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CDI Arrests So. Cal. Podiatrist for Comp Fraud

Licensed podiatrist, Schlomo Schmuel,DPM, 53, of Sherman Oaks, self-surrendered to California Department of Insurance detectives on two felony counts of fraud after allegedly inflating bills and billing for services not rendered or not medically necessary.

The resulting loss to an insurer totaled more than $360,000.

Schmuel operated two businesses, Innovative Orthopedic Solutions and Diamond Orthopedic Services.

While running these two businesses, Schmuel allegedly billed for a hot/cold water unit, also known as a Vital Wrap System, using two combined Healthcare Common Procedure Coding Systems (HCPCS) codes.

The hot/cold unit, used to reduce pain and swelling after undergoing surgery, is a single component and requires only one HCPCS code. By using the two different codes, Schmuel allegedly inflated the invoices and billed for services not rendered.

Department investigators allege Schmuel was also involved in an unlawful kickback scheme where he paid to have the hot/cold water unit prescribed to injured workers, despite it not being medically necessary.

Schmuel allegedly paid a “marketer” $100 for each unit that was prescribed by another medical provider who treated the injured workers with the unit provided by Schmuel.

Schmuel was booked into the Clara Shortridge Foltz Criminal Justice Center.

“This medical professional allegedly used his position of trust to have unneeded medical treatment prescribed to patients in order to scam hundreds of thousands from insurers,” said Insurance Commissioner Ricardo Lara. “My department will continue to investigate fraud and work with our law enforcement partners to ensure California consumers and insurers are protected.”

The Los Angeles County District Attorney’s Office is prosecuting this case.

UCLA Reports on Emerging Transportation Injury Risks

The CDC reports that millions of workers drive or ride in a vehicle as part of their jobs, and motor vehicle crashes are the leading cause of work-related deaths in the United States. All workers are at risk of crashes, whether they drive light or heavy vehicles, or whether driving is a main or incidental job duty. And, the risk of industrial transportation related injury will likely increase according to a new UCLA study of an emerging urban transportation phenomena.

West Los Angeles is the epicenter of the electric scooter phenomenon — Santa Monica was one of the first U.S. cities in which the scooters were widely used — but the vehicles are now available in more than 60 cities nationwide and about a half dozen locations outside of the U.S.

UCLA researchers reporting in the JAMA Network, have found that people involved in electric scooter accidents are sometimes injured badly enough — from fractures, dislocated joints and head injuries — to require treatment in an emergency department.

The researchers examined data from 249 people who were treated at the emergency departments of UCLA Medical Center, Santa Monica, and Ronald Reagan UCLA Medical Center between Sept. 1, 2017, and Aug. 31, 2018. The study found that about one-third of them arrived by ambulance, an indication of the severity of their injuries.

There are thousands of riders now using these scooters, so it’s more important than ever to understand their impact on public health,” said Dr. Tarak Trivedi, the study’s lead author, an emergency physician and scholar in the National Clinician Scholars Program at the David Geffen School of Medicine at UCLA.

The research, published Jan. 25 in JAMA Network Open, is the first published study on injuries caused by electric scooters. It reports that the most common mechanisms of injury among scooter riders were falls (80 percent), collisions with objects (11 percent), or being struck by a moving vehicle such as a car, bicycle or other scooter (9 percent).

E-scooters can reach speeds of about 15 miles per hour, and it has become common to see them zipping along streets and sidewalks — even though they are intended to be used on streets only — often dodging pedestrians and motorists. Unused scooters are frequently left at the edge of curbs, but they sometimes are abandoned in places where they obstruct sidewalks or block building entrances.

Cities have adopted a hodgepodge of responses to the safety issues posed by the new phenomenon. For example, in August 2018, Santa Monica began a public safety campaign with Bird and Lime, two of the leading e-scooter suppliers. A month later, the city launched a pilot program intended to develop administrative regulations on shared scooters and bikes. (Santa Monica already has a longstanding rule prohibiting bikes and electric devices from sidewalks.)

The authors wrote that the Segway, a two-wheeled personal transporter that was introduced in the early 2000s, and a precursor of the scooters, also carried a serious risk for orthopedic and neurologic injuries.

So. Cal. Bio Lab Resolves Fraud Claims for $2M

GenomeDx Biosciences Corp. has agreed to pay $1.99 million to resolve allegations that it violated the False Claims Act, 31 U.S.C. §§ 3729 et seq., by submitting false claims to Medicare for its “Decipher®” post-operative genetic test for prostate cancer patients. GenomeDx is a genomic testing company with operations based in San Diego and headquarters in Vancouver, British Columbia.

