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Workers’ Compensation Daily News for June 18th, 2019

  • FDA Launches Pilot Blockchain Technology Project
    on June 17, 2019 at 9:22 AM

    IBM, Merck and Walmart have been chosen for a U.S. Food and Drug Administration pilot program that will explore using blockchain technology to improve the security of prescription drug supply and distribution.

    The companies said they would work with consultancy KPMG to create a shared blockchain network that will allow real-time monitoring of products in the pharmaceutical supply chain.

    The project has been authorized under the U.S. Drug Supply Chain Security Act. DQSA, was enacted by Congress on November 27, 2013. Title II of DQSA outlines steps to build an electronic, interoperable system to identify and trace certain prescription drugs as they are distributed in the United States.

    The act was passed to improve FDA’s ability to help protect consumers from exposure to drugs that may be counterfeit, stolen, contaminated, or otherwise harmful. The system will also improve detection and removal of potentially dangerous drugs from the drug supply chain to protect U.S. consumers.

    Additionally, the DSCSA directs FDA to establish national licensure standards for wholesale distributors and third-party logistics providers, and requires these entities report licensure and other information to FDA annually.

    The FDA has previously used the DSCSA to issue a warning letter to drug distributor McKesson Corp for violations involving opioid medications.

    The new project is aimed at reducing the time needed to track and trace prescription drugs, improving access to reliable distribution information and ensuring products are handled appropriately and stored at the right temperature while being distributed, the companies said in a statement.

    Blockchain technology, originally conceived a decade ago as the basis for the cryptocurrency bitcoin, will help stakeholders establish a permanent record and can be integrated with existing systems used to trace products while they are distributed.

    The project is scheduled to be completed in the fourth quarter of 2019 and results will be published in a report, the companies said. […]

  • Arrests Made for $120M Fake Insurance Scheme
    on June 17, 2019 at 9:22 AM

    Georgia insurance agents said they busted a $120 million Ponzi scheme which preyed on California farm workers. Three people were arrested during the bust.

    Agents surprised Wesley Bernard Owens, 47, of Suwanee, and Beau Eric Wilson, 34, of Gainesville, before they got up in a pre-dawn raid at their individual upscale homes.

    Owens is the CEO of three Gwinnett County businesses including Bison Data Systems. A search warrant was issued in May of 2017 at all three businesses in conjunction with the California Department of Insurance.

    State officials worked on the case for two long years. Officials said the men were responsible for creating fake certificates of insurance, declaring that large groups of agricultural workers were insured while employed as temporary office staffers.

    "As claims would come in, even though the insurance certificates were fraudulent, Owen's would pay the money himself. Sooner or later, he got more claims than he could pay and the whole Ponzi scheme collapsed, Director of Criminal Investigations Billy Sullivan remarked.

    Sullivan said the scheme didn't stop with the thousands of farm workers who were victimized, but Georgia and California taxpayers took a hit too.

    "Everything they didn't or couldn't pay fell back on Georgia and California Taxpayers and that was approximately $60 million. Right now, we feel comfortable estimating the total loss at $120 million. We believe Owens fraudulently obtained $60 million himself," Sullivan said.

    Two female suspects are also involved, one in Georgia and Jennifer Lynn Ceville James, of Tampa, Florida.

    The elaborate scheme involved six states from California to South Carolina and demanded hundreds of hours in the legwork that took more than two years.

    In all, the four suspects face 88 counts of insurance fraud, identity fraud, felony theft, RICO and many other charges.

    Investigators said they tried to serve a warrant at a home Ronda Nicole Taylor, 48, of Stone Mountain, but she was not home. She is wanted for 21 outstanding warrants connected to the scheme. […]

  • Home Health Agency Owners Convicted for $4M Fraud
    on June 13, 2019 at 11:15 AM

    Two owners and operators of a home health agency were sentenced to 10 years and 6½ years in federal prison for their roles in a scheme to bill Medicare for various items and services - including home health services, diagnostic testing, medical procedures and durable medical equipment - that were not medically necessary and/or were not provided.

    Angela Avetisyan, 43, of Glendale, was sentenced to 120 months in prison by United States District Judge Otis D. Wright II, who also ordered Avetisyan to pay $4,283,674 in restitution and to forfeit all right, title, and interest in $172,000 seized by the government in May 2014, as well as six real properties purchased with fraud proceeds. The Court ordered Avetisyan to make an immediate partial restitution payment of $10,000.

