The Workers' Compensation Daily News for Apr 24, 2018
Drug Makers Accused of Price Gouging - Again
Mon, 23 Apr 2018 09:10:34 - Pacific Time
Imbruvica, a compound that treats white blood cell cancers, has been a bargain at $148,000 per year. Until now, doctors have been able to optimize dosage for each patient by prescribing up to four small-dose pills of it per day.
But after results from a recent small pilot trial indicated that smaller doses would for most patients work as well as the large ones, its manufacturer, Janssen and Pharmacyclics, has decided on the basis of the doctors' interest in smaller dosages to reprice all sizes of the drug to the price of the largest size.
This has the effect of tripling the price for patients, and doctors have now put off any plans for further testing of lower dosages.
According to the story in the Washington Post, a group of cancer doctors focused on bringing down the cost of treatments by testing whether lower - and cheaper - doses are effective thought they had found a prime candidate in a blood cancer drug called Imbruvica that typically costs $148,000 a year.
The science behind Imbruvica suggested that it could work at lower doses, and early clinical evidence indicated that patients with chronic lymphocytic leukemia might do just as well on one or two pills a day after completing an initial round of treatment at three pills per day.
The researchers at the Value in Cancer Care Consortium, a nonprofit focused on cutting treatment costs for some of the most expensive drugs, set out to test whether the lower dose was just as effective - and could save patients money.
Then they learned of a new pricing strategy by Janssen and Pharmacyclics, the companies that sell Imbruvica through a partnership. Within the next three months, the companies will stop making the original 140-milligram capsule, a spokeswoman confirmed. They will instead offer tablets in four strengths - each of which has the same flat price of about $400, or triple the original cost of the pill.
Just as scientific momentum was building to test the effectiveness of lower doses, the new pricing scheme ensures dose reductions won't save patients money or erode companies' revenue from selling the drug. In fact, patients who had been doing well on a low dose of the drug would now pay more for their treatment. Those who stay on the dose equivalent to three pills a day won't see a change in price.
In a statement, Janssen and Pharmacyclics said the companies began to develop the new single-tablet dosing regimen in 2015 "as a new innovation to provide patients with a convenient one pill, once-a-day dosing regimen and improved packaging, with the intent to improve adherence to this important therapy." They called the studies on lower dosing "highly exploratory in nature" and noted that patients who take a higher dose of the drug will save money.
Jennifer Brown, director of the Center for Chronic Lymphocytic Leukemia at the Dana-Farber Cancer Institute, said that the affordability of medication is a concern for her patients. Despite efforts to connect patients with resources to help them afford co-pays, some will request a drug that is cheaper but maybe less effective - or even push to discontinue the medicine. Read More...
Comp Lawyer to Serve 10 Years for $26M Fraud
Mon, 23 Apr 2018 09:10:29 - Pacific Time
Tshombe Anderson, 55, of Grand Prairie, Texas, was sentenced to 120 months in federal prison and ordered to pay $26,572,458.93 in restitution for his role in a scheme he ran along with his family members to fraudulently obtain more than $26 million from the Department of Labor, Office of Worker’s Compensation Programs.
Anderson pleaded guilty in August 2017 to one count of conspiracy to commit health care fraud. Anderson agreed to forfeit $375,000 seized from his residence, a 2015 Mercedes, and his share of the $8,383,075 that was seized from 25 bank accounts. Anderson has been in custody since the time of his arrest in August 2015.
In addition to Anderson, his sister Lydia Bankhead, 63, his wife Brenda Anderson, 47, and his niece Lydia Taylor, 30, were also charged in the indictment returned in September 2015 and pleaded guilty to their roles in the scheme.
"Tshombe Anderson and others conspired to defraud the U.S. Department of Labor’s Office of Workers’ Compensation Programs of more than $26 million. Anderson stole patient information from over 200 injured federal workers and then used the information to fraudulently bill OWCP, enriching himself and others with taxpayer dollars intended for the treatment of injured federal workers. We will continue to work with our law enforcement partners to safeguard all Department of Labor programs," said Steven Grell, Special Agent in-Charge of the Dallas Regional Office of the U.S. Department of Labor, Office of Inspector General.
