Category: Daily News

The world’s top medical technology companies are turning to robots to help with complex knee surgery, promising quicker procedures and better results in operations that often leave patients dissatisfied.  And the report in Reuters Health says that demand for artificial replacement joints is growing fast, as baby boomers’ knees and hips wear out, but for the past 15 years rival firms have failed to deliver a technological advance to gain them significant market share.

Now U.S.-based Stryker and Britain’s Smith & Nephew believe that is about to change, as robots give them an edge.Robots should mean less trauma to patients and faster recovery, although they still need to prove themselves in definitive clinical studies, which will not report results for a couple of years.

Fares Haddad, a consultant surgeon at University College London Hospitals, is one of the first in Britain to use the new robots and has been impressed. However, he agrees healthcare providers need decisive data to prove they are worth an investment that can be as much as $1 million for each robot.

“The main reason for using a robotic system is to improve precision and to be able to hit very accurately a target that varies from patient to patient,” he said. “It is particularly useful in knees because they are more problematic (than hips) and there are a chunk of patients that aren’t as satisfied as we would like with their knee replacement.” Satisfaction rates are only around 65 percent for knee operations, against 95 percent for hips, according to industry surveys.

The rival types of robots vary in cost and sophistication, assisting surgeons with precision image guidance for bone cutting and the insertion of artificial joints.

Orthopaedic companies hope to emulate the success of Intuitive Surgical, an early pioneer of robots in hospitals, which now has more than 4,000 of its da Vinci machines installed around the world for procedures including prostate removal, hernia repair and hysterectomies. In addition to selling into big Western markets, they also want to expand robot use in India, China and other emerging markets, where owning a prestigious high-tech system can be a marketing advantage for private hospitals.

Stryker is leading the charge with its MAKO robotic arm, a platform it acquired for $1.65 billion in 2013 and which has pioneered robot-assisted whole-knee operations by determining optimal positioning and then helping with bone cutting. But it has competition from smaller rival Smith & Nephew, which last week launched a cheaper product called Navio for total knee replacements in the United States. The British group bought the company behind Navio for $275 million in 2016.

That has kicked off the battle in earnest, since both companies are now able to do total knee replacements, which represent the vast majority of knee procedures. MAKO, which uses only Stryker’s joints and implants, costs around $1 million to install, while Navio, which does not have as many features and is not tied exclusively to Smith & Nephew’s products, is less than half the price.

Both companies believe their robots will help them capture a bigger share of an orthopaedic market that has been split between four big players for more than a decade.

Indeed, Smith & Nephew Chief Executive Olivier Bohuon said it was his company’s most important strategic investment for a decade. “We are now basically head to head with Stryker,” he said in an interview. “I do believe we are going to gain market share due to the fact we have robots, whether it’s Stryker or us.”

Stryker, meanwhile, expects its MAKO system to start delivering market share gains from the end of 2017. “As we exit this year, we expect to start to see evidence in our knee market shares,” Katherine Owen, head of strategy at Stryker, told an investment conference in June. “Our goal with MAKO on knees is to capture hundreds of basis points of market share. What that time frame looks like, we haven’t been specific about.”

Zimmer Biomet and Johnson & Johnson, the two other big players in orthopaedics, are lagging in the robotics race but both have plans to enter the area in different ways. J&J is working on surgical robotics with Verily, the life sciences arm of Google parent Alphabet, while Zimmer last year bought a majority stake in France’s Medtech, a specialist in neurosurgery.

Jefferies analysts said the semi-automated bone resection offered by MAKO might well win out in the long term, but Navio offers a far cheaper option and is still well ahead of anything the other two major manufacturers have today.

The owners of Pacific Alliance Medical Center, an acute care hospital located in the Chinatown District of Los Angeles, have agreed to pay $42 million to settle allegations that they were involved in improper financial relationships with referring physicians, the Justice Department announced today.

PAMC, Ltd. and Pacific Alliance Medical Center Inc., the owners of the hospital, agreed to pay the settlement to resolve a lawsuit that alleged they had violated the False Claims Act by submitting false claims to the Medicare and MediCal programs.

The settlement, which was finalized this week, calls for PAMC Ltd. and Pacific Alliance Medical Center Inc. to pay $31.9 million to the United States and $10 million to the State of California.

The settlement resolves allegations brought in a “whistleblower” lawsuit that the defendants submitted or caused to be submitted false claims to Medicare and MediCal for services rendered to patients who had been referred by physicians with whom the defendants had improper financial relationships.

These improper relationships took the form of (1) arrangements under which the defendants allegedly paid above-market rates to rent office space in physicians’ offices, and (2) marketing arrangements that allegedly provided undue benefit to physicians’ practices.

The lawsuit alleged that these relationships violated the Anti-Kickback Statute and the Stark Law, both of which restrict the financial relationships that hospitals may have with doctors who refer patients to them.

