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The Office of Self-Insurance Plans is a program within the director's office of the Department of Industrial Relations responsible for the oversight and regulation of workers' compensation self-insurance in California.

OSIP is also responsible for establishing and insuring that required security deposits are posted by self-insurers in amounts sufficient to collateralize against potential defaults by self-insured employers and groups.

OSIP has posted proposed regulations that will require self-insured public entities to file annual reports providing demographic, claim and financial data regarding their workers’ compensation programs. The reports will be due by October 1 of each year and shall cover liabilities for the preceding July 1 - June 30 fiscal year.

The proposed regulations, mandated by Governor Edmund G. Brown Jr.’s 2012 workers’ compensation reforms, will allow for greater transparency of the solvency and viability of self-insured workers’ compensation programs and the true liabilities of public entities.

As specified by Labor Code section 3702.2(a), the changes would require public entities to report portions of their financial statements pertaining to workers’ compensation liabilities.

Public entities would also be required to provide aggregate information as a point of reference for other public entities.

The proposed regulations were developed in accordance with the recommendations of a 2014 report conducted by the Commission on Health and Safety and Workers’ Compensation, Examination of California Public Sector Self-Insurance Workers’ Compensation Program.

The notice and text of the regulations can be found on the proposed regulations web page.

A public hearing on the proposed regulations has been scheduled for 10 a.m. January 23, 2019, in Room 11 at the Elihu M. Harris State Building, 1515 Clay Street, Oakland, 94612. Members of the public may also submit written comments on the regulations until 5 p.m. that day ...
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/ 2018 News, Daily News
Forty years ago, virtually all surgery was performed in hospitals.

Now, ambulatory surgery centers (ASCs) are health care facilities that offer patients the convenience of having surgeries and procedures performed safely outside the hospital setting. At a time when most developments in health care services and technology typically come with a higher price tag, ASCs stand out as an exception to the rule.

The Workers Compensation Research Institute found an overall shift away from hospital care in workers comp systems across 18 states, with the trend toward receiving care at less-expensive ambulatory surgical centers and nonhospital settings.

Using data from 2002 to 2016, virtually all study states saw a downturn in the percentage of claims with both hospital inpatient and outpatient services, according to Rebecca Yang, a senior public policy analyst with the Cambridge, Massachusetts-based institute.

Business Insurance reports that "Part of the shift follows the trend in general health care and part of it might be influenced by states," Ms. Yang told listeners on a webinar, noting that several states have introduced medical fee schedule changes and other reforms that caused payers to rethink more-expensive hospital care as a first resort.

The study states included California, Connecticut, Florida, Georgia, Illinois, Indiana, Iowa, Louisiana, Massachusetts, Michigan, Minnesota, New York, North Carolina, Pennsylvania, Tennessee, Texas, Virginia and Wisconsin.

Technological advances, now in place at surgical centers and other nonhospital locations, are helping to fuel the trend away from hospital care for injured workers, she said.

Lower prices at surgical centers are also spurring the switch, she added. The WRCI data found that care in the nonhospital setting is typically 40% less expensive than that at hospitals.

Surgeries, among the most costly care, were focus of the research, she said. Knee surgeries performed at ambulatory surgical centers cost 21% to 76% less than at hospitals at 14 states included in the study, according to Ms. Yang’s presentation.

For treatment performed at hospitals, outpatient services are increasing, with cumulative data from 2000 to 2016 showing 39.6% more outpatient activity and only 1.7% more inpatient admissions over that same time, according to data presented during the webinar.
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/ 2018 News, Daily News
Section 111 of the Medicare/Medicaid SCHIP Extension Act (MMSEA) of 2007, at its most basic level, requires insurers and self-insureds to both identify Medicare beneficiaries with whom they pay benefits or settlements associated with workers’ comp, no fault or liability claims and - once identified - report data to Medicare as directed by the Secretary of Health & Human Services.

The reporting act originally mandated that failure to comply with the reporting requirements "shall be subject to a civil money penalty of $1,000 for each day of noncompliance" for each individual for which the information should have been submitted. With the threat of severe penalties, the insurance industry quickly responded, obtaining Responsible Reporting Entity (RRE) IDs and implementing claims system updates and section 111 compliance programs as quickly as possible.

Enter the SMART Act. On January 10, 2013, President Obama signed into law the Medicare IVIG Access and Strengthening Medicare and Repaying Taxpayers Act of 2012. The SMART Act, among other things, softened the language relative provide CMS with discretion not only to the imposition of the penalty but also into the amount of the penalty.

Now, civil money penalties "may be subject to a civil money penalty of up to $1,000 for each day of noncompliance with respect to each claimant." The SMART Act also required the Secretary to quickly solicit proposals determining "specified practices for which such sanctions will and will not be imposed" via the regulatory process.

About a year after the SMART Act was signed into law, CMS kicked off the rulemaking process with an advance notice of proposed rulemaking (ANPRM). The ANPRM sought comment on: what types of practices "would or would not" result in the imposition of civil money penalties; methods to determine the dollar amount of civil money penalties; and ways in which CMS may define what constitutes "good faith efforts" to identify a Medicare beneficiary. CMS received thirty four written comments to the ANPRM, but has done little since issuing the ANPRM.

In the ten years following the introduction of mandatory insurer reporting, the industry has yet to see any evidence of enforcement in the form of the imposition of dreaded civil money penalties.

However, CMS has issued yet another abundantly clear signal that Medicare Secondary Payer (MSP) enforcement will be a priority in 2019.

