Category: Daily News

A total of 14.4 million beneficiaries of Medicare Part D, which offers Medicare recipients the opportunity to get federally subsidized prescription drug coverage, received at least one prescription for an opioid in 2016 while the Medicare Part D program paid about $4.1 billion to provide them with those drugs, according to a study by the inspector general for the Department of Health and Human Services.

Nationwide, 33 percent of all Medicare Part D beneficiaries got federally funded opioids in 2016. In Alabama, it went as high as 46 percent; in Mississippi, it was 45 percent; and, in Arkansas, it was 44 percent.

The IG’s discovery that 14.4 million Medicare Part D beneficiaries got an opioid prescription in 2016 was cited in a Government Accountability Office report.

‘The Centers for Disease Control and Prevention (CDC), reported that from 1999 to 2014 the rate of drug poisoning deaths from prescription opioids nearly quadrupled from 1.4 to 5.1 per 100,000 people,’ said the GAO report. ‘In addition, the Department of Health and Human Services (HHS) Office of Inspector General (HHS-OIG) reported that 14.4 million people (about one-third) who participate in Medicare Part D received at least one prescription for opioids in 2016, and that Part D spending for opioids in 2016 was almost $4.1 billion.”

The inspector general’s report – “Opioids in Medicare Part D: Concerns about Extreme Use and Questionable Prescribing” – was completed in July. “In 2016,” said the IG report, “one out of every three beneficiaries received at least one prescription opioid through Medicare Part D.”

Some of the Medicare Part D beneficiaries received an opioid prescription only for a short period of time. But others received an opioid on what the IG called “a regular basis” – and some received “high” or “extreme” amounts.Some beneficiaries also appeared to be “doctor shopping” in pursuit of opioids. The IG report stated:

— “Specifically, 5 million beneficiaries received opioids for 3 months or more in 2016.”
— “A total of 501,008 beneficiaries received high amounts of opioids through Medicare Part D in 2016. This does not include beneficiaries who had cancer or were in hospice care.”
— “A total of 69,563 beneficiaries received extreme amounts of opioids for the entire year, putting them at serious risk of opioid misuse or overdose. Each of these beneficiaries had an average daily MED [morphine equivalent dose] that exceeded 240 mg for the entire year, This extreme amount is more than two and a half times the dose the CDC recommends avoiding for chronic pain patients.”
— “A total of 22,308 beneficiaries appear to be doctor shopping. Each of these beneficiaries received a high amount of opioids – an average daily MED that exceeded 120 mg for at least 3 months – and have four or more prescribers and four or more pharmacies in 2016. Typically, beneficiaries who receive opioids have just one prescriber and one pharmacy.”

The IG also report noted that a number of prescribers – including doctors, nurses and physician assistants – also exhibited extraordinary patterns in the opioid prescription they issued to Medicare Part D beneficiaries:

The report recommended that the Centers for Medicare and Medicaid Services: “(1) gather information on the full number of at-risk beneficiaries receiving high doses of opioids, (2) identify providers who prescribe high amounts of opioids, and (3) require plan sponsors to report to CMS on actions related to providers who inappropriately prescribe opioids.”

The Division of Workers’ Compensation (DWC) has suspended 21 more medical providers from participating in California’s workers’ compensation system, bringing the total number of providers suspended this year to 73.

DWC Administrative Director George Parisotto issued Orders of Suspension against the following providers:

