Currently more than 70 states, cities and counties have filed lawsuits related to the costs of the opioid addiction crisis.

Discovery in litigation revealed that manufacturers cited biased medical studies to support claims that opioid addiction was rare. These companies allegedly hired pain management experts and doctors to promote use of opioids to other doctors and provided kickbacks and other incentives to doctors to promote use to other doctors.

Manufacturers also were accused of creating and funding a medical-front group to publish and promote false research and information about the drugs and published articles stating that opioid use was non-addicting, among other fraudulent acts.

An yet another city has joined in. According to the Sarasota Patch, the Sarasota City Commission has unanimously voted to retain Bill Robertson, personal injury attorney and CEO of Kirk Pinkerton P.A., and Steven W. Teppler with the Abbott Law Group to represent the City of Sarasota in a lawsuit to recover damages related to the opioid epidemic.

The attorney team will file a lawsuit in federal court with the Middle District in Tampa against as many as seven or more major pharmaceutical manufacturing companies and their distributors.

But there is a new twist. The two attorneys are taking the case on contingency, meaning the city will not incur any expenses unless recovered during the lawsuit.

"Our nation is in crisis and these pharmaceutical companies are putting profits above people by fueling the opioid epidemic with false claims and failure to disclose the long-term risks of these toxic drugs," said Robertson. "Their conduct is fraudulent, unlawful and deceptive and municipalities have lost hundreds of thousands of dollars trying to keep up with expenses related to this malfeasance."

"Damages to municipalities could add up to tens of millions of dollars," said Teppler. "These firms grossly overstated the benefits of opioid therapy, leading to excessive collateral damage, including staggering costs for workers compensation, law enforcement and emergency services, relapse prevention and more."

"We have lost so many to overdose and addiction, which is largely the reason I began a career in public service after law school — to provide a better path for people here," said Sarasota City Commissioner Hagen Brody. "Our city has witnessed a pain pill epidemic that has led to dependence on street opiates like heroin when the supply of pills dried up. This lawsuit is an aggressive move to claw back some of the profit that pharmaceutical companies have made unscrupulously pedaling addiction in our community, and I fully support the effort."

In 2016, Robertson and Teppler represented the City of Sarasota in the oil spill claim against BP, recovering $3 million for the city ...

USI has served over 150,000 clients meeting their property & casualty, employee benefit, personal risk and retirement needs nationwide. It has more than 100 years of consulting and brokerage experience through acquired agencies. It has just published the 2018 Insurance Market Outlook - Insights from our national practice leaders

"In 2017, we saw a continued downward trend in workers’ compensation (WC), including a reduction in premium rates overall, particularly in the loss-sensitive marketplace."

"Given the lack of deterioration in many larger carriers’ combined loss ratios, we expect similar aggressive targeting to grow market share in 2018. While returns for low-risk investment opportunities remain limited, the marketplace’s appetite for premium will drive aggressive - yet prudent- pricing. However, there is underwriting discipline for those clients with poor loss results, declining financials, residence in particular states (i.e. FL, CA, NY, and others) and those in more volatile industry classes."

"Carriers will seek higher retentions as the result of client-specific loss severity or in circumstances when clients are pursuing greater premium savings."

Other USI predictions for workers’ compensation:

- Loss-sensitive programs will either see flat rates or hikes as high as 5 percent, assuming clients have clean or improving loss experience. For those that are seeing worsening loss experience, rates in this category will increase more than 5 percent, and carriers will likely adjust their retention levels.
- For guaranteed-cost programs, USI sees rates ranging between 10 percent decreases to 10 percent jumps. Clients with very clean loss experience would escape changes, and pricing would also vary due to a client’s “specific state payroll distribution due to states’ legislative pressure on adequacy of rates,” according to the report.
- Medical cost inflation is expected to rise 6 percent year-over-year, and this upward trend will continue to affect workers’ compensation and loss liability totals.
- The industry can expect more increases in cost shifting from healthcare plans to workers’ compensation, due in part to problems with the Affordable Care Act.
- While self-insurance remains an alternative to insured workers’ compensation, USI says some states are becoming more conservative on their collateral position for many qualified self-insureds and more employers are "looking more closely at their existing self-insured status because of onerous associated administrative costs."

