Category: Daily News

One of the largest hospital systems in the nation and two of its doctors will pay $37.5 million to resolve violations of the False Claims Act and the California False Claims Act. The settlement – which resolved two cases – is a joint resolution with the U.S. Department of Justice and the California Department of Justice.

The United States and California entered into a settlement agreement with the Prime Healthcare Services system; Prime’s founder and Chief Executive Officer, Dr. Prem Reddy; and interventional cardiologist Dr. Siva Arunasalam to resolve alleged violations of the False Claims Act and the California False Claims Act based on kickbacks paid by Prime to Arunasalam for patient referrals.

Prime includes the Ontario-based Prime Healthcare Services Inc., Prime Healthcare Foundation Inc., Prime Healthcare Management Inc., High Desert Heart Vascular Institute (HDHVI), and Desert Valley Hospital Inc.

Under the settlement agreement, Arunasalam will pay $2 million. Reddy has already paid $1,775,000, and Prime has paid $33,725,000. The United States will receive $35,463,057 of the settlement proceeds, and California will receive $2,036,943.

In 2018, Prime and Reddy paid $65 million to settle unrelated allegations of false claims and overbilling.

The settlement resolves allegations that:

– – Prime paid kickbacks when it overpaid to purchase Arunasalam’s physician practice and surgery center because the company wanted Arunasalam to refer patients to its Desert Valley Hospital in Victorville. The purchase price, which was substantially negotiated by Reddy, exceeded fair market value and was not commercially reasonable. Prime also knowingly overcompensated the doctor when HDHVI entered into an employment agreement with him that was based on the volume and value of his patient referrals to Desert Valley Hospital;
– – For approximately two years between 2015 and 2017, HDHVI and Arunasalam used Arunasalam’s billing number to bill Medicare and Medi-Cal for services that were provided by Dr. George Ponce, even though they knew Ponce’s Medicare and Medi-Cal billing privileges had been revoked, and that billing Ponce’s services under Arunasalam’s billing number was improper; and
– – Certain Prime hospitals billed Medi-Cal, the Federal Employees Health Benefits Program, and the U.S. Department of Labor’s Office of Workers’ Compensation Programs for false claims based on inflated invoices for implantable medical hardware. Arunasalam was not implicated in this conduct.

In connection with the settlement, Prime and Reddy entered into a five-year Corporate Integrity Agreement (CIA) with the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG). The CIA requires, among other things, that Prime maintain a compliance program and hire an Independent Review Organization to review arrangements entered into by or on behalf of its subsidiaries and affiliates.

The civil settlement includes the resolution of claims brought under the qui tam, or whistleblower, provisions of the False Claims Act in two lawsuits filed in federal court in Los Angeles. One suit was filed by Martin Mansukhani, a former Prime executive. The second suit was filed by Marsha Arnold and Joseph Hill, who were formerly employed in the billing office at Shasta Regional Medical Center, a Prime hospital in Redding, California.

Under the qui tam provisions of the False Claims Act, a private party can file an action on behalf of the United States and receive a portion of any recovery. Although the United States did not intervene in these cases, it continued to investigate the whistleblowers’ allegations and helped to negotiate the settlement announced today. Mr. Mansukhani will receive $9,929,656 as his share of the federal government’s recovery.

Loews Hollywood Hotel, LLC employed Jessica Ferra as a bartender. Loews paid Ferra hourly wages as well as quarterly nondiscretionary incentive payments.

For the days when she had to work during lunch or a rest break, her employer paid Ferra only the hourly wage and did not include a percentage of the quarterly incentive.

Ferra filed a class action suit against Loews. Ferra alleged that Loews, by omitting nondiscretionary incentive payments from its calculation of premium pay, failed to pay her for noncompliant meal or rest breaks in accordance with her “regular rate of compensation” as required by Labor Code section 226.7(c).

The trial court granted summary adjudication for Loews on the ground that calculating premium pay according to an employee’s base hourly rate is proper under Labor Code section 226.7(c). The court agreed with Loews that “regular rate of compensation” in section 226.7(c) is “not interchangeable” with the term “regular rate of pay” under section 510(a), which governs overtime pay.

