Author: WorkCompAcademy

The saga of Flint, Michigan, where residents suddenly found themselves drinking lead-poisoned tap water sets the stage for yet another pharmaceutical industry scandal. As the Flint water crisis unfolded one notorious pharmaceutical company saw a chance to cash in.

Valeant Pharmaceuticals raised the price of a drug used to treat lead poisoning by 2,700 percent after acquiring the drug in 2013. Before Valeant took control, the list price for a package of vials had been stable at $950. But in January 2014, Valeant boosted the price to $7,116. By December 2014, several more increases took the price to $26,927. Thus, by 2015 – as the issue of lead poisoning became prominent news – the price for a package of vials rose from $950 to $26,927.

This intravenous treatment, called Calcium EDTA, has been available for decades at a stable price, and is the most effective for severe and life-threatening cases of lead poisoning. The dramatic price increase has drawn the ire of poison control specialists and hospitals since it began.

The problem is, the drug does not have a long shelf life and is not needed in large quantities, since severe lead poisoning is relatively uncommon. This is precisely the excuse Valeant gives for its egregious price hikes, with a company spokesman saying, “The list price increases over the past several years have enabled us to provide to the market consistent availability of a product with high carrying costs and very limited purchase volume of 200 to 300 units per year.”

The greed of Valeant Pharmaceuticals – which does little more than buy up other pharma companies and raise drug prices – was celebrated by Wall St. for two years until an accounting scandal and congressional hearings began tarnishing its image.

By the end of 2015 Valeant raised prices on a number of critical brand-name drugs by an average of 66 percent – five times as much as its closest industry peers. These included Cuprimine, a decades-old drug that treats an inherited disorder called Wilson disease, and a diabetes drug called Glumetza.

Valeant relies on insurance companies and government programs to shield most patients from the skyrocketing costs, but this leads to higher premiums and co-payments, as well as an extra burden on taxpayers.

Doctors have complained to federal officials about the astronomical prices hikes for the lead-poisoning drug and others acquired by Valeant, but the problem is they are complaining to the very State that enables such exploitation through patent monopolies and barring drug imports from other countries.

“This is a drug that has long been a standard of care, and until recently it was widely accessible at an affordable price,” said Dr. Michael Kosnett, an associate clinical professor in the division of clinical pharmacology and toxicology at the University of Colorado’s School of Medicine and a consultant to the California Poison Control System, who has contacted Congress. “There’s no justification for the astronomical price increases by Valeant, which limit availability of the drug to children with life-threatening lead poisoning.”

Twenty-eight states and the District of Columbia have legalized marijuana for a variety of medical uses, and eight of those states plus the district have also legalized it for recreational use.

Now, a new report from the National Academies of Sciences, Engineering, and Medicine offers a rigorous review of scientific research published since 1999 about what is known about the health impacts of cannabis and cannabis-derived products – such as marijuana and active chemical compounds known as cannabinoids – ranging from their therapeutic effects to their risks for causing certain cancers, diseases, mental health disorders, and injuries.

The committee that carried out the study and wrote the report considered more than 10,000 scientific abstracts to reach its nearly 100 conclusions. The committee also proposed ways to expand and improve the quality of cannabis research efforts, enhance data collection efforts to support the advancement of research, and address the current barriers to cannabis research.

The committee found evidence to support that patients who were treated with cannabis or cannabinoids were more likely to experience a significant reduction in pain symptoms. For adults with multiple sclerosis-related muscle spasms, there was substantial evidence that short-term use of certain “oral cannabinoids” – man-made, cannabinoid-based medications that are orally ingested – improved their reported symptoms. Furthermore, in adults with chemotherapy-induced nausea and vomiting, there was conclusive evidence that certain oral cannabinoids were effective in preventing and treating those ailments.

But the report dismisses most of the drug’s other supposedly ‘medical benefits’ as unproven. Crucially, the researchers concluded there is not enough research to say whether marijuana effectively treats epilepsy – one of the most widely-recognized reasons for cannabis prescriptions.

The report also casts doubt on using cannabis to treat cancers, irritable bowel syndrome, or certain symptoms of Parkinson’s disease, or helping people beat addictions.

Turning to potential harms, the committee concluded:

1) Strong evidence links marijuana use to the risk of developing schizophrenia and other causes of psychosis, with the highest risk among the most frequent users.
2) Some evidence suggests a small increased risk for developing depressive disorders, but there’s no evidence either way on whether it affects the course or symptoms of such disorders, or the risk of developing post-traumatic stress disorder.
3) There’s strong evidence that using marijuana increases the risk of a traffic accident, but no clear indication that it promotes workplace accidents or injuries, or death from a marijuana overdose.
4) There’s only weak evidence for the idea that it hurts school achievement, raises unemployment rates or harms social functioning.
5) For pregnant women who smoke pot, there’s strong evidence of reduced birth weight but only weak evidence of any effect on pregnancy complications for the mother, or an infant’s need for admission to intensive care. There’s not enough evidence to show whether it affects the child later, like sudden infant death syndrome or substance use.
6) Some evidence suggests there’s no link to lung cancer in marijuana smokers. But there’s no evidence, or insufficient evidence, to support or rebut any link to developing cancers of the prostate, cervix, bladder, or esophagus.
7) Substantial evidence links pot smoking to worse respiratory symptoms and more frequent episodes of chronic bronchitis.
8) There’s weak evidence that suggests smoking marijuana can trigger a heart attack, especially for people at high risk of heart disease. But there’s no evidence either way on whether chronic use affects a person’s risk of a heart attack.
8) Some evidence suggests a link between using marijuana and developing a dependence on or abuse of other substances, including alcohol, tobacco and illicit drugs.