The United States alleged that GenomeDx submitted claims to Medicare between September 2015 and June 2017 for the Decipher test that were not medically reasonable and necessary because the prostate cancer patients did not have risk factors necessitating the test, namely pathological stage T2 disease with a positive surgical margin, pathological stage T3 disease, or rising Prostate-Specific Antigen (“PSA”) levels after an initial PSA nadir.

“The Department of Justice is committed to ensuring that Medicare patients only receive laboratory testing that is reasonable and necessary for the individual patient,” said Assistant Attorney General Joseph A. Hunt.  “Medically unnecessary and unproven testing increases costs for federal health care programs and is not in the interest of patients.”

“As this settlement demonstrates, we are committed to protecting the integrity of the Medicare program and will hold health care providers accountable under the False Claims Act when they engage in improper billing,” said Robert S. Brewer, Jr., United States Attorney for the Southern District of California. “This settlement is also another example of our commitment to vigorously investigate cases brought to our attention by whistleblowers. We commend the two employees of GenomeDx who had the courage to come forward and work with investigators.”

“Lab tests and other medical services should only be conducted or provided when medically necessary,” said Christian J. Schrank, Special Agent in Charge for the Office of Inspector General of the U.S. Department of Health and Human Services.  “Whistleblowers play a critical role in keeping entities honest and accountable, and are encouraged to report suspected waste, fraud and abuse by those billing federal healthcare programs.”

“The message is clear, if you take advantage of programs like Medicare, you will be held accountable,” said John Brown, FBI Special Agent-in-Charge.  “Companies who engage in filing false claims to generate more corporate revenue are not only stealing from the federal taxpayer, but also from people who rely on federally funded programs for their health care needs.”

The False Claims Act allegations being resolved were originally brought in a lawsuit filed by two former employees of Genome DX, Stephanie LaFleur and Corrine Vause, under the qui tam, or whistleblower, provisions of the False Claims Act, which allow private citizens with knowledge of fraud against the government to bring suit on behalf of the government and to share in any recovery. The whistleblowers will receive approximately $350,000 of the settlement proceeds of $1,990,380.

The investigation was conducted by the Civil Division of the Department of Justice, the U.S. Attorney’s Office for the Southern District of California, the Department of Health and Human Services Office of Inspector General, and the Federal Bureau of Investigation.

Cal Employers Face FEHA Expansion

Last fall, Governor Edmund G. Brown Jr. signed SB 1300 (Jackson; D-Santa Barbara), a comprehensive bill that makes several changes in the law for making sexual harassment claims.

The bill also amends FEHA to specify that an employer may be responsible for the acts of nonemployees for all forms of harassment, rather than the responsibility being limited to sexual harassment, as it was before SB 1300 took effect.

Further, the bill prohibits a prevailing defendant from being awarded fees and costs unless specific conditions are met.

SB 1300 prohibits employers from requiring employees to sign a release of claims under the Fair Employment and Housing Act (FEHA) in exchange for a raise or as a condition of employment.

These provisions took effect on January 1, but employers and defense counsel need to be aware of the bill’s “intent language.”

The broad “intent” language is likely inconsistent with canons of statutory construction and prior court precedent. As such, SB 1300’s intent language will surely increase employer costs as lawyers attempt to erroneously utilize the “findings and declarations” in SB 1300 to expand FEHA litigation.

The general rule of statutory construction is to effectuate the intent of the Legislature, which basically requires the courts to give the statutory language its usual and ordinary meaning. A statute is changed by a material amendment to the statutory language itself, but not by “legislative intent” language.

One intent declaration concerns the Legislature’s view about whether a single harassment incident still could be considered a violation of FEHA. To quote SB 1300: “the Legislature hereby declares its rejection of the United States Court of Appeals for the 9th Circuit’s [decision] and states that the opinion shall not be used in determining what kind of conduct is sufficiently severe or pervasive to constitute a violation of [FEHA].”

Yet, the author removed from her bill the statutory provisions that would have lowered the severe or pervasive standard.

Another declaration concerns the Legislature’s view that “harassment cases are rarely appropriate for disposition on summary judgment.” However, SB 1300 does not amend Code of Civil Procedure Section 437(c), which sets forth the requirements regarding motions for summary judgment. However, SB 1300 does not amend Code of Civil Procedure Section 437(c), which sets forth the requirements regarding motions for summary judgment.

Additionally, the intent language of SB 1300 seeks to lower the legal standard for hostile work environment claims by referring to a single quote by a single justice’s concurring opinion in a U.S. Supreme Court 9-0 decision: :the Legislature affirms its approval of the standard set forth by Justice Ruth Bader Ginsburg in her concurrence that, in a workplace harassment suit, ‘the plaintiff need not prove that his or her tangible productivity has declined as a result of the harassment.’”