Now, an additional notice on the Office of Management and Budget (OMB) website has been posted which indicates that CMS will move forward with a Notice of Proposed Rulemaking (NPRM) on "Civil Monetary Penalties (CMPs) and Medicare Secondary Payer Requirements."
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/ 2018 News, Daily News
The U.S. Food and Drug Administration has declined to approve an abuse-deterrent version of Mallinckrodt Plc’s opioid painkiller Roxicodone, saying some parts of the company’s application need further evaluation.

Mallinckrodt is one of the nation’s largest manufacturers of oxycodone - the most commonly abused prescription painkiller after hydrocodone in 2016.

The treatment is a reformulated version of the company’s commonly abused painkiller Roxicodone, intended to make the drug less desirable and more difficult to be abused by snorting or injecting.

The decision comes after an advisory panel to the FDA voted 10-7 in favor of the drug, saying it should be labeled as abuse deterrent only by the nasal route.

"While all the abuse deterrent properties of this medication are perhaps not as robust as we might like, it is an important advance over the existing formulation," Brian Bateman, a panel member who had voted in favor of the drug’s approval, had then said.

The panel members, during the Nov. 14 meeting, also raised concerns of Mallinckrodt’s treatment creating the same problem as Endo International Plc’s reformulated Opana ER did.

Endo withdrew the drug from the market last year after postmarketing data showed that while the rates of nasal abuse associated with Opana fell, rates of intravenous abuse rose.

"We are evaluating the FDA’s letter and will request a meeting in the coming weeks to discuss it further," Matt Harbaugh, president of the company’s specialty generics unit said in a statement ...
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/ 2018 News, Daily News
Aaron Lindh, was employed as a law enforcement officer when he sustained injury arising out of and in the course of employment to his left eye. More specifically, Lindh took three to six blows to the left side of his head while engaged in a canine training course.

Afterwards, he "suffered severe headaches lasting between several hours to one or two days." Over a month later, while off-duty, Lindh suddenly lost most of the vision in his left eye.

Dr. David Kaye, a neuro-ophthalmologist and the QME, concluded, as had the other physicians, that Lindh’s "blood circulation to his left eye was defective." He stated Lindh "did not have any disability prior to receiving the blows to the head." And "[a]bsent the injury," he thought Lindh "most likely would have retained a lot of his vision in that eye," although he could not "guess" how much. Dr. Kaye agreed "it [was] possible that [Lindh] could have gone his entire life without losing vision." He also agreed, however, that even had Lindh not suffered the blows to his head, he still could have lost his vision "due to this underlying condition."

As to apportionment, it was Dr. Kaye’s "opinion that [Lindh’s] underlying vasospastic personality and vasculature placed him at high risk for damage to different parts of his body." In discussing his initial apportionment of 90 percent (which he adjusted to 85 percent), Dr. Kaye stated, "90 percent [is] due to the underlying condition and 10 percent due to the stress of the injuries," He subsequently repeated it was "unlikely" Lindh would have suffered a vision loss if he had not had the "underlying condition" of "vascular spasticity," a condition that is "rare."

The parties stipulated "the medical record, not including apportionment, rates 40 percent permanent disability, and with apportionment, rates six percent permanent disability." The ALJ rejected Dr. Kaye’s apportionment analysis, and found Lindh had 40 percent permanent disability, and the WCAB affirmed the ALJ’s decision. The Court of Appeal reversed and ordered 85% apportionment in the published case of City of Petaluma v WCAB and Aaron Lindh.

The Court of Appeal rejected the arguments presented by the Board, and the California Applicant's Attorneys Association acting as amicus,"that there must be medical evidence that an asymptomatic preexisting condition will, in and of itself, naturally progress to disable the claimant.." pointing out that the argument "reflects the law prior to 2004."

The 2004 enactment of Senate Bill No. 899 overhauled the statutes governing apportionment. The Legislature intended to reverse a number of the features of the worker’s compensation law, including eliminating the bar against apportionment based on pathology and asymptomatic causes.

"Lindh’s suggestion that apportionment is required only where there is medical evidence the asymptomatic preexisting condition would invariably have become symptomatic, even without the workplace injury, reflects the state of the law prior to the 2004 amendments."

"Under the current law, the salient question is whether the disability resulted from both nonindustrial and industrial causes, and if so, apportionment is required."

"Whether or not an asymptomatic preexisting condition that contributed to the disability would, alone, have inevitably become manifest and resulted in disability, is immaterial."

The post-amendment cases uniformly focus on whether there is substantial medical evidence the disability was caused, in part, by nonindustrial factors, which can include pathology and asymptomatic prior conditions for which the worker has an inherited predisposition.
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/ 2018 News, Daily News
The California Department of Industrial Relations Division of Workers Compensation requested that RAND review the California workers' compensation Medical Legal fee schedule, which has not been revised since 2007. RAND published it findings in a new 30 page report.

Remarkably, RAND points out that the business model for QME reporting has evolved to a system engineered by "management organizations" that "pay the physician performing the evaluation."

In this regard RAND reports that "Management organizations provide administrative and support services to a significant percentage of physicians performing ML examinations. Typically, these organizations provide office space, scheduling, and transcription services, obtain the medical records pertinent to the examination, submit the required ML reports, bill for the services, and pay the physician performing the evaluation."

"The physicians under contract to these organizations are listed as individuals on DWC’s listing of qualified QMEs but the practice locations and phone numbers are those supported by the management company. Some management organizations do not require an exclusive contract, so that the listings for an individual (limited to ten locations by SB 863) may be associated with more than one management organization and/or their private practice location."