The report also forecast trends in commercial market areas including property, general liability, umbrella liability, international, environmental, aviation, crime, cyber, medical malpractice; and kidnap, ransom and extortion ...

The California Supreme Court reversed the Court of Appeal and held that an action by the Orange County District Attorney for civil penalties under the Unfair Competition Law was not preempted by Fed/OSHA . The ruling allows public prosecutors to invoke the UCL to pursue big civil penalties and injunctive relief against employers who fail to comply with workplace safety regulations.

Solus Industrial Innovations, LLC manufactures plastics at its Orange County facility. In 2007, it installed at the facility an electric water heater that was designed for residential use. In March 2009, the water heater exploded, killing two employees.

The Division of Occupational Safety and Health determined that the explosion had been caused by a failed safety valve and the lack of any other suitable safety features on the heater. In an administrative proceeding, the agency charged Solus with five violations of state occupational safety and health regulations, and also cited Solus with a willful violation for failing to maintain the water heater in a safe condition.

In addition, because two employees had died, the Division forwarded the investigation results to the District Attorney of Orange County. (See Lab. Code, § 6315, subd. (g).) In March 2012, the district attorney filed criminal charges against Solus’s plant manager and its maintenance supervisor for felony violations of Labor Code section 6425, subdivision (a).

The Orange County District Attorney also brought an action for civil penalties under this state’s unfair competition law (UCL; Bus. & Prof. Code, § 17200) and fair advertising law (FAL; id., § 17500) against an employer. The action alleged the employer violated workplace safety standards established by the state occupational safety and health law (Cal/OSHA; Lab. Code, § 6300 et seq.) and attendant regulations.

It alleged that Solus’s failure to comply with workplace safety standards amounted to an unlawful, unfair and fraudulent business practice under Business and Professions Code section 17200, and the district attorney requested imposition of civil penalties in the amount of up to $2,500 per day, per employee, for the period from November 29, 2007, through March 19, 2009.

The second was a claim that Solus "made numerous false and misleading representations concerning its commitment to workplace safety and its compliance with all applicable workplace safety standards, and as a result of those false and misleading statements, Solus was allegedly able to retain employees and customers in violation of Business and Professions Code section 17500." The district attorney requested imposition of civil penalties in the same amount for the same period.

The employer contended, and the Trial Court and Court of Appeal ruled that the district attorney’s action was preempted by the federal Occupational Safety and Health Act of 1970. The California Supreme Court reversed in the case of Solus Industrial Innovations, LLC v The Superior Court of Orange County.

The Supreme Court concluded that "the federal OSH Act contemplates a cooperative system of workplace safety regulation, not an exclusively federal one. When federal schemes involve cooperation and concurrent jurisdiction, this circumstance also suggests that the scope of preemption was not intended to be broad."

"Finally, we reiterate the strong presumption against preemption, arising both from the fact that the federal legislation addresses an area that has been the long-standing subject of state regulation and from the fact that California has assumed responsibility under the federal OSH Act to regulate worker safety and health, thereby preempting federal law." ...

In a ruling seen as a victory for Grubhub and its gig economy counterparts, a federal judge in California ruled in the case of Raef Lawson v Grubhub Inc., that the delivery platform does not owe its drivers the benefits of an employment relationship - like minimum wage, overtime pay or workers compensation.Though the case may be appealed, it’s the first such case to reach trial, and may shape the legal relationship between contractors and the digital platforms they rely on.

Grubhub is an internet food ordering service that connects diners to local restaurants. Customers order food through Grubhub’s online platform and Grubhub transmits the orders to restaurants. The food is then delivered either by a restaurant delivery person or a Grubhub driver. Diners may also pick up their own meals ordered through Grubhub.

Grubhub operates in 1,200 markets in the United States. Of those markets, 250 are in California and of those Grubhub offers its own delivery services in five. As of June 2016, there were 4,000 Grubhub delivery drivers in California.

By providing delivery services, Grubhub increases the number of restaurants it can offer to diners on its online platform. In the five California markets where Grubhub offers delivery services, the majority of Grubhub’s diners have their meals delivered by the restaurants. For the remaining customers, Grubhub delivers meals more than the customers pick up the food themselves. The percentage of Grubhub-provided deliveries is growing.

