Category: Daily News

An Orange County Grand Jury last week indicted 45-year-old Kareem Ahmed and 14 others, alleging he formulated topical creams and oversaw an extensive network of kickbacks that paid doctors and pharmacists more than $25 million to prescribe and distribute the products. Ahmed, president of Ontario company Landmark Medical Management, and the others face a total of 44 counts on felony charges including conspiracy, trading rebates for patient referrals, insurance fraud and involuntary manslaughter, according to two grand jury indictments.

The Los Angeles Times back story says that “with little prior history of political giving, Ahmed emerged as a major donor to Obama’s 2012 reelection campaign, giving $1 million to the pro-Obama Priorities USA Action that year, and an additional $5,000 to the president’s campaign, according to data from the Center for Responsive Politics. In addition, Ahmed made the center’s list of 100 top donors to outside spending groups, and also gave $100,000 each to the House Majority PAC and Senate Majority PAC, and thousands more to the Democratic Congressional Campaign Committee and the Los Angeles County Democratic Central Committee.”

The website CampaignMoney.com, which tracks political donations, shows that Ahmed also donated $75,800 in total to the Obama Victory Fund in 2012. Other beneficiaries of Ahmed’s generosity include the Majority PAC and the House Majority PAC, which both received $100,000. Ahmed reportedly donated to a number of Democratic senators and representatives, including $5,000 to Florida Sen. Bill Nelson’s 2012 re-election campaign. In 2013, he contributed $5,200 to Pennsylvania Sen. Bob Casey’s coffers.

The Daily Caller claims that Ahmed also gave California Rep. Brad Sherman a total of $7,500 in 2012. That seemingly merited a shout of from Sherman on the House floor. On June 27, 2012, the politician hat-tipped Ahmed and another doctor in attendance who, said Sherman, “show such leadership of the Muslim community in the Los Angeles area.”

According to TPM, Ahmed claimed in a 2012 interview with the outlet that California Rep. Nancy Pelosi was his “best friend.”

The Orange County Weekly goes on with this back story. One year before that, then-Assemblyman and Assembly Insurance Committee Chairman Jose Solorio (D-Santa Ana) sponsored a bill to stop workers comp profiteering through “drug compounding,” which involves using multiple medications to create a chemical remedy specifically for one patient. It is labor intensive, costly and, according to Solorio’s legislation, devastating to California’s already bloated workers comp system. “Drug compounding–a legal but rarely necessary practice–has exploded as a physician profit-center in workers comp,” Solorio said at the time. “That practice must be stopped.”

Before Governor Jerry Brown signed Solorio’s bill into law in October 2011, the legislation withstood heavy lobbying from Ahmed’s Ontario-based company, Landmark Medical Management. The firm’s former vice president, Bruce Curnick, took credit for gathering opposition to the bill, convincing all Republicans in the State Senate to oppose it so there would not be enough votes for it to advance to the governor and helping hammer out a more industry-palatable version for Brown to sign after the Assembly-Senate negotiations. The State Bar disbarred Curnick in 2000 for misappropriating about $40,000 of client funds, disregarding the welfare of seven clients, acts of moral turpitude and 15 other violations of professional rules. Curnick reportedly mentioned to Talking Points Memo that Solorio’s bill as signed into law was essentially toothless because doctors could get around restrictions by administering the compounds themselves in their offices.

Other interesting cases are pending that raise questions about the role of political influence. Sen. Ronald S. Calderon and his brother, Tom, have been indicted on public corruption charges. The case alleges that Ronald Calderon accepted $88,000 in bribes from an undercover FBI agent and a businessman to affect legislation to extend film-industry tax credits and to change workers’ compensation laws.

It goes without saying that the top twenty pharmaceutical companies and their two trade groups, Pharmaceutical Research and Manufacturers of America (PhRMA) and Biotechnology Industry Organization, lobbied on at least 1,600 pieces of legislation between 1998 and 2004. According to the non-partisan Center for Responsive Politics, pharmaceutical companies spent $900 million on lobbying between 1998 and 2005, more than any other industry. During the same period, they donated $89.9 million to federal candidates and political parties, giving approximately three times as much to Republicans as to Democrats. According to the Center for Public Integrity, from January 2005 through June 2006 alone, the pharmaceutical industry spent approximately $182 million on Federal lobbying. The industry has 1,274 registered lobbyists in Washington D.C.

So the question is this. What does the pharmaceutical industry expect to gain in return?

The California Department of Insurance announced an agreement with the University of California, San Francisco to provide meaningful information to consumers about healthcare prices and quality. The health care pricing and quality transparency project is funded by a federal Cycle III Rate Review Grant from the U.S. Department of Health and Human Services that was awarded to the California Department of Insurance as part of an initiative under the Affordable Care Act.