Users of ML reports indicated that 10-20% of initial evaluations involve supplemental reports that result from the lack of coordination between the ML examiners and the primary treating physicians over diagnostic tests needed for an evaluation and delays in obtaining the medical records in sufficient time for review before the scheduled examination.

Several claims administrators noted the tendency of some examiners to file initial evaluation reports that are incomplete with regard to one or more findings. This forces the claims administrator to either ask for a supplemental report or withhold payment until a complete report is filed. The latter action does not happen often because it could harm the claims administrator’s relationship with the examiner and potentially risks less favorable permanent disability ratings.

RAND found that the $250 per hour rate used to determine the ML allowances is significantly higher than the 2017 allowances for evaluation and management services that consist of similar activities.

It suggests converting the allowance for an extraordinarily complex evaluation into a flat rate based on the complexity of the issues that need to be addressed by the evaluator. Nine states have a flat rate payment, most of which vary by the type or number of body parts.

Consideration should be given to establishing policies that provide incentives for completing high quality reports that address the issues outlined in the cover letter(s) from the parties requesting the evaluation. Timely completion of reports could be incentivized by establishing a higher payment for timely submissions ...
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/ 2018 News, Daily News
A doctor and patient were charged with insurance fraud for billing over $850,000 to an insurance provider for medically unnecessary prescriptions.

Between May 2014 and September 2014, Sabina Maciel Acevedo, 48, who lives in Anaheim, is accused of completing four compound cream prescription forms for herself and three immediate family members without receiving medical examinations.

Dr. David Todd Asher, 50, who lives in Fullerton, is accused of signing all of the forms without examining any of the family members or customizing each prescription. He was a graduate of the Dartmouth Medical School in 1997.

The completed prescription forms were sent to San Dimas Pharmacy in Bakersfield to be fulfilled, and the pharmacy billed $855,210 to Acevedo’s prescription insurance, Express Scripts, which is provided through the Santa Ana Unified School District.

Acevedo is accused of receiving $19,504.57 in kickbacks for fulfilling these prescriptions through San Dimas Pharmacy.

Express Scripts and SAUSD noticed the unusual charges and contacted the Orange County District Attorney’s Office, Bureau of Investigation, who investigated this case.

Dr. Asher has been charged with Insurance fraud with sentencing enhancement allegations for over $100,000 loss and an aggravated white collar crime over $500,000. He faces 13 years and eight months in state prison.

His patient, Sabina Aceedo has been charged with insurance fraud and grand theft with a sentencing enhancement allegations of a crime resulting in over$100,000 loss.

Asher was previously prosecuted in the United States District Court, Central District of California in February 2007. He was charged with conspiracy and illegal kickbacks for patient referrals. He plead guilty to the conspiracy charge in October, 2007 and placed on probation. He stipulated to discipline with the Medical Board for that offense.

Asher now faces new disciplinary charges by the California Medical Board for his conduct while a medical director of Reflections Recovery Center in Costa Mesa. The second charge appears to be related to his signing prescriptions for compounded medications for several patients who had filled out the prescription ...
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/ 2018 News, Daily News
A multidisciplinary research team from the University of Pennsylvania's Perelman School of Medicine, School of Engineering and Applied Science, and School of Veterinary Medicine is aiming to solve back pain by developing bioengineered intervertebral discs made out of an individual's own stem cells.

The researchers at the University of Pennsylvania have been working for the past 15 years on bioengineered disc models - first in laboratory studies, then in small animal studies, and most recently in large animal studies.

The current standard of care does not actually restore the disc, so the hope with this engineered device is to replace it in a biological, functional way and regain full range of motion.

Previously, the researchers tested the new discs - called "disc-like angle ply structures" (DAPS) - in rat tails for 5 weeks. In the new study, whose results appear in the journal Science Translational Medicine, the team developed the engineered discs even further. They then tested the new model - called " endplate-modified DAPS" (eDAPS) - in rats again, but this time for up to 20 weeks.

Following several tests - MRI scans and several in-depth tissue and mechanical analyses - the researchers found that, in the rat model, eDAPS effectively restored original disc structure and function.

This initial success motivated the research team to study eDAPS in goats, and they implanted the device into the cervical spines of some of the animals. The scientists chose to work with goats because, as they explain, the cervical spinal discs of goats have similar dimensions to those of humans. Moreover, goats have semi-upright stature, allowing the researchers to bring their study one step closer to human trials.

The researchers' tests on goats were also successful. They noticed that the eDAPS integrated well with the surrounding tissue, and the mechanic function of the discs at least matched, if not surpassed, that of the original cervical discs of the goats.

The researchers say that the next step will include conducting further, more extensive trials in goats, which will allow the scientists to understand better how well eDAPS works.

Moreover, the research team plans to test out eDAPS in models of human intervertebral disc degeneration, thus hopefully getting one step closer to clinical trials.

The researchers say it would be a paradigm shift for how we really treat these spinal diseases and how to approach motion sparing reconstruction of joints ...
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/ 2018 News, Daily News
A 56-year-old chiropractor has pleaded guilty for his role in a massive workers’ compensation insurance fraud and conspiracy scheme.

Paul Turley (dob 11/12/62) of Granada Hills made a factual basis plea on Monday to one count each of conspiracy to commit insurance fraud, mayhem, insurance fraud and unlawful patient referral. As part of the written plea agreement filed with the court, Turley detailed his involvement in the scheme.

He faces up to eight years in state prison. Sentencing is set for June 14.

Turley is among a dozen defendants who were indicted by a grand jury in 2015 for fraudulently billing tens of millions of dollars to insurance companies for fraudulent surgeries, prescription medications, fake MRIs, falsifying medical reports and office visits.

