Category: Daily News

A former California physician, 54 year old Julian Omidi who lives in West Hollywood, was sentenced Monday to seven years behind bars for using fabricated sleep studies to persuade insurance companies to pay out tens of millions of dollars for Lap-Band surgery. Fines and restitution are to be determined at a hearing in June.

The U.S. Attorney’s office reported that the former doctor and his company were found guilty in December 2021 by a federal jury of scheming to defraud private insurance companies and the Tricare health care program for military service members by fraudulently submitting an estimated $355 million in claims related to the 1-800-GET-THIN Lap-Band surgery business.

Julian Omidi, 53, of West Hollywood, and an Omidi-controlled Beverly Hills-based company, Surgery Center Management LLC (SCM), were found guilty of 28 counts of wire fraud and three counts of mail fraud. Omidi also was found guilty of two counts of making false statements relating to health care matters, one count of aggravated identity theft and two counts of money laundering. Omidi and SCM were found guilty of one count of conspiracy to commit money laundering.

According to evidence presented at his three-month trial, Omidi, a physician whose license was revoked in 2009, controlled, in part, the GET THIN network of entities, including SCM, that focused on the promotion and performance of Lap-Band weight-loss surgeries. Omidi established procedures requiring prospective Lap-Band patients – even those with insurance plans he knew would never cover Lap-Band surgery – to have at least one sleep study, and employees were incentivized with commissions to make sure the studies occurred.

Omidi used the sleep studies to find a reason – the “co-morbidity” of obstructive sleep apnea – that GET THIN would use to convince the patient’s insurance company to pre-approve the Lap-Band procedure.

After patients underwent sleep studies – irrespective of whether any doctor had ever determined the study was medically necessary – GET THIN employees, acting at Omidi’s direction, often falsified the results. Omidi then used the falsified sleep study results in support of GET THIN’s pre-authorization requests for Lap-Band surgery.

Relying on the false sleep studies – as well as other false information, including patients’ weights – insurance companies authorized payment for some of the proposed Lap-Band surgeries. GET THIN received an estimated $41 million for the Lap-Band procedures.

Even if the insurance company did not authorize the surgery, GET THIN still was able to submit bills for approximately $15,000 for each sleep study, receiving an estimated $27 million in payments for these claims. The insurance payments were deposited into bank accounts associated with the GET THIN entities.

Prosecutors estimate Omidi’s total fraudulent billings at approximately $355 million. The victim health care benefit programs include Tricare, Anthem Blue Cross, UnitedHealthcare, Aetna, Health Net, Operating Engineers Health and Welfare Trust Fund, and others. In 2014, the government seized more than $110 million in funds and securities from accounts held by individuals and entities involved in the criminal scheme, including Omidi.

According to Courthouse News, prosecutors had asked for a sentence of 22 years, even though under federal sentencing guidelines, Omidi could be sent to prison for life given the high amount of “intended” financial losses to his victims, including TRICARE, the U.S. military’s health care program.

The judge said she believed that the crimes Omidi had committed were serious but that the federal guidelines for fraud convictions were disproportionate.

“You could have earned a fine living without resorting to fraud,” she told Omidi, referring to his family background and education. “You should have known better.”

Omidi, before the judge imposed the sentence, told her that he was sorry and ashamed to be standing before the court.  “I live in constant remorse,” he said. “I worked hard all my life and tried to do the right thing. I didn’t want to harm anyone.”

Omidi’s lawyers had asked for a sentence of as low as 24 months in prison, arguing that the actual losses to the insurers were far less than the intended losses the government claimed and that two years incarceration would be sufficient punishment for a middle-aged man who has never been to prison before.

Omidi’s mother, Cindy, was sentenced to probation in 2015 after she was convicted of violating laws designed to prevent money laundering.