According to plea documents in the case, Tshombe Anderson worked as an attorney for Union Treatment Centers (UTC). Anderson and his wife, Brenda Anderson, opened a durable medical equipment company called Best First Administration (BFA). BFA was formed, initially, to provide durable medical equipment to patients referred to BFA from UTC. In July 2011, Tshombe Anderson and Brenda Anderson disassociated from UTC.
In April 2013, Tshombe Anderson agreed with Bankhead to open Union Medical Supplies and Equipment (UMSE). In August 2013, Tshombe Anderson opened Skycare Medical Supplies and Equipment (SMSE). Both companies were created in order to submit claims that were inappropriate to OWCP. The same medical information that BFA had received from UTC was used and billed to the same universe of claimants for duplicate, unwanted durable medical equipment that was not medically necessary, using outdated medical information.
Tshombe Anderson continued to do so despite knowing that they were billing OWCP for items that were not associated with the claimant’s injuries and that claimants were often refusing or rejecting the durable medical equipment for which their company had billed.
Tshombe Anderson had access to the operating accounts for UMSE and routinely transferred large sums of cash from those accounts for his personal use or to launder through business accounts for a shell company called American Federal Union Claims Advocates, as well as accounts associated with his law office. Read More...
Court Dismisses Injured Worker RICO and Qui Tam Claims
Fri, 20 Apr 2018 11:00:17 - Pacific Time
Attorneys for injured workers continue to attempt to make a federal Racketeering case out of workers' compensation claims administration, and so far have failed in the 6th and 9th Circuits. Yet they are unrelenting despite lack of success. They have just suffered another legal setback in the 6th Circuit.
The latest case involves Mark Marusza who suffered a serious work-related accident in fall 2011.
He filed a federal civil action claiming that defendant Accident Fund Insurance Company neglected to pay their share of Marusza’s medical bills, which resulted in Medicare paying for a portion of his bills. Accident Fund likewise refused to pay Nancy Gucwa - Marusza’s long-term, live-in girlfriend - for the attendant care she provided.
Marusza and Gucwa alleged in their federal court case that (1) Accident Fund and the defendant physicians defrauded Marusza, Gucwa, and others of benefits, in violation of the Racketeer Influenced and Corrupt Organizations Act; (2) Marusza is entitled to double damages under the Medicare Secondary Payer Act; (3) the defendant doctors tortiously interfered with Marusza’s contractual relationship and/or business expectancy by inducing Accident Fund to deny his benefits; and (4) Accident Fund falsely imprisoned Marusza by requiring him to attend an examination with a neuropsychologist.
The district court dismissed each claim under Federal Rule 12(b)(6) for failure to state a claim. Plaintiffs appealed and the United States Court of Appeals affirmed in the partially published case of Gucwa v. Lawley 2018 U.S. App. LEXIS 942.
The district court found that Marusza lacked standing because his personal injury does not qualify as an injury to "business or property" as contemplated by the RICO statute.
The Court affirmed the dismissal. In Jackson v. Sedgwick Claims Mgmt. Servs., Inc., an en banc panel of this court expressly held that "racketeering activity leading to a loss or diminution of benefits the plaintiff expects to receive under a workers’ compensation scheme does not constitute an injury to ‘business or property’ under RICO." 731 F.3d 556, 566 (6th Cir. 2013) (en banc).
The district court also dismissed Marusza’s claim under the Medicare Secondary Payer Act because he had not alleged financial harm. The Court of Appeals again affirmed.
Because the Medicare Secondary Payer Act is not a qui tam statute, the financial injury suffered by the government does not confer standing upon other parties. Stalley v. Methodist Healthcare, 517 F.3d 911, 919 (6th Cir. 2008). Private plaintiffs must suffer their own individual harm; for instance, a private plaintiff may allege that they were paid less by Medicare than they would have been paid by the primary payer. Read More...
FDA in Favor of First Cannabis-Derived Drug
Fri, 20 Apr 2018 11:00:11 - Pacific Time
An advisory panel to the U.S. Food and Drug Administration unanimously voted in favor of approving the first cannabis-derived medicine in the country, a childhood epilepsy treatment developed by GW Pharma. According to the story in Reuters, the drug, Epidiolex, is derived from cannabidiol (CBD), one of the hundreds of molecules found in the marijuana plant, and an FDA decision is expected by June 27.