Prosecutors later divided the larger case into three smaller ones in an effort to streamline the complex litigation and re-filed several counts that previously had been dismissed. However, indictments remain against orthopedic surgeon, Dr. Munir Uwaydah, and his office manager, Wendee Luke, both of whom are fugitives.

The conspiracy allegedly included paying lawyers and marketers as much as $10,000 a month for illegal patient referrals, known as "capping."

Nearly two dozen patients allegedly were deceived into having surgeries they thought would be performed by Uwaydah. Instead, a physician’s assistant who never attended medical school, carried out invasive and sometimes unnecessary surgeries. Uwaydah was not present in the operating room for all surgeries, prosecutors said.

In addition, nearly two dozen patients have lasting physical scars and many needed additional surgeries to repair the original injury. Last year, co-defendant Marissa Nelson (dob 11/29/76) pleaded guilty to one felony count of conspiracy to commit insurance fraud and admitted a special allegation of taking property of a value exceeding $3.2 million. She faces up to nine years in state prison when she is scheduled to be sentenced on Jan. 25.

The other 10 defendants are awaiting trial. Among the charges they each face are conspiracy, money laundering and unlawful patient referral. Some of the defendants also face aggravated mayhem charges.

The cases were investigated by the Los Angeles County District Attorney’s Bureau of Investigation and the Organized Crime Division. Deputy District Attorneys Dayan Mathai, Catherine Chon, Karen Nishita and Kennes Ma are prosecuting the case ...
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/ 2018 News, Daily News
Actelion Pharmaceuticals US, Inc., has agreed to pay $360 million to resolve allegations that it violated the False Claims Act by paying kickbacks to Medicare patients through a purportedly independent charitable foundation.

When a Medicare beneficiary obtains a prescription drug covered by Medicare Part B or Part D, the beneficiary may be required to make a partial payment, which may take the form of a co-payment, co-insurance, or deductible. These co-pay obligations may be substantial for expensive medications.

Congress included co-pay requirements in these programs, in part, to encourage market forces to serve as a check on health care costs, including the prices that pharmaceutical manufacturers can demand for their drugs.

The Anti-Kickback Statute prohibits pharmaceutical companies from offering or paying, directly or indirectly, any remuneration - which includes money or any other thing of value - to induce Medicare patients to purchase the companies’ drugs.

Prosecutors alleged that Actelion used a foundation as a conduit to pay the co-pay obligations of thousands of Medicare patients taking Actelion’s PAH drugs. By doing so, the government alleged, Actelion was able to induce patients to purchase its drugs when the prices Actelion had set for those drugs otherwise could have posed a barrier to purchases.

The government alleges that Actelion routinely obtained data from the foundation detailing how many patients on each Actelion drug the foundation had assisted, how much the foundation had spent on those patients, and how much the foundation expected to spend on those patients in the future.

Actelion used this information to budget for future payments to the foundation on a drug-specific basis and to confirm that its contribution amounts to the foundation were sufficient to cover the copays of patients taking Actelion’s drugs, but not of patients taking other manufacturers’ PAH drugs.

Actelion engaged in this practice even though the foundation warned the company against receiving data concerning the foundation’s expenditures on copays for Actelion’s drugs.

Meanwhile, the government also alleged that Actelion had a policy of not permitting Medicare patients to participate in its free drug program, which was open to other financially needy patients, even if those Medicare patients could not afford their copays for Actelion’s drugs. Instead, to generate revenue from Medicare and induce purchases of its drugs, the government alleged that Actelion referred such Medicare patients to the foundation, which allowed the patients’ copays to be paid and resulted in claims to Medicare for the remaining cost.

On June 16, 2017, after the alleged conduct, Johnson & Johnson acquired Actelion. Johnson & Johnson was not involved, directly or indirectly, in the alleged conduct and the allegations above do not relate in any way to Johnson & Johnson.
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/ 2018 News, Daily News
In a research report published Tuesday, Florida TaxWatch analyzed California’s IMR process and determined that asking doctors, rather than attorneys and judges, to resolve disputed medical claims could save millions of dollars for Florida’s workers’ compensation system.

California lawmakers authorized IMR in 2012 with the expectation that IMR would reduce workers’ compensation disputes once doctors, attorneys, and other participants came to understand which services could be approved because they meet evidence-based medicine standards. In 2016, the IMRO processed nearly 250,000 applications, a slight decrease from 2015. Of those, 69 percent (172,452) were determined to be eligible for review. Concurrently, 176,002 cases were decided through the IMR process, involving 343,141 treatment request decisions.

In 2016, 167,563 (95.2 percent) of the 176,002 California cases decided using IMR were for applications that listed representation (attorney) for the injured worker. For those cases where the injured worker had representation, the results of the utilization review were upheld in 86.6 percent of the cases. This is similar for those cases where the injured worker did not have representation (84.1 percent).

The reports concludes by saying "California’s successful workers’ compensation reform suggests that replacing Florida’s dispute resolution process with the IMR process used in California might produce similar results in Florida."

"Anytime you can replace a judicial review process that can take more than six months with a non-judicial review process that can take 30 days or less, it is something to, at least, take a look at," TaxWatch Vice President for Research Robert G. Nave, one of the report’s authors, told Watchdog.org Wednesday.

An IMR process could reduce the average time to resolve workers’ comp disputes in Florida from 231 days to about 30, as it has in California, the nonpartisan, nonprofit government fiscal monitor claims in its analysis.

According to the report, adopting an IMR process could save Florida businesses $22.6 million annually and, more importantly, dramatically reduce, if not eliminate, attorney fees - which amounted to more than $400 million during the 2016-17 fiscal year.