    Ashot Minasyan, 61, of North Hollywood, was sentenced to 78 months in prison by Judge Wright, who also ordered Minasyan to pay $4,283,674 in restitution and to forfeit all right, title, and interest in the same $172,000 and six real properties. The Court ordered Minasyan to make an immediate partial restitution payment of $100,000.

    Avetisyan and Minasyan were charged along with Robert Glazer, 73, and Marina Merino, 62, both of Los Angeles, in a second superseding indictment returned in June 2015. On June 7, 2019, co-defendants Glazer and Merino were found guilty after a seven-day trial of conspiracy to commit health care fraud and health care fraud.

    Avetisyan and Minasyan each pleaded guilty on Oct. 9, 2018, to one count of conspiracy to commit health care fraud. As part of their guilty pleas, Avetisyan and Minasyan admitted that, as co-owners and operators of the Los Angeles-based Fifth Avenue Home Health, they engaged in a conspiracy with Glazer, Merino and others to recruit Medicare patients to Glazer’s clinic so that Glazer could use those patients’ information to bill for medically unnecessary outpatient clinic services and refer those patients for medically unnecessary home health services from Fifth Avenue and other home health agencies. Avetisyan and Minasyan further admitted that they paid Merino and other patient recruiters illegal kickbacks to bring Medicare patients to the Glazer clinic.

    As found at sentencing by the Court, Avetisyan and Minasyan, along with their co-conspirators, submitted and caused to be submitted false and fraudulent claims for home health services that were medically unnecessary, for services that were not provided and for claims obtained by the payment of illegal kickbacks.

    Since its inception in March 2007, the Medicare Fraud Strike Force, which maintains 14 strike forces operating in 23 districts, has charged nearly 4,000 defendants who have collectively billed the Medicare program for more than $14 billion. In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.

  • Court Approves Marijuana - In CA Prisons!
    on June 13, 2019 at 11:14 AM

    The slippery slope of "medical marijuana" inches closer and closer to acceptance in many areas, including treatment of workers' compensation claims. The 3rd District Court of Appeal helped to kick the door open when it ruled that California voters legalized recreational possession of less than an ounce of cannabis in 2016, with no exception even for those behind bars.

    In the published case of People v Raybon, the court overturned the Sacramento County convictions of five inmates who had been found with marijuana in their prison cells. The court rejected multiple arguments presented by the California Attorney General, Xavier Becerra, who vigorously argued in favor of the convictions. In so doing, the court claimed that the Attorney General "recycled" old arguments in prior cases that have previously ruled against his arguments.

    "The question before us is not what the Legislature intended in 1949 or 1990, but whether the voters amended Penal Code section 4573.6 by passing Proposition 64 in 2016. The drafters and voters are entitled to opt for a different approach and, in this case, they did just that. They amended the statute to eliminate criminal sanctions for possession of less than an ounce of marijuana and they retained criminal sanctions for possessing more than an ounce or for smoking or ingesting it."

    "The fact the Attorney General may not agree with the voters does not empower us to rewrite the initiative."

    "According to the plain language of ... Proposition 64, possession of less than an ounce of cannabis in prison is no longer a felony," the court ruled Tuesday. "Smoking or ingesting cannabis in prison remains a felony."

    The three-judge panel also rejected the state's argument that guards will lose control over prisons if inmates are free to possess small quantities of marijuana, noting that possession can still be punished as a rules violation with longer prison terms or a reduction in privileges.

    While prison officials can still punish inmates for violating the rules, "this ruling will prevent inmates from having years added to their sentences for simple possession, reducing overcrowding and saving $50,000-75,000 a year in unnecessary costs," said Assistant Public Defender David Lynch.

    The judges scolded the attorney general's office for a counter-argument it said "uses arcane rules" and "twists the meaning of the words of the statute."

    Becerra's office argued that the court's reading of the law was absurd because it in effect allows controlled substances into prisons. But the court noted that it previously ruled that it's not illegal for inmates to have properly prescribed medications or medical marijuana behind bars - though it may be against the rules.

