Tag: Workers Comp

(Reuters) — Teva Pharmaceutical Industries will pay up to $523 million to New York State as part of a nationwide settlement of lawsuits alleging it helped to fuel the U.S. opioid epidemic.

CEO Kare Schultz said Israel-based Teva, the world’s largest generic drugmaker, will make the payment over 18 years, “which is good for us because it means that it’s very manageable in relation to our cash flow and our debt situation.”

“We are quite satisfied with that outcome,” Mr. Schultz told an analysts call after Teva reported third-quarter results that missed expectations and sent its Tel Aviv shares down more than 6%.

After years of negotiations, Teva in July proposed a $4.25 billion nationwide settlement — mostly cash and partly medicines that will amount to $300 million to $400 million over 13 years — to resolve opioid lawsuits.

It expects to start paying in 2023, but it is still in the process of convincing states and counties to accept its proposal.

“We are quite optimistic that we will get a very, very high number of states and subdivisions joining, and we will put the majority of opioid litigation behind us,” Mr. Schultz said.

On Tuesday, CVS Health Corp., Walgreens Boots Alliance and Walmart agreed to pay $13.8 billion to resolve thousands of U.S. state and local lawsuits related to opioid pain drugs.

A report by the U.S. Department of Labor’s Office of Inspector General found that enforcement activities by the U.S. Occupational Safety and Health Administration “did not sufficiently protect workers from COVID-19 health hazards.”

The report, released Monday, found that following an agency audit OSHA did not issue citations to enforce the standard for recording and reporting occupational injuries and illnesses in 15% of sampled fatality inspections and lacked complete information on COVID-19 infection rates at worksites.

The report also stated that throughout the pandemic the agency “closed inspections without ensuring it received and reviewed all items requested from employers to demonstrate alleged COVID-19 health hazards had been mitigated.”

“These issues occurred because OSHA had not established controls to ensure citations were issued or to document the rationale, does not require employers to report all COVID-19 cases among workers, and does not have a tool to ensure it receives and reviews all requested documentation prior to closing inspections,” the report states. “Due to the lack of citations, incomplete information on infection rates at worksites, and insufficient evidence of hazard mitigation, there is a heightened risk that workers suffered unnecessary exposure to the virus.”

A previous OIG audit found a “significant” reduction in OSHA inspections during the pandemic, while complaints significantly increased, according to the report.

In a letter attached to the report, officials at OSHA admitted they lacked reports and data on workplace infections, writing that the “need for better information about the spread of COVID-19… has been a persistent issue for government and public health authorities” and that fixing the issue “will require significant regulatory changes and investment in public and occupational health infrastructure as well as better data collection and analysis capabilities across and range of government agencies that go beyond OSHA’s ability to commit to finding a solution.”

OSHA said it agrees with some of the recommendations in the report and will take them into account in its ongoing rulemaking process for infectious disease prevention in the workplace.

 

 

 

 

 

Alliant Insurance Services said Wednesday it has acquired Mahwah, New Jersey-based Trivedi Capacity Associates, a program manager that focuses on commercial risks, particularly in the community association and condominium association markets.

Terms of the transaction were not disclosed.

Trivedi and its HARP risk purchasing group will become part of Preferred Concepts, a real estate-focused managing general underwriter within the Alliant Underwriting Solutions programs division.

Alliant said in a statement that Trivedi offers a range of niche-focused coverages to associations including umbrella coverage, directors and officers liability, crime and workers compensation.

Trivedi employees will join Alliant. Information on their total was not available.

 

(Reuters) — CVS Health Corp., Walgreens Boots Alliance Inc. and Walmart Inc. have agreed to pay about $13.8 billion to resolve thousands of state, local and tribal government lawsuits accusing the pharmacy chains of mishandling opioid painkillers.

CVS said Wednesday it had agreed to pay about $5 billion over 10 years, and Walgreens disclosed in a filing with the U.S. Securities and Exchange Commission that it had agreed to pay about $5.7 billion over 15 years. Neither company admitted wrongdoing. Walmart has agreed to pay $3.1 billion, mostly upfront, according to two people familiar with the matter.