Taxwatch’s analysis suggests the state could trim back or potentially even eliminate the 31 administrative judges in its Office of the Judges of Compensation Claims, which has annual $13.3 million budget.

More than 30 percent of reviewed California cases in 2016 involved opioid prescriptions with doctors approving access only 9.5 percent of the time. "Treatment providers who consistently prescribe opioids contrary to the established best practices governing the use of opioids run a greater risk of identification as a result of IMR," the TaxWatch analysis says.

"If the state policymakers want to continue to grow Florida’s economy," TaxWatch President and CEO Dominic M. Calabro said in the report’s introduction, "it is imperative that the Legislature take the IMR process into consideration."

Such a proposal is certain to be resisted by the Florida Justice Association, which represents trial lawyers and has opposed attempts to cap attorney’s fees in the past ...
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/ 2018 News, Daily News
Minnesota-based medical device manufacturer ev3 Inc. has agreed to plead guilty to charges related to its neurovascular medical device, Onyx Liquid Embolic System, and pay $17.9 million. Covidien LP, whose parent acquired ev3, separately paid $13 million to resolve False Claims Act allegations resulting from its alleged payment of kickbacks in connection with another medical device, the Solitaire mechanical thrombectomy device.

ev3 will plead guilty to a misdemeanor charge in connection with the company’s distribution of adulterated Onyx, in violation of the Food, Drug and Cosmetic Act. As part of the criminal resolution, ev3 will pay a criminal fine of $11.9 million and will forfeit $6 million.

According to the plea agreement, Onyx was approved by the U.S. Food and Drug Administration (FDA) as a liquid embolization device that is surgically injected into blood vessels to block blood flow to arteriovenous malformations in the brain. The FDA has approved Onyx only for use inside the brain.

Despite the FDA’s limited approval of Onyx, from 2005 to 2009, ev3 sales representatives encouraged surgeons to use Onyx in large quantities for unproven and potentially dangerous surgical uses outside the brain. The company’s sales force continued to tout unapproved and potentially dangerous uses of Onyx even after FDA officials told ev3 executives that they had specific safety concerns regarding uses of Onyx outside the brain at a 2008 meeting. FDA officials told ev3 executives that a study would be required to gain approval for uses of Onyx outside the brain and to ensure that the benefits of the device outweighed the risks.

According to the criminal information, ev3’s management also set-up a system of sales quotas and bonuses that incentivized sales representatives to sell Onyx for unapproved uses and trained the sales force how to instruct physicians on unapproved uses of the device.

Covidien acquired ev3 in 2010, subsequent to the course of criminal conduct covered by the plea agreement. Covidien was acquired by Medtronic in 2015. Although Medtronic played no role in the criminal conduct, the company has agreed as part of the ev3 criminal resolution to implement new compensation structures to ensure the sales force responsible for marketing Onyx is not incentivized to sell the device for unapproved uses. Medtronic has also agreed to conduct compliance monitoring related to the Onyx sales and marketing components.

Covidien separately has agreed to pay $13 million to resolve its civil liability for allegedly paying kickbacks to induce the use of its Solitaire mechanical thrombectomy device. The Solitaire device is intended to restore blood flow and retrieve a blood clot in certain stroke patients.

The United States alleged that Covidien caused false claims to be submitted to Medicare and Medicaid by paying kickbacks to hospitals and institutions to induce them to use Covidien’s Solitaire device. Specifically, the United States alleged that after receiving FDA clearance for the Solitaire device, Covidien launched a registry to pay hospitals and institutions to collect data about user experiences with the device.

For about two years beginning in August 2014, Covidien paid a fee to hospitals and institutions that participated in a registry each time they used a new Solitaire device and reported certain clinical data about their practices for treating stroke patients to Covidien. Covidien solicited certain hospitals and institutions for the registry in order to convert their business from the competitor’s product and/or persuade them to continue using Covidien products, and knowingly and willfully used the registry as a means of increasing device sales.

The civil lawsuit was filed by Jeffrey Faatz, who worked for Covidien from 2012 to 2014, under the qui tam, or whistleblower, provisions of the False Claims Act. The Act allows private parties to sue on behalf of the government for false claims and to share in any recovery. As part of today’s resolution, Mr. Faatz will receive $2,015,000. The case is captioned United States ex rel. Doe v. Covidien PLC et al., Civil Action No. 8:15-cv-01796 AG (JCGx) (C.D. Cal.).
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/ 2018 News, Daily News
The federal courtroom battle over the survival of the new automatic stay law governing liens filed by indicted medical providers, which has been mostly unsuccessful litigation, has now been dismissed.

Dr. Eduardo Anguizola, while facing multiple counts of insurance fraud filed by Orange County prosecutors, is one the plaintiffs who claims Labor Code 4615 - the automatic lien stay law - violates the procedural component of the due process clause because it immediately stays all liens without notice or a hearing.

Other plaintiffs were Vanguard Medical Management, One-Stop Multi-Specialty Medical Group and related entities.

Soon after this suit was filed, Governor Brown signed AB 1422 into law which was adverse to his federal claim. AB 1422 contains a new LC 4615 subsection (e) which reads "The automatic stay required by this section shall not preclude the appeals board from inquiring into and determining within a workers’ compensation proceeding whether a lien is stayed pursuant to subdivision (a) or whether a lien claimant is controlled by a physician, practitioner, or provider."

In October, 2017 the federal court issued a restraining order against the DIR. It limited stays to instances where the lien claimant was given proper notice, and required a hearing before the WCAB should any of them claim they should not be subject to a stay. It was a partial victory for plaintiffs who sought more restraint.