The syrup contains less than 0.1 percent of tetrahydrocannabinol (THC), the substance that makes people high.
The FDA panel found that the drug’s benefits outweighed the risks to treat patients aged 2 years and older with Dravet Syndrome (DS) and Lennox-Gastaut Syndrome (LGS), rare childhood-onset forms of epilepsy that are among the most resistant to treatment.
The agency does not have to act on the recommendations of its experts, but usually does.
"The overall tone of the meeting was positive, with the FDA having identified no obstacles to approval," Cantor Fitzgerald analyst Elemer Piros said, adding that he expects the drug will be approved much before June 27.
The panel’s backing comes after the FDA staff on Tuesday gave a favorable review, citing three clinical studies that showed the drug reduced frequency of seizures in patients with the disease when added to a current therapy.
Analysts said an approval will also confirm the therapeutic benefits of CBD. "This should aid CBD in being efficiently rescheduled by the Drug Enforcement Administration." Under the U.S. federal law, marijuana is considered to have no medicinal value.
However, the FDA panel highlighted the limited association between the use of CBD and elevated liver enzymes, which Cantor Fitzgerald’s Piros believe could lead to a boxed warning label, the severest form of FDA warning.
It is estimated there are about 14,000-18,500 patients with LGS, and 1 in 40,000 sufferers of Dravet Syndrome in the United states, for which there is no approved treatment. Some LGS patients have to wear helmets to avoid brain injuries from "drop seizures" that cause loss of muscle strength. Read More...
Ambulance Co. Employee to Serve 36 Months for $1.1M Fraud
Thu, 19 Apr 2018 05:02:13 - Pacific Time
A former employee of a Southern California ambulance company was sentenced to 36 months in prison for his role in a scheme that resulted in more than $1.1 million in fraudulent claims to Medicare.
Aharon Aron Krkasharyan, 54, of Los Angeles, was sentenced by U.S. District Judge George H. Wu, who also ordered Krkasharyan to pay $484,556 in restitution to Medicare, jointly and severally with his co-conspirators, who await sentencing. On Nov. 27, 2017, Krkasharyan pleaded guilty to one count of conspiracy to commit health care fraud.
Krkasharyan was employed as the Quality Improvement Coordinator for Mauran Ambulance Inc. (Mauran) of San Fernando, an ambulance transportation company operating in the greater Los Angeles area that provided non-emergency services to Medicare beneficiaries, many of whom were dialysis patients.
As part of his plea, Krkasharyan admitted that between June 2011 and April 2012, he conspired with other Mauran employees to submit claims to Medicare for ambulance transportation services for individuals who did not need such services. Krkasharyan also admitted that he and his co-conspirators instructed Mauran emergency medical technicians to conceal the patients’ true medical conditions by altering paperwork and creating fraudulent reasons to justify the ambulance services.
Krkasharyan was charged along with Toros Onik Yeranosian, 55, the former owner of Mauran; Oxana Loutseiko, 57, the former general manager of Mauran; and Maria Espinoza, 47, a former employee of a Los Angeles dialysis treatment center. Yeranosian, Loutseiko and Espinoza each pleaded guilty and are pending sentencing. The former dispatch supervisor at Mauran, Christian Hernandez, 37, who was previously charged in the case, has also pleaded guilty and awaits sentencing.
According to court documents, during the course of the conspiracy, Mauran submitted over $28 million in claims to Medicare. Krkasharyan’s co-defendants admitted that at least $6.6 million of those claims were false and fraudulent claims for medically unnecessary transportation services. Medicare paid at least $3.1 million on those false and fraudulent claims.
The case was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the United States Attorney’s Office for the Central District of California. The case was investigated by the FBI and HHS-OIG. Trial Attorneys Alexis D. Gregorian and Jeremy R. Sanders of the Fraud Section prosecuted the case. Read More...
Jury Convicts in So. Cal Ambulance Fraud Case
Thu, 19 Apr 2018 05:02:08 - Pacific Time
And in another case against medical transportation companies, a federal jury in Los Angeles just convicted the former owner, operator and managers of a Southern California ambulance company of health care fraud charges in connection with a Medicare fraud scheme of at least $2.4 million.
