Category: Daily News

McKinsey & Company Inc., a global management consulting firm based in New York, has agreed to pay $650 million to resolve a criminal and civil investigation into the firm’s consulting work with opioids manufacturer Purdue Pharma L.P. The resolution pertains to McKinsey’s advice to Purdue concerning the sales and marketing of Purdue’s extended-release opioid drug, OxyContin, including a 2013 engagement in which McKinsey advised on steps to “turbocharge” sales of OxyContin.

This resolution marks the first time a management consulting firm has been held criminally responsible for advice resulting in the commission of a crime by a client and reflects the Justice Department’s ongoing efforts to hold actors accountable for their roles in the opioid crisis. The resolution is also the largest civil recovery for such conduct.

Additionally, a former McKinsey senior partner who worked on Purdue matters has been charged with obstruction of justice in federal court in Abingdon, Virginia. Martin E. Elling, 60, a U.S. citizen currently residing in Bangkok, Thailand, has been charged with one count of knowingly destroying records, documents and tangible objects with the intent to impede, obstruct and influence the investigation and proper administration of a matter within the jurisdiction of the Justice Department. Elling has agreed to plead guilty and is expected to appear in federal court in Abingdon to enter his plea and for sentencing at later dates.

As part of the government’s resolution with McKinsey, the company has entered into a five-year deferred prosecution agreement (DPA) in connection with a criminal Information filed in U.S. District Court for the Western District of Virginia against McKinsey’s U.S. subsidiary (McKinsey & Company Inc. United States. The information charges McKinsey U.S. with one felony count of knowingly destroying records, documents and tangible objects with the intent to impede, obstruct, and influence the investigation and proper administration of a matter within the jurisdiction of the Justice Department; and one misdemeanor count of knowingly and intentionally conspiring with Purdue and others to aid and abet the misbranding of prescription drugs, held for sale after shipment in interstate commerce, without valid prescriptions.

McKinsey has agreed to pay a penalty of over $231 million, a forfeiture amount of over $93 million (reflecting all money it was paid by Purdue from 2004 to 2019) and a payment of $2 million to the Virginia Medicaid Fraud Control Unit to resolve the criminal allegations. McKinsey also has entered into a civil settlement agreement in which it will pay over $323 million to resolve its liability under the False Claims Act for allegedly providing advice to Purdue Pharma L.P. that caused the submission of false and fraudulent claims to federal healthcare programs for medically unnecessary prescriptions of OxyContin, as well as allegedly failing to disclose to the U.S. Food and Drug Administration (FDA) conflicts of interest arising from McKinsey US’s concurrent work for Purdue and the FDA. This brings the total payments under the global resolution to $650 million.

Today’s filing includes a 71-page Agreed Statement of Facts, which provides a detailed account of McKinsey’s work with Purdue relating to OxyContin. As part of the resolution, McKinsey has agreed to implement a significant compliance program, including a system of policies and procedures designed to identify and assess high-risk client engagements. As part of this compliance program, McKinsey will implement new document retention procedures and training for all partners, officers and employees who provide or implement advice to clients. This compliance program is in addition to the provisions negotiated between McKinsey and the Department in a concurrent resolution with McKinsey & Company Africa that was announced on Thursday, Dec. 5.

McKinsey has also agreed that it will not do any work related to the marketing, sale, promotion or distribution of controlled substances during the five-year term of the DPA. The resolution requires McKinsey’s Managing Partner to certify, on an annual basis, the firm’s compliance with its obligations under the DPA and federal law.

“For the first time in history, the Justice Department is holding a management consulting firm and one of its senior executives criminally responsible for the sales and marketing advice it gave resulting in the commission of crime by a client,” said U.S. Attorney Christopher R. Kavanaugh for the Western District of Virginia. “This ground-breaking resolution demonstrates the Justice Department’s ongoing commitment to hold accountable those companies and individuals who profited from our Nation’s opioid crisis.”

According to the California Medical Board records, Kevin Tien Do M.D.was born in Saigon, Vietnam and came to the United States in 1982, when he was 16 years old. He graduated from USC Medical School in 1991 and completed his residency in Physical Medicine and Rehabilitation at UCLA on June 30, 1995.