    "The Attorney General raises the same hackneyed and losing arguments in each case involving contraband in jails or prisons," the judges wrote.

    "The voters made quite clear their intention to avoid spending state and county funds prosecuting possession of less than an ounce of marijuana, and quite clear that they did not want to see adults suffer criminal convictions for possessing less than an ounce of marijuana," Sacramento County Assistant Public Defender Leonard Tauman said in an email. The appeals court "quite properly honored what the electorate passed."

    "We want to be clear that drug use and sales within state prisons remains prohibited," said corrections department spokeswoman Vicky Waters. She said the department "is committed to providing a safe, accountable environment for prisoners and staff alike and we plan to evaluate this decision with an eye towards maintaining health and security within our institutions."

    Attorney General Xavier Becerra's office said it is reviewing the ruling and did not say if he will appeal. […]

  • Medical Marijuana No Help for Opioid Crisis
    on June 12, 2019 at 5:43 AM

    Legalizing medical marijuana no longer appears to be linked with a drop in fatal opioid overdoses, according to a new U.S. study reviewed by Reuters Health, that calls into question the potential for cannabis to help fix the opioid crisis.

    In recent years, many advocates for legalizing marijuana - including some doctors and public health officials - have cited a pivotal 2014 study that found lower rates of fatal opioid overdoses from 1999 to 2010 in the states that legalized medical marijuana.

    For the current study, published in the Proceedings of the National Academy of Sciences, researchers used similar methods to take another look at the same period examined in the 2014 study and extend the analysis through 2017, to include many states that only recently legalized medical marijuana.

    The new study found a similar result for the same period covered in that 2014 study: about a 21 percent decrease in opioid overdose deaths for every 100,000 people in the population when states legalized medical marijuana.

    But when the new study looked over more time - from 1999 to 2017 - they found an almost 23 percent increase in opioid overdose deaths in states with medical marijuana laws.

    "With the benefit of a longer time span ... we conclude that medical cannabis laws do not seem to have reduced opioid overdose mortality at the population level," said lead study author Chelsea Shover of Stanford University School of Medicine in California.

    Like the 2014 study, the new analysis can’t show whether people are using marijuana instead of opioids for pain relief or recreation, Shover said by email. And these studies also weren’t designed to determine the safety or effectiveness of medical marijuana for any specific health issues.

    The current study didn’t find a difference in opioid deaths associated with legalized marijuana based on how permissive or restrictive state laws might be, or whether states allowed only medical pot or also permitted recreational use.

    California became the first state to legalize medical marijuana in 1996. Today 47 states permit some version of medical pot.

    It’s possible that the connection between marijuana laws and opioid overdose deaths has shifted over time due at least in part to differences in the characteristics of the states that did this years ago and states that did this only recently, the study authors note.

    "States that legalized medical cannabis early formed a group that was pretty different from the rest of the U.S.," Shover said.

  • Patients Happier in Small Hospitals with Amenities
    on June 12, 2019 at 5:43 AM

    Compared to smaller facilities, hospitals that provide complex care for critical illness or serious injury may find it harder to make patients happy.

    The new study reviewed by Reuters Health suggests.that patients may be more likely to give top ‘5-star’ ratings to hospitals that don’t offer many commonly sought-after services like emergency rooms and intensive care units.

    In an effort to help patients find high quality care, the U.S. Centers for Medicare and Medicaid Services (CMS) publishes hospital rankings based on patients' experiences, on a website called Hospital Compare. But research to date hasn't offered a clear picture of how much patients' ratings, on a scale of 1 to 5, might help people find the best place to go for care, researchers note in JAMA Internal Medicine.

    In the current study, researchers examined services offered and patient experience ratings for 2,798 hospitals nationwide. Compared to hospitals with lower ratings, hospitals with 5 stars were 84 to 92 percent less likely to provide emergency services, intensive care, cardiology or neurology, the study found.

    These results suggest that patients shouldn’t rely exclusively on 5-star ratings to choose where to seek care, said lead study author Dr. Zishan Siddiqui of Johns Hopkins School of Medicine in Baltimore.

    "This is especially true for patients with multiple medical problems and chronic illness. They are much less likely to receive comprehensive services when admitted," Siddiqui said by email. "Hospital patient experience rating systems in general should be just one of many hospital metrics patients should look at when selecting hospitals."