Yaroslav Proshak, aka Steven Proshak, 47, of Valley Village, California; Emilia Zverev, 58, of Van Nuys, California; and Sharetta Michelle Wallace, 37, of Inglewood, California, each were convicted of one count of conspiracy to commit health care fraud and five counts of health care fraud following a two-week trial.
Proshak’s sentencing is scheduled for Nov. 24, 2015, and Zverev’s and Wallace’s sentencing is scheduled for Nov. 30, 2015, all before U.S. District Judge S. James Otero of the Central District of California, who presided over the trial.
Proshak owned and operated ProMed Medical Transportation, an ambulance transportation company in the greater Los Angeles area that provided non-emergency ambulance transportation services to Medicare beneficiaries, many of whom were dialysis patients. Zverev was the billing manager, and Wallace supervised ProMed’s emergency medical technicians (EMTs).
The evidence at trial demonstrated that, between May 2008, and October 2010, the defendants conspired to bill Medicare for ambulance transportation services for individuals whom the defendants knew did not need such services. In addition, the evidence showed that the defendants instructed EMTs who worked at ProMed to conceal the true medical conditions of patients they were transporting by altering requisite paperwork and creating fraudulent documents to justify the transportation services.
According to evidence admitted at trial, during the course of the conspiracy, ProMed submitted at least $2.4 million in false and fraudulent claims to Medicare for medically unnecessary transportation services. Medicare paid at least $1.2 million of those claims.
The case was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Central District of California. The case was investigated by the FBI and HHS-OIG. The case was prosecuted by Trial Attorneys Blanca Quintero, Fred Medick and Ritesh Srivastava of the Criminal Division’s Fraud Section.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 2,300 defendants who have collectively billed the Medicare program for more than $7 billion. In addition, HHS’s Centers for Medicare & Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent provide Read More...
Amazon Scraps Plan to Enter Pharmacy Business
Wed, 18 Apr 2018 09:10:50 - Pacific Time
Amazon Business, which sells bulk items to business customers, has shelved its plan to sell and distribute pharmaceutical products after considering it last year, according to people familiar with the matter.
Instead, CNBC reports that the company has found that business to be more challenging than expected. The setback illustrates the challenges of getting into the medical supply and pharmaceutical space, even for a company as big as Amazon. .
The change in plan comes partly because Amazon has not been able to convince big hospitals to change their traditional purchasing process, which typically involves a number of middlemen and loyal relationships, and perhaps illegal incentives as have been demonstrated in national civil and criminal litigation.
Moreover, Amazon would also need to build a more sophisticated logistics network that can handle temperature-sensitive pharmaceutical products, according to these people.
Still, Amazon hasn't completely ruled out getting into the pharma distribution space eventually. Multiple reports have speculated that the company will someday add a direct-to-consumer prescription drug business. Amazon Business could also reconsider getting into the pharma space once it gains more scale, multiple people said.
Meanwhile, the company continues to explore other health-care projects through different teams across the company, including Alexa and the secretive Grand Challenge team, sometimes referred to as "1492."
Amazon has started a secret skunkworks lab dedicated to opportunities in health care, including new areas such as electronic medical records and telemedicine. Amazon has dubbed this stealth team 1492, which appears to be a reference to the year Columbus first landed in the Americas.The stealth team, which is headquartered in Seattle, is focused on both hardware and software projects.
Amazon has been selling medical products like glucometers, gloves and stethoscopes to medical clinics for several years. It now has the necessary licensing in 47 out of 50 states and the District of Columbia, according to its website.
But Amazon has struggled to land contracts with large hospital networks, despite convening an advisory board that includes major hospital executives, according to two people familiar. These groups of hospitals have long-standing contracts with distributors, like Cardinal Health and McKesson. Many hospitals also own a stake in entities called group purchasing organizations that negotiate on their behalf, leveraging their collective negotiating power.
The CNBC report points out that that the health-care supply chain is well-entrenched and will be hard to break into, according to one expert. "The hospital and health-care systems have entangling alliances with their existing purchasing and supply chain partners," said Tom Cassels, head of strategy and business development at Leidos Health. "It's very difficult to replicate the Amazon buying experience in health care," he said.
