Category: Daily News

Hogan Lovellls published a synopsis of federal enforcement activity that lead to their conclusion that “the implementation of electronic health records (EHR) and rapid expansion of telemedicine has caught the attention of the Department of Justice (DOJ) and the qui tam relators’ bar, prompting rigorous enforcement actions and increasing False Claims Act (FCA) cases.”

DOJ has traditionally been wary of telemedicine. Even before the COVID-19 pandemic and the accompanying rapid expansion of telehealth, enforcement in the telemedicine industry was on the rise. In 2019, DOJ pursued enforcement actions in the telehealth space that involved claims for durable medical equipment (DME) and for compound medicines.

Through “Operation Brace Yourself,” DOJ targeted an alleged fraud and kickback scheme through which DME companies paid illegal kickbacks and bribes to medical professionals working for fraudulent telemedicine companies. In exchange, the medical professionals referred Medicare beneficiaries to the conspiring DME companies for back, shoulder, wrist, and knee braces that were medically unnecessary.

The DOJ investigation resulted in enforcement actions against 24 defendants associated with five telemedicine companies, as well as the owners of dozens of durable medical equipment companies and three licensed medical professionals. According to DOJ, the fraud schemes involved more than $1.2 billion in loss.

Traditionally, Medicare’s coverage of telemedicine has been extremely limited. As a result of the pandemic, telehealth service providers were granted broad flexibility to provide telemedicine services and this flexibility remains today. The easing of restrictions stemming from the COVID-19 pandemic has prompted a dramatic increase in the use of telehealth.

It seems unlikely that the federal government will reinstate pre-pandemic restrictions on telehealth services given the increased popularity and reliance on telehealth services. Indeed, Congress has introduced several bipartisan bills to address post-pandemic telehealth services, signaling that utilization of telehealth services will likely remain prevalent.

In October of 2020, DOJ announced a telehealth enforcement action for a fraudulent DME billings scheme dubbed “Operation Rubber Stamp.” The scheme involved allegedly paying medical professionals to order DME, genetic and other diagnostic testing, and pain medications without sufficient patient diagnostic interaction, resulting in $1.5 billion in fraudulent billings to government health care insurance programs.

False Claims Act (FCA) violations have been alleged and resolved in an ongoing investigation dubbed Operation “Happy Clickers,” which involves allegations that physicians “approved orders for medically unnecessary braces and cancer genetic testing despite many red flags that these items and services were illegitimate.”

In recent years, DOJ has pursued several FCA cases related to Electronic Health Records (EHR) that have led to large settlements and highlight various FCA risks.

For example, in 2020, Practice Fusion Inc, a health information technology developer, paid $145 million to resolve criminal and civil investigations relating to its EHR software, including a $118.6 million FCA settlement. The resolution addressed allegations that Practice Fusion “extracted unlawful kickbacks from pharmaceutical companies in exchange for implementing clinical decision support (CDS) alerts in its EHR software designed to increase prescriptions for their drug products.”

FCA and other fraud investigations relating to telehealth fraud and EHR are expected to continue. Brian M. Boynton, Acting Assistant Attorney General for the Civil Division at the Department of Justice, recently stated that he expects “a continued focus on telehealth schemes, particularly given the expansion of telehealth during the pandemic.” He also identified fraud relating to EHR as another area that is likely to be a focal point of future enforcement efforts.

The Department of Health and Human Services Office of Inspector General (OIG) has also made clear that it is “conducting significant oversight work assessing telehealth services during the public health emergency.”

Telemedicine and EHR technologies have rapidly changed patient care, introducing opportunities for potential fraud and abuse and exposing gaps in oversight. Claims administrators should expect increased fraudulent activities in these areas going forward and take steps to minimize their risk.

Two California Democratic lawmakers took separate aim Tuesday at pandemic disinformation they argue receives a broad audience and misplaced credibility through social media platforms – rejecting concerns that their legislation might carry free speech or business privacy considerations.