1) Christopher King of Beverly Hills, owner of medical-billing and medical-management companies, and his wife were the masterminds in a $40 million conspiracy to commit medical insurance fraud along with over two dozen doctors, pharmacists and business owners. More than 13,000 patients and at least 27 insurance carriers were victims in the scheme. King pled guilty in Orange County Superior Court on April 26 to two felony counts of conspiracy to commit medical insurance fraud and felony insurance fraud. King, co-owner of Monarch Medical Group, King Medical Management and One Source Laboratories, recruited doctors and pharmacists to prescribe unnecessary treatment for patients with workers’ compensation insurance.
2) Marisa Schermbeck Nelson of Torrance pled guilty on July 26 in Los Angeles County Superior Court for her involvement in a fraudulent $150 million workers’ compensation insurance billing and capping conspiracy with orthopedic surgeon Munir Uwaydah. Nearly two dozen patients were deceived by Dr. Uwaydah and his staff into undergoing surgeries they were told would be performed by Dr. Uwaydah, but were instead performed by a physician’s assistant who has never attended medical school. These patients were operated on under general anesthesia and without Dr. Uwaydah present in the operating room. The scheme included payments of up to $10,000 a month for illegal referrals.
3) Marlon Songco of Burbank, president of Rehab Dynamics, Inc., pled guilty in federal court on January 8, 2015 for paying illegal kickbacks as part of a Medicare fraud scheme along with co-conspirators Joseff Sales and Danniel Goyena. Department of Industrial Relations Newsline No. 2017-102 Page 2
4) Dolphus Dwayne Pierce II, chiropractor in Lemoore, was found guilty in Kern County Superior Court on January 8, 2016 of conspiracy to commit insurance fraud for billing insurance companies for services that were unnecessary, not rendered or double billed.
5) Julio Diaz, physician in Santa Barbara and Orange Counties, was found guilty in August 2015 on 79 counts of writing prescriptions for narcotics without a legitimate medical purpose.
6) Edward Balbas, physician in Rancho Cucamonga, pled guilty on May 5 in Riverside County Superior Court to two felony counts of insurance fraud for submitting more than 165 fraudulent bills over a three-year period. As part of his plea agreement, Balbas was required to pay multiple insurance companies restitution of over $650,000.
7) Randall William Tonelli, pharmacist in San Mateo, pled guilty in federal court on July 11, 2016 to knowingly offering to sell and trade a prescription drug sample and misbranding drugs for sale with the intent to defraud and mislead. Tonelli surrendered his pharmacist license on October 13, 2016.
8) Candelaria Valdez, medical services provider in Hemet, pled guilty in September 2016 in Riverside Superior Court to misdemeanor battery relating to abuse of a patient.
9) Bennie Johnson, osteopathic physician in Encinitas, had his license revoked by the osteopathic board on March 6. The board determined he had committed repeated acts of gross negligence in his treatment of multiple cancer patients.
10) Helen Chang, physician in San Diego, was disciplined by the Medical Board of California for incompetence and gross negligence in her treatment of a patient. She surrendered her medical certificate on November 1, 2015.
11) Raffiel Arvon Norwood of Rosamond, former vocational nurse, pled guilty in federal court on October 22, 2009 to felony possession of child pornography. Norwood surrendered his medical license on July 7, 2016. He was suspended from the Medi-Cal program last April.
12) Mark Anderson, dentist in Woodland, was found guilty in March 2009 on felony counts of sexual battery.
13) Jerry Tabuyo, operator of a community care facility for the elderly in San Jacinto, pled guilty in January to operating without a license.
14) William Richard Bailey, osteopathic physician in San Diego, had his medical license revoked following conviction for tax evasion in 2016. He was sentenced to more than three years in federal prison and required to pay over $500,000 in restitution and fines.
15) James Francis Murphy of Encinitas, osteopathic physician, was convicted on federal charges of income tax fraud and evasion. He was sentenced to four years in prison commencing on February 24, 2015 and ordered to pay $447,528 in restitution. His medical license was revoked on October 24, 2016.
16) David Anderson, chiropractor in San Diego, pled guilty to mail and income tax fraud in 1997. He was suspended from participation in the Medicare and Medi-Cal programs on September 20, 2001.
17) Robert Craig Taylor, former chiropractor in Los Angeles, was convicted in March 2007 of misdemeanor burglary and identity theft, in September 2007 of felony possession of a controlled substance for sale and grand theft and in December 2007 of receiving stolen property, identity theft and commercial burglary. His chiropractic license was revoked effective October 25, 2009.
18) Matthew Cole, Newport Beach physician, pled guilty December 15, 2015 to federal charges of conspiracy to obtain controlled substances by misrepresentation, fraud, forgery deception and subterfuge. He was barred from participating in the Medi-Cal program following his conviction.
19) Joanne Benzor, Riverside physician, pled guilty in 2009 to two counts of driving under the influence of alcohol. Her medical license was revoked between May 18, 2012 and June 16, 2017, at which time it was reinstated subject to limitations.
20) Virginia Garrett of Sarasota, Florida, former registered nurse, was convicted on August 20, 2008 in Los Angeles Superior Court for reckless driving while under the influence of alcohol and drugs, with a prior conviction for driving with a blood alcohol content exceeding the legal limit. Her medical license was revoked by the Board of Registered Nursing on January 27, 2012.
21) Kenneth R. Geiger, physician in Sonoma, surrendered his medical license on April 2, 2008 following an evaluation that he suffers from an illness that impairs his ability to safely practice medicine.