Given that SB 1300 did not change the statutory standards for summary judgment and hostile work environment, the superfluous intent language in SB 1300 does not serve to provide guidance regarding either of these standards. As the U.S. Supreme Court has stated, “We are governed by laws, not by the intentions of legislators.”

Study Claims Surgery is a Leading Cause of Death

A new study claims that surgery is a leading cause of death. The findings were published in a research letter to The Lancet medical journal.

About 4.2 million people worldwide die every year within 30 days of surgery — more than from HIV, tuberculosis and malaria combined, a new study reports.

The findings show that 7.7 percent of all deaths worldwide occur within a month of surgery, a rate higher than that from any other cause except ischemic heart disease and stroke.

About 313 million surgical procedures a year are performed worldwide, according to The Lancet Commission on Global Surgery, but little is known about the quality of surgery around the world. That’s what this study set out to explore, using available data on volume and type of procedures and death rates.

Surgery has been the ‘neglected stepchild’ of global health and has received a fraction of the investment put in to treating infectious diseases such as malaria,” said lead author Dr. Dmitri Nepogodiev. He’s a research fellow at the University of Birmingham in England.

Along with finding that 4.2 million people a year die within a month of having surgery, his team discovered that half of those deaths occur in low- and middle-income countries.

Researchers from Birmingham’s NIHR Global Health Research Unit on Global Surgery said 4.8 billion people worldwide lack timely access to safe and affordable surgery. They estimated that there is an unmet need for 143 million surgical procedures a year in low- and middle-income countries.

But answering unmet needs those countries would increase the worldwide number of postoperative deaths to 6.1 million a year, the investigators said.

Although not all postoperative deaths are avoidable, many can be prevented by increasing investment in research, staff training, equipment and better hospital facilities,” Nepogodiev said in a university news release. “To avoid millions more people dying after surgery, planned expansion of access to surgery must be complemented by investment in to improving the quality of surgery around the world,” he noted.

Court Rules “On-Call” Scheduling Requires 2 Hours Pay

A California Court of Appeal just made a sweeping change in California’s reporting time pay rules which now limits a common “on-call” scheduling practice used by employers throughout the state.

In 2012, Skylar Ward worked as a sales clerk in a Tilly’s, Inc., store in Torrance, California.

Under Tilly’s scheduling policy, Ward was required to call in approximately two hours before the start of her shift to determine whether she needed to come to work. If Tilly’s told her to report to work, she was required to do so and would be paid for that shift as normal. However, if Tilly’s informed her that there was no need to come in, Ms. Ward would receive no compensation.

Ward filed a putative class action complaint in 2015. The trial court sustained a demurrer without leave to amend, finding that by merely calling in to learn whether an employee will work a call-in shift, Ward and other employees do not report to work as contemplated by Wage Order 7. The court of appeal reversed in the published case of Ward v. Tilly’s, Inc.

The court held that merely calling in for one of these mandatory on-call shifts constitutes “report[ing] to work,” which entitled Ms. Ward and her coworkers to a minimum of two hours of reporting time pay under the applicable wage order.

Prior to the case, various courts had disagreed about what it truly meant to “report to work” within the context of this provision, with many courts – not to mention employers – understandably believing that this required the employee to physically report to the workplace location in order to be eligible for reporting time pay.

In relevant part, the court examined the language from the reporting time rule contained within Wage Order No. 7-2001 codified at California Code of Regulations, title 8, section 11070.

The court ultimately reasoned that even having to place a telephone call as part of a mandatory on-call schedule fell within this “reporting” rule for two main reasons. First, requiring reporting time pay would “require employers to internalize some of the costs of overscheduling, thus encouraging employers to accurately project their labor needs and to schedule accordingly.”

Second, it would also “compensate employees for the inconvenience and expense associated with making themselves available to work on-call shifts, including forgoing other employment, hiring caregivers for children or elders, and traveling to a worksite. In relying on these public policy considerations, the court aligned itself with prior California cases that tended to tie the compensability of worktime to the degree of employer control over an employee’s activities.

The court left several key questions unanswered. Most notably, the court failed to address the issue of whether its holding would apply retroactively – potentially exposing countless employers across the state that utilize similar on-call scheduling policies to staggering class action liability.

The court also neglected to address the inherent line-drawing problem contained within its decision; that is, how long before a shift could an employee call in and still have it constitute compensable reporting? If not two hours, then how long?