Paul Geller, one of the lawyers who negotiated for the governments, said that settlements with pharmacies “will bring billions of additional dollars to communities that are desperate for funds to combat the epidemic” of opioid addiction.

CVS general counsel Thomas Moriarty said in a statement the company was pleased to resolve the claims and the deal was “in the best interest of all parties, as well as our customers, colleagues and shareholders.”

Walgreens said in its SEC filing that it “continues to believe it has strong legal defenses” and will defend itself vigorously against any future lawsuits not covered by the settlement.

Both CVS and Walgreens said their agreements would not be final until certain non-monetary terms were worked out, and that the total amount could be reduced if not enough government plaintiffs sign on.

Walmart did not immediately respond to a request for comment.

The proposed settlement, which would be the first nationwide deal with retail pharmacy companies, follows nationwide opioid settlements with drugmakers and distributors totaling more than $33 billion.

In more than 3,300 lawsuits, beginning in 2017, state and local governments accused drugmakers of downplaying the risks of their opioid pain medicines, and distributors and pharmacies of ignoring red flags that prescriptions were being diverted into illegal trafficking.

They said the resulting human toll, as well as strain on public health services and law enforcement, was a public nuisance that the companies must pay to fix.

CVS, Walgreens and Walmart are the three largest retail pharmacies in the country by market share. If their settlement becomes final, it will put much of the sprawling, years-long litigation over opioids to rest, though cases are still pending against smaller, more regionally focused pharmacy operators including Rite Aid Corp. and Kroger Co.

Less than a month after the U.S. Occupational Safety and Health Administration fined Dollar General Corp. $1.6 million for workplace safety violations, the agency on Tuesday said its inspectors issued another $2.8 million in penalties for similar violations at stores in Alabama, Florida and Georgia.

Seven inspections from April 28 through June 3 identified 31 violations similar to those found at other Dollar General stores where litigation is pending. The investigations were conducted at stores in Clay, Dothan, Odenville and Town Creek, Alabama; Darien and West Point, Georgia; and Panama City Beach, Florida.

In addition to exposing workers to the risk of being stuck by improperly stacked boxes and blocking exits, Dollar General also allegedly failed to label fire extinguishers or make them accessible to workers; stored boxes in front of electrical panels; failed to use exit signs; exposed workers to electrocution; and did not install handrails on stairs where required.

The violations allegedly found in these recent inspections are similar to ones OSHA has found at Dollar General locations across the nation.

In October, inspections at four locations in Alabama, Florida and Georgia uncovered numerous hazards, leading OSHA to propose $1.7 million in penalties. In August, inspections at three other Georgia locations resulted in $1.3 million in penalties. In February, OSHA proposed $1 million in penalties after inspections at three other Mobile locations and one in Dalton, Georgia, found similar hazards.

In December 2021, an inspection in Mobile led OSHA to propose $321,827 in penalties for exposing workers to slip-and-trip hazards and not keeping the main storeroom orderly to allow a safe exit in an emergency.

In all, the department said it has fined Dollar General a total of $12.3 million for safety violations since 2017.

WorkCompCentral is a sister publication of Business Insurance. More stories here.

 

 

Opioid prescribing in workers compensation nosedived to an all-time low last year, a new report finds, but experts say the picture is complicated, with other drugs taking over the pain management space, among other factors. 

AmTrust Financial Services Inc. reported in October that only 15.2% of its workers compensation claims for 2021 involved an opioid prescription, down from 60% in 2017 and 25% in 2018. The data represents a reduction of 75% in prescriptions containing an opioid over four years, the insurer said.

The numbers are in line with other reports.

Enlyte Group LLC subsidiary Mitchell International Inc. reported in July that in 2021 30.3% of injured workers had opioid prescriptions. Workers comp opioid spending has declined more than 62% since 2016, according to data collected in 2021 by Maggie Valley, North Carolina-based consulting company CompPharma LLC.

Concerns are emerging, however, that other drugs are moving in to replace opioids as a pain management go-to in comp. Foremost are nonsteroidal anti-inflammatory drugs; neurological drugs, such as gabapentin, which target nerve pain; topical creams; muscle relaxers; and anti-anxiety drugs in a class known as benzodiazepines, according to experts.

The latter two are of particular concern, as they are considered sedatives similar to opioids, though not as deadly, experts say.