The expanded availability of opioid use disorder-related telehealth services and medications during the COVID-19 pandemic was associated with a lowered likelihood of fatal drug overdose among Medicare beneficiaries, according to a new study just published in JAMA Psychiatry,

This study is a collaborative research effort led by researchers at the National Center for Injury Prevention and Control, a part of the Centers for Disease Control and Prevention (CDC); the Office of the Administrator and the Center for Clinical Standards and Quality, both part of the Centers for Medicare & Medicaid Services (CMS); and the National Institute on Drug Abuse, a part of the National Institutes of Health (NIH).

In this national study, researchers analyzed data among two cohorts of Medicare beneficiaries to explore receipt of opioid use disorder-related telehealth services, receipt of medications for opioid use disorder, and fatal overdoses before and during the COVID-19 pandemic.

They compared data from two cohorts of Medicare beneficiaries across two time periods. The first cohort was constructed with data from September 2018-February 2020 and included 105,162 Medicare beneficiaries with opioid use disorder (the “pre-pandemic cohort”).

The second cohort was constructed with data from September 2019-February 2021 and included 70,479 Medicare beneficiaries with opioid use disorder, (the “pandemic” cohort).

In addition, the researchers conducted an analysis to examine the demographic and clinical characteristics associated with fatal overdose in the pandemic cohort.

Key findings of this study include:

– – Medicare beneficiaries that began a new episode of opioid use disorder-related care during the pandemic and received opioid use disorder-related telehealth services were found to have a 33% lower risk of a fatal drug overdose.
– – Medicare beneficiaries who received medications for opioid use disorder from opioid treatment programs (OTP) and those who received buprenorphine, one of the medications for opioid use disorder, in office-based settings also had reduced odds of a fatal drug overdose of 59% and 38%, respectively.
– – Mortality rates (classified as all-cause mortality and drug overdose mortality specifically) were higher in the pandemic cohort compared to the pre-pandemic cohort; however, the percentage of deaths due to drug overdose were similar between the two cohorts.

Although the results of this study were able to identify the positive impact opioid use disorder-related telehealth services had on lowering the risk for fatal drug overdose in the pandemic cohort, the authors note that only 1 in 5 Medicare beneficiaries in the pandemic cohort received OUD-related telehealth services.

Similarly, only 1 in 8 beneficiaries in the pandemic cohort received medications for opioid use disorder. These findings underscore the need for continued expansion of these potentially life-saving interventions across clinical settings.

“The results of this study add to the growing research documenting the benefits of expanding the use of telehealth services for people with opioid use disorder, as well as the need to improve retention and access to medication treatment for opioid use disorder,” said lead author Christopher M. Jones, PharmD, DrPH, Director of the National Center for Injury Prevention and Control, CDC. “The findings from this collaborative study also highlight the importance of working across agencies to identify successful strategies to address and get ahead of the constantly evolving overdose crisis.”

“At a time when more than 100,000 Americans are now dying annually from a drug overdose, the need to expand equitable access to lifesaving treatment, including medications for opioid use disorder, has never been greater,” said Wilson Compton, M.D., M.P.E, deputy director of the National Institute on Drug Abuse and senior author of the study. “Research continues to indicate that expanded access to telehealth is a safe, effective, and possibly even lifesaving tool for caring for people with opioid use disorder, which may have a longer-term positive impact if continued.”

“CMS is committed to ensuring that the beneficiaries we serve can access the high-quality behavioral health services they need,” said senior author Dr. Shari Ling, M.D., Deputy Chief Medical Officer at CMS. “This study shows that many beneficiaries were able to utilize opioid use disorder-related telehealth services during the pandemic, but we need to continue our efforts to broaden the use of telehealth, particularly in underserved communities.”

Kelly Gola and members of the class she represents were adjunct faculty – part-time university professors engaged to teach on a semester-by-semester basis – at the University of San Francisco.

Adjunct faculty at the University, of whom there are more than 600, are represented by a labor organization: the USF Part Time Faculty Association which had a Collective Bargaining Agreement (CBA) with the employer.

