patients to specific pharmacies in return for remuneration.
Most recently, Next Health, a Dallas-based network of labs and pharmacies, and its successive owners, Critical Health Care Management, were subject to search following a $100 million lawsuit filed by United Healthcare that the companies were involved in a kickback scheme. The owners of both businesses are already charged with health care fraud in another federal case involving Forest Park Medical Center.
Among the allegations leveled against Next Health: that their pharmacies issued animal drugs, that they manipulated the ingredients of compounds to increase costs, and that unnecessary genetic and drug tests were administered as part of a “wellness study.”
Other healthcare companies facing federal scrutiny include Medoc Health Services, Southwest Laboratories, Trilogy Pharmacy, and the ADAR Group. However, the eight defendants from Ability Pharmacy may be the most impudent of all. They are charged with committing a $158 million fraud for inflating the costs of so-called compound pain creams: on at least one occasion, one container of the miracle cream cost them $15.00 to produce; they charged $28,000.00 for it. That’s a mark-up of 186,667%.
- Copyright 2018,Dan Price, Stone Loughlin & Swanson, LLP
The Division of Workers' Compensation recently held hearings on the DWC proposed rules intended to provide guidelines for penalties for Carrier administrative violations. The proposed rules, required by the Legislature, grew out of complaints by stakeholders that the Division's current method of levying penalties were inconsistent of overly harsh with little explanation of how a penalty was derived.
In Senate Bill 1895, the Legislature amended the Texas Labor Code Section 415.021, to require the Division to adopt rules to provide a degree of consistency and fairness to the administrative penalties imposed by the Division:
(c-1) The commissioner shall adopt rules that require the |
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| division, in the assessment of an administrative penalty against a | |
| person, to communicate to the person information about the penalty, | |
| including: | |
| (1) the relevant statute or rule violated; | |
| (2) the conduct that gave rise to the violation; and | |
| (3) the factors considered in determining the penalty. | |
A series of criminal actions announced this month by both State and Federal authorities demonstrate the criminal justice system is taking workers' comp fraud seriously in Texas. The following are a few of the recent actions which seek to end the practice of double-dipping, i.e., earning unreported post-injury wages while collecting workers' compensation indemnity benefits based on an inability to work.
As discussed in last month’s newsletter, attorneys’ fees are a hot topic of discussion in the Texas workers’ compensation system. With the recent indictment of a claimant’s attorney alleging fraudulent billing, as well as the revelations of some incredibly high hourly billers in the system, the Division is now weighing in on the issue. Tim Riley, Deputy Commissioner for Compliance and Investigations, issued a July 11 memo to remind attorneys of the Division’s requirements for submitting fee applications as well as the Division’s right to enforce compliance. Deputy Commissioner Riley specifically warns attorneys that approval of an application for attorney’s fees does not foreclose the possibility of an enforcement action related to the application.
The full memo is available on the TDI Website.
- Copyright 2018, Stone Loughlin & Swanson, LLP
According to an article in The Texas Tribune, Governor Greg Abbott’s office will be reviewing all Texas agency rules before they are posted in the Texas Register for public comment. Luis Saenz, the Governor’s Chief of Staff, wrote a letter to the agencies saying, “Prior to publication of a proposed rule in the Texas Register, the Office of the Governor will review the Notice of Proposed Rule as well as the agency’s internal analysis of the rule.”
Governor Abbott claims this approach will “eliminate redundancies and inefficiencies, and provide a dispassionate ‘second opinion” to the proposed agency’s rules.
While the move is intended to promote efficiency, it also significantly expands the power of his office. The process will ensure the involvement of the Governor’s Office in all agency rule-making decisions, including the Texas Department of Insurance and the Division of Workers’ Compensation.
Texas agencies have been directed to provide certain information to the Governor—including the draft rule and its expected impact on local employment and the economy—before posting the proposed rule in the Texas Register. The letter does not specify what power the Governor has over those proposed rules.
For agencies that have statutory or programmatic deadlines for rule promulgation, this mandate will require them to reconsider their timelines, adding extra time to allow for gubernatorial review.
Click the link to read Governor Abbott's letter.
- Copyright 2018, Stone Loughlin & Swanson, LLP
Computers, smartphones, and tablets are everywhere and seemingly make peoples’ lives easier. A study conducted by UCLA found that young people spend upwards of 7 hours a day attached to their devices. Garry W. Small, et. al.,Healthy behavior and memory self-reports in young, middle-aged, and older adults, 26.6International Psycogeriatrics 981-989.