“Consumers today have limited or no access to information about the price and quality of healthcare services before they receive care. Purchasing healthcare is like shopping in a department store with a bag over your head-you have no idea what the medical costs are before you get the bill. Increased access to medical pricing and quality information is vital to help consumers make more informed decisions about their care, because the best quality care is not necessarily the most expensive care,” said Insurance Commissioner Dave Jones. “Transparency in medical pricing should improve competition and result in lower medical costs, as patients will vote with their feet if medical provider prices exceed those of competitors.”

Under the agreement with the California Department of Insurance, researchers at the Philip R. Lee Institute for Health Policy Studies at UCSF will collect and analyze data to develop price and quality information for a number of common medical procedures and episodes of care. The information will be made available online. In the initial stage of the project, UCSF’s analysis will provide average prices for geographic regions within the state using a number of data sources, including private commercial health insurance and public health programs such as Medicare.

“There are increasing calls for transparency about price and quality in California and nationally”, said Dr. Adams Dudley, Associate Director for Research at the Philip R. Lee Institute for Health Policy Studies, at UCSF. “We look forward to making more information available to California patients and their families, so they can make more informed decisions about where to get health care.”

Pursuant to the agreement with Department of Insurance, UCSF will also convene a collaborative stakeholder process with a diverse range of stakeholders, to obtain ongoing feedback regarding the project, build partnerships with interested parties, and ensure the healthcare pricing and quality project provides useful information to a number of important audiences, including consumers, businesses, health insurers and healthcare providers.

Commissioner Jones continued, “As the first price and quality transparency initiative undertaken by the State of California, we look forward to collaborating with all interested stakeholders and public agencies to make healthcare pricing and quality information available in a sustained way for all Californians.”

A specialized skin cream prescribed by a local doctor for a woman’s back and knee pain allegedly killed her 5-month-old baby after he came in contact with it, according to a Los Angeles coroner’s report. The infant’s parents are suing the mother’s doctor, whose involvement in the case also led to his being charged with involuntary manslaughter in an indictment filed last week by the Orange County Grand Jury.

According to the story on the Southern California Public Radio website, the parents of the baby, Andrew Gallegos, have filed a product liability and medical negligence lawsuit against Dr. Andrew Jarminski, physician assistant Joseph Gutierrez, Healthcare Pharmacy, Allied Medical Group and Industrial Pharmacy Management. Industrial Pharmacy Management, has a connection to another massive workers’ compensation fraud case. Industrial Pharmacy Management’s managing partner is Michael Drobot, who pleaded guilty in federal court in April to his role in a half billion dollar workers’ compensation fraud scheme.

The lawsuit claims Gallegos’ mother, Priscilla Lujan, went to Jarminski’s Long Beach office in February 2012 for treatment of injuries she suffered while working at Goodwill Industries. Medical records show Jarminski allegedly prescribed Lujan a compound transdermal cream comprised of the antidepressant amitriptyline, the pain reliever tramadol and the cough suppressant dextromethorphan.

Lujan’s attorney, Shawn McCann, claims she went home that night and applied the cream to her knee and back, as she was directed by Jarminski. After using the medication, she took care of her baby, including preparing a bottle for him and bouncing him on her knee and holding him over her shoulders, according to McCann. Lujan put the baby to sleep in her bed and awoke in the morning to find him unresponsive. He died an hour later “as a result of multiple drug intoxication,” according to the autopsy report. The report also stated that Andrew had high levels of three drugs in his system – the same drugs in the compound cream prescribed by Jarminksi. Tramadol and dextromethorphan were present at lethal levels, the coroner found. Ruling the death a homicide, the coroner’s report said the high levels of drugs in the baby’s blood could not result from incidental skin absorption or passive transfer, and instead suggested the baby ingested the medication. Medication residue was found on one of the baby’s bottles, the coroner reported.

Lawyers for Jarminski, Gutierrez, Healthcare Pharmacy, Allied Medical Group and Industrial Pharmacy Management did not return calls from KPCC seeking comment.

Lujan was arrested after her son’s death, but the Los Angeles District Attorney declined to file charges because of insufficient evidence, according to spokeswoman Jane Robison. The lawsuit suggests the compound cream should not have left Jarminski’s office because its label said it was only to be applied in a medical office under a doctor’s direction. There were other problems with the label, McCann said. “It wasn’t properly labeled with [Lujan’s] name, what the prescription was for, or how to use it,” he said.

The cream Jarminski prescribed for Lujan was costly. Workers’ compensation records show Jarminski’s office billed $1,700 for the initial 25-day supply of the cream. Jarminski was informed the cream was linked to Lujan’s son’s death but, according to McCann, that didn’t stop the doctor from sending more creams. “Priscilla had expressed she didn’t want to see that cream anymore or use it anymore,” McCann said. “Despite that they continued to send her more creams by mail and bill workers’ comp for it.” McCann said at least two to four more tubes of cream were sent to Lujan after her son’s death. It’s unclear how much Jarminski billed in workers’ compensation claims for those additional tubes.

