Author: WorkCompAcademy

UnitedHealth Group is poised to grow its presence in the mental health sector if it closes a yet-to-be-confirmed deal for pharmacy operator Genoa Health.

This “convergence of retail, pharmacy and health insurance,” as former Blue Cross and Blue Shield of Minnesota CEO Michael Guyette put it to Twin City Business in an interview this April, has become an emerging trend in the marketplace.

While not formally announced, a source familiar with the deal told Axios that a tentative agreement had been reached.

Genoa, a Washington-state based company, operates 400 pharmacies across the country – all of which deal with patients with behavioral or other complex, chronic health issues.

Axios said that with Genoa under its belt, the Minnetonka-based Fortune 500 company UnitedHealth Group would control the specialty channel.

Axios didn’t offer a sale figure, but Bloomberg reported Tuesday that if Genoa sold, it could fetch a price of more than $2 billion. Bloomberg also noted Walgreens as a potential buyer.

The prospect of a UnitedHealth Group-Genoa deal follows an agreement reached late last year involving CVS buying Aetna for $69 billion, though the merger is still pending. Meanwhile, Amazon recently acquired prescription delivery startup PillPack Inc.

For localized healthcare entities, Guyette suggested this trend means a need to adjust to the changes to stay competitive, like by launching strategic partnerships.

Axios was told that after the sale to UnitedHealth Group, Genoa CEO John Figueroa would move on and Genoa chief commercial officer Mark Peterson would step in to run Genoa under UnitedHealth.

None of the parties involved in the potential deal, however, have yet commented.

The WCIRB Governing Committee voted to authorize the WCIRB to submit a January 1, 2019 Advisory Pure Premium Rate Filing to the California Insurance Commissioner.

The Filing will propose advisory pure premium rates that average $1.70 per $100 of payroll, which is 4.5% less than the average approved July 1, 2018 advisory pure premium rate of $1.78 and 20% less than the industry average filed pure premium rate of $2.13 as of July 1, 2018.

If adopted, this would be the eighth consecutive pure premium rate decrease since 2015 totaling approximately 40%.

In his presentation to the Governing Committee, WCIRB EVP and Chief Actuary Dave Bellusci noted that the indicated January 1, 2019 average advisory pure premium reflects continued downward loss development, acceleration in claim settlements, sharply declining pharmaceutical costs and decline in the number of liens being filed.

Despite these continued favorable trends, Mr. Bellusci cautioned that allocated loss adjustment expenses continue to increase and that the medical savings driving these advisory pure premium rate decreases could erode if medical inflation rates were to return to levels closer to historical norms.

The WCIRB will submit its January 1, 2019 Advisory Pure Premium Rate Filing to the California Department of Insurance (CDI) on or around August 21, 2018.

The CDI will schedule a public hearing to consider the Filing and once the Notice of Proposed Action and Notice of Public Hearing is issued, the WCIRB will post a copy in the Filings and Plans section of the WCIRB website.

A Burbank man who operated a string of allegedly sham medical clinics – and who already faces federal charges of using the clinics to orchestrate a massive narcotics scheme – was arrested this week on new charges that he unlawfully procured United States citizenship.

Armen Simonyan, 44, who was free on bond in the narcotics-trafficking case, was arrested after being named in a two-count indictment returned this week by a federal grand jury. The new indictment charges Simonyan with unlawful procurement of United States citizenship and making a false statement on a passport application.

Simonyan was previously indicted in August 2017 on charges that he and other conspirators disseminated more than 2 million pills of controlled prescription drugs to the black market, mostly oxycodone and hydrocodone. Simonyan is currently scheduled to go on trial in that case on February 12, 2019.

The 2017 indictments charge 14 defendants who allegedly participated in an elaborate scheme they mistakenly hoped would conceal a high-volume drug trafficking operation. The alleged leader was Minas Matosyan, an Encino man also known as “Maserati Mike,” who is charged with leading the scheme and controlling six of the sham clinics.

Matosyan allegedly supplied corrupt doctors in exchange for kickbacks derived from proceeds generated when the other sham clinics created fraudulent prescriptions or submitted fraudulent bills to health care programs.

The new indictment outlines Simonyan’s 15-year history of securing United States immigration benefits via fraud and identity theft.

Simonyan allegedly entered the United States from Armenia under a stolen identity and a fraudulent passport. He then sought asylum in the United States, allegedly concocting a false narrative that he was born in Azerbaijan to parents of supposed mixed Armenian-Azerbaijani nationality; that his family suffered ethnic violence, including the murder of both his parents; and that he fled to the United States via Russia.

The new indictment alleges that, in fact, Simonyan was born in Armenia to Armenian parents, that he entered the United States from Armenia, and that both of his parents were alive.

Simonyan will lose his United States citizenship if convicted of the immigration fraud charge.

The indictment also charges Simonyan with lying on his application for a United States passport after he gained citizenship. The alleged false statements related to his place of birth, his date of birth, and his claim that his mother was deceased.

Remoxy ER (oxycodone) Extended-Release Capsules CII, based on Pain Therapeutics’ ORADUR technology, is a long-acting formulation of oxycodone designed to discourage most methods of tampering linked to opioid abuse.