“While opioids have decreased significantly, it’s kind of become a more diffused problem, and it’s now branched out into other controlled substances,” said Silvia Sacalis, a Tampa, Florida-based licensed pharmacist and vice president of clinical services for Healthesystems LLC.

“These are other controlled substances that unfortunately have similar side effect profiles to opioids with the sedation and the impact on cognition, which is what keeps injured workers from returning to work.”

Ms. Sacalis added that “it’s now important to be more vigilant than ever” in managing prescriptions.

Melissa Burke, Southington, Connecticut-based vice president and head of managed care and clinical for AmTrust, said managed care in comp is moving away from drugs — when possible.

“There are many other ways to treat pain than with opioids, and that’s where the industry has gone,” she said. “We’re very vigilant about ensuring (workers) have what they need.

“If it’s post-op, if they have an immediate need for a pain medication, they’re getting it; we are certainly not getting in the way of that. But we’re ensuring that step two and phase two of their injury recovery process is finding something that’s addressing their needs for pain management and addressing what’s causing the pain.”

Sometimes, the answer is alternative drugs other than opioids, she said. This involves “identifying whether it is truly an anti-inflammatory need, or do we need something for neuropathy? Do we need a non-pharmacologic treatment, like acupuncture therapy? Do they just need cognitive behavior therapy to address what’s internally driving them to focus on their pain?” she said.

Doctors are also getting better at looking at alternatives and proceeding with caution, said Dr. Adam Seidner, Hartford, Connecticut-based chief medical officer for Hartford Financial Services Group Inc.

“The doctors are making sure that they’re doing a proper assessment and that they have the proper management and that they feel comfortable taking care of these patients, both in the acute and chronic pain situations,” he said. “The proper management of acute pain is … important because if it’s not done correctly, it can lead to long-term, chronic pain.”

And while opioids have gone down “drastically” in comp, it doesn’t mean the industry’s work is done, said Joe Paduda, Skaneateles, New York-based president of CompPharma LLC.

“While the actual prescription reporting for workers compensation claimants, for drugs paid for by workers comp, has gone down, it does not mean that all those patients who were taking opioids that were paid for by workers comp are not still taking opioids.”

There are reasons to suspect injured workers are tapping into group health policies, or paying cash for opioids, and still going to work, he said.

The elimination of a metric for diagnosing mental disorders from the American Medical Association’s guide on disability ratings is a welcome change for workers compensation professionals addressing mental injury claims, experts say. 

An analysis released this fall by the National Council on Compensation Insurance said the effects of changes made last year to the AMA’s guide are “uncertain” when it comes to diagnosing and determining disability. The Boca Raton, Florida-based ratings agency said that “the only significant content and methodology changes were for mental and behavioral disorders.”

The changes appear in the sixth edition of the guide, which had last been updated in 2008. The new version aligns with the “most current (guidelines) in medicine and provides a basis for fair and consistent evaluations and impairment ratings.” 

Most states are required to use the AMA guide to determine comp-related disability. 

The overhaul was proposed by the American Psychiatric Association and the American Psychological Association to align with the “Diagnostic and Statistical Manual of Mental Disorders,” or the DSM, considered the authoritative guide to the diagnosis of mental disorders, according to the AMA.

The new guidelines, in both the DSM and the AMA guides, eliminated the so-called global assessment of functioning scale as a means of determining impairment. 

The GAF provides a score between zero and 100 based on a person’s function — the higher the score the higher the function — and the ratings are grouped in tens. Experts say the GAF is too imprecise and creates confusion and conflict when determining disability.

“From a clinician perspective, the GAF was always problematic,” said Mark Debus, Chicago-based clinical manager of behavioral health with Sedgwick Claims Management Services Inc., adding that he expects little to no changes in comp claims as a result of its removal. “When they removed it the therapist community had a huge sigh of relief because it’s just kind of a silly score. To begin with, it’s extremely subjective.” 

Les Kertay, a psychologist who helped draft the latest AMA guide and senior vice president of behavioral health with Axiom Medical in Chattanooga, Tennessee, said the GAF was removed from the DSM because it “had some significant reliability problems” and that “taking it out, especially because it was no longer in the DSM, made some sense. If it’s bad enough that the American Psychiatric Association doesn’t want to use it anymore then we probably shouldn’t use it.”

