Author: WorkCompAcademy

A former resident of Aliso Viejo who submitted fraudulent bills to insurance companies that sought well over $8 million for tests and services that were never performed was just sentenced to 97 months in federal prison.

Michael Mirando, 40, who currently resides in Portland, Oregon, was sentenced by United States District Judge Percy Anderson, who also ordered Mirando to pay just over $3 million in restitution. At the conclusion of the hearing, Judge Anderson – who called the defendant “totally unrepentant” – remanded Mirando into custody.

Following a one-week trial, Mirando was found guilty in May of 15 counts of health care fraud. The federal jury deliberated for less than 30 minutes before issuing its verdicts.

The evidence presented during the trial showed that Mirando – who was an owner of Holter Labs, LLC, which provided cardiac monitoring services using an ambulatory electrocardiography device known as a Holter recorder – defrauded dozens of private insurance companies by submitting millions of dollars in claims for services that were never performed.

Mirando handled most of Holter Lab’s business activities, including purchasing the Holter recorders, advertising, managing the company’s finances, and submitting the medical claims to the patients’ insurance companies. Holter Labs was based in Laguna Niguel until Mirando moved the company to Portland in 2012.

Holter Labs provided the Holter recorder to physicians, who prescribed the devices to monitor patients’ heart rates for one to two days. Mirando then billed the patients’ insurance companies for the prescribed 24- or 48-hour tests, but he also submitted bills for services never ordered – such as 30-day tests – and for services the device could not perform – such as brain scans and oxygen studies.

From 2005 through 2016, Mirando submitted tens of thousands of claims to health insurance companies, some of which were for services legitimately performed. But Mirando also submitted bills “for services that doctors never ordered, patients never received, and that the Holter devices never performed and, in many cases, were incapable of performing,” according to documents filed by prosecutors.

The bills submitted to 26 health insurance companies sought approximately $10.3 million, which included approximately $8.4 million for tests that his company’s heart rate monitors never performed and were unable to perform. The victim health insurance companies paid about $3 million on these fraudulent claims.

After Mirando admitted that he purchased his house in Portland with proceeds generated by the fraud scheme, Judge Anderson recently signed a preliminary order of forfeiture for that residence.

The case against Mirando was investigated by the Federal Bureau of Investigation. The case was prosecuted by Assistant United States Attorneys Michael G. Freedman and Katherine A. Rykken of the General Crimes Section.

A large group of U.S. states accused key players in the generic drug industry of a broad price-fixing conspiracy, moving on to widen an earlier lawsuit to add many more drugmakers and medicines.

According to the Reuters Health report, the lawsuit, brought by the attorneys general of 45 states and the District of Columbia, accused 18 companies and subsidiaries and named 15 medicines. It also targeted two individual executives: Rajiv Malik, president and executive director of Mylan NV, and Satish Mehta, CEO and managing director of India’s Emcure Pharmaceuticals.

The states said the drugmakers and executives divided customers for their drugs among themselves, agreeing that each company would have a certain percentage of the market. The companies sometimes agreed on price increases in advance, the states added.

The states said Malik and Mehta spoke directly to one another to agree on their companies’ shares of the market for a delayed-release version of a common antibiotic, doxycycline hyclate.

“It is our belief that price-fixing is systematic, it is pervasive, and that a culture of collusion exists in the industry,” Connecticut Attorney General George Jepsen, who is leading the case, told a news conference in Hartford.

Mylan said in a statement it had found no evidence of price-fixing by the company or any of its employees, and vowed to defend itself vigorously. Malik, the company’s second-ranking official, has received more than $50 million in compensation over the past three years, last year making more than CEO Heather Bresch. “Mylan has deep faith in the integrity of its president, Rajiv Malik, and stands behind him fully,” the company said.

Two former executives of Emcure’s subsidiary Heritage Pharmaceuticals pleaded guilty in January to federal charges of conspiring to fix prices and divide up the market for doxycycline and the diabetes drug glyburide. The two men, former Heritage president Jason Malek and former chairman and chief executive Jeffrey Glazer, reached a deal with 41 states and territories in which they each agreed to pay $25,000 and cooperate with the state probe.

The original complaint, filed in December, targeted Mylan, Heritage, Aurobindo Pharma USA Inc, Citron Pharma LLC, Mayne Pharma USA Inc and Teva Pharmaceuticals USA Inc.