Raef Lawson worked as a restaurant delivery driver for Grubhub in Southern California for four months in late 2015 and early 2016. He complains that Grubhub improperly classified him as an independent contractor rather than an employee under California law and in doing so violated California’s minimum wage, overtime and employee expense reimbursement laws.

He brings his claims in his individual capacity and as a representative action pursuant to the California Private Attorney General Act (PAGA). The critical question is whether under California’s common law Borello test, Mr. Lawson was an employee or an independent contractor.

Prior to performing Grubhub food deliveries, Mr. Lawson worked for other so-called "gig economy" companies, including Lyft, Uber, Postmates, and Caviar. He drove for these companies, including Grubhub, because the flexible scheduling allowed him to pursue his acting career. Mr. Lawson continued to deliver food for Postmates and Caviar during the four months he was delivering for Grubhub.

After considering all of the Borello factors as a whole in light of the trial record, the Court found in its February Opinion that Grubhub has satisfied its burden of showing that Mr. Lawson was properly classified as an independent contractor.

Grubhub exercised little control over the details of Mr. Lawson’s work. Grubhub did not control how he made the deliveries. Nor did it control the condition of the mode of transportation Grubhub also did not control Mr. Lawson’s appearance. He was not required to have any Grubhub signage on his car. It did not require Mr. Lawson to undergo any particular training or orientation. Mr. Lawson, rather than Grubhub, controlled whether and when Mr. Lawson worked, and for how long.

While some factors weigh in favor of an employment relationship, Grubhub’s lack of all necessary control over Mr. Lawson’s work, including how he performed deliveries and even whether or for how long, along with other factors persuade the Court that the contractor classification was appropriate for Mr. Lawson during his brief tenure with Grubhub ...

California's insurance commissioner has launched an investigation into Aetna after learning a former medical director for the insurer admitted under oath he never looked at patients' records when deciding whether to approve or deny care.

California Insurance Commissioner Dave Jones expressed outrage after CNN showed him a transcript of the testimony and said his office is looking into how widespread the practice is within Aetna.

"If the health insurer is making decisions to deny coverage without a physician actually ever reviewing medical records, that's of significant concern to me as insurance commissioner in California -- and potentially a violation of law," he said.

Aetna, the nation's third-largest insurance provider with 23.1 million customers, told CNN it looked forward to "explaining our clinical review process" to the commissioner.

The California probe centers on a deposition by Dr. Jay Ken Iinuma, who served as medical director for Aetna for Southern California from March 2012 to February 2015, according to the insurer.

The deposition came as part of a lawsuit filed against Aetna filed by Gillen Washington, a college student who suffers from a rare immune disorder. Washington was diagnosed with common variable immunodeficiency, or CVID, in high school, The case is expected to go to trial later this week in California Superior Court.

During his videotaped deposition in October 2016, Iinuma -- who signed the pre-authorization denial -- said he never read Washington's medical records and knew next to nothing about his disorder. The doctor said he was following Aetna's training, in which nurses reviewed records and made recommendations to him.

Questioned about Washington's condition, Iinuma said he wasn't sure what the drug of choice would be for people who suffer from his condition. Iinuma further says he's not sure what the symptoms are for the disorder or what might happen if treatment is suddenly stopped for a patient. "Do I know what happens?" the doctor said. "Again, I'm not sure. ... I don't treat it."

Aetna defended Iinuma, who is no longer with the company, saying in its legal brief that he relied on his "years of experience" as a trained physician in making his decision about Washington's treatment and that he was following Aetna's Clinical Policy Bulletin appropriately.

Jones said his expectation would be "that physicians would be reviewing treatment authorization requests," and that it's troubling that "during the entire course of time he was employed at Aetna, he never once looked at patients' medical records himself."

"That's why we've contacted Aetna and asked that they provide us information about how they are making these claims decisions and why we've opened this investigation."

He said his investigation will review every individual denial of coverage or pre-authorization during the medical director's tenure to determine "whether it was appropriate or not for that decision to be made by someone other than a physician."

If the probe determines that violations occurred, he said, California insurance code sets monetary penalties for each individual violation ...

Pain-pill giant Purdue Pharma LP will stop promoting its opioid drugs to doctors, a retreat after years of criticism that the company’s aggressive sales efforts helped lay the foundation of the U.S. addiction crisis.

