Category: Daily News

An Orange County Social Services Agency (SSA) group counselor has been charged for defrauding over $30,000 from the County of Orange by making fraudulent statements relating to his workers’ compensation claim. Maluelue Tafua, 40, Orange, is charged with two felony counts of insurance fraud and two felony counts of making fraudulent statements. If convicted, Tafua faces a maximum sentence of eight years in state prison. He is out of custody on $20,000 bail.

At the time of the crime, Tafua worked as a group counselor for SSA.

On Jan. 8, 2014, Tafua is accused of claiming that he injured his right shoulder and elbow restraining someone while working at Orangewood Children’s Home. SSA attempted to accommodate his injury by assigning him to modified duties within the work restrictions prescribed by the treating physician. Tafua is accused of going to his doctor and claiming to be unable to use his right arm. SSA could not accommodate that restriction and placed Tafua on temporary total disability.

On June 3, 2014, Tafua is accused of bench pressing 315 pounds in a gym. During a medical appointment with his doctor the following day, Tafua is accused of claiming that his pain had not improved and that he had been complying with his treatment. He is accused of failing to report that he exercised using weights at the gym.

On July 14, 2014, the County began investigating this case after observing inconsistencies in the defendant’s statements, what was observed at the gym, and what activities he told the doctor he was capable of performing. Deputy District Attorney Pam Leitao of the Insurance Fraud Unit is prosecuting this case.

The Department of Justice has reached 70 settlements involving 457 hospitals in 43 states for more than $250 million related to cardiac devices that were implanted in Medicare patients in violation of Medicare coverage requirements. Twenty-seven California hospitals were included in the settlement: Irvine-based St. Joseph Health System agreed to pay $2.7 million on behalf of 10 affiliated hospitals; Sacramento-based Sutter Health agreed to pay $3 million on behalf of 12 affiliated hospitals; and San Diego-based Scripps Health agreed to pay $5.6 million on behalf of five affiliated hospitals.

An implantable cardioverter defibrillator, or ICD, is an electronic device that is implanted near and connected to the heart. It detects and treats chaotic, extremely fast, life-threatening heart rhythms, called fibrillations, by delivering a shock to the heart, restoring the heart’s normal rhythm.  It is similar in function to an external defibrillator (often found in offices and other buildings) except that it is small enough to be implanted in a patient’s chest. Only patients with certain clinical characteristics and risk factors qualify for an ICD covered by Medicare.

Medicare coverage for the device, which costs approximately $25,000, is governed by a National Coverage Determination (NCD). The Centers for Medicare and Medicaid Services implemented the NCD based on clinical trials and the guidance and testimony of cardiologists and other health care providers, professional cardiology societies, cardiac device manufacturers and patient advocates. The NCD provides that ICDs generally should not be implanted in patients who have recently suffered a heart attack or recently had heart bypass surgery or angioplasty. The medical purpose of a waiting period -40 days for a heart attack and 90 days for bypass/angioplasty – is to give the heart an opportunity to improve function on its own to the point that an ICD may not be necessary. The NCD expressly prohibits implantation of ICDs during these waiting periods, with certain exceptions.The Department of Justice alleged that from 2003 to 2010, each of the settling hospitals implanted ICDs during the periods prohibited by the NCD.

“The settlements announced today demonstrate the Department of Justice’s commitment to protect Medicare dollars and federal health benefits,” said U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida. “Guided by a panel of leading cardiologists and the review of thousands of patients’ charts, the extensive investigation behind the settlements was heavily influenced by evidence-based medicine. In terms of the number of defendants, this is one of the largest whistleblower lawsuits in the United States and represents one of this office’s most significant recoveries to date. Our office will continue to vigilantly protect the Medicare program from potential false billing claims.”

Most of the settling defendants were named in a qui tam, or whistleblower, lawsuit brought under the False Claims Act, which permits private citizens to bring lawsuits on behalf of the United States and receive a portion of the proceeds of any settlement or judgment awarded against a defendant. The lawsuit was filed in federal district court in the Southern District of Florida by Leatrice Ford Richards, a cardiac nurse, and Thomas Schuhmann, a health care reimbursement consultant. The whistleblowers have received more than $38 million from the settlements. The Department of Justice is continuing to investigate additional hospitals and health systems.

In the Angelotti Chiropractic federal constitutional challenge to the 2013 lien activation fee case, the United States Court of Appeals for the Ninth Circuit issued a decision in June holding that the preliminary injunction staying implementation of the lien activation fee should be vacated. The Court of Appeals denied a Rehearing Petition and issued its mandate to the District Court on October 19, 2015.

Under SB863, lienholders were to be afforded until December 31, 2013 to pay lien activation fees. The now vacated preliminary injunction went into effect on November 19, 2013 and the DWC deactivated the payment systems. As a result, lienholders – including lienholders not a party to this action – were unable to pay lien activation fees for 43 days prior to the December 31, 2013 deadline.

At an October 29 status conference in federal court, the parties agree that lienholders should be afforded at least 43 days to pay activation fees after the former payment systems are re-activated and the parties jointly requested that the deadline be made December 31, 2015. And the DWC requested that it be given until November 9, 2015 to reactivate the payment systems.

The Court ordered that the DWC has until November 9, 2015 to re-establish the activation fee payment systems. Any holder of a lien filed prior to January 1, 2013 shall be permitted to pay lien activation fees required by Cal. Lab Code § 4903.06 from November 9, 2015 to December 31, 2015. Any lien filed prior to January 1, 2013 for which the lien activation fee has not been paid on or before December 31, 2015 shall be dismissed by operation of law pursuant to Cal. Lab Code § 4903.06(a)(5). This provision shall have no effect on liens that were dismissed prior to this order.