The states are pressing a new complaint that would add Novartis AG’s unit Sandoz, India-based Sun Pharmaceutical Industries Ltd, Endo International PLC’s unit Par Pharmaceutical, Dr. Reddy’s Laboratories, Apotex Corp, Glenmark Generics Ltd, Lannett Company Inc, Alkem Laboratories Ltd’s unit Ascend Laboratories and Cadila Healthcare Ltd’s unit Zydus Pharmaceuticals Inc.

Teva spokeswoman Denise Bradley said the company denied the allegations. Endo spokeswoman Heather Lubeski said the company would vigorously defend itself against the claims. Other companies did not immediately respond to requests for comment.

The original lawsuit centered on just two medicines, delayed-release doxycycline and glyburide. The price of doxycycline rose from $20 for 500 tablets to $1,849 between October 2013 and May 2014, according to U.S. Senator Amy Klobuchar, a Minnesota Democrat who had been pressing for action on high drug prices.The amended complaint would expand the number of drugs to include glipizide-metformin and glyburide-metformin, which are among the most commonly used diabetes treatments.

Others include: acetazolamide, which is used to treat glaucoma and epilepsy; the antibiotic doxycycline monohydrate; the blood pressure medicine fosinopril; the anti-anxiety medicine meprobamate; and the calcium channel blocking agent nimodipine.

The proposed merger between U.S. pharmacy operator CVS Health Corp and No. 3 health insurer Aetna Inc represents a $66 billion bet that insurers can drive down high U.S. drug prices by cutting out the middleman.

The move is the most expensive effort to date that would enable a national health insurer to take back full control of prescription medicines for their customers by negotiating prices with pharmaceutical manufacturers and setting customer out-of-pocket costs for each drug.

Reuters Health reports that CVS, one of the largest U.S. pharmacy benefits managers, has offered to buy No. 3 health insurer Aetna for more than $200 per share. It could take at least several weeks for any deal to materialize.

If the deal happens, it would likely pressure rival insurers, drugmakers, pharmaceutical benefits managers, and retail pharmacies to also consider mergers or switching partners to try to keep up with the potential healthcare cost savings or increase in profit margins.

“It’s an alternate model at this point. It’s not clear that it’s definitely a better one,” BMO Capital Markets analyst Matt Borsch said. “More consolidation could lead to pressure on some of the brand-name drug prices and a better counterweight to the big pharma companies.”

For years, insurers paid drug benefits managers like CVS and Express Scripts Holdings Co to negotiate down drug prices, with both parties taking a share of any discount by the time a medicine was paid for by consumers.

But outrage over the high costs of drugs has grown as consumers have picked up a larger portion of the tab for drug costs and it is threatening profit margins all along the drug supply chain, from manufacturers to distributors, insurers and pharmacies.

UnitedHealth Group Inc and Humana Inc currently have in-house pharmacy benefits businesses, and say that it has helped them keep medical costs down.

Anthem Inc recently decided to go down that same path. It cut ties with Express Scripts during a $3 billion legal fight, and said it would use CVS to build its own pharmacy benefits business in the next few years. That tie-up could now be at risk if CVS reaches a deal to buy Aetna.

CVS also provides management services for Aetna rival Cigna Corp. If CVS buys Aetna, that could revive Cigna’s interest in buying Humana, analyst Christine Arnold of investment bank Cowen & Co said in a research note.

Aetna earlier this year closed the door on a deal with rival insurer Humana Inc after antitrust regulators said that combination and a rival deal between Anthem Inc and Cigna Corp were anti-competitive.

Over the past decade, health insurers have diverged on the value of the pharmacy benefits business.

Anthem sold its pharmacy benefit manager to Express Scripts and outsourced almost all of the business in 2010.

UnitedHealth took the opposite approach when it decided in 2011 to bring its pharmacy benefits management in house, then bought an even bigger standalone benefits manager, Catamaran, in 2015.

Humana operates its own pharmacy benefit manager and Cigna and Aetna have hybrid approaches where they manage some parts in house and outsource others.  

Another potential lure of a deal for Aetna would be to capitalize on the growing number of simple health services offered in a CVS store, from flu shots to blood pressure checks. Reimbursing such patient care outside of a doctor’s office or hospital could cut healthcare costs, Gupta said.