“You and I might have rated someone quite differently on the GAF,” he said, adding that the AMA still relies on other measures for diagnosis and disability determination for mental injuries. 

As part of their research, Mr. Kertay and other medical professionals examined what disability ratings would be without the GAF measurement. There were little to no differences in diagnoses and ratings without the GAF, he said. 

While most states require medical professionals to rely on the most recent AMA guide, California is holding on to the previous version, according to Ron Heredia, a psychologist and director and founder of Los Angeles-based Good Mood Legal, which specializes in reviewing psychology reports in insurance claims. 

The GAF score is “another piece of information” for a claim and one of the reasons for the state’s adherence to the 5th AMA guide, he said.

Mr. Heredia agreed that the score’s subjectivity is a concern. When so-called “psych claims” are challenged, medical records are often found lacking in concrete details — such as what the injured worker is experiencing — and the GAF score leaves much out, he said. 

“The GAF score is essentially the doctor picking a number zero to 100, and if they wanted to, they could very well just pick a number out of a hat and say that’s the GAF score,” Mr. Heredia said. 

“And when challenged by either an attorney or even a claims examiner about the GAF score that they assigned, all the doctor really has to do is say, ‘Well, I gave that score because it’s my clinical judgment.’ And they could just repeat that like a broken record. There’s really no rhyme or reason, or formula the doctor has to follow to come up with the GAF score.”

 

 

 

 

 

 

Drug tests following an injury, questions on immigration status and discrimination against workers who file claims are among the topics in recent court decisions that shed light on questions the workers compensation system has long sought answers to. 

California

For example, California’s 6th District Court of Appeals in an Aug. 26 decision in Manuel v. Superior Court (BrightView Landscape Services Inc.) held that an employer can’t force an injured worker to provide discovery responses to questions about his immigration status.

Rigoberto Jose Manuel injured his back in January 2018 while working for BrightView Landscape Services. He went to an occupational medical clinic and saw a doctor who released him to work. 

Mr. Manuel completed one full shift before his supervisor told him not to return and BrightView terminated his employment.

The parties disputed whether BrightView terminated Mr. Manuel’s employment in retaliation for his injury or whether he failed to return to work because federal immigration authorities questioned his eligibility to work in the U.S.

BrightView filed a motion to compel Mr. Manuel to disclose his immigration status. A trial court granted the motion in November 2020.

The appeals court, however, ruled the trial court’s order was an error. The plain language of Labor Code Section 1171.5 establishes immigration status as irrelevant for the purposes of enforcing state labor laws unless the party requesting the information has shown clear and convincing evidence that the inquiry is necessary to comply with federal immigration law.

The court said BrightView did not meet its burden to show by clear and convincing evidence that inquiry into Mr. Manuel’s immigration status was necessary to comply with federal immigration law.

The court said federal immigration law prohibits a worker from seeking reinstatement or post-discovery back pay, but Mr. Manuel did not seek reinstatement or lost wages as remedies. Thus, the court said, BrightView was prohibited from requesting discovery into Mr. Manuel’s immigration status for his retaliatory firing claim.

Nebraska

The Nebraska Supreme Court in its Sept. 9 decision in Dutcher v. Department of Correctional Services, held the exclusive remedy of workers compensation prohibited a woman from suing her employer for wrongful termination under the state’s Fair Employment Practice Act.

Suzette Dutcher worked for the Department of Correctional Services and injured her right knee in a training exercise in April 2015. The department fired her in December 2016 when it could not find another position that accommodated her physical restrictions.

Ms. Dutcher sued the department alleging violations of the Nebraska Fair Employment Practice Act. A state trial court granted the Department of Correctional Services’ motion for summary judgment, dismissing the case on the basis of exclusive remedy.

Nebraska’s highest court noted this was the first time it addressed exclusive remedy in the context of a civil claim brought under the Fair Employment Practice Act.

The state Supreme Court said exclusivity provisions in the Workers’ Compensation Act are broadly worded, while the Fair Employment Practice Act is silent on its application to disabilities arising from compensable injuries. Without additional guidance from lawmakers, the court concluded the discrimination claim arose from her covered injury and was, therefore, prohibited by exclusivity. 