The whistleblower lawsuit was filed by Paul Chan, who was employed as a manager by one of the defendants, under the qui tam provisions of the False Claims Act. Under the False Claims Act, private citizens can bring suit on behalf of the United States and share in any recovery. The United States may intervene in the lawsuit, or, as in this case, the whistleblower may pursue the action. Mr. Chan will receive over $9.2 million as his share of the federal recovery.

“This settlement is a warning to health care companies that think they can boost their profits by entering into improper financial arrangements with referring physicians,” said Special Agent in Charge Christian J. Schrank of the Department of Health and Human Services, Office of Inspector General (HHS-OIG). “Working with our law enforcement partners, we will continue to crack down on such deals, which work to undermine impartial medical judgement, drive up health care costs, and corrode the public’s trust in the health care system.”

The case, United States ex rel. Chan v. PAMC, Ltd., et al., CV13-4273 (C.D. Cal.), was monitored by the United States Attorney’s Office, the Civil Division’s Commercial Litigation Branch, and HHS-OIG.

A Report in the National Review claims Medicare and Medicaid together account for about $1 trillion in federal spending annually, and estimates suggest that $1 out of ever $10 of that spending is fraud. Some estimates go much higher.

According to Malcolm Sparrow, a Harvard professor of public management who studies medical fraud, the government’s approach long has been backward: “Basically, the audits they’re using on a random sample are nothing like fraud audits,” he told The Nation. “The difference between a fraud audit and a medical review audit – a medical review audit, you’re taking all the information as if it’s true and testing whether the medical judgment seems appropriate. You can use these techniques to see where judgments are unorthodox or payment rules have not been followed, but almost nothing in these methods tests whether the information you have is true.”

Which is to say, investigators are asking whether a certain treatment was in fact appropriate for what ails Mrs. Jones, not whether Mrs. Jones exists. Entitlement fraud is what security experts describe as an “adaptive threat,” meaning that it is a problem without a solution, because the problem mutates in response to every solution developed.

Fraud tends to cluster in certain areas and in certain treatment categories. The reason for that is that this fraud is not random, not just the result of some general practitioner padding his bills. It’s the work of organized crime. As Sparrow points out, when there is a criminal case filed against one of these fraud artists, then billing in a particular category – some years ago, it was HIV fusion treatments – falls off steeply, by as much as 90 percent. The implication here is that fraudulent billing may make up the majority of Medicaid and Medicare spending in some categories.

This is a major criminal enterprise, one involving transnational crime syndicates looking for a better return than that provided by drug smuggling and the other familiar rackets. According to The Economist: Some criminals are switching from cocaine trafficking to prescription-drug fraud because the risk-adjusted rewards are higher: the money is still good, the work safer and the penalties lighter. Medicare investigators in Florida regularly find stockpiles of weapons when making arrests. The gangs are often bound by ethnic ties to international venues.

On a dollar-per-dollar basis, the Department of Health and Human Services fraud-recovery units by most accounts do relatively effective work – but do not do very much of it, having recovered less than $2 billion in fraud losses in fiscal 2016. And there were only 1,160 convictions in fraud cases in 2016, or barely one fraud conviction a year for every two staffers in the anti-fraud division.

It should be understood that data mining isn’t a substitute for intelligent analysis – it isn’t a black box that can be switched on and start spitting out the home addresses of fraudsters. It is a tool, but one that can be used effectively only by an intelligent and creative team of human analysts.

But even problems that cannot be solved can be managed. The private sector may provide illustrative examples.

Peter Thiel is a Silicon Valley entrepreneur who cofounded PayPal. As a payment system, PayPal was a natural target for fraud artists, and it developed sophisticated anti-fraud protocols, some of which were incorporated into a subsequent Thiel business called Palantir, a powerful data-mining platform that is used by everybody from U.S. intelligence agents to police detectives, for tasks ranging from mapping out where IEDs are likely to be planted to – more relevant to our immediate concern here – identifying fraud.

The point here is that workers’ compensation administrators need to adapt quickly to new tools and technologies – more quickly than perpetrators adapt to new methods of perpetrating medical fraud.

The Department of Justice announced that Daniel J. Rush pleaded guilty in federal court this month to three felony counts: receiving an illegal payment as a union employee; honest services fraud; and conspiracy to commit structuring and money laundering.

In pleading guilty, Rush, 56, of Crescent City, Calif. (formerly of Oakland, Calif.), admitted that between 2011 and 2015 he was employed by the United Food and Commercial Workers International (UFCW International) as the Organizing Coordinator for the unofficial medical cannabis and hemp division. Rush admitted he violated the Taft-Hartley Act when he accepted compensation from employees in, or potentially in, a labor organization.

Rush also admitted he committed honest services wire fraud with the intent to deprive the UFCW of its right to his honest services and he conspired with workers’ compensation attorney Marc Terbeek, 55, of Berkeley, Calif., to launder money and to evade reporting requirements in an effort to conceal the source of the money.