The Division of Workers’ Compensation (DWC) has suspended three more medical providers from participating in California’s workers’ compensation system, bringing the total number of providers suspended this year to 52.

DWC Administrative Director George Parisotto issued Orders of Suspension against the following providers:

1) Byong Chun “David” Min of Irvine pled guilty on April 20, 2016 to health care fraud and illegal kickbacks. Min, co-owner and operator of Glory Rehab Team, Inc., which also operated as Dream Hospital and Daesung Clinic in Orange County, was involved in an illegal kickback scheme referring Medicare beneficiaries to co-schemers Marlon Songco, Joseff Sales and Danniel Goyena, knowing that they would bill Medicare for services that were never provided.

2) Sujan Thyagaraj of Roswell, New Mexico, a physician whose medical license was summarily suspended in New Mexico in March 2016 after criminal charges were filed against him for sexual assault on a patient. The Medical Board of California revoked his physician and surgeon’s license on September 23, 2016. Thyagaraj was suspended from the Medi-Cal program on August 29, 2017.

3) Rhonda Singleton of Los Angeles, owner of substance abuse treatment facility Singleton Housing Project, pled no contest in Los Angeles County Superior Court on January 25, 2017 to grand theft of the California Health Care Deposit Fund. Singleton was suspended from Medi-Cal on August 15, 2017.

AB 1244 (Gray and Daly), which went into effect January 1, introduced new changes to the workers’ compensation system and requires the division’s Administrative Director to suspend any medical provider, physician or practitioner from participating in the workers’ compensation system under certain circumstances.

Numerous lien claimants by and through their sole representative Maximum Medical filed over 1,200 Petitions for Reconsideration,challenging an administrative action which prevented them from filing in their cases because they had allegedly failed to timely file required declarations.

Thereafter, to secure uniformity of decision in the future, the Chair of the Appeals Board, upon unanimous vote of its members, assigned these cases to the Appeals Board as a whole for an en banc decision. The cases at issue are defined as: “The Cases Involving a Labor Code section 4903.05(c) Declaration filed after 5:00 p.m. on Friday, June 30, 2017 through 5:00 p.m. on Monday, July 3, 2017 where a Petition for Reconsideration was filed on the issue of timeliness of the filing” and are designated as The Lien Cases.

The Lien Cases were consolidated on motion of the Appeals Board for the limited purpose of making the orders herein, including designating Rodriguez v. Garden Plating Co. (ADJ8588344) as the master case and designating service of this decision to lien claimants’ representative, Maximum Medical.

The providers in the Lien Cases contend that since July 1, 2017 fell on a Saturday, the required declarations were timely filed because the declarations were filed no later than the close of business on Monday, July 3, 2017 so that the notation placed in EAMS by DWC was improper.

However, on October 3, 2017, DWC issued a Newsline stating in pertinent part that: [DWC] will lift the notation in its Electronic Adjudication Management System (EAMS) that indicates all liens with Labor Code section 4903.05(c) declarations filed on July 2 and July 3 were dismissed.

The DWC has now removed the notation as to dismissal. Accordingly, lien claimants are not aggrieved (Lab. Code, §§ 5900, 5903) and their Petitions for Reconsideration are moot. Thus, the WCAB ruled that the Petitions must be dismissed. As set forth above in the Newsline and as discussed below, the issue of timeliness must be adjudicated in each case in the first instance at the trial level. Accordingly, the WCAB made no opinion on the merits of the issue of whether the declarations were timely filed.

Given that the Petitions for Reconsideration are nearly identical and given the limited resources of the Appeals Board, consolidation of the cases for the narrow purpose of addressing the Petitions for Reconsideration was appropriate. The en banc decision shall apply to any case in which a Labor Code section 4903.05(c) Declaration was filed by a lien claimant after the close of business at 5:00 p.m. on Friday, June 30, 2017 through the close of business at 5:00 p.m. on Monday, July 3, 2017, whether or not the case number is identified in this decision.

Whether declarations filed after the close of business at 5:00 p.m. on Friday, June 30, 2017 through the close of business at 5:00 p.m. on Monday July 3, 2017 were timely filed is not presently at issue, and we make no determination as to the timeliness of filing of such declarations. Once such a determination has been made, any aggrieved person may seek review of such determination. (Lab. Code, §§ 5900, 5903.)