Currently, cannabis is the most popular illicit drug in the United States, in terms of past-month users. Based on a recent nationwide survey, 22.2 million Americans ages 12 and older reported using cannabis in the past 30 days. This survey also reports that 90 percent of adult cannabis users in the United States said their primary use was recreational, with about 10 percent reporting use solely for medical purposes. Around 36 percent reported mixed medical and recreational use. In addition, between 2002 and 2015, the percentage of past-month cannabis users in the U.S. population ages 12 and older has increased steadily from 6.2 percent to 8.3 percent.

A former Ventura County neurosurgeon has been sentenced to nearly twenty years in prison for his role in a $2.8 million health care fraud scheme in which he caused serious bodily harm to patients by performing unnecessary invasive spinal surgeries.

Aria O. Sabit M.D., 43, has a significant criminal history, dating back to 2010, while practicing at Ventura based Community Memorial Hospital. At the time Sabit was a licensed neurosurgeon in California.

Sabit admitted that, in approximately February 2010, while he was on the staff of a California Community Memorial Hospital, he became involved with Apex Medical Technologies LLC (Apex), which was owned by another neurosurgeon and three non-physicians. In exchange for the opportunity to invest in Apex and share in its profits, Sabit agreed to convince his hospital to buy spinal implant devices from Apex and to use a substantial number Apex spinal implant devices in his surgical procedures. Sabit further admitted that he and Apex’s co-owners concealed Sabit’s involvement in Apex from the hospitals and surgical centers.

As a result of these unnecessary surgeries, about 30 of Dr. Sabit’s patients sued him for malpractice. Community Memorial Hospital cut ties with Dr. Sabit in December 2010 to protect patients.

With his California career in the rearview mirror, Sabit took his practice to Detroit. His fraudulent ways were far from over, however. He convinced patients in Detroit to receive spinal fusions with metal instrumentation, but “subsequent diagnostic imaging revealed that he never installed the hardware, just bone dowels, and never achieved fusion,”.

On Nov. 24, 2014, authorities arrested Dr. Sabit. By May 2015, he pleaded guilty to four counts of health care fraud, one count of conspiracy to commit health care fraud and one count of unlawful distribution of a controlled substance, resulting in losses to Medicare, Medicaid and various private insurance companies.

In connection with his guilty plea, Sabit admitted that he derived significant profits by convincing patients to undergo spinal fusion surgeries with “instrumentation” (medical devices designed to stabilize and strengthen the spine) that he never performed and billed public and private healthcare benefit programs for those fraudulent services.

Sabit further admitted that, in some instances, he operated on patients and dictated in his operative reports – which he knew would later be used to support fraudulent insurance claims – that he had performed spinal fusion with instrumentation, when he had not. Specifically, Sabit fraudulently billed public and private health care programs for instrumentation when, in fact, he used cortical bone dowels made of tissue. Sabit failed to render services in relation to lumbar and thoracic fusion surgeries, including in certain instances, billing for implants that were not provided.

In connection with his guilty plea, Sabit admitted that the financial incentives provided to him by Apex and his co-conspirators caused him to use more spinal implant devices than were medically necessary to treat his patients in order to generate more sales revenue for Apex, which resulted in serious bodily injury to his patients. Sabit also admitted that, on a few occasions, the money he made from using Apex spinal implant devices motivated him either to refer patients for unnecessary spine surgeries or for more complex procedures that they did not need.

Sabit also is a defendant in two civil False Claims Act cases brought by the Justice Department in the Central District of California. These cases remain pending.

Simon Hong (who is also known as Seong Wook Hong), 55, a Brea man, who operated rehabilitation clinics in Walnut, Torrance and Los Angeles and defrauded Medicare out of approximately $3 million by billing for unneeded or unnecessary services has been sentenced to 121 months in federal prison.

Hong was found guilty in October of eight counts of healthcare fraud, nine counts of illegal kickbacks related to healthcare referrals and two counts of aggravated identity theft.

Hong owned physical therapy clinics operated by companies called Hong’s Medical Management, Inc., CMH Practice Solution, and HK Practice and Solution, Inc. As part of the scheme, Hong recruited Medicare beneficiaries and provided uncovered services like massage and acupuncture for them. Even though the beneficiaries did not receive actual physical therapy, Hong’s co-conspirators billed Medicare for physical therapy, and then funneled 56 percent of the reimbursement funds back to Hong.

