Category: Daily News

The United States spends more on health care than any other country, with costs approaching 18% of the gross domestic product (GDP).

Overtreatment and low-value care cost the U.S. healthcare system between $75.7 and $101.2 billion annually. Despite the associated high cost, unnecessary or ineffective care appear to be on the rise.

A search of peer-reviewed and “gray” literature from January 2012 to May 2019 focused on the 6 waste domains previously identified by the Institute of Medicine and Berwick and Hackbarth: failure of care delivery.

Computations yielded the following estimated ranges of total annual cost of waste: failure of care delivery, $102.4 billion to $165.7 billion; failure of care coordination, $27.2 billion to $78.2 billion; overtreatment or low-value care, $75.7 billion to $101.2 billion; pricing failure, $230.7 billion to $240.5 billion; fraud and abuse, $58.5 billion to $83.9 billion; and administrative complexity, $265.6 billion.

One strategy to promote quality, value-based care is applying evidence-based medicine (EBM) to help guide treatment decisions. EBM integrates medical research with clinical expertise and patient values to support decision making based on the best available evidence.

How well does that work? Researchers attempted to answer that question in a study recently published in the journal PLOS, “Guideline adherence and lost workdays for acute low back pain in the California workers’ compensation system.”

In the U.S., state workers’ compensation (WC) systems have developed or adopted treatment guidelines to promote evidence-based care for occupational injuries. The most common occupational injury is back strain, and occupational stressors are thought to contribute to low back pain (LBP). The point of this new study was to quantify the influence of adherence to guideline-recommended interventions in the first week of treatment for an initial low back pain (LBP) injury on lost workdays.

In a retrospective cohort of California’s workers’ compensation claims data from May 2009 to May 2018, 41 diagnostic and treatment interventions were abstracted from the medical claims for workers with acute LBP injuries and compared with guideline recommendations. Lost workdays within 1-year post-injury were compared by guideline adherence. 59,656 workers met the study inclusion criteria.

The reviewers concluded that when workers received guideline-recommended interventions, they typically returned to work in fewer days. The majority of workers received at least one non-recommended intervention, demonstrating the need for adherence to guideline recommendations. Fewer lost workdays and improved quality care are outcomes that strongly benefit injured workers.

With that being said, the study disclosed in its Conflict of Interest Statement that authors Gaspar and Wizner are employed by MDGuidelines, which is the sole proprietor of ACOEM guidelines. Hegmann is Editor-in-Chief of the ACOEM guidelines.

Luis Beltran Witron claimed an injury to the bilateral shoulders, neck, back and chest on May 5, 2019 while employed as a laborer by Polymeric Technology Corporation.

On August 13, 2019, defendant sent a letter to applicant acknowledging his claim. Enclosed with the letter was a copy of the Complete MPN Notification in English and Spanish.

Defendant subsequently sent applicant a Notice of Acceptance of Claim on August 26, 2019. An MPN Notification in English and Spanish was enclosed again. The parties stipulated that the claim was accepted for the left shoulder and that Witron initially treated at Concentra in the MPN.

Applicant’s attorney filed an Application for Adjudication of Claim on September 21, 2020. On the same date, applicant’s attorney sent a letter requesting a change of PTP and nominated NMCI Medical Clinic.

On February 10, 2021, applicant’s attorney sent a letter to defendant stating “the applicant will commence treatment with NMCI as the carrier failed to provide the applicant with an MPN PTP per the previous demand.”

On the same date, defendant sent an email to applicant’s attorney stating: “The claim is accepted for the left shoulder. If your client is interested in receiving medical treatment for the left shoulder on an industrial basis, he can access the BHHC MPN and designate a treating physician.”

At an expedited hearing the applicant contends that he has the right to treat outside the MPN because defendant failed to comply with applicant’s demand letter for a change of treating doctor and a request to schedule the initial appointment per CCR Section 9767.5(g).

The WCJ found that there was a delay by defendant in responding to applicant’s request for a change of treating physician, but the delay did not constitute a neglect or refusal of medical treatment. Reconsideration of this finding was denied in the WCAB panel decision of Witron v Polymeric Technology Corporation (ADJ13620994 – June 2021)

The issue was whether defendant’s delay in responding to applicant’s September 21, 2020 request to treat with NMCI constituted a neglect or refusal to provide care.

Applicant was treating regularly in the MPN from August 2019 until January 2020. There is no evidence in the record of any treatment after January 2020. Applicant sent his request to treat with NMCI in September 2020. As acknowledged by the WCJ in her Report, there was a delay by defendant in responding to this request until February 2021. However, applicant did not provide evidence at trial of any treatment (or even efforts to obtain treatment) following his September 2020 request.