After about eight years following completion of his UCLA Residency, Dr. Do was convicted, on on August 15, 2003, following his plea of guilty, of violating Title 18, United States Code, sections 2 and 1347 (aiding and abetting health care fraud) in the United States District Court for the Eastern District of California, Case Number 2:02CR00338-01, entitled The United States of America v. Kevin Tien Do,

He was sentenced to 12 months in federal prison, commencing October 15, 2003, and ordered to pay an assessment of $100 and restitution of $366,031.24

From April of 1997 through December 31, 1998, he aided and abetted a billing company named “Medi-Syn” in a scheme to defraud Medi-Cal. He permitted Medi-Syn to use hisr Medi-Cal provider number to submit claims requesting payment for services purportedly rendered by him which he did not provide and which were never provided by anyone else. Do Medi-Syn opened a joint account under the name “Premier Health Providers Network” into which the Medi-Cal checks were deposited. Do provided 80 percent of these funds to Medi-Syn and kept 20 percent for himself. As a result of the scheme, Medi-Cal was defrauded out of $366,031.24.

In order to obtain leniency in the 2003 case against him, Do agreed to act as an undercover operative and to cooperate with the FBI in its investigation of Edgemont Hospital a psychiatric hospital in Los Angeles, and in a third investigation regarding podiatrist Gary Feldman and the West Pico Medical Clinic where Do worked. He participated in 43 undercover operations from December of 1998 through May of 1999. He also provided additional assistance in 2000. Respondent’s cooperation led to the conviction of Dr. Feldman.

Do began serving his federal prison sentence in the 2003 case on October 15, 2003, and was officially released from custody on October 13, 2004. He remained on federal probation until October of 2007.By 2004, Do had paid in full the $366,03 1.24 restitution ordered by the criminal court.

The Physician’s and Surgeon’ s Certificate No. G 76640 issued to Kevin Tien Do was revoked in late 2005 after an Accusation was filed against him by the California Medical Board. However, the revocation was stayed and he was placed on probation for ten years under several terms and conditions.

On October 26, 2016 the Medical Board concluded that Dr. Do had “completed probation in Case No. 06-2002-136106, is entitled to full restoration of the Physician’s and Surgeon’s Certificate.” It was therefore ordered that his medical license “be fully restored to renewed/current status and free of probation requirements, effective September 22, 2016.”

Now, more than two decades after his 2003 conviction,,Kevin Tien Do, M.D., who is now 59 years old and lives in Pasadena, worked for an Inland Empire medical company, and has now agreed to plead guilty – in new case – to conspiring to defraud California’s workers’ compensation fund of millions of dollars by continuing to work on workers’ compensation matters after being suspended due to a prior health care fraud conviction. He agreed to plead guilty to one count of conspiracy to commit mail fraud and one count of subscribing to a false tax return. .

Beginning in 2016, Do began to work for Liberty Medical Group Inc., a Rancho Cucamonga-based medical company, for which he would draft SIBTF-related medical reports that Liberty would then bill to the California SIBTF program. In October 2018, California suspended Do from participating in California’s workers’ compensation program, which included the SIBTF, because he had previously been convicted of federal health care fraud in 2003. Despite his suspension, Do continued to work for Liberty on SIBTF-related workers’ compensation matters.

To conceal that Do was unlawfully continuing to participate in the workers’ compensation SIBTF program after his suspension, Liberty’s owner came up with a plan. That plan was that Do would continue to author the SIBTF-related reports, which Liberty would then continue to mail to the California SIBTF for payment. rather than listing Do’s name on the billing forms and the attached medical reports mailed to the California SIBTF, like they had had done before Do’s suspension, Liberty instead fraudulently listed other doctors’ names on the billing forms and attached medical reports, even though Do had drafted and compiled the reports.

Do admitted that Liberty was paid more than $3 million by California SIBTF for such reports that Liberty mailed to the California SIBTF for payment after Do’s October 2018 suspension.

Do’s plea agreement also details that Liberty’s owner edited Do’s medical reports, even though that co-conspirator was not a doctor or other licensed medical professional.

Under California law, shareholders/owners of a medical corporation must be licensed in the practice of medicine or other related medical fields, such as a psychologist, registered nurse, or licensed physician assistant. In his plea agreement, Do admitted that real owner of Liberty and Do’s co-conspirator was another person who was not a doctor or other medical professional, but rather, was a California attorney then employed as a prosecutor for the Orange County District Attorney’s Office, and who later became an Orange County Superior Court judge during the conspiracy.

According to the Orange County Register, the Orange County Superior Court Judge named in the plea agreement is Israel Claustro, Claustro has served as a Senior Deputy District Attorney and an Assistant Head of Court at the Orange County District Attorney’s Office since 2020, where he has served in several roles since 2002. He served as a Law Clerk at the Orange County District Attorney’s Office from 2001 to 2002. Claustro earned a Juris Doctor degree from the Western State College of Law.