The University’s practice with respect to adjunct faculty was to hire them to teach individual classes on a semester-by-semester basis. For each semester, the University would issue appointment letters offering employment to prospective adjunct professors during a specified assignment period that ran from the first day of that semester’s classes to the end of the semester.

Gola filed a lawsuit against the University. Among other theories of recovery, as a first cause of action, the operative complaint alleged a claim for unpaid wages on behalf of Gola and a class of similarly situated adjuncts. According to this claim, the assignment letters set out the terms of an employment contract only for the period specified in the letters, i.e., the teaching semester, and set a salary for that period only.

Yet adjunct faculty were required to work outside that period to prepare syllabi and course materials before classes started, and to grade exams and submit final grades after classes ended, and they were not paid for their time outside the assignment period.

As a second cause of action, the operative complaint alleged that the University failed to issue wage statements in compliance with Labor Code section 226(a) because adjuncts’ wage statements did not include the total hours worked during the pay period and the effective hourly rate.

Finally, Gola asserted a derivative claim under the Private Attorneys General Act (PAGA) (§ 2698 et seq.) seeking civil penalties for the Labor Code violations asserted in counts one through three.

As an affirmative defense, the University asserted that Gola’s claims were preempted by The federal Labor Management Relations Act (LMRA) (29 U.S.C. § 141 et seq.). which preempts all state-law claims that require interpretation of a CBA.

This affirmative defense was bifurcated and tried to the court. Following the bench trial, the trial court issued a statement of decision holding that Gola’s first and third causes of action were indeed preempted because these claims could not be resolved without interpreting the CBA.

With respect to Gola’s second cause of action, the wage statement claim, the trial court determined this claim was not preempted by federal law. The wage statement claim proceeded to a bench trial on the merits. The trial court found that the wage statements the University issued to adjunct faculty did not include the “total hours worked by the employee” or the employee’s effective hourly rate. The trial court calculated statutory damages of $1,621,600 and PAGA penalties of $545,235. The trial court later issued an order awarding Gola $1,307,225.95 in attorneys’ fees and $21,510.23 in costs.

The University timely appealed the judgment, and Gola cross-appealed. The Court of Appeal affirmed the judgment in the published case of Gola v University of San Francisco – SF-A161477 (April 2023).

After the trial court issued its statements of decision and judgment, however, the Legislature enacted Labor Code section 515.7, which provides that faculty at nonprofit higher education institutions “shall be exempt” from the provisions of Labor Code section 226, subdivision (a)(2) and (9), provided they are employed in a professional capacity as defined in the statute, and provided they are paid a salary that meets at least one of three tests for minimum compensation (salary tests).

Among the various issues raised on appeal, the University contends that newly enacted Labor Code section 515.7 should be applied retroactively to this case. If it is so applied, the University contends, Gola’s section 226 claims must fail because Gola and the subclass will be classified as exempt for the relevant period.

The Court of Appeal noted that Labor Code Section 515.7 is plainly intended to create a pathway to accord adjunct faculty exempt professional status and relieve nonprofit universities of hour and pay reporting requirements for adjuncts, provided adjuncts’ pay meets one of the three salary tests. But the statute does not directly speak to whether it reaches back to hour and pay reporting obligations incurred before September 9, 2020 when it was adopted as an urgency measure, and thus taking effect that day.

The Court concluded “This silence in itself strongly indicates prospective application. Moreover, we find in the text of the statute itself an additional indication of prospective application…”

The Institute for Clinical and Economic Review (ICER) is an independent non-profit research institute that produces reports analyzing the evidence on the effectiveness and value of drugs and other medical services. ICER’s reports include evidence-based calculations of prices for new drugs that accurately reflect the degree of improvement expected in long-term patient outcomes, while also highlighting price levels that might contribute to unaffordable short-term cost growth for the overall health care system.

The Institute just released a 113 page Draft Evidence Report assessing the comparative clinical effectiveness and value of exagamglogene autotemcel (“exa-cel”, Vertex Pharmaceuticals and CRISPR Therapeutics) and lovotibeglogene autotemcel (“lovo-cel”, bluebird bio) for sickle cell disease. This preliminary draft marks the midpoint of ICER’s eight-month process of assessing these treatments, and the findings within this document should not be interpreted to be ICER’s final conclusions.

