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Workers' Compensation Daily News for Apr 19, 2018

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...

Gynecologist Disciplined for Sexual Misconduct Now Comp Doctor
Mon, 16 Apr 2018 09:55:21 - Pacific Time
Dr. Anthony Steven Bianchi, MD currently still holds a California license as a physician. His office location is 6042 N Fresno Street, Suite 101 in Fresno.. He now claims to practice Occupational Medicine at this address which the Associated Press claims to be a clinic evaluating and treating workers' compensation cases in its expose of sexual misconduct in medicine.

The Disciplinary Records of the Medical Board of California provide great detail on his tawdry history with female patients. The details of his behavior are alleged in great detail in these state documents, and they should not be read by anyone who reacts badly to graphical detail.

Disciplinary charges were first filed against Bianchi by the Medial Board of California in 2012. According to the allegations of a December 2012 First Amended Accusation, he engaged in sexual misconduct with female patients as a gynecologist dating back to 2009. His activities with two of them were specific in the Accusation.

On November 13, 2013, Bianchi and his attorney signed a Stipulated Settlement and Disciplinary Order. He admitted that the Medical Board could make a prima facie case against him based upon the Complaint. He was placed on probation which included that he undergo a complete psychiatric evaluation, enter into psychotherapy, and complete a Professional Boundaries Program. He was placed on probation for a period of five years from the date of the Disciplinary Order. Thus his probation would end on December 20, 2018.

A follow up disciplinary action was filed by the Medical Board on May 5, 2015. The Board alleged in its disciplinary action, that, while he was practicing as a gynecologist, he placed a chair against the exam room door, put his fingers into an inappropriate area of a female patients anatomy while exposing himself. This alleged patient abuse occurred in 2009 but was brought to the attention of the Board in 2013 after the victim heard about the prior discipline

These episodes led to disciplinary Orders by the state's medical board in 2012 and in 2016. Bianchi agreed not contest the charges, and he held onto his medical license. Probation did not require him to notify any subsequent patients of his probationary status, despite the fact he was required to notify his malpractice carrier and employer.  

The AP article that uses his case as an example claims that "When the doctors are disciplined, the punishment often consists of a short suspension paired with mandatory therapy that treats sexually abusive behavior as a symptom of an illness or addiction.".

The AP goes on to say that decades of complaints that the physician disciplinary system is too lenient on sex-abusing doctors have produced little change in the practices of state medical boards. And the #MeToo campaign and the rapid push in recent months to increase accountability for sexual misconduct in American workplaces do not appear to have sparked a movement toward changing how medical boards deal with physicians who act out sexually against patients or staffers.

The sentencing of Larry Nassar, a former doctor for the U.S. Olympic gymnastics program convicted of abusing more than 150 women and girls, has put a high-profile case of physician misconduct in the spotlight.

But across the country, most doctors accused of sexual misconduct avoid a medical license review entirely. A study last year found that two-thirds of doctors who were sanctioned by their employers or paid a settlement as the result of sex misconduct claims never faced medical board discipline.

"There's been a failure of the medical community to take a stand against the issue," said Azza Abbudagga, a health services researcher with nonprofit advocacy organization Public Citizen.

She published a report recently detailing sexual misconduct among physicians. Its findings showed that of the 253 doctors reported to the National Practitioner Data Bank for having been sanctioned by their respective hospitals or health care organizations for sexual misconduct, or paid a settlement that stemmed from such an allegation, 170 of them were not disciplined by state medical boards, even though all boards have access to the reports filed with the data bank. Read More...

Curing Patients NOT a Sustainable Business Model
Mon, 16 Apr 2018 09:55:14 - Pacific Time
Science and medicine are getting very close to big and meaningful breakthroughs on diseases and maladies that were once only somewhat treatable with very expensive routines of medications. Gene therapy breakthroughs have been a big part of this, with the FDA approving promising gene therapy trials, and even more exciting results coming in from around the world.

But, it is interesting to see information about how some of the health care industry thinks about all this. How they think can be a predictor on what they will eventually do.

In an April 10 report for biotech clients, Goldman Sachs delved into a pretty awkward subject - cures. Analysts noted that one-shot cures for diseases are not great for business as they're bad for longterm profits.

The investment banks' report, titled "The Genome Revolution," asks clients: "Is curing patients a sustainable business model?" The answer may be "no," according to follow-up information.

Analyst Salveen Richter and colleagues laid it out: "The potential to deliver 'one shot cures' is one of the most attractive aspects of gene therapy, genetically engineered cell therapy, and gene editing.

However, such treatments offer a very different outlook with regard to recurring revenue versus chronic therapies... While this proposition carries tremendous value for patients and society, it could represent a challenge for genome medicine developers looking for sustained cash flow."

They pointed to Gilead Sciences, which markets treatments for hepatitis C that have cure rates exceeding 90 percent.

In 2015, the company's hepatitis C treatment sales peaked at $12.5 billion.

But as more people were cured and there were fewer infected individuals to spread the disease, sales began to languish. Goldman Sachs analysts estimate that the treatments will bring in less than $4 billion this year.