AB 1244 (Gray and Daly), which went into effect January 1, introduced new changes to the workers’ compensation system and requires the division’s Administrative Director to suspend any medical provider, physician or practitioner from participating in the workers’ compensation system under certain circumstances such as the above.

It what may be characterized as a federal lawsuit pieced together from evidence that exists across existing criminal and civil litigation, 14 AIG related companies seek restitution from nearly 30 named defendants who it claims fraudulently or illegally made claims for payment for providing worker’s compensation treatment on cases where AIG entities provided coverage. The 22 page federal lawsuit filed on October 31, 2017 lists the following entities as defendants:

– Healthsmart Pacific, Inc.
– Healthsmart Pacific, Inc. doing business as Pacific Hospital of Long Beach
– Long Beach Pain Center Medical Clinic, Inc. a California Corporation
– International Implants, LLC a California Corporation
– International Implants, LLC formerly known as SI Venture Partners LLC
– Michael D. Drobot, Sr. an individual
– Michael R. Drobot Jr. an individual
– Industrial Pharmacy Management LLC a California Corporation
– Venture Partners, LLC
– Long Beach Prescription Pharmacy a California Corporation
– Coastal Express Pharmacy, Inc. a California Corporation
– Meds Management Group LLC a California Corporation
– Pacific Specialty Physician Management, Inc. a California Corporation
– First Medical Management, Inc. a California Corporation
– Paul Richard Randall an individual
– Platinum Medical Group, Inc. a California Corporation
– Linda Martin an individual
– Daniel Capen an individual
– Daniel Capen, M.D., A Professional Corporation a California Corporation
– Southwestern Orthopedic Medical Corporation a California Corporation, Beneficiary and Heir to the Estate Of Downey Orthopedic Medical Group
– Southwestern Orthopedic Medical Corporation a California Corporation doing business as Channel Islands Orthopedic
– Westlake Surgical Medical Associates, Inc. a California Corporation
– Ismael Silva an individual
– Healthpointe Medical Group, Inc. a California Corporation
– National Intraoperative Monitoring a California Corporation formerly known as West Ocean Union Medical
– Southwest Hospital Development Group, Inc. a former California Corporation
– Starbase, Inc. a California Corporation
– Lokesh S. Tantuwaya an individual
– Dr. Lokesh S. Tantuwaya, M.D., Inc. a California Corporation

What stands out in the AIG lawsuit is its reliance on either admissions filed in plea agreements in other cases made by federally indicted  and convicted parties, or the deposition testimony already taken in related cases. In other words much of the evidence relied upon by AIG in their suit was available “in plain sight,” in plea agreements or discovery in other litigation. For example the AIG complaint quotes from data in other cases such as the following examples.