Small Pharmacies Sue Major PBM for “Secret Rebates”

Independent pharmacists across Ventura County have filed a lawsuit against OptumRx, alleging the company manipulated drug pricing to enable lower reimbursement rates paid to small drugstores and plunging businesses underwater.

OptumRx, one of the biggest operations of its kind in the United States and part of the UnitedHealth network, sets payment rates as the pharmacy benefit manager for the Gold Coast Health Plan. The publicly funded Gold Coast organization provides Medi-Cal insurance to nearly 200,000 low-income Ventura County residents.

The pharmacists allege the company used contracts negotiated with agents of pharmacies to force the businesses into accepting payment that often fell below costs. OptumRx threatened people who pushed back with expulsion from the network, the complaint stated.

The lawsuit alleges unfair trade practices, breach of contract and violation of California law. It was filed by 18 companies and individuals in Ventura County Superior Court.

The litigation also targets three pharmacy services administration organizations – operated by Cardinal Health, Arete Pharmacy Network and AmerisourceBergen – that worked as middlemen between the pharmacies and OptumRx.

Leaders of OptumRx have repeatedly defended their pricing in a drama that dates back to last summer, shortly after the company assumed its role as Gold Coast’s pharmacy benefit manager.

“OptumRx’s role is to ensure consumers and health plan payers have convenient access to affordable prescription medications, and we will continue to work to help lower health care costs for Gold Coast Health Plan and California taxpayers,” said OptumRx spokesman Drew Krejci in a statement Thursday. “We believe this lawsuit is without merit and will vigorously defend ourselves.”

Pharmacists have crowded meetings of the Ventura County Medi-Cal Managed Care Commission for months, complaining about below-market rates they say shut down the Medical Plaza Pharmacy in Fillmore and put many others in jeopardy. The commission governs Gold Coast.

An independent consultant reviewed the rates and told the commission in April that the reimbursement paid by OptumRx is comparable to payment in similar Medicaid plans in California and elsewhere. After a closed-door discussion, commissioners announced they would not try to force the pharmacy benefit manager to raise the rates.

The lawsuit alleges OptumRx won the Gold Coast contract because it offered price guarantees and met the guarantees by obtaining secret rebates from drug makers and then manipulating pricing.

OptumRx also used something called the “maximum allowable cost” list to force reimbursement down, pharmacists claim. The so-called MAC list helps set the reimbursement rate and is supposed to be influenced by prices different distributors ask for the same generic medication. The pharmacists allege OptumRx ignored market prices and made up its own maximum allowable cost “based on thin air.”

It is “a moving target moved at Optum’s whim,” the lawsuit stated. It alleged OptumRx also kept its MAC price for generic drugs secret and violated state law by not making decisions on appeals by pharmacists within seven business days.

Bay Area Doctor Arrested for SDI Fraud Schemes

A federal grand jury indicted Dr. George David, a Freemont Psychiatrist, and Linda Nguyen with conspiracy to commit mail fraud and substantive mail fraud.

According to the indictment filed January 29, 2019, and unsealed in February, David, 78, and Nguyen, 66, of Union City, engaged in a scheme to defraud California’s State Disability Insurance (SDI) program.

The SDI program is designed to provide partial wage replacement benefits to eligible California workers who are unable to work due to a non-work-related illness, injury, or pregnancy.

To receive SDI benefits, a claimant must file a claim for benefits supported by a Physician/Practitioner Certification attesting to the claimant’s disability.

According to the indictment, David provided fraudulent Physician/Practitioner Certifications to support fraudulent SDI applications for non-disabled claimants. In addition, the indictment alleges that Nguyen facilitated the fraud by assisting non-disabled persons with the execution and submission of fraudulent documents.

The indictment further alleges that Nguyen charged the non-disabled persons for processing their fraudulent applications. In sum, the defendants each were charged with one count of conspiracy to commit mail fraud, in violation of 18 U.S.C. § 1349, and one count of substantive mail fraud, in violation of 18 U.S.C. § 1341.

The defendants were arrested and made their initial appearances before U.S. Magistrate Judge Donna M. Ryu. Both defendants were released on bond. Magistrate Judge Ryu scheduled David’s and Nguyen’s next appearances for February 8 and February 15, 2019, respectively, for arraignment and identification of counsel.

If found guilty, the defendants face a maximum statutory sentence of 20 years in prison for each count in the indictment. However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.

Special Assistant U.S. Attorney Christopher Vieira is prosecuting the case with the assistance of Kimberly Richardson. The prosecution is the result of an investigation by the FBI and Social Security Administration Office of the Inspector General.