Through this scheme Hong and his co-conspirators billed Medicare from the spring of 2009 until November 2013 and received approximately $2,929,775 in reimbursements, of which Hong received approximately $1,640,674. Hong was ordered to pay $2,929,775 in restitution.

Hong is one of 10 defendants who were charged in 2015 and early 2016 for healthcare fraud related to physical therapy. Eight others have pled guilty, and one, David Y. Kim, 54, of Los Angeles, remains a fugitive. Those previously convicted in the investigation are:

1) Joseff Sales, 39, of Buena Park, a co-owner and operator of Rehab Dynamics, who pleaded guilty to one count of healthcare fraud and one count of illegal kickbacks, and was sentenced last year to 51 months in prison;

2) Danniel Goyena, 39, of Buena Park, a co-owner and operator of Rehab Dynamics, who pleaded guilty to two counts of healthcare fraud and was sentenced last year to 51 months in prison;

3) Marlon Sonco, 39, of Sylmar, who pleaded guilty in June 2015 to conspiracy and is scheduled to be sentenced on January 23;

4) Eddieson Legaspi, 40, of Lomita, an employee of Rehab Dynamics, pleaded guilty to conspiracy to commit healthcare fraud and also was sentenced yesterday to 15 months;

5) Ohun Kwon, 50, of Fullerton, the owner/operator of E.K. Medical Management, which referred patients to Rehab Dynamics, pleaded guilty to conspiracy to commit healthcare fraud and was sentenced last year to 27 months in federal prison;

6) Leovigildo Sayat, 39, of Torrance, an employee of RSG Rehab, pleaded guilty to conspiracy to commit health care fraud and was sentenced last year to two years in prison;

7) Byong Chun “David” Min, 68, of Irvine, co-owner/operator of Glory Rehab Team, which operated as Dream Hospital in Orange County, who pleaded guilty to healthcare fraud and illegal kickbacks, also was sentenced yesterday to 45 months in prison; and

8) Jason S. Min, 35, of Irvine, David Min’s son, who was the other owner/operator of Glory Rehab, pleaded guilty last year to obstruction of justice and is scheduled to be sentenced on February 6.

These individuals should be precluded from recovery of any bills or liens that may be pending in California Workers’ Compensation cases as a result of new law that took effect this year.

In a separate case, Hong pleaded guilty last month to conspiracy to commit health care fraud in another scheme involving occupational and physical therapy services that were never provided to Medicare beneficiaries. Medicare suffered losses of approximately $2.4 million in relation to this scheme. Hong is scheduled to be sentenced in this case in Los Angeles federal court by United States District Judge George Wu on March 6.

Los Angeles budget officials warned, in a January 6 memo, that the City needs to immediately borrow tens of millions of dollars to avoid dipping into its emergency reserve fund after several high-profile lawsuit payouts.

The City Administrative Office recommended that the city borrow $50 million to $70 million to address cases that are part of a “new trend of increased liability payouts.”

The City typically budgets $60 million a year for its legal liability fund, but has already paid out $135 million since July 1, when the current fiscal year began.

Recent significant payouts include a $200-million settlement by the Los Angeles City Council over a housing-related lawsuit brought by disabled groups and an $8-million settlement to end lawsuits related to the fatal Los Angeles Police Department shootings of three unarmed men in separate incidents. The $200 million will be paid out over 10 years.

The report recommends issuing Judgment Obligation Bonds to fund these settlements, and warns against dipping into the city’s reserve fund, which is for financial emergencies.

As of November, the reserve fund stood at about $295 million, which the report said is “only precariously above” the minimum amount required under city policy – 5% of the General Fund budget. The recommendation comes after the city paid out $100 million in legal cases last fiscal year, said Assistant City Administrative Officer Ben Ceja. He said the rising expenditures “could be the new normal in terms of paying out cases.”

After calling the financial crisis to the attention of City officials, a Second Financial Status Report reported “a potential $52 million expenditure deficit and highlighted risks to revenues totaling $138 million. Since that report, additional information has increased the reported expenditure deficit to up to $80 million, while a new identified shortfall increases the combined revenue risk to $165 million. Therefore, the combined potential deficit currently stands at $245 million.”

The Report goes on to state that the “options to resolve this deficit are extremely limited.” The deficit is “mostly driven by the liability claims account, human resource benefits account, and recent labor agreements reached with firefighters.”

“One significant source of expenditures includes pending resolutions to additional cases being handled by the City Attorney and Conflict Counsel. These payouts are above the $135.5 million identified in the FSR, which already exceeded the Adopted Budget by $67 million. As this Office stated at the time of the adoption of the 2016-17 Budget, potential liabilities above budgeted amounts posed a major risk in 2016-17 that had the potential to exceed the available reserves set aside in the Unappropriated Balance. The City must strive to increase the funding available for liabilities in the upcoming budget process.”

In order to borrow the money, the report requests that “the City Attorney to present an amendment to the Los Angeles Administrative Code (Section 11.27) to clarify and expand on the types of settlements that are eligible to be paid with Judgment Obligation Bonds in a manner more consistent with current legal practice, and to provide more procedural flexibility with respect to the timing of certain portions of the issuance process.”