In the event the payment systems are not re-established by November 9, 2015, or thereafter become non-operational, the December 31, 2015 deadline shall be extended by one calendar day for every day the payment systems are non-operational.

The Justice Department announced that Adventist Health System has agreed to pay the United States $115 million to settle allegations that it violated the False Claims Act by maintaining improper compensation arrangements with referring physicians and by miscoding claims. Adventist is a non-profit healthcare organization that operates hospitals and other health care facilities in 10 states including California.

The allegations arose from two lawsuits filed respectively by whistleblowers Michael Payne, Melissa Church and Gloria Pryor, who worked at Adventist’s hospital in Hendersonville, North Carolina, and Sherry Dorsey, who worked at Adventist’s corporate office, under the qui tam provisions of the False Claims Act. Sherry Dorsey was a former chief operating officer of Physician Enterprise, a division of Adventist Healthcare. The act permits private parties to file suit on behalf of the United States for false claims, and to share in any recovery. The whistleblowers’ share of the settlement has not yet been determined.

Sherry Dorsey worked at corporate headquarters and reported to top Adventist executive. At a meeting with executives in August 2012, Dorsey allegedly raised questions about 85 physicians who were paid above the 90th percentile of Medical Group Management Association benchmarks for their specialties. Many of them were paid $1 million a year, and some got $2 million or $3 million, according to the complaint. “It was humanly impossible for each of the doctors to have work relative value units [RVUs] that would normally be attributed to the work of 5, 6, or 7 full-time doctors in the same field of practice,” the complaint said. Dorsey suggested assessments of the coding and billing practices of the physicians to determine if there were any irregularities, but she allegedly was rebuffed because the audits would be too expensive. Still, Dorsey continued to sound alarms about physician compensation. Adventist allegedly quantified Stark-related overpayments, but didn’t repay them. “She was, in essence, told to play ball, to not raise too much of a fuss about it,” says Atlanta attorney Marlan Wilbanks, who represents Dorsey.

The other complaint filed by Michael Payne, Melissa Church and Gloria Pryor describes how Adventist hospitals pay physicians generously even though their practices lose money. The losses are “tolerated” only because the hospitals track the value of the physicians’ referrals and “know they can more than make up for those losses through the marginal gains in income that the [hospitals realize]” from the referrals for inpatient and ancillary services, the complaint alleged.

There were no subpoenas or depositions on the way to the resolution of two false claims cases. Because Adventist self-disclosed some violations to the Department of Justice, it was given credit for cooperation, and the case moved through with relative speed and no formal litigation,

The cases, United States ex rel. Payne, et al. v. Adventist Health System/Sunbelt, Inc., et al. No. 12-856 (W.D.N.C), and United States ex rel. Dorsey v. Adventist Health System Sunbelt Healthcare Corp., et al., No. 13-217 (W.D.N.C), were handled by the Civil Division’s Commercial Litigation Branch, the U.S. Attorney’s Office of the Western District of North Carolina and HHS-OIG. The claims settled by this agreement are allegations only, and there has been no determination of liability.

Drug pricing advocates affiliated with AIDS Healthcare Foundation (AHF) announce they will file close to 550,000 signatures of registered California voters with state election officials by November 2nd in order to qualify The California Drug Price Relief Act, a statewide ballot initiative that will revise California law to require state programs to pay no more for prescription medications than the prices negotiated by the U.S. Department of Veterans Affairs. The V.A. generally pays 20% to 24% less than any government program. The advocates intend to qualify the measure for the November 2016 presidential election ballot in California.

Separately, advocates from AHF and ‘Ohioans for Fair Drug Prices’ have been collecting voter signatures in Ohio for a similar drug pricing ballot measure since mid-August. State officials approved petition language in early August. Both the California and Ohio measures are expected to qualify for, and appear on the November 2016 presidential election ballots in their respective states.

To qualify the California measure, 365,880 valid signatures of registered voters are needed (5% of all votes cast for governor in the most recent statewide election, which was held in November 2014). However, as a cushion, advocates, who began collecting signatures in early April, will continue to collect signatures up until the October filing deadlines. Signatures are to be submitted to the respective counties statewide, and after signature certification, the ballot measure is expected to be placed on the November 2016 California ballot.

“As of August 16th, we had already collected enough signatures to qualify our California ballot measure, which, when passed by voters in November 2016, will compel state officials to obtain V.A. pricing – by far, the lowest pricing available to any government agency – for the purchase of prescription drugs for use in state programs,” said Michael Weinstein, president of AIDS Healthcare Foundation and one of the citizen proponents of the California measure.

“Nationally, prescription drug spending increased more than 800 percent between 1990 and 2013, making this one of the fastest-growing segments of health care,” said Tracy Jones, Executive Director of the AIDS Taskforce of Greater Cleveland and one of the citizen proponents of the Ohio measure. “Spending on specialty medications, in particular, such as those used to treat HIV/AIDS, Hepatitis C, and cancers, are rising faster than other types of medications. In 2014 alone, total spending on specialty medications increased by more than 23 percent. And although Ohio has engaged in efforts to reduce prescription drug costs through rebates, drug manufacturers are still able to charge the state more than other government payers for the same medications, resulting in a dramatic imbalance that must be rectified. That is why we are mounting this initiative, bringing the critical issue to legislators and, if necessary, directly to Ohio voters if the legislature fails to act.”