The world’s first CRISPR-based gene-editing therapy appears to be nearing the market. And an influential drug cost watchdog has an early idea of how the treatment should be priced to be considered cost-effective in sickle cell disease (SCD).

Vertex and CRISPR Therapeutics’ gene editing-based exa-cel – and bluebird bio’s gene replacement therapy lovo-cel – can be priced up to $1.93 million to be cost-effective, the Institute for Clinical and Economic Review said in a draft report (PDF) published Wednesday. The figure accounts for the drugs’ net prices after discounts and rebates.

The report comes shortly after Vertex and CRISPR last week said they had completed their rolling FDA applications for exa-cel in SCD and beta thalassemia with a request for priority review. If approved, exa-cel would become the first therapy based on the Nobel-winning CRISPR technology.

“Sickle cell disease can affect nearly every organ system in the body, and severe sickle cell disease affects nearly every aspect of a person’s life,” said ICER’s Chief Medical Officer, David Rind, MD. “From the earliest days of gene therapy, patients, families, and clinicians have imagined that someday it might be possible to address the underlying genetics of sickle cell to achieve a cure. These first two genetic therapies, using different technologies and altering different genetic targets may mean that day has nearly arrived.”

The prevalence of sickle cell disease is unknown, but CDC estimates place it at about 100,000 cases in the U.S. It is a blood disease that can spur chronic complications among all organs, and annual healthcare costs rack up to $2.98 billion, the ICER said.

The model developed to generate cost-effectiveness findings in ICER’s draft report used cutting-edge evidence from academic researchers and was informed by what matters to patients.  

Through collaborative input from patients, clinicians, health economists, payers, and manufacturers, ICER’s draft model not only includes the projected health benefits and cost offsets from reducing the acute events as measured in the clinical studies but also includes the projected benefits from eliminating the fear of future acute events, reductions in chronic events and mortality, health equity considerations, and reductions in lost productivity and caregiver burden.

Two proposed gene therapies for sickle cell disease (SCD) are each worth up to $1.9 million, according to an April 12 draft evidence report from the Institute for Clinical and Economic Review.Given that both gene therapies offer the promise of a potential cure, ICER compared them with standard of care over a lifetime.

The health economics reviewers figured the two therapies could cost between $1.58 million to $1.72 million under commonly used cost-effectiveness thresholds that only look at benefits within the healthcare system. The range goes up to between $1.79 million to $1.93 million when considering broader societal value.

Gene therapies typically cost multiple millions of dollars per treatment. Bluebird recently launched Zynteglo, a sister med to lovo-cel, at $2.8 million. Zynteglo is approved for beta thalassemia, a rare blood disorder that affects about 1 in 100,000 individuals.

It’s not immediately clear how bluebird or Vertex-CRISPR will price their therapies. A Vertex spokesperson said the company is still reviewing the report. In a separate statement, a bluebird spokesperson said the company hasn’t set a price for lovo-cel and is currently focused on completing its FDA application.

During an interview with Fierce Pharma, ICER’s chief medical officer, David Rind, M.D., stressed that the cost-effectiveness analyses are preliminary and may change. ICER is gathering public comments until May 9 and pushed back its final report publish date to July 13 in anticipation of more data on exa-cel.

Each year the California Chamber of Commerce releases a list of job killer bills to identify legislation that it says will decimate economic and job growth in California. Earlier this month, CalChamber released its 2023 Job Killer List which includes bills dealing with labor and employment issues, taxation, housing costs, and climate and energy policies, and it expects several additions to the list in the coming weeks.

The CalChamber has named the following as job killer bills for 2023 under the category of Labor and Employment, along with it’s summary of the impact on employers and jobs that they expect.

