Category: Daily News

Beverly Hills Radiologist Ronald Grusd and two of his corporations, California Imaging Network Medical Group and Willows Consulting Company, were convicted by a federal jury this week of fraud and bribery charges in connection with a massive health care-fraud scheme involving the State of California’s Workers’ Compensation program.

After a seven-day trial, the jury found Dr. Grusd and his companies guilty on all charges facing them, including Conspiracy, Honest Services Mail and Wire Fraud, Health Care Fraud, and Travel Act violations, based on their years-long bribery and fraud scheme.

According to evidence presented at trial, Dr. Grusd and his companies paid kickbacks for patient referrals from multiple clinics in San Diego and Imperial counties in order to fraudulently bill insurance companies over $25 million for medical services. Dr. Grusd negotiated with various individuals, including a primary treating physician, the payment of kickbacks for the referral of workers’ compensation patients for various medical services, including MRIs, ultrasounds, Shockwave treatments, toxicology testing and prescription pain medications.

After the patients were referred for the treatment or service, one of Dr. Grusd’s companies, California Imaging Network Medical Group, would fraudulently bill insurance companies for the procedures, concealing from both the patients and the insurers that substantial kickbacks had been paid in violation of California law. Another of Dr. Grusd’s companies, Willows Consulting Company, funneled the kickback payments to those directing the referral of the patients from the various clinics. Records presented at trial showed that Dr. Grusd paid over one hundred thousand dollars in bribes to secure the billings for hundreds of patients, with bribes paid on a per-patient or per-body-part formula.

Dr. Grusd was ordered to return to federal court on March 12, 2018, for a sentencing hearing for himself as well as both corporations. Since 2009, Dr. Grusd and his various companies have filed tens of thousands of liens in the California Workers Compensation System, seeking reimbursement for hundreds of millions of dollars from multiple insurers. To date, any outstanding liens have been stayed and will be sent to lien consolidation for dismissal proceedings as a result of the convictions.

The jury could not reach a unanimous verdict as to Dr. Grusd’s administrator, Gonzalo Paredes, who was ordered back to court on January 4, 2018, for a hearing regarding a retrial.

Dr. Grusd, Paredes, and the corporations were originally indicted by a federal grand jury in November 2015, when the U.S. Attorney’s Office and the San Diego District Attorney’s Office, working in conjunction with the Federal Bureau of Investigation and the California Department of Insurance, announced multiple arrests arising from “Operation Back Lash” – a long-term, proactive health care fraud investigation targeting corruption and fraud in the California Workers’ Compensation system that is continuing.

Since then, nearly 40 individuals and corporations have been charged with federal and/or state crimes, including doctors, attorneys, marketers and providers of medical services and devices. The four other defendants charged with Dr. Grusd and Paredes – who were alleged to have received bribes in exchange for patient referrals – have pleaded guilty and are cooperating with the continuing investigation while awaiting sentencing. The charges on which Dr. Grusd went to trial were brought in July 2017, when a grand jury returned a Superseding Indictment against him and his companies.

Grusd’s practice, California Imaging Network Medical Group, operated clinics throughout California in San Diego, Los Angeles, Beverly Hills, Fresno, Rialto, Santa Ana, Studio City, Bakersfield, Calexico, East Los Angeles, Lancaster, Victorville and Visalia.

Joung Hyen Lee, Hyen Uk Lee, and Esther Lee are former employees of The Christian Herald, Inc., a corporation they allege is solely owned and was managed by their former boss, Jun Yang.

Joung Hyen Lee was a reporter, while Hyen Uk Lee and Esther Lee were administrative assistants. These three plaintiffs filed suit against Yang and the Herald asserting five wage-and-hour claims. Hyen Uk Lee asserted three additional causes of action (assault and battery and intentional infliction of emotional distress against Yang, and premises liability against the Herald) arising out of alleged physical confrontations with Yang.

As to these claims, Hyen Uk Lee alleged that on two occasions in September 2012, Yang physically attacked her. Specifically, on September 13, 2012, Yang threw a cellular phone at her and grabbed her, causing injury to her arm and body. In addition, on September 20, 2012, Yang pushed Hyen Uk Lee against a door, causing her to hit her head on the corner of the door and lose consciousness. As to the tort claims against Yang, Hyen Uk Lee sought compensatory as well as punitive damages.