Assemblyman Evan Low said his bill would label doctors’ promoting of misinformation or disinformation about COVID-19 to the public as unprofessional conduct that could draw disciplinary action from the California Medical Board. Disinformation is generally considered to be intentional or deliberate falsehoods, while misinformation can be inadvertent.

The California Medical Association hasn’t taken a position on Low’s bill. But the association’s president, Dr. Robert E. Wailes, said in a statement that misinformation has prolonged the pandemic, “making the work of our frontline health care workers more difficult and dangerous while harming community health.”

The legislation differs from efforts in some other states like Florida and Tennessee, where Republican lawmakers have resisted doctor discipline proposals.

Tennessee’s Board of Medical Examiners unanimously adopted in September a statement that said doctors spreading Covid misinformation – such as suggesting that vaccines contain microchips – could jeopardize their license to practice.

But before any physicians could be reprimanded for spreading falsehoods about covid-19 vaccines or treatments, Republican lawmakers threatened to disband the medical board.

The growing tension in Tennessee between conservative lawmakers and the state’s medical board may be the most prominent example in the country. But the Federation of State Medical Boards, which created language adopted by at least 15 state boards, is tracking legislation introduced by Republicans in at least 14 states that would restrict a medical board’s authority to discipline doctors for their advice on Covid.

In Florida, a Republican-sponsored bill making its way through the state legislature proposes to ban medical boards from revoking or threatening to revoke doctors’ licenses for what they say unless “direct physical harm” of a patient occurred. If the publicized complaint can’t be proved, the board could owe a doctor up to $1.5 million in damages.

Some medical boards have opted against taking a public stand against misinformation. The Alabama Board of Medical Examiners discussed signing on to the federation’s statement, according to the minutes from an October meeting. But after debating the potential legal ramifications in a private executive session, the board opted not to act.

A few physician groups are resisting attempts to root out misinformation, including the Association of American Physicians and Surgeons, known for its stands against government regulation.

And Sen. Richard Pan’s proposal, which still is being finalized, would require online platforms like Facebook to publicly disclose how their algorithms work and how they promote user content, including which data sets are used and how they rank the prominence of user posts.  The platforms would also be required to confidentially share more detailed information with researchers, with the goal of creating more responsible algorithms.

Congress is considering a Platform Transparency and Accountability Act with a similar goal at the federal level, Pan said, but he wants California to take the lead.

As the world gets closer to the eventual end of the virus pandemic, more than ever, white-collar workers worldwide are working remotely, and last year most said they want to keep that arrangement with employers. Just 3% of white collar workers wanted to return to the office five days a week, according to a poll by Accenture Research last year. But this year, the love affair with hybrid work may be fading.

A full 86% of employees wanted to work from home at least two days a week, the report said after surveying nearly 10,000 people around the world last year, across areas including finance, technology and energy. All age groups felt the same way, they added. Workers reported a preference for commuting into cities on Tuesdays, Wednesdays and Thursdays, raising the prospect of empty offices for the rest of the week.

Many banks geared up for flexible working after two years of COVID lockdowns, with the likes of Citigroup Inc., HSBC Holdings Plc and NatWest Group Plc allowing hybrid working for many staff. Some fintech companies like Revolut Ltd. and Eigen Technologies Ltd. are even allowing staff to work entirely remotely.

NatWest expects around 87% of its 60,000 staff to split work between home and the office in the longer term. For now about 10,000 of its staff, including traders and employees in branches and data centers, still work entirely in the office, Sam Bowerman, one of the bank’s human resources directors, said in an interview earlier this month.

“We’re keen to avoid mandating X number of days per week. It’s customer led,” Bowerman said. “So far we’ve seen no detriment to productivity and the flexibility has produced a lot of goodwill.”

In theory, hybrid offers the best deal for both employer and employee. It combines pre-Covid-19 patterns of office-based working with remote days, in a working schedule that would allow both in-person collaboration and team building, as well as greater flexibility and the opportunity for focused work at home.

But in reviewing the phenomena, the BBC claims in a story reported in January, that emerging data is beginning to back up anecdotal evidence: many workers report, that hybrid work is emotionally draining.