In February 2018, the plaintiffs filed two new motions, one asking the court to hold the DWC in contempt, and the other, alternatively to reconsider its December 2017 ruling. The court denied both motions.

The defendants also filed a motion to dismiss certain claims in the First Amended Complaint. The court granted the motion, and last April, dismissed the first, second, third, fourth, and fifth claims (except for the facial due process component of the fourth claim for relief) without prejudice. As to the sixth and seventh claims for relief (the Supremacy Clause claim and the Takings Clause claim), the Court dismissed those claims with prejudice. The plaintiffs have until May 17 to file a Second Amended Complaint.

Things have not gotten any better for the lien claimants since then.

On November 28, the plaintiff lien claimants signed a Stipulation for Voluntary Dismissal of the Case. The parties agreed that "This stipulation and dismissal completely terminate the above-entitled action against all parties. Each party will bear its own attorneys' fees and costs. The preliminary injunction currently in effect will be dissolved as of the filing of this stipulation of dismissal." Pursuant to the stipulation of the parties, Judge Wu signed an Order to Dismiss With Prejudice ...
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/ 2018 News, Daily News
A federal judge who has been asked to sign off on the U.S. government’s decision to approve CVS Health Corp’s acquisition of insurer Aetna Inc said Tuesday he was "less convinced" than the government that the companies had struck a deal that ensured the merger was legal under antitrust law.

According to the report by Reuters, Judge Richard Leon of the U.S. District Court for the District of Columbia had complained last week in a hearing that the two sides had treated him as a "rubber stamp" for the agreement. CVS closed the $69 billion transaction last week and began the integration process.

"At this stage, I am less convinced of the sufficiency of the government’s negotiated remedy than the government is," he wrote in the order issued on Tuesday.

The Justice Department approved the merger of CVS, a pharmacy chain and benefits manager, and Aetna on condition that the health insurer sell its Medicare Part D drug plan business to WellCare Health Plans Inc (WCG.N). That sale was completed last month.

Also in the order, Leon asked the government and the companies to file a brief by Dec. 14 to show why their integration should not be halted while he considers whether or not to approve the consent decree reached in October.

Most consent agreements that the antitrust agencies strike with companies to resolve competitive concerns are approved by federal courts with little fuss under the 1974 Tunney Act, which requires courts to ensure the agreements are in the public interest.

Companies generally do not wait for final court approval before closing their transactions ...
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/ 2018 News, Daily News
A jury has convicted Gonzalo Paredes, 62, of 51 felony counts of paying illegal kickbacks to a doctor for patient referrals and fraudulently billing workers’ compensation insurance companies in the California workers’ compensation system.

The jury reached their verdict on Thursday, November 29, after a nine-day trial.

This prosecution resulted from Operation Backlash, a large-scale, joint federal and state investigation into multi-million dollar fraud and illegal kickbacks in the state workers’ compensation system. Paredes was the office administrator for Advanced Radiology of Beverly Hills, owned by radiologist Dr. Ronald Grusd.

Earlier this year, the U.S. Attorney’s office convicted Grusd on 39 felony fraud counts for paying kickbacks for patient referrals from multiple clinics in San Diego and Imperial counties, resulting in fraudulent bills to insurance companies of over $22 million for medical services. Grusd was sentenced to 10 years in federal prison.

The scheme in San Diego involved Advanced Radiology paying a local chiropractor money in exchange for the referral of patients. This allowed Advanced Radiology to treat the patients and then bill several million dollars to insurance companies.

As the office administrator for Advanced Radiology, Paredes helped negotiate the kickback deals with the chiropractor and facilitated the kickback payments to the chiropractor and those working with him. "When law enforcement became aware of the scam, we began following the trail of dirty money and it took us in many different directions," DA Summer Stephan said.

"This criminal network bought and sold patients like cattle and they cashed in on the backs of people who trusted them with their health. They conspired to illegally game the system on a level that we’ve not seen before, but the game is over."

Paredes faces a maximum of 43 years and four months in state prison. His sentencing is set for February 1 in Department 1803 of the San Diego Superior Court downtown.

The District Attorney’s Office partnered with the FBI, California Department of Insurance, and U.S. Attorney’s Office in the investigation and prosecution of Paredes.

Insurance fraud in California is a $15 billion-a-year problem. It’s the second-largest economic crime in America, exceeded only by tax evasion ...
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/ 2018 News, Daily News
The European Monitoring Centre for Drugs and Drug Addiction (EMCDDA) was established in 1993. It is one of the EU’s decentralised agencies.

The EMCDDA exists to facilitate a more evidence-informed understanding of issues that are important for developing better drug-related policies and actions across Europe. In a new series of reports, it turns its attention to cannabis, a substance with a long history of use that has recently emerged as a controversial and challenging issue in both European and wider international drug policy debates.

Cannabis is the most commonly used illicit drug in Europe. It is also the drug about which both public attitudes and the political debate are most polarized. Interest in this area is rapidly growing, prompted by some quite dramatic international developments in the ways in which some countries and jurisdictions are now regulating this substance.

In this report, EMCDDA examined the evidence for, and practice of, making cannabis or cannabis-based medicines available for therapeutic purposes. The new 48 page EMCDDA report concluded that the evidence is still thin on the medical use of cannabis. The Lisbon-based EMCDDA said in its first report on the topic that so far there were "important gaps in the evidence".

One of the most commonly reported reasons patients use cannabis for medical purposes in the United States is to treat chronic pain that is not caused by cancer (chronic non-cancer pain, CNCP). This includes neuropathic pain, arthritis, back pain, neck and shoulder pain, and headaches.