Gilead's rapid rise and fall of its hepatitis C franchise highlights one of the dynamics of an effective drug that permanently cures a disease, resulting in a gradual exhaustion of the prevalent pool of patients," the analysts wrote.

The report noted that diseases such as common cancers -- where the "incident pool remains stable" -- are less risky for business.

Interpreters Slam Proposed Fee Regulations
Fri, 13 Apr 2018 05:58:51 - Pacific Time
Is $448 enough compensation for a full day’s work for a certified interpreter servicing a hearing and deposition in California? What about $225 for half a day’s work? Some of them who are responding to the newly proposed fee regulations do not think so.

The DWC wants to know, so it is seeking public comment on the proposed interpreter fee schedule regulations it posted to its online forum on April 2, 2018.

A document made available online by the DWC shows that early comments to the proposed interpreter fee schedule centered around the amount, which, as one commenter observed, is only a "marginal improvement from the measly $52 per hour rate in 2015."

Another complained about the percentage of the interpreter’s fee that interpreting agencies charge as a commission. "As it stands today, they take 30-50%. No one is even mentioning the disproportionate ratio of the broker's commission versus the interpreter's fee. We the interpreters are the service providers, not the agencies or brokers."

She also complains that there "is no allowance for parking fees or for mileage, which, especially for interpreters who live and work in rural areas, in all fairness must be taken into consideration."

A Korean interpreter complains that the fee schedule "is hopelessly removed from the market rates." He concludes that "the new lower rates will serve a single purpose of benefiting the insurance companies."

The chief objective of the proposal is to create a uniform fee structure, which it said is based on the federal court system.

Interpreters’ compensation has become a thorny issue in California ever since amendments have been introduced in the Labor Code and other state laws over the past three years to curb the incidence of medical fraud.

In May 2017, a group of interpreters even took the DWC to court over the new system of compensation for interpreters. In June, the same group led the fight against allowing "provisionally certified" interpreters to work if certified legal and medical interpreters are not available, which the group claimed has led to the undercutting of fees.

The regulation is also introducing a streamlined process for claiming payments, which includes detailed invoice information and billing codes. It also requires full documentation on the process of selection and arrangement of interpreters, especially if “alternative” interpreters were selected in the absence of a certified interpreter. Read More...

Physicians Convicted in Compound Medication Fraud
Fri, 13 Apr 2018 05:58:44 - Pacific Time
Two physicians pleaded guilty Wednesday in San Diego federal court, admitting to their role in prescribing expensive and unnecessary medications as part of a $65 million fraud against the military’s healthcare system.

Carl Lindblad and Susan Vergot, who worked for Choice MD in Cleveland, Tenn., wrote 4,442 total prescriptions in the span of a year and a half as part of the scheme, according to the investigation.

According to prosecutors, military members in San Diego were paid to recruit Marines and their family members to participate in a fake medical study, which included speaking to a doctor in a telemedicine session and being prescribed compound medication.

Lindblad, 53, and Vergot, 31, admitted to writing the prescriptions despite never examining the patients in person, and then sending the prescriptions to a pharmacy in Bountiful, Utah, which would bill TRICARE health insurance an exorbitant amount of money for the specialized medicine. Compound prescriptions are much more expensive than standard medicine because they are custom-made by pharmacists to tailor to a patient’s special needs. The medications have not been specified but many were in cream form, according to authorities.

In May 2015, TRICARE put a stop to filling prescriptions using non-FDA approved ingredients - used in compound prescriptions - after an audit uncovered suspicion of fraud.

The two doctors pleaded guilty to charges of conspiracy to commit health care fraud. They are set to be sentenced June 29.

The medical clinic’s owners, Jimmy and Ashley Collins, are also charged in the investigation and have pleaded not guilty. Prosecutors allege the couple made $45 million dollars in the scheme, using the money to buy property around Tennessee, Aston Martin cars and a yacht.

CFK Inc., the owner of The Medicine Shoppe pharmacy in Utah at the time, is also charged. Prosecutors have not revealed the people behind CFK, although court records identify them by the initials T.S. and W.W. Business records identify one of the owners as Wade Walters of Walters Holdings. Walters is one of several people being investigated in Mississippi on TRICARE fraud allegations.

Last month, Joshua Morgan, a former San Diego Marine, pleaded guilty to his role as a recruiter in the case. Read More...

Past Week News Archive

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...

Federal Health Care Fraud Program Recovers $2.4B in 2017: Mon, 9 Apr 2018 09:21:04 - Pacific Time: Read More...

Whistleblower Accuses Ventura County of $100M Medical Fraud: Mon, 9 Apr 2018 09:20:55 - Pacific Time: Read More...

Fraud Arrests Made at So. Cal Rehab Center: Fri, 6 Apr 2018 06:24:32 - Pacific Time: Read More...

Cal/OSHA Gets Tough on Unsafe Roofer: Fri, 6 Apr 2018 06:24:22 - Pacific Time: Read More...