“To allow Dutcher additional relief in a civil action in district court under the (Nebraska Fair Employment Practice Act) would be to judicially interfere with the quid pro quo determined by the Legislature through the Nebraska Workers’ Compensation Act,” the court said.

Nevada

In another case addressing a wrongful termination claim, the Nevada Supreme Court affirmed the right of employers to fire workers for using recreational cannabis, despite state-licensed businesses selling the drug for recreational and medicinal use.

The court said in its Aug. 11 decision in Ceballos v. NP Palace LLC that cannabis remains illegal at the federal level, so a state law prohibiting adverse employment actions against people who use products that are legal in the state does not protect cannabis use.

Danny Ceballos slipped and fell in the Palace Station break room near the end of his shift in June 2020. He was forced to take a drug test and was fired when the test came back positive for cannabis.

The court said the law creating a private right of action for workers fired for the use of lawful products doesn’t apply to cannabis because it is illegal under federal law and, state law notwithstanding, it is illegal in Nevada, too.

At the same time, the court said state law allows employers to prohibit or restrict employees from using recreational marijuana, so an employee fired after testing positive at work does not have a common-law tortious discharge claim.

“If the Legislature meant to require employers to accommodate employees using recreational marijuana outside the workplace but who thereafter test positive at work, it would have done so,” the court said. “It did not.”

Alaska

More recently, Alaska’s high court faced a similar question about intoxication and upheld an award of benefits to a worker who admitted to using cocaine and drinking on the job and who tested positive for drugs and alcohol after his accident.

Virgil Adams fell about 30 feet while working on a roof. The property owner did not have comp coverage and the Workers’ Compensation Benefits Guaranty Fund was joined as a party to the case.

Mr. Adams admitted to partaking in the illicit substances he said were readily available at the job site he characterized as “a revolving frat house.” A post-accident drug test showed he had used cocaine within 48 to 72 hours. The test also revealed his blood alcohol level was .049.

The Workers’ Compensation Board said the evidence supported a conclusion that Mr. Adams fell because the supports for the ladder he was on gave way. Since that would have caused anyone to fall, the board said intoxication was not a proximate cause of the accident. 

The Workers’ Compensation Appeals Commission and state Supreme Court both affirmed.

The high court said in its Oct. 7 decision that intoxication is an affirmative defense that requires the employer, or in this case the fund, to prove an injury was proximately caused by the worker’s use of drugs or alcohol.

Greg Jones is senior editor and Sherri Okamoto is legal reporter for Work Comp Central, a sister publication of Business Insurance.

 

 

 

The Occupational Safety and Health Administration is significantly increasing its enforcement response for repeat and willful workplace safety citations, and not only are six-figure fines becoming more common, but a series of recent million-dollar fines, as well as criminal prosecutions, underscore the seriousness with which OSHA under the Biden Administration is enforcing workplace safety rules. 

Consequently, employers with prior OSHA citations need to be particularly vigilant to ensure compliance with their health and safety programs.

The conduct driving these large enforcement cases involves repeat or willful allegations. OSHA’s Field Operations Manual defines a repeat violation as occurring when an “employer has been cited previously for the same or a substantially similar condition or hazard and the citation has become a final order.” Willful violations may be cited by OSHA for either an intentional disregard for the requirements under the Occupational Safety and Health Act or plain indifference to employee safety and health.

Under current OSHA penalty authority, the agency may impose a fine of $145,027, per violation, for each separate repeat or willful citation. Congress significantly enhanced OSHA’s enforcement position by adjusting fines upward for inflation in 2015, the first increase since 1990. As a result, OSHA’s penalty authority increased by 78%. While the skyrocketing trajectory of 2022 penalties is due in part to the inflation adjustment, OSHA is aggressively pursuing enforcement for repeat and willful citations and frequently combining multi-count items per citation with separate maximum penalties for each item. 