A review of studies on the effects of cannibis on CNCP showed a "Small (but statistically significant) effect compared with placebo." Other areas of medical use were also reviewed. For example, other medical uses, such as sleep disorders, anxiety disorders, depression, degenerative neurological disorders, and inflammatory bowel disease the evidence was rated as "insufficient."

The short-term adverse effects of medical cannabinoids and cannabis have been evaluated in the clinical trials reported in this study. In general, the short-term adverse events reported were similar to those of other commonly used medicines and related to symptoms such as dizziness, dry mouth, disorientation, nausea, euphoria, confusion and somnolence. Serious adverse events were rare.

There is less evidence about the risks of long-term medical use of cannabinoids, but in general those reported are similar to those reported for short-term use. Over time, more people report adverse events, but these are generally mild to moderate.

A handful of regulated pharmaceuticals use chemicals derived from cannabis, such as GW Pharmaceuticals’ Sativex which is approved for treating symptoms of multiple sclerosis. But cannabis itself and most products made from it are governed by countries’ individual criminal laws on illegal drugs, which may or may not allow medicinal use ...
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/ 2018 News, Daily News
According to a report in the Fresno Bee, Antoian Griffin, will not stand trial on a felony charge of a trying to pay a hit man $200,000 to kill a lawyer because the Fresno County District Attorney’s Office has dropped the charge of solicitation for murder.

The motion to dismiss was submitted one day after the key witness, Curtis McAfee, invoked his right against self-incrimination and declined to testify against defendant Antoian Griffin. After the judge appointed a lawyer for McAfee, McAfee testified.

McAfee said he was remaining silent because a Fresno police detective called him before Wednesday’s hearing and threatened to arrest him if he did not testify against Griffin. McAfee told the judge he could not identify the detective because the man in the telephone call never identified himself.

Assistant District Attorney Steve Wright said dropping the charge was the right thing to do.

"After presenting evidence during the preliminary hearing and hearing from the witnesses that testified in court up to that point, the prosecutor handling the case came to the conclusion that the evidence did not support proceeding any further, so he complied with his ethical and moral obligations by dismissing the case," Wright said.

Defense attorney Miles Harris said the charge should never have been filed because McAfee is "a mentally unstable individual with a history of making these kinds of claims."

McAfee and Griffin know each other because McAfee, whom Harris described as "a self-proclaimed paralegal," had helped Griffin with some legal paperwork involving a workers’ compensation case, Harris said.

It was a strange ending to a criminal case in which Griffin’s lawyer contended that Griffin never threatened a lawyer from the McCormick Barstow firm, nor does he have the money to hire a hit man. Griffin, 57, survives on a $910 monthly disability check, court records show.

In addition, Harris contended law enforcement was duped by McAfee, saying McAfee made up the story. McAfee lacks credibility, Harris said, because he has a criminal record that includes a conviction for making criminal threats.

The target in the alleged murder plot works for McCormick, Barstow, Sheppard, Wayte & Carruth and specializes in personal injury, product liability, medical malpractice and other areas of civil litigation. He is identified in court papers and was identified during Wednesday’s hearing. The Bee is not identifying him because of concern for his family’s safety.

In testimony Wednesday, Fresno police officer Kyle Novak and Cpl. Jacob Dellone said Griffin targeted the lawyer because he had represented another lawyer who once represented Griffin in a workers’ compensation lawsuit. After Griffin lost the lawsuit, he sued both lawyers, court records show.

In June, Judge Mark Snauffer dismissed the suit against the two lawyers, ruling that Griffin had no evidence to support his claim of civil conspiracy.

According to Novak and Dellone, a tipster, later identified as McAfee, called McCormick Barstow two times on Sept. 27 to warn the law firm that Griffin had put "a contract out" on the lawyer and was offering $200,000 to kill him. The caller asked the lawyer not to call police because he feared Griffin would find out. The caller then hung up. In addition, Novak testified that the lawyer never mentioned any threat by Griffin ...
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/ 2018 News, Daily News
Eight medical device makers, including a California startup that uses virtual reality to treat chronic pain, topped an innovation contest aimed at addressing the opioid crisis, the U.S. Food and Drug Administration said on Friday.

As part of the FDA’s ongoing commitment to address the opioid crisis, the FDA’s Center for Devices and Radiological Health (CDRH) launched an Innovation Challenge in May 2018. The challenge was intended to spur the development of medical devices, including digital health technologies and diagnostic tests, that could provide new solutions to detecting, treating and preventing addiction, addressing diversion and treating pain.

The goal was to provide additional incentives for medical device developers to invest in products that can address the addiction crisis and advance the development of innovative, safe and effective technologies. We received more than 250 applications from medical device developers.

Silicon Valley-based startup CognifiSense, which is developing the virtual reality therapy, and iPill Dispenser, which uses a biometrically controlled mobile app that aims to cut overconsumption by dispensing pills based on prescriptions, were among the winners of the FDA’s contest.

The company is developing VR Neuropsychological Therapy or VRNT, a proprietary VR software platform that provides psychological and experiential training to chronic pain patients to normalize their pain perception.

VR distraction therapy utilizes the immersive power of VR to create high cognitive load. It consists of entertaining games or experiences which focus the user on another task and away from the pain. Distraction therapy has been shown to be effective in providing short-term relief in acute pain. Immersive video games that shift the user's focus from the pain are known as "distraction therapy".

VRNT differs from distraction therapy in that it specifically targets the brain's "neuroplasticity", or ability to change over time.