Terbeek, was allegedly involved in a massive corruption case filed by the FBI’s Public Corruption and Civil Rights Squad. The FBI and IRS raided Terbeek’s office in January 2015 and since then he has been cooperating with investigators. The sworn Affidavit signed by FBI Special Agent Roahn Wynar attached to the criminal complaint against Daniel Rush claims the following scenario occurred.

Daniel Rush was an official with the United Food and Commercial Workers Union that had established a “Cannabis Division” to organize dispensary employees. He was also closely involved in Measure D, the process to regulate medical marijuana dispensaries in Los Angeles, and also connected to legalization’s most prominent pitchman: Lt. Gov. Gavin Newsom.

According to the allegations of paragraph 31 of the Affidavit , Tarbeek admitted to the FBI that he had been paying “kickbacks” to Rush for sending Terbeek legal work since 2004. Rush “encouraged” Terbeek to acquire a workers compensation law practice to litigate cases referred by the Insitutio Laboral de la Raza. In exchange Tarbeek gave Rush a credit card associated with Terbeek’s law firm and Terbeek paid it off routinely. Text messages confirmed this practice continued as late as February 2015. From 2010 to 2015, Rush spent $110,000 on Terbeek’s card, about $2,000 per month, for mostly personal expenses.

Also, Terbeek allegedly agreed to share legal fees with Rush derived from Terbeek’s clients seeking permits to operate dispensaries in California, Nevada, and beyond (Affidavit paragraph 34). After creation of this arrangement, Terbeek paid Rush $5000 as his “share” of the medical marijuana legal fees.

For his part in the scheme, on February 15, 2017, TerBeek was charged by information with one count of making a payment to a union employee, in violation of 29 U.S.C. § 186(a), and one count of willful violation of anti-structuring regulations, in violation of 12 U.S.C. § 1956.He pleaded guilty to both counts on February 16, 2017

Terbeek is scheduled to be sentenced by Judge Gilliam on August 21, 2017, and Rush will be sentenced on October 2. . Rush is looking at the possibility of 30 years in prison as well as a $565,000 fine but is currently free on a $100,000 bond

State Bar records reflect that Terbeek remains an active unrestricted member at this time.

A new opioid interstate study reports decreases in the amount and frequency of the drug prescribed to injured employees covered by workers’ compensation in several states. However, the Workers Compensation Research Institute’s (WCRI’s) study, Interstate Variations in Use of Opioids, 4th Edition, also found higher opioid use and other patterns of high-risk drug use in other states during the same time period.

The study examined 26 states’ workers’ compensation (WC) systems, which covered more than 430,000 nonsurgical WC claims and about 2.3 million prescriptions connected with those claims. The study also found that New York, Michigan, Kentucky and Maryland had the highest reduction in opioid use among the states with lower average uses by workers injured in 2010 and 2013.

The 26 states included in this study are Arkansas, California, Connecticut, Florida, Georgia, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maryland, Massachusetts, Michigan, Minnesota, Missouri, Nevada, New Jersey, New York, North Carolina, Pennsylvania, South Carolina, Tennessee, Texas, Virginia, and Wisconsin. These states represent over two-thirds of the workers’ compensation benefits paid in the United States.

The WCRI study shows decreases in opioid prescriptions in most of the 26 states it observed. But opioid addiction from pain-killers reportedly has reached epidemic heights.

Between 65% to 75% of injured workers on pain killers had at least one opioid prescription between 2013 to 2015, with the highest incidents in Arkansas (85%), South Carolina (80%) and Louisiana (80%). New York, Pennsylvania and Louisiana had the highest number of opioid claims among the 26 states – though, again, New York did see substantial decreases.

This report serves as a tool to monitor changes in opioid utilization as states implement reforms addressing opioid prescribing and dispensing. Moreover, by comparing variations in the use of opioids across the states, this study can help policymakers and stakeholders be better informed about the level of opioid use in their states and better target future efforts to address issues related to prescription opioids in their states.

But at the same time, more U.S. workers are testing positive for drug use, according to a May 2017 Quest Diagnostics ​study. In fact, addiction to cocaine, marijuana and methamphetamines is at a 12-year high, the study shows. Increases in drug addiction could present more misconduct issues for employers and raise treatment costs.

“This year’s findings are remarkable because they show increased rates of drug positivity for the most common illicit drugs across virtually all drug test specimen types and in all testing populations,” said Barry Sample, PhD, senior director, science and technology, Quest Diagnostics Employer Solutions.

The positivity rate in urine testing for cocaine increased for the fourth consecutive year in the general U.S. workforce and for the second consecutive year in the federally-mandated, safety-sensitive workforce. Cocaine positivity increased 12 percent in 2016, reaching a seven-year high of 0.28 percent, compared to 0.25 percent in 2015 in the general U.S. workforce, and seven percent among federally-mandated, safety-sensitive workers to 0.28 percent, compared to 0.26 percent in 2015.