Paragraph 47 reads: On February 20, 2014, Drobot, Sr. pleaded guilty and admitted in his plea agreement that a) “Beginning in or around 1998 and continuing through in or around November 2013, he conspired with dozen of doctors, chiropractors, marketers, and others to pay kickbacks in return for those persons to refer thousands of patients to Pacific Hospital for spinal surgeries and other medical services;” b) “To help generate the monies for the kickback payments, defendant used a co-schemer’s company or his own company . . . to fraudulently inflate the price of medical hardware purchased by Pacific Hospital to be used in the spinal surgeries . . . “; and c) “In paying the kickbacks, inflating the medical hardware costs, and submitting the resulting claims for spinal surgeries and medical services, defendant and his co-conspirators acted with the intent to defraud workers’ compensation insurance carriers . . . ”

Paragraph 48 reads: Defendant Randall, who pleaded guilty in United States v. Randall, Case No. 12-cr-00023. Randall admitted in his plea agreement that his company, Platinum Medical “paid kickbacks to physicians for referring workers’ compensation patients for toxicology tests.”

Paragraph 49 reads: Randall also admitted in a March 9, 2016 deposition that he negotiated contractual agreements between Drobot Sr. and physicians to provide compensation for those doctors performing spinal surgeries at Pacific Hospital. He testified that there were “many” such agreements entered into between Drobot Sr. and doctors for compensation for spine surgeries at Pacific Hospital.

Paragraph 49 reads: In United States v. Linda Martin, Case No. 16-cr-00014. Martin admitted in her plea agreement that she “conspired with Drobot, other hospital employees, dozens of doctors, chiropractors, marketers, and others to pay kickbacks in return for referral of hundreds of patients to Pacific Hospital for spinal surgeries and other medical services paid for primarily through the California Workers’ Compensation System (“SWCS”) and the Federal Employees’ Compensation Act (“FECA”).”

Paragraph 59 reads: Documents produced by Pacific Hospital Fraud co-conspirators IPM, PSMP and/or International Implants (also referred to as “I2”) demonstrate that Capen, either directly or through Capen, M.D., received monthly “reimbursement” in the amount of $10,137.90 from May through September 2008, totaling $50,689.50. By November 2009, International Implants records reflect that “per surgery,” Capen was receiving $5,833 as a “monthly payment” and $8,333 as a “management fee.” Between January and June 2010, the co-conspirator records demonstrate that Capen performed 32 “Qualifying Fusions” for the Pacific Hospital Fraud, resulting in a $440,000 payment due.

Paragraph 71 reads: According to records produced in another litigation, Tantuwaya had a $70,000 “option” contract dated March 1, 2010, pursuant to which PSPM was to make payments to Tantuwaya “due on the 15th day of each succeeding month until aggregate pmts equal $15,000,000.” December 2010 PSPM records list his year-to-date payments as $510,000. January 2012 PSPM records list total payments to Tantuwaya from 2009-2012 as $943,900. December 2012 PSPM records list total payments to Tantuwaya as $1,453,900.

And the allegations continue to show that much evidence is contained in plea agreements signed by perpetrators in criminal cases, and depositions already taken in other civil actions against the same group of perpetrators. In other words the evidence is in “plain sight.” It is not that hard any more to piece together the pieces of a puzzle found across a variety of criminal and civil actions that show the big picture needed to prevail in a recovery action by an insurance company.

The Division of Workers’ Compensation has posted an order adopting regulations to update the evidence-based treatment guidelines of the Medical Treatment Utilization Schedule (MTUS).

The updates, effective for medical treatment services rendered on or after December 1, 2017, incorporate by reference the American College of Occupational and Environmental Medicine’s (ACOEM’s) most recent treatment guidelines to the General Approaches, Clinical Topics, and Special Topics sections of the MTUS.

“We are publishing this Administrative Order one month before its effective date to give the public, especially treating physicians and utilization review physicians, thirty days to prepare before these evidence-based updates become effective,” said George Parisotto, DWC Administrative Director.