In a recent global study by Seattle based employee engagement platform Tinypulse, more than 80% of people leaders reported that such a set-up was exhausting for employees. Workers, too, reported hybrid was more emotionally taxing than fully remote arrangements – and, even full-time office-based work.

“There was a feeling that hybrid would be the best of both worlds,” says Elora Voyles, an industrial organizational psychologist and people scientist at Tinypulse, based in California. “For bosses, it means they retain a sense of control and that they can see their workers in person. For employees, it offers more flexibility than full-time in the office and means they can work safely during the pandemic.”

However, as the novelty of hybrid working has faded, so too has workers’ enthusiasm. “We found that people were less positive about hybrid through 2021 as the year went on,” explains Voyles.

Optimism among workers soon gave way to fatigue. In Tinypulse’s survey of 100 global workers, 72% reported exhaustion from working hybrid – nearly double the figures for fully remote employees and also greater than those based fully in the office. Voyles says the small sample size reflects a wider trend; she believes it’s the disruption to employees’ daily routines – and the staccato nature of hybrid – that workers find so tiring.

Physically carrying work back-and-forth between home and the office may also come with a psychological impact for some. A recent study found 20% of UK workers reported difficulties switching off from work and feeling ‘always on’; struggling to adapt to hybrid, and the permeable boundaries between home and work, was cited as a major factor.

A San Fernando Valley woman pleaded guilty to federal criminal charges for conspiring to defraud health insurance companies by causing millions of dollars in fraudulent claims to be submitted to provide patients with “free” cosmetic procedures, including Botox injections. The indictment included several co-conspirators, including an insurance company SIU investigator who helped her avoid detection.

Roshanak Khadem, 54, a.k.a. “Roxanne Khadem” and “Roxy Khadem,” of Sherman Oaks, pleaded guilty to one count of conspiracy to commit health care fraud and one count of subscribing to a false income tax return. She was the last of the group to plead guilty.

According to her plea agreement, she owned and operated facilities that provided aesthetic services to clients, including R&R Med Spa in Valley Village and Nu-Me Aesthetic and Anti-Aging Center in Woodland Hills.

Khadem caused patients to visit her clinics to receive cosmetic procedures, including Botox injections, facials and laser hair removal. Khadem knew these procedures were not covered by the patients’ health insurers. Khadem also knew that her employees informed some patients that, if they turned over their health insurance information to the Khadem-owned clinics, the patients could receive free or discounted cosmetic procedures pursuant to a “credit” they would earn.

Health insurance information from these patients was provided to the insurance biller for the clinics, knowing and intending that the information would be used to submit false and fraudulent claims to the health insurers for medical procedures that Khadem knew were either not actually provided to the patients or were not medically necessary.

Then, based on the amount that the health insurers paid on those false and fraudulent claims, Khadem and others would calculate an amount, which the co-conspirators referred to as a “credit,” that the patients could use to receive free or discounted cosmetic procedures from the clinics. Those patients would then come into the clinics to receive the free or discounted cosmetic procedures.

Khadem and her co-conspirators submitted claims, which included false and fraudulent claims for which those companies paid out at least $1,361,200.  Prosecutors estimate the amounts paid based on false and fraudulent claims submitted as part of the health care fraud conspiracy in which Khadem participated could be as much as $7,991,406.

Khadem failed to report this income on her income tax returns for 2013, 2014 and 2015. Khadem’s underreporting of her income for these three years caused a total tax loss of $453,451.

A June 27 sentencing hearing hearing has been scheduled, at which time she will face a statutory maximum sentence of 13 years in federal prison.

44 year old Gary Jizmejian, who lives in Santa Clarita, and who was a former senior investigator at the Anthem Special Investigations Unit, the anti-fraud unit within Anthem, previously pleaded guilty to using his cell phone to send text messages to co-defendants as part of a this commercial bribery scheme was also sentenced to 18 months in federal prison.