TV Ads to Include Drug Price Transparency

Johnson & Johnson said on Thursday it will start adding the price of its medicines to television commercials by next month, becoming the first drugmaker to heed a call by U.S. President Donald Trump for price transparency of drugs advertised directly to consumers on TV.

The healthcare conglomerate said it will include both the list price of a product – the price before any rebates or discounts to insurers or pharmacy benefit managers – as well as potential out-of-pocket costs that patients will pay.

The move, announced in a statement on J&J’s website, won swift praise from U.S. Health and Human Services Secretary Alex Azar. Last May, Azar’s office released a blueprint for reducing the cost of drug prices, which included a proposal to require disclosure of list prices in TV ads for drugs.

“We commend Johnson & Johnson for recognizing the value of informing consumers about list prices and for doing so voluntarily. We call on other manufacturers to follow their lead,” Azar said in a statement.

Trump made lowering the cost of prescription drugs for U.S. consumers a central issue of the 2016 presidential campaign and emphasized it again in his State of the Union Address this week.

Ads for the blood thinner Xarelto, J&J’s most widely prescribed medicine, will be the first television spot to include pricing information, the company said. The treatment used to prevent blood clots costs about $450 to $540 a month.

Congress has increased its scrutiny of U.S. drug pricing since Democrats took over control of the House of Representatives in January, while pressure is also coming from the Republican-led Senate.

Republican Senator Chuck Grassley, chairman of the Senate Finance Committee, and Democratic Senator Ron Wyden, ranking member of the committee, on Monday invited executives from seven pharmaceutical companies, including J&J, to testify at a Feb. 26 hearing on rising drug prices.

Corvel Reports on 10,000 Telehealth Visits

As the first company to offer telehealth in the workers’ compensation space, there was no roadmap to follow. Since adding telehealth services in 2015, CorVel has now completed 10,000 virtual visits. With this significant milestone, David Lupinsky, CorVel’s Vice President of Medical Review Services reported on a few of the lessons the company learned:

In order to make telehealth equally efficacious to the brick and mortar visit, it needed to offer the same features patients have come to expect, value, and appreciate. Immediate access to medical services such as physical therapy, diagnostics imaging, pharmacotherapy, and durable medical equipment are essential to a successful telehealth offering.

Telehealth physicians have prescribed medications, ordered vaccines, requested durable medical equipment, and scheduled short term physical therapy and diagnostic imaging when clinically appropriate.

Brick and mortar evaluations take 4+ hours on average, factoring travel and wait times, while virtual visits last an average 30 minutes from start to finish. And though it is customary for injured employees to wait 1-2 days for the claim to be completely set up before receiving treatment, telehealth provides appropriate clinical care within minutes of the injury. Moreover, all claims data obtained through virtual visits is loaded into CareMC, its claims management technology, making the information immediately and easily accessible for all constituents.

Interdisciplinary care is defined by its multi-specialty shared relationships and common goals. While it’s appropriate to have multiple team members and providers working on a claim, CorVel has learned the importance of working towards a shared goal of providing timely, appropriate care for injured workers.

To ensure consistent protocols and concordance with each case, it has a dedicated medical director who oversees telehealth physicians and maintains communication with the nursing director. Communication between the claims intake department (FNOL), triage nurse, and treating telehealth physician significantly reduces duplication of services and thus patient wait times, patient frustration, and coding errors.

As a result of an integrated and shared database, all data captured by its 24/7 nurse triage and telehealth services can be accessed by both its FNOL intake team and our adjusters in real time. This is crucial to minimizing talk time, ensuring consistency, and maximizing the patient experience.

With telehealth becoming more popular in “mainstream healthcare”, it is now an expectation for injured employees. Since patients expect a telehealth platform to provide these services, it’s essential they be delivered in a coordinated fashion with updated clinical notes available to the providers on follow up visits to maintain an equal or superior standard of care to brick and mortar outcomes.

Healthcare is evolving and at the core of its change is data and artificial intelligence (AI). At CorVel, it has utilized AI with the Edge, its completely modernized claims management portal. The Edge takes claims data from a variety of sources, including bill review and pharmacy, to identify potential risk for certain claims and push out telehealth visits to mitigate the risk.

The real cost of a “minor” injury can significantly change when viewed in the context of medications, psychosocial factors, testing, and opioids. Automatic identification of these proprietary factors can elevate this case to higher acuity and a telehealth visit can be pushed out to the patient for a collaborative and holistic approach to care that can be implemented while working in tandem with other treating physician already involved in the patient’s care.

Being able to integrate this data into its claims management platform has allowed CorVel to prevent many minor injuries from becoming expensive claims. Read Corvel’s recent white paper, Breaking Down Barriers, to learn more about its approach to telehealth in performance-based networks.