– – AB 524 (Wicks; D-Oakland) Expansion of Litigation Under FEHA. Exposes employers to costly litigation under the Fair Employment and Housing Act by asserting that any adverse employment action was in relation to the employee’s family caregiver status, which is broadly defined to include any employee who contributes to the care of any person of their choosing, and creates a de facto accommodation requirement that will burden small businesses.

– – AB 1156 (Bonta; D-Alameda) Expands Costly Presumption of Injury. Significantly increases workers’ compensation costs for public and private hospitals by presuming certain diseases and injuries are caused by the workplace and establishes an extremely concerning precedent for expanding presumptions into the private sector.

– – SB 525 (Durazo; D-Los Angeles) Costly Minimum Wage Increase. Imposes significant cost on health care facilities and any employer who works with health care facilities by mandating increase in minimum wage to $25.

– – SB 365 (Wiener: D-San Francisco) Undermines Arbitration. Discriminates against use of arbitration agreements by requiring trial courts to continue trial proceedings during any appeal regarding the denial of a motion to compel, undermining arbitration and divesting courts of their inherent right to stay proceedings.

– – SB 399 (Wahab; D-Hayward) Bans Employer Speech. Chills employer speech regarding religious and political matters, including unionization. Is likely unconstitutional under the First Amendment and preempted by the National Labor Relations Act.

– – SB 616 (Gonzalez; D-Long Beach) Costly Sick Leave Expansion on All Employers. Imposes new costs and leave requirements on employers of all sizes, by more than doubling existing sick leave mandate, which is in addition to all other enacted leave mandates that small employers throughout the state are already struggling with to implement and comply.

– – SB 627 (Smallwood-Cuevas) Onerous Return to Work Mandate. Imposes an onerous and stringent process to hire employees based on seniority alone for nearly every industry, including hospitals, retail, restaurants, movie theaters, and franchisees, which will delay hiring and eliminates contracts for at-will employment.

– – SB 723 (Durazo; D-Los Angeles) Onerous Return to Work Mandate. Imposes an onerous and stringent process for specific employers to return employees to the workforce for specified industries, including hotels and restaurants that have been disproportionally impacted by this pandemic, and removes guardrails on existing law by making mandate permanent and significantly broadening the applicability of the law.

– – SB 809 (Smallwood-Cuevas; D-Los Angeles) Prohibits Consideration of Conviction History in Employment. Prohibits nearly every employer from considering conviction history of an applicant or existing employee in employment decisions and imposes cumbersome process on employers that are legally not allowed to hire individuals with certain convictions.

“California’s robust private sector economy creates and maintains more than 17 million jobs, paying $1.6 trillion in annual wages and salaries,” said CalChamber President and CEO Jennifer Barrera. “Yet, cost pressures, workforce challenges, litigation threats, and California’s pernicious housing shortage are an ever-present threat to our continued success. Costly policies – like the ones on CalChamber’s job killer list – stifle job creation, reduce investment in our economy, and drive outward migration. Job killing policies make California unattractive both to current employers and entrepreneurs who, incidentally, generate the preponderance of the state’s tax revenue, and to those who might want to come here to invest in our future economy.”

The CalChamber tracks the bills throughout the rest of the legislative session and works to educate legislators about the serious consequences these bills will have on the state. Over the last five years, the outcome of bills on the past Job Killer Lists were as follows:

– – 2022: 19 Job Killers identified, 2 sent to Governor Gavin Newsom, 2 signed;
– – 2021: 25 Job Killers identified, 2 sent to Governor Newsom, 1 signed, 1 vetoed;
– – 2020: 19 Job Killers identified, 2 sent to Governor Newsom, 1 signed, 1 vetoed;
– – 2019: 31 Job Killers identified, 2 sent to Governor Newsom, 1 signed, 1 vetoed;
– – 2018: 29 Job Killers identified, 1 sent to Governor Edmund G. Brown Jr., 1 vetoed;
– – 2017: 27 Job Killers identified, 3 sent to Governor Brown, 2 signed, 1 vetoed;