Yang argued the tort causes of action, assault and battery, and intentional infliction of emotional distress, failed to state a claim because workers’ compensation is the exclusive remedy for injury sustained in the workplace.

As to the two tort claims, the trial court noted Hyen Uk Lee alleged both incidents occurred in the workplace and concluded “the alleged facts do not fall outside of the scope of the exclusive remedy of the workers’ compensation statute. Nor is there an allegation of lack of workers’ compensation insurance as to these causes of action.”

Plaintiffs appeal from the judgment entered in favor of Yang after the trial court sustained his demurrer to the first amended complaint without leave to amend. The Court of Appeal reversed the judgment in part in the unpublished case of Lee v. Yang.

The Court of Appeal reasoned that “the Labor Code provides an employee may sue his or her employer, notwithstanding the exclusive remedy provision of workers’ compensation, ‘[w]here the employee’s injury – is proximately caused by a willful physical assault by the employer.” (§ 3602, subd. (b)(1); see also Soares v. City of Oakland (1992) 9 Cal.App.4th 1822, 1828 – 1829″

“Here, Hyen Uk Lee alleges that on September 13, 2012, Yang threw a cellular phone at her and grabbed her, causing injury to her arm and body. Hyen Uk Lee further alleges that on September 20, 2012, Yang pushed her against a door, causing her to hit her head on the corner of the door and to then lose consciousness. These allegations are sufficient to survive a demurrer on the cause of action for assault and battery.”

A new report published by Research and Markets says that the healthcare analytics market is expected to reach $29.84 billion by 2022 up from $8.92 billion in 2017, producing a compound annual growth rate (CAGR) of 27.3%.

Increasing government initiatives to increase EHR adoption, growing pressure to curb healthcare costs, availability of big data in healthcare, increasing venture capital investments, rising focus on improving patient outcomes, and technological advancements are driving the growth of the healthcare analytics market.

On the other hand, factors like the lack of skilled analysts (that limits the use of healthcare solutions), the high cost of these solutions, and operational gaps between payers and providers, are expected to limit the growth of this market to a certain extent.

The healthcare analytics market is segmented into descriptive, predictive, and prescriptive analytics by type.

The prescriptive analytics segment is expected grow at a highest CAGR during the forecast period. The high growth of this segment is attributed to the ability of prescriptive analytics to ensure the synergistic integration of predictions and prescriptions.

Based on application, the healthcare analytics market is segmented into clinical analytics, financial analytics, operational and administrative analytics, and population health analytics.

Financial analytics market is segmented into revenue cycle management; claims processing; payment integrity and fraud, waste, & abuse (FWA); and risk adjustment and risk assessment. Due to the rising focus of payers on the early detection of fraud and reducing preventable costs, the market for fraud analytics is expected to register a significant growth during the forecast period, therefore driving the market for financial analytics.

Based on the component, the healthcare analytics market is segmented into services, software, and hardware.

The services segment accounted for the largest share of the healthcare analytics market in 2016. With the increasing need for business analytics services and the introduction of technologically advanced healthcare analytics software, which requires extensive training to use as well as regular upgrades, the services segment is expected to grow at the highest CAGR during the forecast period.

In 2017, North America is expected to account for the largest share of the market followed by Europe.  Factors such as growing federal healthcare mandates to curb rising healthcare costs and provide quality care; increasing regulatory requirements; growing EHR adoption; and rising government initiatives focusing on personalized medicine, population health management, and value-based reimbursements are expected to drive market growth in North America.

The report provides an overview of the healthcare analytics market. It aims at estimating the market size and future growth potential of this market across different segments such as type, application, component, delivery model, end user, and region.

The report also includes an in-depth competitive analysis of the key players in the market along with their company profiles, recent developments, and key market strategies.

The Riverside County District Attorney’s Office has asked for an arrest warrant against Carlos Valencia, the employer of two men who were fatally electrocuted in March 2016 while pollinating palm trees in Thermal.

A report in the Desert Sun says that an investigation into the deaths of Osvaldo Ceron and Ernesto Hurtado found that Carlos Valencia, owner of Valencia Trimming in La Quinta, misclassified employees to make their jobs appear to be lower risk to his insurance provider and lied about employee pay.

Valencia deprived California’s insurance fund for workers’ compensation of $100,000 and cost the state more than $35,000 in unreported payroll taxes between 2012 and 2017, the arrest declaration says.

The district attorney filed the felony charges against Valencia, 49, on Dec. 7 with a recommended cash bond of $135,000.