The consistent use and dependence on these devices comes with some negative consequences. Individuals who rely heavily on technology may suffer deterioration in cerebral performance such as short-term memory dysfunction. Research has shown that reliance on devices can lead to issues with memory and cognitive skills, dubbed “digital dementia.” “Digital Dementia” is a term coined by Manfred Spitzer and is used to describe how overuse of digital technology can result in the breakdown of cognitive abilities in ways that are commonly seen in people who have suffered head injuries or psychiatric illness.
What impact does this have for employers and workers’ compensation carriers? Digital dementia may become the new carpel tunnel syndrome, especially with older generations who were not exposed to technology before entering the workforce. An employee could argue digital dementia is an “occupational disease” that naturally results from working with technology.
These “digital dementia” claims will likely be decided in a manner similar to “job stress” or mental trauma claims. The Texas Supreme Court has held that damage or harm caused by repetitious mentally traumatic activities does not constitute an occupational disease and is not considered a compensable injury under the Act. However, if the event can be traced to a definite time, place, and cause, it could produce a compensable injury. In most cases, it will be difficult for an injured employee to pinpoint a discernable time, place, and cause to the alleged “digital dementia,” because it is a “repetitive” type injury that occurs over time.
Click the link to learn more aboutDigital Dementia and the effects it has on the brain.
- Copyright 2018,Stone Loughlin & Swanson, LLP
Enrique Colon, a healthcare worker, was convicted of falsifying workers’ compensation claims. Mr. Colon was indicted along with EME International, Inc. and two others on charges of engaging in organized criminal activity for over-billing for the exams. Mr. Colon was found guilty of submitting false medical claims to an insurer for more time than it actually took to perform functional capacity evaluations.
In response to the conviction, Cassie Brown, Commissioner of Workers’ Compensation, said: “Addressing fraud is vital to the health and success of the workers’ comp system here in Texas. The [D]ivision is committed to protecting injured employees and policyholders from these schemes.”
Report suspected cases of insurance fraud by calling 1-800-252-3439 or visit www.tdi.texas.gov/fraud/.
- Copyright 2018, Stone Loughlin & Swanson, LLP
In the past several years, there have been a litany of federal and state indictments (and convictions) for health care fraud involving healthcare providers and pharmacies. Most recently, a group of doctors, pharmacies, and federal worker advocates were indicted in connection with a compounded drug scheme that defrauded the federal workers’ compensation program and Tricare out of almost $40 million.
The court documents allege the fraud was coordinated by a Houston couple, John Cruise, CEO of the Injured Federal Workers Advocate Association, and his wife, Lashonia Johnson, the director of a group that helps federal workers who are injured on the job. The couple also ran a pharmacy in Texas that dispensed compounded medicine. The doctors involved in the scheme were allegedly taking kickbacks from Cruise and Johnson for prescribing expensive and unneeded compounds to federal workers referred by a therapy center.
- Copyright 2018, Stone Loughlin & Swanson, LLP
In this most recent case, Dr. Vanderwerff, with whom some of you may already be familiar, argued that he was entitled to payment from Travelers because its network provider list was given to the claimant by a website link instead of on paper. Therefore, he argued, the claimant was not given the proper notice of network requirements so the claimant was free to treat out-of-network with Dr. Vanderwerff.
In an opinion issued June 28, 2018, the Dallas Court of Appeals rejected Dr. Vanderwerff's argument. The court held that the term "written description" as used in section 1305.451 of the Insurance Code includes an electronic format rather than paper only. The Court noted that when asked in oral argument, “Are words any less written if they are written electronically rather than on paper?,” Dr. Vanderwerff’s counsel conceded, “No.” Dr. Vanderwerff was represented by claimant attorney Brad McClellan.
The Court also declined Dr. Vanderwerff’s request to reconsider its 2015 opinion in this same case. In that opinion, the Court, citing the redundant remedies doctrine, held that Dr. Vanderwerff cannot seek declaratory relief on the same issue in his suit for judicial review in order to try and recover attorney's fees. It also held that he can’t bring claims for declaratory relief on issues which the Division has exclusive jurisdiction and where he has failed to exhaust his administrative remedies.
Among other things, the Court's opinion means that carriers and employers will not have to start handing out 400 page paper provider directories to employees. The Court’s opinion can be readhere.
James Loughlin, with the Firm, represented Travelers in the case.
- Copyright 2018,Stone Loughlin & Swanson, LLP