And MSN reports that the plea agreement with Do refers to the judge only as “co-conspirator #1,” but an investigation by the Southern California News Group has identified the jurist as Israel Claustro, who was appointed to the bench in 2022..

A reporter’s request for comment from Claustro was relayed to him through Orange County Superior Court officials. In response, court spokesperson Kostas Kalaitzidis said, “The court cannot discuss any case pending before any court, as ethical rules prohibit any such discussion.”

Officials with the U.S. Attorney’s Office declined to comment. Additionally, the state Commission on Judicial Performance would not disclose whether it is investigating Claustro,

That true owner who was Do’s co-conspirator not only was a signatory on Liberty’s bank account, but also issued and signed Liberty’s checks to Do and others. The plea agreement specifies that much of the more than $3 million that the SIBTF paid Liberty during the years following Do’s suspension then flowed to another company controlled by Liberty’s owner and his wife, which totaled to more than $1.5 million.

Do also admitted that he failed to accurately report to the IRS all the money he had been paid by Liberty. Do admitted that on his 2021 tax return, he failed to report approximately $66,227 of the income that Liberty paid him.

Once Do enters his guilty plea, he will face a statutory maximum sentence of 20 years in federal prison for the mail fraud count and up to three years in federal prison for the tax fraud count.

The FBI, IRS Criminal Investigation, and the California Department of Insurance are investigating this matter. Assistant United States Attorneys Charles E. Pell of the Orange County Office and Ryan J. Waters of the Asset Forfeiture and Recovery Section are prosecuting the case.

CEO of one of California’s largest vocational return to work counseling centers, Hazel Ortega, 53, of La Habra, appeared in court after being charged with 23 felony counts including insurance fraud, theft, and forgery.

A Department of Insurance investigation found Ortega allegedly defrauded at least four insurance companies by forging documents on behalf of unknowing injured workers.

The Department’s investigation began after receiving multiple referrals from insurance companies alleging Ortega, owner of Ortega Counseling Center, a motivational speaker, and author of “From Bounced Checks to Private Jets,” was referring injured workers to schools which were not approved and not eligible to receive the voucher funds through the Supplemental Job Displacement Benefit (SJDB) program, which provides an allowance of $6,000 to $10,000 for educational retraining or skill enhancement for qualifying injured workers to provide them a marketable skill to re-enter the workforce after a workplace injury. This benefit is provided as a voucher that can be used at state-approved or accredited schools.

The Department of Insurance is urging any injured workers who believe they may have been victimized by Ortega or the Ortega Counseling Center to contact Detective Kuhlman or Sergeant Jimenez at the Department of Insurance by phone at (909) 919-2200.

Through the course of the investigation, detectives located and interviewed injured workers who had SJDB and Vocational Return to Work counseling invoices submitted to insurance companies by Ortega and discovered Ortega was pressuring and coercing injured workers to attend these unapproved schools and not providing them with any other additional choices.

Ortega also submitted forms to insurance companies on the injured workers’ behalf which they had not seen or reviewed. Multiple injured workers were shown documents submitted on their behalf which they had never seen and stated their signature had been forged. In one instance, detectives interviewed an injured worker for whom Ortega submitted an invoice to an insurance company alleging she provided nearly five hours of counseling services. When the injured worker was contacted, they confirmed they had never heard of Ortega nor met with her for counseling services.

Ortega was arraigned and charged previously in Los Angeles County for her participation in another nearly $1 million-dollar insurance fraud scheme. It is alleged Ortega and other vocational counselors received nearly $500,000 in illegal kick back payments for referring students to a fraudulent school in the Los Angeles area.

This case is being prosecuted by the Los Angeles County District Attorney’s Office.

Kaiser Permanente’s hospital-at-home program (HaH) has grown significantly in the past year, nearly quadrupling its capacity. The program’s average daily census has increased from 22.5 to 80.6 across all regions. Some of the areas where Kaiser Permanente offers Care at Home services include: Northern California, Southern California, Georgia, Mid-Atlantic states, Northwest, and Washington state.

Kaiser Permanente has been developing infrastructure to support the program’s growth, and building confidence in the program among patients and staff. The program is also encouraging more admissions from the emergency department and inpatients.