The company told employees this week that it would cut its sales force by more than half, to 200 workers. It plans to send a letter Monday to doctors saying that its salespeople will no longer come to their clinics to talk about the company’s pain products.

"We have restructured and significantly reduced our commercial operation and will no longer be promoting opioids to prescribers," the company said in a statement. Instead, any questions doctors have will be directed to the Stamford, Connecticut-based company’s medical affairs department.

OxyContin, approved in 1995, is the closely held company’s biggest-selling drug, though sales of the pain pill have declined in recent years amid competition from generics. It generated $1.8 billion in 2017, down from $2.8 billion five years earlier, according to data compiled by Symphony Health Solutions. It also sells the painkiller Hysingla.

Purdue is credited with helping develop many modern tactics of aggressive pharmaceutical promotion. Its efforts to push OxyContin included OxyContin music, fishing hats and stuffed plush toys. More recently, it has positioned itself as an advocate for fighting the opioid addiction crisis, as overdoses from prescription drugs claim thousands of American lives each year.

Purdue and other opioid makers and distributors face dozens of lawsuits in which they’re accused of creating a public-health crisis through their marketing of the painkillers.

More than a dozen states, including New York, New Jersey, Alabama and Washington, and more than 100 cities and counties, are suing Purdue over charges it facilitated the U.S. opioid crisis through aggressive marketing. It is also a codefendant, along with Endo International, Johnson & Johnson's Janssen, Teva Pharmaceutical and Allergan, in the opioid marketing investigation underway by 39 states' attorneys general.

Purdue officials confirmed in November that they are in settlement talks with a group of state attorneys general and trying to come up with a global resolution of the government opioid claims.

About 200 remaining Purdue salespeople will focus on promoting the company’s opioid induced constipation drug, Symproic. The drug launched last year in partnership with Shionogi & Co ...

The White House Office of Management and Budget Director Mick Mulvaney and newly-confirmed Health and Human Services Secretary Alex Azar sat down with a small group of reporters Thursday morning to exclusively preview the White House’s Fiscal Year 2019 budget and how the administration plans to make good on the president’s commitment to tamper down drug prices.

Azar said the administration is framing the issue through two key questions: "How can we try to start flipping some of those incentives in the system geared towards higher prices? How do we find pockets of our programs where we maybe don’t negotiate enough or have people negotiating on our behalf to get as good of a deal?"

The administration is targeting a number of federal agencies, like the U.S. Food and Drug Administration (FDA), and federal policies, like Medicaid (Parts B and D), to accomplish those objectives.

The administration is planning on asking Congress to clarify the definition of generic, over-the-counter drugs in an effort to avoid misclassifications that lead to exorbitant waste and provide potential loopholes for manufacturers to game the system. Azar said the goal of asking Congress to specifically clarify drugs is to ensure that "generic and branded drugs are paying properly on the Medicaid rebate program."

The HHS Office of Inspector General found that drug manufacturers likely misclassified 3 percent of the drugs in the Medicaid rebate program in 2016. The OIG found that misclassifications cost Medicaid more than $1 billion from 2012-2016.

Another initiative the admin will be pursuing is lobbying Congress to give HHS the authority to allow a small group of states to see if they are able to negotiate with manufacturers and get a better deal from manufactures than the federal government is currently able to negotiate from the Medicaid statutory rebate programs. "If they would like to take a shot at managing their formulary and negotiating better deals than we can get, we would like to do a pilot where up to 5 states could do that," Azar said.

The administration is also trying to give Part D providers greater flexibility in how they provide benefits to seniors, like making generic medications completely free to Part D seniors.

"The first is actions that we could take address excessive price increases in Part B - the physician administered drugs that we currently pay for in Part B with what is called Average Sales Price (ASP) plus 6 methodology," Azar said. Medicare Part B pays physicians and hospital systems for outpatient services. ASP is the current payment formula set in 2003. The rate is set from the average sales price, plus an additional 6 percent. Azar wants to take the payment rate for newly launched drugs, or drugs with no set ASP value, and move them toward a new payment rate of 103 percent.

Another of the key areas of focus will be on ending the gaming of FDA generic drug approval process. Barring some exceptions, after the FDA grants a manufacturer a "180-day exclusivity" period for a generic drug, it "cannot approve subsequently submitted" applications until that period has expired. In other words, some argue that the rule bars competing generic drugs from entering the market.