But, in an industry that is now well known for marketing, by some, by way of illegal kickbacks and perks, one must be left to wonder if that is yet another discovered or undiscovered impediment for the Amazon platform. Read More...
DWC Updates Formulary List
Wed, 18 Apr 2018 09:10:41 - Pacific Time
DWC Administrative Director George Parisotto has issued an Order updating the Medical Treatment Utilization Schedule (MTUS) Drug Formulary effective May 15, 2018 pursuant to Labor Code section 5307.29.
The Administrative Director’s update Order adopts changes to the MTUS Drug List including the following:
- Addition and deletion of drugs for treatment of Eye Disorders to coordinate with the updated ACOEM Eye Disorders Guideline which was adopted into the MTUS
- Designation of "Exempt/Non-Exempt" status for drugs added for treatment of Eye Disorders
- Designation of "Special Fill" status for drugs added for treatment of Eye Disorders
- Update of guideline reference symbols for Ankle and Foot Disorders and Eye Disorders
- Designation of an additional corticosteroid as eligible for the "Special Fill"
The brand name of the corticosteriod now designated for 4 day special fill is Celestone, and the generic name is Betamethasone. It is used for a number of diseases including rheumatic disorders such as rheumatoid arthritis among others. It is available as pill, by injection, and as a cream.
"Special Fill" means the policy set forth in section 9792.27.12 allowing dispensing of identified Non-Exempt drugs without prospective review where the drug is prescribed or dispensed in accordance with the criteria set forth in subdivision (b) of section 9792.27.12.
Two of these requirements are that the drug is prescribed at the single initial treatment visit following a workplace injury, provided that the initial visit is within 7 days of the date of injury; and that the prescription is for a supply of the drug not to exceed the limit set forth in the MTUS Drug List.
The updated MTUS Drug List and the Administrative Director Order is posted on the DWC MTUS drug formulary web page. Further updates to the MTUS Drug List will be made on a quarterly, or more frequent, basis. Read More...
GE Ships Off-the-Shelf Biotechnology Factories
Tue, 17 Apr 2018 08:31:38 - Pacific Time
Interest in medicines, which use engineered viruses to carry healthy genetic material into the cells of sick people, has exploded recently as the first wave of gene-fixing drugs reach the market. That has left some drug companies scrambling for sufficient capacity at a time when the industry is also grappling with shortages of DNA-carrying viral vectors.
And now General Electric, the powerhouse industrial company, is raising its bet on biotechnology with the launch of prefabricated manufacturing units for producing virus-based gene and cell therapies, novel anti-cancer treatments and vaccines.
GE, better known for making jet engines and turbines, sees an opportunity in the fast-growing field. It aims to build on its existing expertise in biotech manufacturing by delivering a "factory-in-a-box" service specifically for viral vector-based medicine.
The U.S. conglomerate already makes off-the-shelf modular factories for other complex biological medicines, such as monoclonal antibodies.
Its so-called KUBio factories are cheaper and faster to construct than traditional factories, offering GE a way to win business for its growing life sciences business. Depending on the factory design and the drug being made, an equivalent KUBio could reduce build costs by as much as 50 percent, according to the company.
Taiwanese manufacturer of biologics, JHL Biotech, recently upped the ante and ordered an entire high-tech pharmaceuticals factory. Made by GE in Germany, Sweden and the U.S., the components for the world’s largest single-use modular plant for making biopharmaceuticals, recently left Europe for JHL’s new site in Wuhan, the capital of China’s Hubei Province.
GE Healthcare’s KUBIo includes everything from bioprocessing equipment to the building and overall project coordination. The modules at the site arrive 80 to 90 percent pre-equipped with the heating, ventilating, and air conditioning (HVAC) system, the clean room, most of the utility equipment, and all of the piping necessary to run the plant.
When the sixty-two completed KUBio modules that make up the factory reach the destination at Wuhan’s Biolake Science Park , they will help JHL make affordable biologics for markets where they are otherwise prohibitively expensive.
Biologics, also called biopharmaceuticals, are a new class of medicines made from strings of complex proteins. They are now leading the charge against disease and represent the fastest growing class of drugs. They range from synthetic insulin to medicines that can be used to treat cancer, rheumatoid arthritis and other diseases.