Overall eight submissions were selected. The following selected proposals include therapeutic and diagnostic medical devices intended to treat opioid use disorder, detect and treat overdose, dispense medication and treat pain:

- Brainsway, Ltd (Brainsway Deep Transcrainal Magnetic Stimulation (DTMS) Device)
- Avanos (Pain therapy Device)
- iPill Dispenser (iPill Dispenser)
- Masimo Corporation (Overdose Detection Device)
- ThermoTek, Inc. (NanoThermTM and VascuTherm TM Systems)
- Milliman (Opioid Prediction Service)
- Algomet Rx, Inc. (Rapid Drug Screen)
- CognifiSense, Inc. (Virtual Reality Neuropsychological Therapy)

The FDA received over 250 applications for the innovation challenge, which seeks to prioritize the approval of novel medical devices including digital health technologies such as mobile medical apps ...
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/ 2018 News, Daily News
Christine McKellar began her 16-year employment with Cedars-Sinai Medical Center in 2000. Cedars-Sinai terminated her employment in April 2016.

Before she was terminated, several of McKellar's physicians authored a number of "to whom it may concern" letters sent to Cedars-Sinai attempting to excuse her from work for unspecified medical reasons. Several of them were written by Gayle K. Windman, Ph.D. from the office Dr. Thomas Curtis claiming she was disabled for "emotional stress complications."One of them said she was disabled because of "EMOTIONAL STRESS COMP."

Because none of the notes sent on McKellar’s behalf contained sufficient information to satisfy Cedars-Sinai’s leave policies, Cedars-Sinai sent McKellar a series of letters detailing the specific information it needed from her to process her request for leave.

McKellar received all of Cedars-Sinai’s letters, but never opened, read, or responded to any of them. McKellar requested no form of accommodation from Cedars-Sinai between her cessation of work on January 6, 2016 and her termination on April 20.

Ultimately Cedars-Sinai sent her a letter explaining that she had been "separated from employment."

McKellar alleged in six causes of action that Cedars-Sinai retaliated against her for filing a workers’ compensation claim and discriminated against her based on her claimed disability.

Cedars-Sinai filed a motion for summary judgment, arguing, among other things, that it had a legitimate non-pretextual reason to terminate McKellar’s employment. The trial court granted the motion. McKellar appealed and the court of appeal affirmed in the unpublished case of McKellar v. Cedars-Sinai Medical Center

To avoid summary judgment based on her proffered theory, McKellar needed to produce admissible evidence in the trial court that the decisions leading to McKellar’s termination were made on the basis of her disability or workers’ compensation claim.

The evidence McKellar relies on is that Cedars-Sinai sent five letters to a post office box. The necessary implication is that Cedars-Sinai should have attempted to contact McKellar some other way. The record, however, establishes that Cedars-Sinai did attempt to contact McKellar by telephone. McKellar had changed her telephone number because, she said, she did not want anyone at Cedars-Sinai to be able to contact her.

Cedars-Sinai had no obligation to reach out to someone other than its employee to determine whether that employee intended to comply with the company’s leave policy. McKellar’s argument assumes that McKellar could unilaterally require Cedars-Sinai to engage in the FEHA "interactive process" to determine effective reasonable accommodations with a representative McKellar designated without notifying Cedars-Sinai. That assumption is incorrect for a variety of reasons.
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/ 2018 News, Daily News
Gino Carl von Eckstein was sentenced to 10 years in prison for possessing with intent to distribute methamphetamine. Eckstein, 25, of Brisbane, Calif., pleaded guilty to the charge on September 5, 2018, after federal agents executed search warrants on his car and three residences he was using.

A federal grand jury filed an indictment on June 26, 2018, charging Eckstein with one count of intentionally possessing with intent to distribute 500 grams and more of a mixture and substance containing methamphetamine, in violation of 21 U.S.C. §§ 841(a)(1) and 841(b)(1)(A)(viii). He pleaded guilty to the charge.

Eckstein admitted that he possessed counterfeit "Adderall" pills, or pills that appeared to be Adderall, but in fact contained methamphetamine. Eckstein admitted he stored the pills in his car, at three locations in San Francisco’s Richmond District, in Brisbane, and in San Leandro. Eckstein further admitted he possessed the equipment and ingredients necessary to manufacture counterfeit Adderall pills. In total, agents allegedly found over 1,000 grams of suspected methamphetamine.

"Counterfeit pharmaceuticals are a danger to the community," said U.S. Attorney Tse. "As this case illustrates, we are responding to the emerging threat of counterfeit pharmaceuticals in our district, particularly when the substances are laced with potentially life endangering drugs. Those individuals who put these dangerous products in our community will be prosecuted to the fullest extent of the law."

"Producing unregulated concoctions and marketing them as a legitimate substance is criminal and dangerous. These drugs are unsafe and their use can have devastating consequences," stated DEA Special Agent in Charge Chris Nielsen. "We will continue working with our partners to hold people accountable who threaten public health and safety by distributing counterfeit pharmaceuticals."

In addition to the prison term, the court also sentenced the defendant to a 5-year period of supervised release. Eckstein has been in continuous custody since June 15, 2018, and will begin serving his sentence immediately.

Assistant United States Attorney Sheila Armbrust in prosecuting this case. This case is the result of an investigation by the DEA, CBP, FBI, and IRS-CI, with assistance from the San Francisco Police Department. This case was investigated and prosecuted by member agencies of the Organized Crime Drug Enforcement Task Force, a focused multi-agency, multi-jurisdictional task force investigating and prosecuting the most significant drug trafficking organizations throughout the United States by leveraging the combined expertise of federal, state, and local law enforcement agencies ...
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/ 2018 News, Daily News