Construction fall protection cases appear to be where the agency is particularly focused on citing repeat and willful violations. According to OSHA, more than one-third of all construction-related fatalities were due to falls from heights in fiscal year 2021. In October 2022, OSHA announced a $1.1 million fine stemming from six willful, five repeat, and one serious citation for an Ohio construction contractor, Charm Builders Ltd., that had been cited 11 times previously for fall protection violations. Similarly, in late August 2022, a New York roofing and siding contractor, ALJ Home Improvement Inc., was fined over $1.3 million for OSHA fall protection violations involving a second fall-from-heights fatality in the past three years. Another construction case involving willful allegations stems from a floor collapse with a demolition contractor in Boston. OSHA fined JDC Demolition $1.2 million in late September 2022, with violations imposed for inadequate training and operating heavy equipment with unsafe loads on partially demolished floors. 

General industry enforcement has also seen a series of recent million-dollar fines. Lockout/tagout violations involving willful and repeat conduct for New Jersey auto parts seller The Auto Store LLC led to the issuance of a $1.2 million fine following an employee hand injury in March 2022. And, of course, OSHA has had a well-publicized campaign directed at repeat violations at discount retail stores over the past five years in connection with blocked fire exits and fire extinguishers, along with unstable stacks of merchandise. These repeat issues resulted in a $1.2 million fine for Dollar Tree associated with two Family Dollar stores in Ohio as reflected in the agency’s August 2022 press release. 

The Biden Administration’s effort to double down on repeat and willful conduct is also evidenced by OSHA’s update and re-issuance of its Severe Violator Enforcement Program. Although in existence since 2010, the agency updated the SVEP in September 2022, “to focus inspection resources on employers that have demonstrated indifference to their OSH Act obligations by committing willful, repeated, or failure-to-abate violations.” Employers with two or more willful or repeat violations are subject to the SVEP, and just one willful or repeat violation can subject a business to the SVEP if it involves a workplace fatality or catastrophe causing three or more hospitalizations. Once OSHA places a company in the SVEP, those employers are subject to further inspections and follow-up referrals.

Criminal enforcement

In addition to the recent significant increase in civil monetary fines, the Biden Administration is also increasing criminal prosecutions as reflected by enhanced coordination and referrals between the Department of Labor and the Justice Department. Several recent criminal cases demonstrate the willingness of DOJ to charge employers with OSH Act crimes for workplace safety violations, notwithstanding the fact that federal prosecutors have historically not pursued criminal cases for a variety of reasons. The OSH Act’s penalty for a willful workplace fatality is a misdemeanor, and jail time has rarely been imposed because most employers are corporate entities, not individuals.

In August 2022, Alabama-based ABC Polymer Industries LLC, was charged with two OSH Act crimes for machine guarding after a worker was pulled into unguarded moving rollers as part of a manufacturing process involving plastic extrusion assembly lines. Also in August 2022, the U.S. Department of Justice issued a press release when Tampa Electric Co. was sentenced for an OSH Act crime involving the failure to brief employees of hazards of the job and related workplace precautions.

The Justice Department also continues to pursue cases under its Worker Endangerment Initiative, a program where federal prosecutors seek to couple Title 18 crimes, such as obstruction of justice, false statements, conspiracy, etc., to enhance criminal prosecution for workplace safety crimes. This is particularly evident in cases that may not involve a worker fatality when the OSH Act’s criminal provisions do not apply. 

In May 2022, for example, DOJ announced the indictment of Didion Milling and six company officials following a dust explosion that killed multiple workers and injured 15 others. In addition to OSH Act criminal charges, federal prosecutors indicted individuals for falsifying entries in a cleaning logbook, as well as false and misleading testimony regarding knowledge about combustible dust hazards. OSHA’s press release stated that the employer had not installed a venting or dust collection system and failed to develop and implement a written program to effectively prevent and remove combustible dust. 

The trend of the U.S. Department of Labor and Justice Department aggressively pursuing OSHA workplace health and safety compliance with both increased civil fines and criminal enforcement is likely to continue throughout the remainder of the Biden Administration. Businesses should carefully evaluate their training, operating procedures, safe work practices, and related programs in meeting their regulatory duties for a safe workplace.

Andrew Brought is a partner in the Kansas City, Missouri, office of Spencer Fane LLC. He counsels manufacturers, industrial clients and businesses with complex environmental and workplace safety/OSHA matters. He can be reached at abrought@spencerfane.com.