The ACOEM guidelines that are incorporated by reference into the MTUS are:

– Initial Approaches to Treatment Guideline (ACOEM June 30, 2017)
– Opioids Guideline (ACOEM April 20, 2017)
– Chronic Pain Guideline (ACOEM May 15, 2017)
– Ankle and Foot Disorders Guideline (ACOEM September 2015)
– Occupational/Work-Related Asthma Medical Treatment Guideline (ACOEM January 4, 2016)
– Low Back Disorders Guideline (ACOEM February 24, 2016)
– Cervical and Thoracic Spine Disorders Guideline (ACOEM May 27, 2016)
– Elbow Disorders Guideline (ACOEM 2013)
– Eye Disorders Guideline (ACOEM April 1, 2017)
– Hand, Wrist, and Forearm Disorders Guideline (ACOEM June 30, 2016)
– Hip and Groin Guideline (ACOEM May 1, 2011)
– Knee Disorders Guideline (ACOEM October 28, 2015)
– Occupational Interstitial Lung Disease Guideline (ACOEM January 4, 2016)
– Shoulder Disorders Guideline (ACOEM August 1, 2016)

“DWC has incorporated the most recent ACOEM guidelines to ensure the guidelines in the MTUS contain the most recent, state-of-the-art current evidence-based recommendations,” said DWC Executive Medical Director Dr. Raymond Meister.

The administrative order consists of the order and two addendum:

1) Addendum one shows the regulatory amendments directly related to the evidence-based updates to the MTUS.
2) Addendum two contains hyperlinks to the updated ACOEM guidelines adopted and incorporated into the MTUS by reference.

Since the ACOEM guidelines contain proprietary content, a commercial license from ReedGroup, the publisher of the ACOEM guidelines, is required when physicians and entities use the MTUS for commercial purposes.

An attorney representing a majority of 66 counties and cities nationwide that have lawsuits filed against opioid distributors accused of fueling a national drug epidemic has requested the cases be consolidated into a multidistrict litigation and heard before one judge.

The Herald Dispatch reports that a motion filed Sept. 25 with the U.S. Judicial Panel on Multidistrict Litigation, Attorney James C. Peterson said all 66 cases filed in 11 districts nationwide make similar claims, and consolidation would create better cohesion and efficiency as the cases move forward against the “Big Three” distributors – McKesson Corp., Cardinal Health and AmerisourceBergen Drug Corp. Peterson’s firm represents clients in 46 of those cases.

Various pill manufacturers are also named in various lawsuits, including Purdue, Teva/Cephalon, Janssen, Endo, Actavis and Mallinckrodt.

The original allegations made by Huntington at the beginning of 2017 started a rippling effect of cases being filed across the nation. Currently, lawsuits are pending in federal courts in West Virginia, Illinois, Alabama, California, Kentucky, Ohio, New Hampshire, Tennessee and Washington.

The cities and counties allege drug firms breached their duty to monitor, detect, investigate, refuse and report suspicious orders of prescription opiates coming into the states over the past several years – a duty the lawsuits claim companies have under the Controlled Substances Act of 1970. The 66 lawsuits claim the businesses were negligent in creating a public nuisance and participated in corrupt practices, Peterson said.

“The economic burden of prescription opioid misuse alone is $78.5 billion a year, including the costs of health care, lost productivity, addiction treatment and criminal justice expenditures.” Paul T. Farrell Jr., who represents several counties throughout the country, said the companies had paid millions in fines and had licenses suspended for similar allegations.

Peterson wrote that the federal government has recently fined McKesson a record $150 million for failure to report suspicious orders and Cardinal Health was fined $44 million for similar allegations.

Peterson also pointed to Purdue’s agreement to pay approximately $600 million in fines in 2007 for deceptive marketing regarding the addictive nature of OxyContin.

Peterson argued the best location for the cases to be heard would be Ohio because of its central and easily accessible location, underutilized court system and because it is one of the hardest hit areas represented in all the lawsuits. He also wrote the Big Three each maintains facilities or is headquartered in the state. Illinois would also be satisfactory, he wrote.

“As this national calamity continues to unfold, the federal judiciary should respond with a cohesive and efficient judicial methodology, rather than risking inconsistent decisions on pre-trial issues and duplication of efforts in different federal courts,” he said.