The 20-day time limit for a Medical Access Assistant (MAA) to schedule an appointment per AD Rule 9767.5(g) only applies where the MAA is scheduling an appointment with a specialist based on a referral, not to the scheduling of an initial appointment with a primary treating physician.

The record does not indicate that applicant was seeking an appointment with a specialist based on a referral; rather, it shows that he was requesting treatment generally. Moreover, as noted above, applicant did not request assistance from the MAA. Therefore,AD Rule 9767.5(g) does not apply to the facts in this case.

“Defendant’s delay in responding to applicant’s single September 21, 2020 letter asking to treat with NMCI is not substantial evidence of a neglect or refusal to provide treatment such that applicant may treat outside the MPN.”

The CEO of several Southern California-based medical imaging companies was found guilty by a federal jury today of running a scheme in which more than $250 million in claims were fraudulently submitted through the state workers’ compensation system for medical services procured through bribes and kickbacks to physicians and others.

40 year old Sam Sarkis Solakyan, who lives in Glendale, was found guilty of one count of conspiracy to commit honest services mail fraud and health care fraud, and 11 counts of honest services mail fraud.

Solakyan was the CEO of several medical-imaging companies, including the Glendale-based Vital Imaging Inc., and San Diego MRI Institute. Solakyan operated diagnostic imaging facilities throughout California, including the Bay Area, Los Angeles and Orange counties, and San Diego.

According to the evidence presented at the eight-day trial, from no later than mid-2013 to November 2016, Solakyan conspired with Steven Rigler, a Solana Beach-based chiropractor; Fermin Iglesias, the former CEO of MedEx Solutions, a patient-scheduling company; and others to perpetrate a scheme in which physicians were paid bribes and kickbacks in exchange for the referral of workers’ compensation patients. The compensation offered to the corrupt doctors consisted of either cash or referrals of new patients in what is known as a “cross-referral” scheme.

The conspirators obscured the true nature of their financial relationships in order to conceal the bribes and kickbacks, including by entering into various sham agreements such as contracts for “marketing,” “administrative services,” and “scheduling,” when in fact the money Solakyan paid amounted to volume-based, per- magnetic resonance imaging (MRI) scan bribes and kickbacks to induce physicians to refer and continue referring patients to Solakyan’s companies.

Solakyan’s recruiters required physicians to refer a minimum number of patients to receive “cross-referrals,” and those referrals stopped if the physicians failed to meet the minimum quota. Solakyan’s recruiters – Fermin Iglesias, 41 of Glendale, and Carlos Arguello, 39, of Bonita – were paid more than $8.6 million for obtaining MRI referrals, payments which were concealed from patients and health insurers.

Solakyan concealed his cash payments to Rigler for patient referrals by calling them “reports,” and in March 2015 he asked Rigler if Solakyan could “send my driver with your reports,” then stated, “I’ll have him contact you then I’ll just send him with your reports, buddy,” according to a September 2018 federal grand jury indictment.

In total, Solakyan submitted and caused to be submitted more than $250 million in claims for medical services procured through the payment of bribes and kickbacks.

Rigler pleaded guilty in November 2015 to one count of conspiracy to commit honest services mail fraud and was sentenced to six months in federal prison.

Iglesias pleaded guilty in December 2016 to conspiracy to commit honest services mail fraud and health care fraud and was sentenced in February 2019 to five years in federal prison.

Arguello pleaded guilty in August 2016 to conspiracy to commit honest services mail fraud and health care fraud and was sentenced in April 2019 to four years in federal prison.

United States District Judge Cynthia A. Bashant has scheduled an October 4 sentencing hearing, at which time Solakyan will face a statutory maximum sentence of 240 years in federal prison.

The FBI and the California Department of Insurance, Fraud Division, investigated this matter. Assistant United States Attorney Faraz R. Mohammadi of the Santa Ana Branch Office and Assistant United States Attorney Adam P. Schleifer of the Major Frauds Section are prosecuting this case.

GlaxoSmithKline Plc agreed to pay San Francisco based biotech Alector Inc. as much as $2.2 billion to develop therapies targeting diseases such as Parkinson’s and Alzheimer’s.

Neurodegenerative disease has been the subject of costly workers’ compensation claims in past years. The most notable of them was the NFL and contact sport related claims for concussion caused dementia.

The agreement comes weeks after the FDA approved the first new Alzheimer’s drug in almost two decades, Biogen Inc’s Aduhelm, reinvigorating the industry’s efforts to develop more treatments in a challenging therapy category.