The Court of Appeal affirmed, holding that “regular rate of compensation” in section 226.7(c) and “regular rate of pay” in section 510(a) are “not synonymous, and the premium for missed meal and rest periods is the employee’s base hourly wage.”

The California Supreme Court reversed in the case of Ferra v Loews Hollywood Hotel, LLC.

The question is what the Legislature meant when it used the phrase “regular rate of compensation” in section 226.7(c). Neither the Labor Code nor Wage Order No. 5-2001 defines the term, and the words by themselves may reasonably be construed to mean either hourly wages, as Loews contends, or hourly wages plus nondiscretionary payments, as Ferra contends.

After review of the legislative history and case law, The Supreme Court held that the term “regular rate of compensation” in section 226.7(c) has the same meaning as “regular rate of pay” in section 510(a) and encompasses not only hourly wages but all nondiscretionary payments for work performed by the employee.

This interpretation of section 226.7(c) comports with the remedial purpose of the Labor Code and wage orders and with our general guidance that the “state’s labor laws are to be liberally construed in favor of worker protection.”

It also rejected Loews’s request that the decision be prospectively applied. The decision shall have retroactive effect.

In 2007, Purdue Pharma paid out one of the largest fines ever levied against a pharmaceutical firm for mislabeling of its product OxyContin, and three executives were found guilty of criminal charges. The company is seen by many as the origination of what became the opioid crisis.

After becoming the target of multiple civil actions across the states, Purdue Pharma, is seeking Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court in the Southern District of New York.

Nine states have yet to agree to the Purdue Pharma bankruptcy plan. They include Connecticut, where the company is headquartered, as well as California, Delaware, Maryland, New Hampshire, Oregon, Rhode Island, Vermont and Washington. The District of Columbia also hasn’t agreed to the deal. They seek further liability from Purdue’s owners. Specifically, the states say individual members of the Sackler family directed marketing that misled the doctors who wrote OxyContin prescriptions and the patients given the addictive painkiller recklessly.

Courthouse News reports that Connecticut Attorney General William Tong had harsh words Friday when attorneys representing the family who owns the bankrupt OxyContin maker Purdue Pharma, threatened a demand for sanctions against four states and the District of Columbia.

Tong said the Sackler’s attorneys sent an email the previous day with a motion for sanctions, complete with about 165 pages of exhibits, against Connecticut, California, Maryland, Rhode Island and the District of Columbia.

In the draft motion, the Sackler family’s attorneys said they sought the sanctions, including fees and reprimands, because the states made allegations that lacked evidence.

One example quoted in the filing is that Connecticut ignored the Sacklers’ demand that it produce documents to back up its allegation that the family engaged in “Knowing Participation in Deception.”

“There is no evidence that Beverly, David, Jonathan or Richard Sackler had any involvement in the drafting or approval of the content of marketing material or what sales representatives said, were authorized to say or prohibited from saying during the Relevant Period,” the draft motion states. Attorneys for the Sackler family wrote that they were serving the draft 21 days before they intended to file it to give the states an opportunity to back up their assertions.

Tong said the Sackler family attorneys withdrew the motion Friday morning “after they got tremendous blowback from a lot of different parties” for the move. In a sharp series of comments, Tong described the withdrawn proposal as a threat against his state, “an organized crime family intimidation tactic” and “colossally idiotic.”

Tong said he made the allegations at issue in a complaint filed more than two years ago, and the last-minute filing was an attempt to pressure the state to accept a settlement proposal. “The Sacklers are trying to use the company’s bankruptcy to shield themselves from liability and from paying what they ought to pay for their role in causing and fueling the opioid crisis,” Tong said.

NPR-KCUR in Kansas City reports that Pfizer Inc. and two other companies have agreed to pay $345 million to resolve long-running litigation over EpiPen price hikes. In 2007 an EpiPen package cost about $100. Today, it costs more than $650 without pharmacy coupons or manufacturer discounts.

EpiPens are auto-injectable devices that deliver the drug epinephrine, which is used to treat life-threatening allergic reactions known as anaphylaxis. Anaphylaxis is most commonly caused by food allergies but can also be caused by insect bites, medications and other substances.