Valencia Trimming employees Ceron and Hurtado were electrocuted while pollinating palm trees at 68600 Harrison Ave. in Thermal on March 12, 2016.

The two men were using a truck with a boom. Hurtado was maneuvering the boom when the bucket carrying both men made contact with a power line, according to the DA, shocking them.

Ceron fell from the bucket to the ground, where he was found dead by a third employee. Hurtado remained in the bucket, which caught fire while the group waited for the power company to shut off the power line. He was electrocuted and burned.

According to the DA, Valencia misreported both pay rate and worker classification to the State Compensation Insurance Fund.

SCIF issued Valencia Trimming an insurance policy effective in 2012. But Valencia “reported his payroll under landscaping and not tree trimming,” a classification that lowered Valencia’s insurance rate prior to the deaths of Ceron and Hurtado. Valencia later admitted to SCIF that “no landscaping operations are performed” by his business, according to the DA.

Valencia also underreported employee payroll wages to SCIF and to state tax authorities, the declaration says. For example, Valencia told SCIF investigators after the incident that Hurtado had earned $15,000 annually and that Ceron had earned $11,000 annually, but previously reported to SCIF that his business had no payroll wages during periods when one or both men were employees.

SCIF found that Valencia “never reported any payroll wages” to the Employment Development Department, California’s largest tax collection agency.

The trade group representing U.S. drugmakers said it has a filed a lawsuit to stop California from implementing a law aimed at reining in prescription drug prices.The Pharmaceutical Research and Manufacturers of America (PhRMA) initiated litigation in the United States District Court for the Eastern District of California challenging SB 17, which it alleges is an unprecedented and unconstitutional California law.

SB 17, Hernandez which was signed into law this year, requires pharmaceutical companies to notify health insurers and government health plans at least 60 days before scheduled prescription drug price hikes that would exceed 16 percent over a two-year period and to explain the reasons behind those increases.

In its federal complaint, filed last week, PhRMA argues that SB 17 attempts to dictate national health care policy related to drug prices in violation of the United States Constitution, singles out drug manufacturers as the sole determinant of drug costs despite the significant role many other entities play in the costs patients pay, and will cause market distortions such as drug stockpiling and reduced competition.

PhRMA seeks a declaration from the Court that certain provisions of SB 17 violate the United States Constitution and requests that the Court permanently enjoin the State from implementing or enforcing those provisions of the law. Specifically, the complaint alleges that SB 17 violates:

– the Commerce Clause, which prohibits California from regulating drug pricing beyond the State’s borders;
– the First Amendment, by compelling speech by manufacturers justifying their price changes; and
– the Fourteenth Amendment’s due process clause because the law is unconstitutionally vague.

SB 17 provides that if a manufacturer has increased certain products’ federally defined nationwide list price (wholesale acquisition cost, or WAC) by 16 percent or more cumulatively over the prior two to three calendar years, then that company may not increase the WAC in the current calendar year unless the company first provides registered purchasers and State purchasers with 60 days’ advance notice of the price increase. The WAC is a publicly available national price, not a price specific to California.

PhRMA claims that this law, therefore, expressly saddles the entire country with California’s “misguided drug pricing policy” by imposing restrictions on the national list price of manufacturers’ medicines.

It also alleges that the law also does not address the large rebates and discounts insurance companies and pharmacy benefit managers (PBMs) are receiving and that are not always passed on to patients. Further, the advance notice requirement could incentivize prescription-drug arbitrage by effectively creating a “buying window” for selected entities to stockpile products before price increases go into effect, which in turn could create substantial market distortions.

PhRMA says it recognizes that people have important questions about their medicine costs. That is why PhRMA says it has been convening a conversation called Let’s Talk About Cost that takes a broad look at this complex issue, exploring the slowdown in medicine cost growth, the rising cost of chronic disease, insurance coverage of medicine, the role of middlemen, and what our industry can do to make medicine more affordable for patients.

“In this time of great innovation and advancement in therapies, we understand how important it is for patients to have affordable access to the medicines they need, but SB 17 is not only poorly conceived, it also misses the mark with its myopic focus on manufacturers and provisions that are in clear violation of the Constitution,” said James C. Stansel, PhRMA Executive Vice President and General Counsel. “The law creates bureaucracy, thwarts private market competition, and ignores the role of insurers, pharmacy benefit managers and hospitals in what patients pay for their medicines.”