The trategic global collaboration was formed for the development of two clinical-stage, potential first-in-class monoclonal antibodies (AL001 and AL101), which are targeting neurodegenerative disease.

AL001 is currently in a Phase 2 study in symptomatic frontotemporal dementia patients with a mutation in the C9orf72 gene and is planned to enter Phase 2 development for amyotrophic lateral sclerosis (ALS) in the second half of 2021.

Enrolment is currently underway for a pivotal Phase 3 trial for AL001 in people at risk for or with frontotemporal dementia due to a progranulin gene mutation (FTD-GRN).

AL101 is in a Phase 1a clinical trial and is designed to treat patients suffering from more prevalent neurodegenerative diseases, including Parkinson’s disease and Alzheimer’s disease.

Frontotemporal dementia is a rapidly progressing and severe form of dementia found most frequently in people less than 65 years old at the time of diagnosis. It affects 50,000 to 60,000 people in the United States and roughly 110,000 in the European Union, with potentially higher prevalence in Asia and Latin America.

There are currently no FDA-approved treatment options for frontotemporal dementia.

The therapies are part of an emerging field of research that tries to use the body’s own immune system to fight neurodegenerative diseases. In this case, scientists are seeking to increase levels of a protein in the brain called progranulin, which helps regulate the immune response and affects the survival of neurons.

Under the terms of the collaboration agreement, Alector will receive $700 million in upfront payments. In addition, Alector will be eligible to receive up to an additional $1.5 billion in clinical development, regulatory and commercial launch-related milestone payments.

Alector will lead the global clinical development of AL001 and AL101 through Phase 2 proof-of-concept. Thereafter, Alector and GSK will share development responsibilities for all late-stage clinical studies for AL001 and AL101 and all costs for global development will be divided between the two companies.

A federal jury has found four Los Angeles-area residents guilty of criminal charges for scheming to submit fraudulent loan applications seeking millions of dollars in Paycheck Protection Program (PPP) and Economic Injury Disaster Loan (EIDL) COVID-19 relief funds.

At the conclusion of an eight-day trial, the following defendants were found guilty on June 25:

– – Richard Ayvazyan, 42, of Encino;
– – Richard Ayvazyan’s wife, Marietta Terabelian, 37, of Encino;
– – Richard Ayvazyan’s brother, Artur Ayvazyan, 41, of Encino;
– – Vahe Dadyan, 41, of Glendale.

All four defendants were found guilty of one count of conspiracy to commit bank fraud and wire fraud, 11 counts of wire fraud, eight counts of bank fraud and one count of conspiracy to commit money laundering. Richard Ayvazyan also was found guilty of two counts of aggravated identity theft. Artur Ayvazyan also was found guilty of one count of aggravated identity theft. Vahe Dadyan also was found guilty of one count of money laundering.

The jury also found the defendants must forfeit bank accounts, jewelry, watches, gold coins, three residential properties and approximately $450,000 in cash.

The defendants used fake, stolen and synthetic identities to submit fraudulent applications for PPP and EIDL loans guaranteed by the Small Business Administration (SBA) under federal law.  In support of the fraudulent applications, the defendants often submitted false and fictitious documents to lenders and the SBA, including fake identity documents, tax documents and payroll records.

A September 13 sentencing hearing has been scheduled, and each defendant will face decades in federal prison.

Prior to the verdict, the following defendants pleaded guilty to criminal charges in this case:

– – Manuk Grigoryan, 46, of Sun Valley, pleaded guilty on June 7 to one count of bank fraud and one count of aggravated identity theft. Judge Wilson has scheduled a September 13 sentencing hearing, at which time Grigoryan will face a statutory maximum sentence of 32 years in federal prison.
– – Edvard Paronyan, 40, of Granada Hills, pleaded guilty on June 11 to one count of wire fraud. He will face a statutory maximum sentence of 20 years in federal prison at his August 30 sentencing hearing.
– – Tamara Dadyan, 39, of Encino, Artur Ayvazyan’s wife and Vahe Dadyan’s cousin, pleaded guilty on June 14 to one count of conspiracy to commit bank fraud and wire fraud, one count of aggravated identity theft and one count of conspiracy to commit money laundering. She will face up to 52 years in federal prison at her September 27 sentencing hearing.
– – Arman Hayrapetyan, 41, of Glendale, pleaded guilty on June 21, to one count of conspiracy to commit money laundering. He will face up to 20 years in federal prison at his sentencing hearing, which is scheduled for September 20.

On May 17, 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Department of Justice in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud.