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Corona Pharmacist Sentenced for $13M Compound Med Fraud

An Orange County pharmacist has been sentenced to 70 months in federal prison for submitting more than $13 million in claims for medically unnecessary compounded medication prescriptions.

42 year old Thu Van Le, a.k.a. “Tony Le,” who lives in Placentia, was sentenced by United States District Judge R. Gary Klausner.

In addition to the prison term, Judge Klausner ordered Le to pay $10,982,759 in restitution to Tricare, the U.S. military’s managed health care plan, and $768,488 in restitution to Amplan, Amtrak’s employee health care benefit plan.

Le, a pharmacist who owned TC Medical Pharmacy located at 760 S. Washburn Ave. #1 in Corona California, pleaded guilty on July 12 to one count of health care fraud.

From March 2015 to December 2016, Le’s pharmacy submitted more than $13 million in total claims to Tricare and AmPlan, against which Tricare paid $10,982,759 and AmPlan paid $768,488. Le, in turn, paid so-called “marketers” handsome kickbacks of up to 50 percent of the Tricare reimbursements.

The marketers used personal and insurance information to generate fraudulent prescriptions for compounded medications, according to court documents. Marketers who participated in the scheme solicited beneficiaries of the health plans through misleading cold calls that promised free compounded medications. In some cases, beneficiaries were not contacted at all and simply received expensive medications that they did not order.

Compounded drugs are tailor-made products doctors may prescribe when the Food and Drug Administration-approved alternative does not meet the health needs of a patient.

Le agreed to be bound by Tricare and AmPlan rules for reimbursement of claims for their beneficiaries. Tricare and AmPlan required that medications be medically necessary, that beneficiaries be examined by physicians, and that Le’s pharmacy collect co-payments. The prescriptions were supposed to be for unique patient needs, but they instead were formulated to maximize reimbursements and were prepared on an assembly-line basis.

The Defense Criminal Investigative Service, the FBI, IRS Criminal Investigation, Amtrak’s Office of Inspector General, the Office of Personnel Management’s Office of Inspector General, the United States Department of Labor – Employee Benefits Security Administration, the Department of Health and Human Services, and the California Department of Insurance investigated this matter.

Assistant United States Attorney Mark Aveis of the Major Frauds Section prosecuted this case.

Pfizer Vaccine Protection Declines to 47% by 5 Months

The Los Angeles Times reports that research conducted in Southern California has confirmed the dramatic erosion of the Pfizer-BioNTech COVID-19 vaccine’s protection against “breakthrough” coronavirus infections.

The new study, one of the largest and longest to track the effectiveness of a vaccine in Americans, found that the vaccine’s ability to protect against infection stood at 88% in its first month, then fell to 47% after just five months.

But even as the Delta variant became the predominant strain across the Southland, the vaccine’s effectiveness at preventing COVID-19 hospitalizations held steady at close to 90% for as long as six months. What’s more, it maintained that power across vaccine recipients of all age groups.

The study, funded by Pfizer and published Monday in the journal Lancet, also provides strong new evidence that the waning immunity against infection probably would have been seen with or without the arrival of the Delta variant.

Researchers found that a fresh inoculation with the Pfizer-BioNTech vaccine protected just as well against an infection with the Delta variant as it did against infection with other versions of the coronavirus.

Second, the vaccine’s ability to keep vaccinated people out of the hospital remained high across a span of time when the Delta variant gained ground in Southern California.

And third, breakthrough infections were more closely linked to the amount of time that had lapsed since vaccination than they were to the particular viral variant involved.

By showing that waning immunity, not the Delta variant, was the likely reason for the rise in breakthrough infections, the study suggests it may not be necessary to reformulate a Pfizer-BioNTech booster that specifically targets Delta. For now, at least, a third shot identical to the first two would probably extend the vaccine’s early record of protection against all strains, including Delta.

The protection provided by the Pfizer vaccine beyond six months has been an open question, hinted at only by Israeli studies that suggest COVID-19 hospitalization rates rise in those above 60 years of age.

In another recent study, researchers from Emory University and Stanford found that six months after being inoculated with the Pfizer vaccine, roughly half of 56 young and middle-aged adults had no detectable neutralizing antibodies against the SARS-CoV-2 virus. The reduced immunity was particularly dramatic against the coronavirus variants Delta, Beta and Mu.

That study was posted last week on BioRXiv, a site where researchers share preliminary work before it has been peer-reviewed. But its findings of “a substantial waning of antibody responses” – as well as a drop in the immunity provided by T cells – suggest that a third booster immunization “might be warranted,” its authors wrote.

Fraud Case Dismissed Against Turlock Physician After Full Restitution

Back in May, 2017 a federal grand jury returned an eight-count criminal indictment. charging Dr. Basil Hantash with eight counts of health care billing fraud. The dermatologist is president and medical director of Advanced Skin Institute on Geer Road in Turlock.

According to federal court documents, Dr. Hantash was a dermatologist and the medical director of the Advanced Skin Institute in Turlock California . For about six years Hantash made insurance reimbursement claims to private insurance companies for performing acne surgeries. In fact, however, the indictment states he only performed only cosmetic procedures known as chemical peels or microdermabrasions. The indictment notes Hantash employed estheticians to perform work, but per California law they are prohibited from performing surgeries.

Government records state in 2014 Anthem Blue Cross audited the Advanced Skin Institute. In response Hantash allegedly submitted false documents claiming he did surgeries using surgical blades. In fact, he had not. The indictment includes fraudulent billings submitted to Anthem and Blue Shield.

Then on October 4 2021, the Modesto Bee reported that Federal charges against Dr. Hantash have been dismissed after the doctor complied with a deferred prosecution agreement in the health care billing fraud case. The Department of Justice prosecuted the case in the U.S. District Court in Fresno.

Judge Dale Drozd approved a deferred prosecution agreement in September 2019 obligating Hantash to stop seeking reimbursements from insurance companies for procedures using a dermalinfusion device, unless the practice received prior approval from insurance providers.

Hantash agreed to return insurance company payments received for those procedures between January 2011 and April 2016. According to terms of the agreement, Advanced Skin Institute reimbursed $92,234 to Anthem Blue Cross and $81,515 to Blue Shield of California.

The federal case was dismissed Sept. 27.

Hantash expressed the opinion last week the criminal indictment was not justified. “This was a civil dispute and contractually should have gone to arbitration,” the physician said by email.

Federal authorities seized $687,583 in funds from an Advanced Skin Institute account in 2017. The court agreement called for returning $513,804 to Hantash’s practice after reimbursements of $173,749 to the insurance companies.

October 4, 2021 – News Podcast


Rene Thomas Folse, JD, Ph.D. is the host for this edition which reports on the following news stories: Plaintiff Attorneys in Subrogation Action Can Settle and Switch Sides. Major SoCal Gaming Company Resolves EEOC Claims for $18M. Bizarre Premium Fraud Conviction Appeal Continues for 18 Years. Car Wash Owners Face Premium Fraud Charges. SoCal Woman Sentenced for Multi-Million Dollar Medical Fraud. Gov Newsom Vetoes Limitations on Apportionment. Newsom Signs Law Extending CIGA Authority to Borrow $1.5 Billion. CWCI Finds IMR Volume Continued to Decline in 2021. WCIRB Reports Lowest Written Premium Since 2012. California Business Exits to Other States Doubled in 2021.

Work Comp Costs for Workplace Diseases Face Projected Increases

Increased global risk for infectious disease epidemics, coupled with state-level legislative trends expanding presumptions for communicable disease, mean that the burden of related costs may fall more heavily on employers and the workers’ compensation system.

According to the report in RxInformer, the COVID-19 pandemic forced employers to examine the impact and mitigation of infectious disease risk in the workplace as never before. It changed the way in which many of us work at least temporarily; for others, more permanently as some organizations make the decision to adopt long-term strategies for their workforce based on lessons learned from the pandemic.

And in some cases, as exampled by the unprecedented federal mandate beholding businesses to rigorous vaccination and testing requirements for their employees, it is forcing employers to take on an increasingly larger role in solutioning what has traditionally been a public health issue.

The World Health Organization (WHO) states that “epidemics of infectious disease are occurring more often, and spreading faster and further than ever, in many different regions of the world.” The global organization attributes this to a combination of environmental, biological and lifestyle factors that include increased cross-border travel, urbanization, population displacement due to humanitarian emergencies, conflicts and natural disasters, and unhealthy agricultural and food production practices, just to name a few.

While traumatic injuries such as sprains, strains and tears top the U.S. Bureau of Labor Statistics’ list of occupational injury types, illness directly related to exposure at work comprises approximately five percent of total occupational injury and illness incidence. It has been estimated in a separate analysis that on-the-job illness totals nearly $60 billion a year for both medical and indirect (productivity) costs.

Prior to the COVID-19 pandemic, the definitions for occupational illness were typically quite narrow and predominantly applied to specific industries in which the risk of exposure at work significantly outweighs the risk of exposure in one’s daily life.

But the legislative trends arising from COVID-19 have expanded how states are beginning to look at communicable diseases in the workplace – and where the responsibility for related medical costs resides. While the language and approach vary from state-to-state, 2021 saw a wave of proposals that would put permanent legislation into place allowing injured workers who contract a communicable disease in the workplace to file a workers’ compensation claim.

Presumptions aside, communicable diseases – even those that are not deemed occupational – cost employers significantly in terms of employee lost time and productivity. Take the common flu virus. Pre-pandemic, the 2018-2019 productivity loss estimate due to influenza was $17.6B, based on a 4-day work loss assumption per sick employee.

USCF and Scripps Research Neuroscientists Awarded Nobel Prize

Our ability to sense heat, cold and touch is essential for survival and underpins our interaction with the world around us. In our daily lives we take these sensations for granted, but how are nerve impulses initiated so that temperature and pressure can be perceived? This question has been solved by this year’s Nobel Prize laureates.

The laureates identified critical missing links in our understanding of the complex interplay between our senses and the environment.

University of California, San Francisco David Julius utilized capsaicin, a pungent compound from chili peppers that induces a burning sensation, to identify a sensor in the nerve endings of the skin that responds to heat. Scripps Research in La Jolla, California scientist Ardem Patapoutian used pressure-sensitive cells to discover a novel class of sensors that respond to mechanical stimuli in the skin and internal organs. These breakthrough discoveries launched intense research activities leading to a rapid increase in our understanding of how our nervous system senses heat, cold, and mechanical stimuli.

Prior to the discoveries of David Julius and Ardem Patapoutian, the understanding of how the nervous system senses and interprets our environment still contained a fundamental unsolved question: how are temperature and mechanical stimuli converted into electrical impulses in the nervous system?

In the latter part of the 1990’s, David Julius saw the possibility for major advances by analyzing how the chemical compound capsaicin causes the burning sensation we feel when we come into contact with chili peppers. Capsaicin was already known to activate nerve cells causing pain sensations, but how this chemical actually exerted this function was an unsolved riddle.

After a laborious search, a single gene was identified that was able to make cells capsaicin sensitive. The gene for capsaicin sensing had been found! Further experiments revealed that the identified gene encoded a novel ion channel protein and this newly discovered capsaicin receptor was later named TRPV1. When Julius investigated the protein’s ability to respond to heat, he realized that he had discovered a heat-sensing receptor that is activated at temperatures perceived as painful.

While the mechanisms for temperature sensation were unfolding, it remained unclear how mechanical stimuli could be converted into our senses of touch and pressure. Researchers had previously found mechanical sensors in bacteria, but the mechanisms underlying touch in vertebrates remained unknown. Ardem Patapoutian, wished to identify the elusive receptors that are activated by mechanical stimuli.

The breakthrough by Patapoutian led to a series of papers from his and other groups, demonstrating that the Piezo2 ion channel is essential for the sense of touch. Moreover, Piezo2 was shown to play a key role in the critically important sensing of body position and motion, known as proprioception. In further work, Piezo1 and Piezo2 channels have been shown to regulate additional important physiological processes including blood pressure, respiration and urinary bladder control.

September 27, 2021 – News Podcast


Rene Thomas Folse, JD, Ph.D. is the host for this edition which reports on the following news stories: Modified Work Not Required After Discovery of Undocumented Status. Drugmakers Pay $453M to Resolve Pay-For-Delay Price Fixing. Understaffed Psychiatric Hospital Resolves Suit for $2.85M. 138 Defendants Charged in 1.4 Billion Healthcare Fraud Busts. Contractors Charged with $5 Million Premium Fraud Scheme. Global Fraud Prevention Market Growing 25% Annually. DWC Withdraws Setting of TTD Rates for 2022. WCRI Study Claims Early Manual Therapy Lowers Med Costs. Comp Drug Costs Decreased by 38% in Ten Years. NCCI Analysis Shows WC Costs More than Group Health.

Newsom Signs Law Extending CIGA Authority to Borrow $1.5B

The California Insurance Guarantee Association (CIGA) was created by legislation in 1969 as an association of insurers that makes payments to policyholders of property/casualty, workers’ compensation and “miscellaneous” insurers when the member insurance company becomes insolvent and is unable to do so. It is a statutory entity that depends on the establishing legislation for its existence and for a definition of the scope of its powers, duties and protections.

CIGA is funded by premium surcharges upon applicable lines of insurance, and those surcharges are limited by statute to a maximum of 2%.

The purpose of CIGA is to pay “covered claims” of member insurance companies that have become insolvent. CIGA’s total liability for any single claim is $500,000, other than claims for workers’ compensation, which are not limited. CIGA does not have to pay a claim to the extent that it is covered by any other insurance of a class covered by this law and available to the claimant or insured (Insurance Code §1063.1(c)(9)(A)).

There are several catastrophic risks that contribute CIGA’s need to be able to access large amounts of cash including pandemic risks, the risk of a devastating earthquake occurring during work time in a major city, and potential losses due to wildfires and other natural disasters.

In 2003, Assembly Bill 227 (Vargas) provided express authority for CIGA to issue up to $1.5 billion in bonds to fund workers’ compensation claims payments for injured workers of insolvent insurers. At the time and beginning in the late 1990s, CIGA had assumed responsibility for paying covered claims of 27 insolvent workers’ compensation insurance companies. The Legislature placed a sunset provision on the original bonding authority and has extended the date on four separate occasions.