    "Patient experience performance ratings are a relationship between communication and responsiveness needs of the patients and how well the hospitals perform to meet these needs," Siddiqui added.

    "If a hospital has patients only with simpler communication and responsiveness needs, they may meet these needs without necessarily performing at a higher level," Siddiqui said. "The 5-star hospitals appear to get higher scores because they are more often taking care of patients with simpler needs."

    Patients who search for only 5-star hospitals when they need complex care may therefore be surprised to find many types of services they need are unavailable at these hospitals, the study team writes.

    "Patient experience, driven in part by the hospitality of staff but largely by the quality of hospital amenities, is an important driver of where patients receive care," Jena, who wasn’t involved in the study, said by email.

  • Dentist Faces 75 Charges for 600 Fake Root Canals
    on June 11, 2019 at 9:26 AM

    58 year old April Rose Ambrosio, a San Diego dentist, was charged with 75 felony insurance fraud counts for allegedly bilking insurance companies of hundreds of thousands of dollars by submitting claims for procedures she never performed, including more than 600 root canals. Her office was located at 10717 Camino Ruiz # 164, San Diego, CA 92126

    She faces 83 years in prison if convicted of all counts.

    Prosecutors allege Ambrosio submitted insurance claims for as many as 28 root canals on a single patient, and also submitted claims indicating she had performed more than 100 root canals over a three-month period for a family of four.

    According to court documents, an insurance company filed a suspected fraud form with the California Department of Insurance in December 2016 over the unusually high number of root canals performed on that family, and Ambrosio’s failure to provide supporting documentation for the dental work.

    Ambrosio is accused of defrauding eight insurance companies in the alleged billing scheme, which took place over the course of three years. Though she received around $300,000, according to the Department of Insurance, prosecutors say she billed the insurance companies for nearly $600,000.

    She remains out of custody on her own recognizance, but Superior Court Judge Laura Parsky ordered Ambrosio to surrender her passport. The judge also imposed a Fourth Amendment waiver, which means Ambrosio is subject to law enforcement searches, even without a warrant.

    She pleaded not guilty to all counts and is due back in court Sept. 5 for a readiness conference.

    "The audacity of this defendant's repeated fraud is astounding," San Diego County District Attorney Summer Stephan said. "Unfortunately, when insurance companies get ripped off, consumers ultimately pay the price through higher premiums."

    Investigators from the state Department of Insurance, working with the insurance fraud division of the San Diego County District Attorney’s Office, spent two years investigating Ambrosio.

  • Double Dipping Business Owner Sentenced
    on June 11, 2019 at 9:26 AM

    The Ventura County District Attorney announced that Charles Ruben (DOB 9/13/1951), formerly of Simi Valley, was placed on summary probation for a period of 36 months after pleading guilty to a violation of Insurance Code section 1871.4(a)(l)-making a fraudulent statement of a material fact for the purpose of obtaining workers' compensation benefits.

    As a result of the prosecution of this case, Ruben paid restitution in full to victim State Compensation Insurance Fraud in the amount of $41,326, and, to victim 1st Class Access Control in the amount of $3,811.

    Ruben was placed on disability for an injury sustained while employed at 1st Class Access Control in Simi Valley.

    During that time, he collected disability payments that totaled $34,981 and systematically failed to report that he earned $48,686 while working as a self-employed contractor.

    He was President of Cr’s Gate Service, Inc. Cr’s Gate Service, Inc. is a California Domestic Corporation filed on March 9, 2006. The company’s filing status is listed as Suspended and its File Number is C2869102. The Registered Agent on file for this company is Charles Ronald Ruben and was located at 1596 Kane Ave, Simi Valley, CA 93065-3625.

    In the United States, workers compensation fraud costs insured employers $2 billion annually. The Ventura County District Attorney's Office is committed to vigorously prosecuting dishonest employees who steal disability benefits they are not entitled to receive. […]

  • Jury Convicts Doctor and Recruiter
    on June 10, 2019 at 9:22 AM

    A federal jury has found an East Hollywood-based doctor and patient recruiter guilty for their roles in a $33 million Medicare fraud scheme in which Medicare was billed for clinic, home health, hospice services and durable medical equipment that patients did not need or did not receive.