The prescription, production and distribution of compound transdermal creams are at the center of the sealed indictment delivered last week by the Orange County Grand Jury. Fifteen people were indicted for their roles in the alleged scheme, which purportedly involved more than $25 million in kickbacks paid to physicians who prescribed the creams. Jarminski was among those indicted by the grand jury, as was Michael Rudolph, the owner of Healthcare Pharmacy, which is named in Lujan’s lawsuit. Healthcare Pharmacy’s name is on the label of Lujan’s prescription as the preparer of the compound cream. Rudolph was indicted along with Jarminski for fraud and involuntary manslaughter, as was the scheme’s alleged mastermind, Kareem Ahmed. Jarminski is associated with Allied Medical Group (another firm named in Lujan’s suit), as is Dr. Daniel Capen, who was also indicted by the grand jury on fraud charges.

California lawmakers on Thursday moved to restrict the number of football practices in which students are allowed to tackle each other, due to concerns that permanent brain damage could result from concussions among high school athletes.

The measure, which would require approval from a medical professional before students who suffer head injuries may return to the field, is the latest action by U.S. lawmakers to try to minimize brain damage to professionals and students during sporting events. “We have a multitude of evidence that this does not just affect professional athletes, but that younger kids who are still developing are just as susceptible,” the bill’s author, Democratic Assemblyman Ken Cooley, said in a statement. “Medical research has shown hits don’t have to produce a concussion to have long-lasting effects.”

If signed by Democratic Governor Jerry Brown, the measure, AB 2127 by Democratic Assemblyman Ken Cooley of Rancho Cordova .passed by the state senate on a 23-5 vote on Thursday, would make California the 20th U.S. state to restrict practices by middle school and high school football teams during which tackling and other full-contact activities are allowed.

Several studies have noted an increase in high school concussions in recent years, although it is not clear whether the rise is due to more injuries or improved diagnosis. Numerous professional players have developed severe symptoms believed to have been caused by repeated head trauma.

Under Cooley’s bill, any player who is suspected of having a head injury must be removed from athletic activity for the rest of the day. He or she cannot return to play unless the activity is approved by a licensed health care provider. The bill also forbids high school or middle school football teams from conducting more than two practices per week during the season and pre-season during which tackling and other full-contact activities are allowed.

Such practices are banned altogether during the off-season, and may last no more than 90 minutes during the season.

An article on the Southern California Public Radio website reports that the Orange County Grand Jury has indicted 15 people – including a major donor to President Barack Obama’s re-election campaign, 10 doctors and a pharmacist – for their alleged involvement in a multi-million dollar workers compensation fraud scheme. The alleged ringleader and two others also face one charge of involuntary manslaughter. The sealed indictment – obtained by KPCC – accuses Obama donor Kareem Ahmed of orchestrating the elaborate operation. According to the filing:

1) Ahmed allegedly hired pharmacists to produce three compounded transdermal creams.
2) Ahmed then paid kickbacks to a number of physicians and chiropractors to prescribe the creams to their workers’ compensation patients.
3) Ahmed then allegedly conspired with the doctors to submit fraudulent workers’ compensation claims.

Ahmed allegedly paid physicians a total of more than $25 million to dispense the compound creams between June 15, 2010, and Dec. 31, 2012, according to the indictment. The amounts individual doctors received between 2010 and 2013 ranged from $600,000 to more than $2.5 million, it alleged. Among those Ahmed allegedly paid were Daniel Capen, M.D. (more than $2.5 million); Andrew Jarminski, M.D. (more than $1.9 million); pharmacist Michael Rudolph (more than $1 million); and Rahil Kahn, M.D. (more than $1 million), according to the indictment.

KPCC tried to reach Capen, Jarminski, Rudolph and Kahn for comment, but they were unavailable.

Ahmed allegedly gave the “‘kickback’ scheme the appearance of legitimacy by requiring the physicians and the pharmacists to sign a contract for purchase of future accounts receivables,” the indictment said.

One of the 44 counts in the indictment charged Ahmed, Rudolph and Jarminski of involuntary manslaughter. It alleged that on or about Feb. 3, 2012, the three “did unlawfully and without malice kill Andrew G. (a minor) … in the commission of a lawful act which might produce death, in an unlawful manner and without due caution and circumspection.” The indictment gave no other details.

Ahmed is president and CEO of Landmark Medical Management, an Ontario firm. In response to a request for comment, his assistant Ladonna Hieber emailed a statement: “Kareem Ahmed and his staff are innocent of all charges that have been alleged. The charges are meritless and we expect full exoneration of any wrongdoing.”

A spokeswoman at the Orange County DA’s office said she cannot comment on the indictment, since it is sealed.

An October 2012 article by Talking Points Memo first raised questions about his alleged business practices. The Orange County DA’s office raided Landmark Medical’s offices last October.

Ahmed was a top donor to Democratic efforts in 2012. He gave more than $1 million, with most of it going to the pro-Obama super PAC Priorities USA Action, according to data compiled by the Center for Responsive Politics.