However, a joint meeting of the Anesthetic and Analgesic Drug Products Advisory Committee and Drug Safety and Risk Management Advisory Committee to the FDA voted 14 to 3 against approving the drug. And the FDA agreed and argued that the benefits of the drug did not outweigh the risks.

The company reacted badly.

“This is a bizarre conclusion to reach, especially during a time of staggering human and economic toll created by opioid abuse and addiction,” said Remi Barbier, Pain Therapeutics’ president and chief executive officer, in a statement. “We have an innovative drug with a social purpose, and a staggering amount of data that easily supports best-in-class abuse deterrence versus OxyContin. We relied on the criteria of a fair, neutral and impartial regulatory review, as any sponsor would. Instead, I believe Remoxy received an ideological judgment call that is vague in nature but conclusive in its damaging effects.”

This is the companies fourth rejection on Remoxy. Seemingly in response to the rejection, Pain Therapeutics has launched a strategic reorganization. It plans to shift its focus from tamper-resistant opioid formulations to Alzheimer’s disease. Details are expected to be released in the upcoming weeks.

The FDA has perhaps changed direction on approval of opioid pain management strategies. They have announced “we must also take steps to help those with acute and chronic pain who need access to medicines, including opioids, get improved treatment alternatives.”

“Transitioning from the current market, dominated by conventional opioids, to one in which most opioids have abuse-deterrent properties, holds significant promise for a meaningful public health benefit. While these innovative formulations are designed to make it harder for people to manipulate the opioid drug so they can’t be abused, it’s important that prescribers and patients understand that these drugs are not ‘abuse-proof,’ and they do not prevent addiction, overdose, or death.”

“In addition, part of our ongoing work is ensuring that drug approval and removal decisions are made within a benefit/risk framework that evaluates not only the outcomes of opioids when used a prescribed, but also the public health effects of inappropriate use of these drugs. We are continually re-evaluating the safety of approved opioid products based on both post-market data the FDA has required from sponsors and additional sources of information as part of our safety surveillance.”

Both the announced policy and the FDA current opioid rejection history seem to indicate a trend away from opioid drugs toward “alternatives,” whatever that might be.

Prime Healthcare Services, Inc.; Prime Healthcare Foundation, Inc.; Prime Healthcare Management, Inc.; and Prime’s Founder and chief executive officer, Dr. Prem Reddy, have agreed to pay the United States $65 million to settle allegations that 14 Prime hospitals in California knowingly submitted false claims to Medicare by admitting patients who required only less costly, outpatient care and by billing for more expensive patient diagnoses than the patients had (a practice known as “up-coding”).

Under the settlement agreement, Reddy will pay $3.25 million and Prime will pay $61.75 million.

Headquartered in Ontario, California, Prime Healthcare Services and the not-for-profit Prime Healthcare Foundation constitute one of the largest hospital systems in the nation, with 45 acute-care hospitals located in 14 states.

The following 10 hospital defendants owned by Prime Healthcare Services are parties to the settlement agreement: Alvarado Hospital Medical Center, Garden Grove Medical Center, La Palma Intercommunity Hospital, Desert Valley Hospital, Chino Valley Medical Center, Paradise Valley Hospital, San Dimas Community Hospital, Shasta Regional Medical Center, West Anaheim Medical Center and Centinela Hospital Medical Center.

Four other hospital defendants owned by Prime Healthcare Foundation are also parties to the settlement agreement: Sherman Oaks Hospital, Montclair Hospital Medical Center, Huntington Beach Hospital and Encino Hospital Medical Center. Prime Healthcare Management, a subsidiary of Prime Healthcare Services, provides management, consulting and support services to hospitals owned and operated by Prime.

The settlement resolves allegations that, from 2006 through 2013, Prime engaged in a deliberate, corporate-driven scheme to increase inpatient admissions of Medicare beneficiaries who originally presented to the Emergency Departments at the 14 Prime hospitals in California.

The government claimed that the inpatient admission of these beneficiaries was not medically necessary because their symptoms and treatment needs should have been managed in a less-costly outpatient or observation setting. Hospitals generally receive significantly higher payments from Medicare for inpatient admissions as opposed to outpatient treatment; therefore, the admission of beneficiaries who do not need inpatient care, as alleged here, can result in substantial financial harm to the Medicare program.

The settlement also resolves allegations that, from 2006 through 2014, Prime engaged in up-coding by falsifying information concerning patient diagnoses, including complications and comorbidities, in order to increase Medicare reimbursement.

This settlement resolves a False Claims Act (FCA) lawsuit filed in federal court in Los Angeles by Karin Berntsen, the former director of performance improvement at Alvarado Hospital Medical Center in San Diego. Under the qui tam, or whistleblower, provisions of the FCA, private citizens are permitted to bring lawsuits on behalf of the United States and obtain a portion of the government’s recovery. The FCA also permits the government to intervene and take over the lawsuit, as it did in this case as to some of Ms. Berntsen’s allegations. Ms. Berntsen will receive $17,225,000 as her portion of the settlement amount.

The case is United States ex rel. Karin Berntsen v. Prime Healthcare Services, Inc., et al., CV11-08214-PJW (C.D. Cal.). The claims resolved by this settlement are allegations only and there has been no determination of liability.