    Following a seven-day trial, Robert A. Glazer, of North Hollywood, the owner and operator of the East Hollywood-based Glazer Clinic, was found guilty of one count of conspiracy to commit health care fraud and 12 counts of health care fraud. Co-defendant Marina Merino, 62, of Los Angeles, a marketer who recruited patients in exchange for kickback payments, was found guilty of one count of conspiracy to commit health care fraud and eight counts of health care fraud.

    Glazer and Merino are scheduled to be sentenced on September 9 by United States District Judge Otis D. Wright II. Each defendant faces the possibility of decades in federal prison.

    Glazer and Merino were charged in a 2015 superseding indictment, along with Angela Avetisyan, the officer manager of Glazer Clinic and co-owner of Fifth Avenue Home Health located in East Hollywood, and Ashot Minasyan, co-owner of Fifth Avenue.

    According to the evidence presented at trial, Merino and other marketers received payments from Avetisyan and Minasyan to recruit Medicare beneficiaries to the Glazer Clinic. Thereafter, Glazer billed Medicare for office services and tests that patients did not need or did not receive.

    Glazer also referred Medicare patients for a variety of services, including home health and hospice services, as well as ordered durable medical equipment that patients did not need or did not receive. Based on referrals from Glazer, Avetisyan and Minasyan billed Medicare for home health services that were not rendered or were not medically necessary through their company, Fifth Avenue.

    Avetisyan, who worked as an office manager at the Glazer Clinic, also sold Glazer’s referrals to other home health and durable medical equipment agencies. Together, the defendants and their co-conspirators submitted and caused to be submitted claims of approximately $33 million, of which Medicare paid approximately $22 million, the evidence showed.

    Avetisyan and Minasyan pleaded guilty to conspiracy to commit health care fraud in October 2018, and are scheduled to be sentenced on June 10.


  • Drugmaker Settles Kickback Case - Then Files Bankruptcy
    on June 10, 2019 at 9:22 AM

    Drugmaker Insys Therapeutics Inc filed for Chapter 11 bankruptcy protection, about a week after agreeing to pay $225 million to settle a U.S. probe into bribes it paid to doctors for prescribing a powerful opioid medication.

    The filing in U.S. Bankruptcy Court in the District of Delaware made Insys the first drug manufacturer to turn to bankruptcy due to legal expenses brought on by accusations of responsibility in the deadly U.S. opioid epidemic. Shares of the company fell nearly 60 percent to 52 cents in premarket trading.

    Insys said it intends to continue operating its business, while it pursues the sale of substantially all its assets under a court-supervised sale process.

    Chandler, Arizona-based Insys, which manufactured the fentanyl spray Subsys, agreed on June 5 to settle the U.S. Justice Department probe and have a subsidiary plead guilty to fraud charges.

    A month earlier, a federal jury in Boston found Insys founder John Kapoor and four other former executives and managers guilty of engaging in a vast racketeering conspiracy.

    Prosecutors alleged that while Kapoor served as Insys' chairman, the company paid doctors and other medical practitioners bribes in exchange for prescribing Subsys to their patients, often to those who did not have cancer.

    Insys did so by paying medical practitioners to act as speakers at sham events ostensibly meant to educate clinicians about Subsys.

    Prosecutors said the scheme helped boost sales of Subsys, whose net revenue grew from $8.6 million in 2012 to $329 million in 2015. Insys went public in 2013 with what became the best-performing initial public offering of that year.

    The Justice Department probe led to multiple people being charged including Kapoor, the company's majority shareholder, in October 2017 on the same day U.S. President Donald Trump declared the opioid crisis a public health emergency.

    The investigation took a toll on Insys and sales of Subsys declined. In May, Insys said it had just $87.6 million in cash at the end of the first quarter and $240.3 million in liabilities.

    The company said on Monday it intends to pay vendors and suppliers in full for goods and services provided after the filing date of June 10.

    Other opioid manufactures face lawsuits by state and local governments seeking to hold them responsible for the epidemic, including OxyContin maker Purdue Pharma. Purdue has also considered filing for bankruptcy to address potentially significant liabilities from roughly 2,000 lawsuits, sources told Reuters in March. […]

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