The litigation dates to 2016, when numerous class action lawsuits were filed against Pfizer, Mylan and other defendants alleging they engaged in anticompetitive conduct in connection with their marketing of the EpiPen.

The lawsuits were transferred to federal court in Kansas City, Kansas, because of its geographical centrality. Trial was scheduled to begin this Sept. 7, but if Crabtree approves the settlement, Pfizer and the two other companies proposing to settle – Meridian Medical Technologies Inc. and King Pharmaceuticals Inc. – will be off the hook.

Multiple law firms have been involved in the complex litigation, which featured the production of over 11 million pages of documents and 158 depositions, according to court documents.

In documents filed in federal court in Kansas City, Kansas, the companies asked the court to grant preliminary approval to the settlement, which would end the litigation against the three companies.

The proposed settlement comes just three weeks after U.S. District Judge Daniel Crabtree granted summary judgment to another defendant, Mylan, on the plaintiffs’ racketeering claims and some antitrust claims. But he allowed other antitrust claims against Mylan to proceed to trial.

A Pfizer spokesperson said in an email that the company “denies any wrongdoing and continues to believe its actions were appropriate.”

“This resolution reflects a desire by the Company to avoid the distraction of continued litigation and focus on breakthroughs that change patients’ lives,” the spokesperson said.

Rex Sharp, a Prairie Village lawyer representing the plaintiffs, said in an email that his clients were pleased that Pfizer had agreed to the settlement while noting it still requires court approval.

He said the plaintiffs looked forward to trying the remaining claims against Mylan before a jury. Mylan owns the rights to the EpiPen brand, but the devices are manufactured by Pfizer.

A man who is unable to move or speak can now generate words and sentences on a computer using only his thoughts.

The ability comes from an experimental implanted device that decodes signals in the man’s brain that once controlled his vocal tract, as researchers reported Wednesday in The New England Journal of Medicine.

The man is currently limited to a vocabulary of just 50 words and communicates at a rate of about 15 words per minute, which is much slower than natural speech.

“This tells us that it’s possible,” says Edward Chang, a neurosurgeon at the University of California, San Francisco. “I think there’s a huge runway to make this better over time.”

A device that allowed people who can’t speak to communicate using brain circuits previously used for speech would be “more natural, and hopefully effortless compared to current assistive devices,” says Chethan Pandarinath, an assistant professor in the Department of Biomedical Engineering at Emory University and Georgia Tech.

Currently, people with paralysis who have lost the ability to speak usually rely on devices that use eye or head movements to spell out words one letter at a time. Some use a device that allows them to control a computer cursor with thoughts.

Chang’s team wanted to find a better solution for the man, identified only as BRAVO1 to protect his privacy. The name refers to his status as the first patient in a study called BRAVO, or Brain-Computer Interface Restoration of Arm and Voice.

BRAVO1, who is in his late 30s, has been paralyzed and unable to speak since he had a stroke 15 years ago, Chang says.

“The stroke left him nearly completely paralyzed in his arms and legs but also in the muscles of his vocal tract,” Chang says. But the areas of the brain that once issued speech commands are intact.

“We didn’t know if the speech commands in the brain would still work after 15 years,” he says. “And even if we could revive those dormant brain signals for speech, could we actually translate those into full words?”

To find out, the team implanted sensors on the surface of the man’s brain. Then it had a computer study the patterns of electrical activity produced when he attempted to speak 50 different words. The process took months.

Once BRAVO1 could reliably generate words on a computer screen, the team began having him form sentences. To help improve accuracy, the team added a program that analyzed the context of each word as it was added.

The system is a bit like the texting software on most smartphones. “So, for example, if one word is just not decoded correctly, this autocorrect function can correct it,” Chang says.

After months of adjustments to the system, the man was able to generate a word reliably every four seconds, or roughly 15 words per minute.

A device able to decode words in the brain could eventually help thousands of people who’ve had a stroke or a traumatic brain injury, says Krishna Shenoy, a professor in the School of Engineering at Stanford University.

The ability to recognize even 50 words in the brain is a huge achievement, Shenoy says. “But I think that’s just the tip of the iceberg. I think that could easily become 500 or 5,000 words.”