The indictment alleged that, in return for cash payments, Jizmejian assisted Khadem and others by providing them with confidential Anthem information that helped them submit fraudulent bills to Anthem. In September 2012, Jizmejian gave Khadem insurance billing codes – CPT Codes – that Jizmejian knew could be used to submit fraudulent claims to Anthem without Anthem detecting the fraudulent claims. Jizmejian gave Khadem the billing code for an allergy-related lab test and instructed her to submit to Anthem large numbers of bills with this CPT code. Khadem and other members of the conspiracy used this billing code to submit approximately $1 million in fraudulent claims to Anthem, according to the indictment.

The indictment further alleged that Jizmejian worked to prevent the insurance companies from detecting the fraud at the clinics, which included helping Khadem to avoid responding to inquiries from fraud investigators, diverting attention of other Anthem SIU investigators away from the clinics, and closing Anthem investigations into fraud that was being committed at the clinics.

In September 2015, based on confidential information obtained from Anthem, Jizmejian tipped Khadem off about a federal criminal investigation into the clinics, according to the indictment.

The remaining three defendants in this case each have pleaded guilty. Lucine Ilangezyan, 42, of North Hills, pleaded guilty to one count of conspiracy to commit health fraud, and was sentenced to 18 months in federal prison. Dr. Roberto Mariano, 63, of Rancho Cucamonga, a physician who helped operate the clinics, and Marina Sarkisyan, 52, of Panorama City, who was the office manager at the clinics, await sentencing.

Juan Suarez sustained a cumulative injury to his low back and neck through September 8, 1993 (ADJ365717) while employed by Haley Brothers insured by Unicare Insurance and a specific injury to his low back and neck on July 27, 1986 (ADJ3469175) while employed at T.M. Cobb Company insured by Liberty Mutual.

In a 1997 Stipulations with Request for Award, Liberty Mutual paid Unicare $25,000.00 in full satisfaction of its contribution issue to resolve any and all future claims for contribution. Unicare agreed to assume full and sole responsibility for all future payment of benefits

Unicare is now insolvent and its claims are administered by the California Insurance Guarantee Association (CIGA). CIGA took the position that Liberty Mutual was “other insurance” despite the wording of the Stipulation. Thus the issue submitted at a January 2020 trial was: “Is Liberty Mutual liable for the administration of this claim and possible reimbursement and contribution to the California Insurance Guarantee Association.”

The WCJ agreed with CIGA and found that Liberty Mutual is available “other insurance” and ordered that Liberty Mutual take over administration of applicant’s medical care and resolve reimbursement and contribution issues with CIGA.

But Liberty Mutual’s Petition for Reconsideration of this order was granted in the panel decision of Suarez v Haley Bros/TM Cobb et.al. (ADJ365717 – ADJ3469175) (Feb 2022)

In order to obtain reimbursement or a change of administrators, CIGA must show that Liberty Mutual is jointly and severally liable for medical treatment.

The panel discussed the Court of Appeal decision in California Ins. Guarantee Assn. v. Workers’ Comp. Appeals Bd. (Lopez) (2016) 245 Cal.App.4th 1021 (81 Cal.Comp.Cases 317), where a final award apportioning liability between insurers did not change the joint and several nature of defendants’ liability.

In Lopez, the insurers agreed, in a compromise and release agreement, that the insurers would apportion liability for the remaining liens according to proof and with rights to contribution and reimbursement between the two being reserved. The Lopez Court noted that the carriers understood their liability remained joint and several even after settlement and apportionment

However in this case, Unicare Insurance settled its contribution rights as part of the Stipulated Award, and, significantly, the award issued solely against Unicare. Applicant was a signatory to these stipulations, including the stipulation that only Unicare would be liable for benefits. Therefore, after the settlement, Liberty Mutual no longer had any liability for benefits to Mr. Lopez and he could only obtain medical treatment benefits from Unicare.

There cannot be joint and several liability where one party has no liability. Accordingly, the panel granted reconsideration and found that Liberty Mutual is not liable for applicant’s medical treatment and CIGA is not entitled to reimbursement from them.