The California legislature has passed, and Governor Newsom has just signed AB 1541 a fifth extension of this bonding authority. The last date upon which CIGA is authorized to issue bonds would change from January 1, 2023 to January 1, 2026.

Specifically, this new law extends the existing ability of CIGA to request the issuance of bonds by the California Infrastructure and Economic Development Bank to more expeditiously and effectively provide for the payment of covered claims arising from insolvencies of insurance companies providing workers’ compensation insurance.

SoCal Woman Sentenced for Multi-Million Dollar Medical Fraud

A California woman was sentenced for her role in a multi-million-dollar Medicare fraud scheme.

Stefanie Hirsch, 51, of Los Angeles, Calif., was sentenced by U.S. Senior District Court Judge George A. O’Toole Jr. to three years of probation. Hirsch was also ordered to pay a fine of $2,500. On Feb. 24, 2021, Hirsch pleaded guilty to violating the HIPAA statute.

Hirsch sold access to a Medicare eligibility tool that allowed Juan C. Perez Buitrago and Nathan LaParl to improperly access patients’ detailed personal, demographic, medical and insurance information.

Hirsch owned EI Medical, Inc., a Medicare-enrolled wheelchair and scooter repair company that qualified for access to a health care clearinghouse that contains Medicare patients’ personal, medical and insurance information.

Hirsch improperly gave Perez Buitrago and LaParl access to that clearinghouse and charged them about $0.25 per patient eligibility check. Using Hirsch’s credentials,

LaParl accessed the personal and medical data of more than 350,000 patients and Perez Buitrago’s credentials were used for 150,000 patients.

Perez Buitrago and LaParl pleaded guilty to federal health care crimes in October 2020 and January 2021, respectively.

Acting United States Attorney Nathaniel R. Mendell; Johnnie Sharp Jr., Special Agent in Charge of the Federal Bureau of Investigation, Birmingham Field Division; Phillip Coyne, Special Agent in Charge of the Department of Health and Human Services, Office of the Inspector General, Boston Division; and Joshua McCallister, Acting Inspector in Charge of the U.S. Postal Inspection Service made the announcement. Assistant U.S. Attorney Elysa Q. Wan of Mendell’s Health Care Fraud Unit prosecuted the case.

Gov. Newsom Vetoes Limitations on Apportionment

This year the California legislature passed SB 788, and sent the bill to Governor Newsom for signature. The bill would have added the following language to Labor Code 4663, one of the permanent disability apportionment statutes.

“The approximate percentage of the permanent disability caused by other factors shall not include consideration of race, religious creed, color, national origin, gender, marital status, sex, sexual identity, or sexual orientation.The source of this bill was the California Applicants’ Attorneys Association. Assembly amendments in the legislative process removed genetic characteristics and age as factors that would be prohibited.

Most of the legislative effort to limit apportionment over the last few years has been in response to case law. In April 2017, the Court of Appeal published its decision in the case of City of Jackson v WCAB (Rice) which confirmed apportionment to genetic factors. Christopher Rice was a police officer who suffered a spine injury. A PQME found that genetic factors were significant factors in his permanent impairment. The Court of Appeal reversed the WCAB which refused to allow apportionment to genetics.

The letter response by Governor  Newsom reads as follows:

I am returning Senate Bill 788 without my signature. This bill would preclude a physician from using certain characteristics as the basis for apportionment of permanent disability.”

“Current law states that physicians shall not apportion the percentage of permanent disability awarded based on the gender,race, or other personal characteristic of the employee and provides protection from the inappropriate application of apportionment law.”

“Instead, physicians are required to apportion the disability award based solely upon the employee’s own medical history and medical evidence.”

“While I support efforts to combat bias within the medical profession, this bill creates confusion with well-settled law, which is likely to result in increased litigation and subsequent delays to much-needed benefits to workers.”

Ongoing efforts by the Division of Workers’ Compensation to implement mandatory continuing education of medical-legal evaluators related to current anti-bias is better suited to achieve the intent of this bill.”

On this recurrent legislative issue, Newsom followed vetoes by Governor Brown on several apportionment bills passed by the legislature in years past.

In 2018, Governor Brown vetoed AB 479. This proposed law would have set limits to apportionment of permanent disability in cases involving breast cancer. Brown’s veto message noted that it was similar to three previous measures that he has vetoed, Assembly Bill 570 in 2017, Assembly Bill 1643 in 2016 and Assembly 305 in 2015.

Brown said that AB 479, and its predecessors, have repeatedly singled out specific conditions and proposed a special set of rules that apply to them. This would result in an even more complex workers’ compensation system that would essentially be “disease by statute,” which would ultimately burden injured workers seeking quick resolution to their claims.