GE is also stepping up operations within the wider supply chain that is needed to deliver cell therapies like Novartis’ Kymriah and Gilead Sciences’ Yescarta, both of which were approved in 2017 for treating certain blood cancers.
Last year, for example, GE Healthcare bought British-based Asymptote, a specialist in freezing, preserving and transporting large volumes of living cells. Overall, GE says it expects to have a $1 billion-a-year gene and cell therapy business by 2025.
The are now more than 700 viral vector-based therapies in clinical trials, spurring demand for biologically secure bioreactors to churn out products. Since most such treatments are targeted therapies designed for small patient populations, GE is betting that drug companies will prefer its flexible small-scale KUBio units to large traditional factories. Read More...
Travelers Streamlines Digital Claims
Tue, 17 Apr 2018 08:31:30 - Pacific Time
The Travelers Companies, Inc. announced its newest digital capabilities to improve the claim experience for injured employees. The additions provide increased access to medical professionals after a workplace injury.
MyTravelers® for Injured Employees, the company’s web-based and mobile-friendly self-service tool for workers compensation claims, offers two-way messaging between an injured employee and a Travelers Claim Nurse professional. This digital tool provides access to a full claim team, including claim and medical professionals, and helps keep injured employees more engaged in the process to help accelerate their recovery.
Two-way document sharing will also be added to the MyTravelers for Injured Employees tool. Injured employees will be able to easily upload important materials related to their claim, including state workers compensation forms, work status reports, mileage trackers and medical reports. This new feature will make it easier and faster for injured employees to exchange information with Travelers so they can move forward through the claim process more efficiently.
The company also announced the addition of a telemedicine capability, enabling qualified injured employees to conduct appointments with a physician via a secure video connection on their computer or smartphone. By delivering clinical health care from a distance, telemedicine may offer a cost-effective alternative to emergency room visits while also providing access to care when it is not readily available.
"We continually look for new ways to deliver a better workers compensation claim experience for someone who has been injured on the job," said Rich Ives, Vice President of Workers Compensation Claim at Travelers. "Our latest capabilities not only speed up access to medical care and make it easier to communicate, but they also address our customers’ top concerns — the health of their employees and the rising costs of health care."
"We know that better outcomes are achieved when injured employees are closely engaged in their claims, and our new digital capability makes it easier than ever for someone to stay involved in the process while focusing on their recovery," said Vinny Armentano, Senior Vice President of Claim at Travelers.
Travelers says it offers a range of workers compensation services that benefit injured employees and their employers: The Early Severity Predictor® model helps predict which injured employees are most at risk for chronic pain; the ConciergeCLAIM® Nurse program helps injured workers with the workers compensation process; and the Cultural Advantage services provide Spanish-speaking claim and medical professionals to bridge language barriers. Read More...
Past Week News Archive
Gynecologist Disciplined for Sexual Misconduct Now Comp Doctor: Mon, 16 Apr 2018 09:55:21 - Pacific Time: Read More...
Curing Patients NOT a Sustainable Business Model: Mon, 16 Apr 2018 09:55:14 - Pacific Time: Read More...
Interpreters Slam Proposed Fee Regulations: Fri, 13 Apr 2018 05:58:51 - Pacific Time: Read More...
Physicians Convicted in Compound Medication Fraud: Fri, 13 Apr 2018 05:58:44 - Pacific Time: Read More...
First Opioid Cost Recovery Trial Set for March 2019: Thu, 12 Apr 2018 09:52:06 - Pacific Time: Read More...
Salinas Caregiver Guilty of Fraud Charges: Thu, 12 Apr 2018 09:52:02 - Pacific Time: Read More...
Deputy Sheriff Sentenced in Comp Fraud Case: Wed, 11 Apr 2018 09:36:20 - Pacific Time: Read More...
CVS Launches Drug Price Transparency Tool: Wed, 11 Apr 2018 09:36:15 - Pacific Time: Read More...
Opioid and Compound Med Spend Declines in Comp Claims: Tue, 10 Apr 2018 09:49:36 - Pacific Time: Read More...
Owner of Ventura Cleaning Service Guilty of Premium Fraud: Tue, 10 Apr 2018 09:49:29 - Pacific Time: Read More...