Research from Kaiser Permanente published last year reveals that its hospital-at-home program was scaled successfully, creating hospital capacity; however, the program’s care quality as it was being scaled could not be determined. Published in The American Journal of Managed Care, the study aimed to assess the feasibility of scaling a hospital-at-home program within an integrated healthcare delivery system.

Such programs are well established in England, Canada, Israel, and other countries where payment policies encourage – or at least do not discourage – the provision of health care services in less costly venues.

In Victoria, Australia, for example, every metropolitan and regional hospital has a hospital at home program, and roughly 6 percent of all hospital bed-days are provided that way. For specific conditions, the use of at-home care is significantly greater: nearly 60 percent of all patients with deep venous thrombosis (DVT) were treated at home in 2008, as were 25 percent of all hospital patients admitted for acute cellulitis.

A 2018 study by the Cincinnati Veterans Affairs Medical Center examined hospital readmissions, costs, mortality, and nursing home admissions of veterans who received Hospital-in-Home (HIH) services. Average per person costs were $7,792 for HIH services and $10,960 for traditional inpatient care (P<0.001). HIH veterans were less likely to use a nursing home within 30 days of discharge (3.1%) than non-HIH veterans (12.6%) (P<0.001). Thirty-day readmission rates and mortality were not statistically different between HIH and non-HIH veterans.

And a recent article in Forbes said that Since 2020, hospital-at-home programs have gained substantial traction as a patient-centered alternative to hospital care. Although available in the U.S. since the 1990s, these programs – delivering acute medical care in a home setting through care coordination, telehealth and remote patient monitoring (RPM) – are on the rise.

Forbes reports that with the Centers for Medicare & Medicaid Services’ waiver, over 350 hospitals across the U.S. have implemented or are planning to launch HaH programs. While high initial costs and implementation challenges remain, research shows that HaH care is 32% less expensive than inpatient care. As hospitals increasingly adopt these programs, evidence continues to support HaH as an affordable, viable model for acute care delivery.

Traditional hospital care requires substantial resources to maintain inpatient beds, utilities and facility management. Operating a hospital involves constant operational costs – from electricity and water to the cleaning and upkeep of facilities. HaH programs alleviate much of this financial burden by shifting care to the home setting and minimizing the need for expensive infrastructure.

The Leapfrog Hospital Safety Grade is the only hospital ratings program focused exclusively on preventing medical errors and patient harm. It is fully transparent, free to the public and updated biannually in the fall and spring.

The Group released its fall 2024 Hospital Safety Grade, evaluating nearly 3,000 hospitals on their ability to prevent medical errors, accidents and infections.

The Hospital Safety Grade uses up to 30 performance measures to assign an “A,” “B,” “C,” “D” or “F” to individual hospitals and uses a public, peer-reviewed methodology, calculated by top patient safety experts under the guidance of a National Expert Panel. It is transparent and free to the public. Leapfrog analysts use the data to observe national performance trends and state rankings.

For fall 2024, Utah ranks number one with the highest percentage of “A” hospitals for the third cycle in a row, followed by Virginia and Connecticut in second and third. The latest Grades also show hospitals are making progress in patient safety across several performance measures including notable improvements in healthcare-associated infections, hand hygiene and medication safety.

“Preventable deaths and harm in hospitals have been a major policy concern for decades. So, it is good news that Leapfrog’s latest Safety Grades reveal that hospitals across the country are making notable gains in patient safety, saving countless lives,” stated Leah Binder, President and CEO of The Leapfrog Group. “Next, we need hospitals to accelerate this progress – because no one should have to die from a preventable error in a hospital.”

Key findings on state performance on the fall 2024 Leapfrog Hospital Safety Grade include:

– – The states with the highest percentages of “A” hospitals are Utah, Virginia, Connecticut, North Carolina, New Jersey, California, Rhode Island, Idaho, Pennsylvania, Colorado and South Carolina.
– – Utah ranks #1 in percentage of “A” hospitals for the third Safety Grade cycle in a row.
– – California ranks in the top 10 for the first time since fall 2014.
– – There were no “A” hospitals in Iowa, North Dakota, South Dakota or Vermont.

Regrettably, Pacifica Hospital of the Valley in Sun Valley California received a grade of “F” and seventeen California hospitals received a grade of “D.” Pacifica Hosptial was rated “D” in fall of 2021, and fell to “F” in sprint 2022 and has remained at “F” ever since.

Detailed hospital performance information, including patient experience and safety measures, as well as grades for individual hospitals searchable by states and localities is available at HospitalSafetyGrade.org.