Getting rid of the ruling will help spark more market competition, which could help drive down prices, Azar argues. "This will accelerate the approval of generics and the entry to market from one particular aspect of gaming around the 180-day exclusivity that keeps multiple new entries from coming to market in the generic space," Azar told reporters.

"What we would ask Congress to clarify is that once the FDA approves another drug, the clock on that 180-days starts. As it stands, the first to file gets approved. Right now, some companies will just sit on that and park it."

The White House will roll out its plans in more detail Monday, along with its 2019 budget ...

Maryland’s attorney general has filed a lawsuit seeking to enforce a subpoena the state sent Insys Therapeutics Inc as part of a probe into allegations the drugmaker deceptively marketed a fentanyl-based cancer pain medicine.

Reuters reports that Maryland Attorney General Brian Frosh confirmed on Thursday that his office filed a lawsuit in state court after Insys resisted turning over documents sought as part of an investigation into the drugmaker’s role in the opioid epidemic.

Frosh said the state had been investigating the Chandler, Arizona-based company since 2016 amid allegations that Insys had marketed its product Subsys to not just patients with severe cancer pain but for other conditions.

The lawsuit, filed on Monday, called Insys’s resistance to turning over all of the documents the state sought "troubling" given its claims that its conduct had changed.

"Usually the reason people fight disclosures is that they don’t want the people seeking disclosures to know what they’ve been up to," Frosh said in an interview.

Insys did not immediately respond to a request for comment. It has said that it has taken steps to prevent past mistakes from happening again and has said that Subsys made up 0.02 percent of opioid prescriptions in 2016.

Insys has found itself at the center of several lawsuits and investigations focused on Subsys, an under-the-tongue spray intended for cancer patients that contains fentanyl, a synthetic opioid.

Federal prosecutors in Boston have accused seven former executives and managers at Insys including billionaire founder John Kapoor of participating in a scheme to bribe doctors to prescribe Subsys and to defraud insurers.

Insys has said it may have to pay at minimum $150 million as part of a settlement with the U.S. Justice Department. It already agreed to pay $9.45 million in settlements with four state attorneys general and faces lawsuits by five others ...

A whistleblower is a person who exposes any kind of information or activity that is deemed illegal, unethical, or not correct within an organization that is either private or public. Recognizing the public value of whistleblowing has been increasing over the last 50 years. In the United States, both state and Federal statutes have been put in place to protect whistleblowers from retaliation.

The False Claims Act is the federal Government's primary litigation tool in combating fraud against the Government. The law includes a qui tam provision that allows people who are not affiliated with the government to file actions on behalf of the government, informally called "whistleblowing" especially when employed by the organization accused in the suit.

Whistleblowers who bring qui tam suits are required to file their cases under seal. The DOJ likes it that way, because it may pursue its investigation in a manner that does not tip off the target of the investigation.

California has a similar False Claims Act with qui tam provisions. Also under the California law, the whistleblower's lawsuit is filed under seal to permit the California Attorney General or local prosecuting authority to investigate and, if warranted, intervene in the action.

But, Jeffrey Werkin, a former high-stakes corporate-fraud prosecutor with the Department of Justice, had secretly stockpiled sealed lawsuits brought by whistleblowers. His plan was to sell copies of the suits to the very targets of the pending government investigations - and his services to defend them.

Wertkin carried out his plan for months, right up until the day an FBI agent arrested him in a California hotel lobby last year. On that day, Wertkin believed he was meeting at a Cupertino hotel with a representative from a company with whom he would exchange the sealed whistleblower complaint for a duffel bag filled with $310,000. In truth, Wertkin was meeting with an undercover employee of the FBI.

The 41-year-old partner at the prominent DC firm of Akin Gump Strauss Hauer & Feld was caught wearing a wig and fake mustache trying to peddle a sealed federal lawsuit for $310,000 to a Silicon Valley technology company. "My life is over," he told the undercover agent after his arrest at an intended cash drop at the Cupertino hotel.

Wertkin recently pleaded guilty to two counts of obstruction of justice and one count of transportation of stolen property.

Wertkin admitted that during the last month of his employment as a trial attorney with the Department of Justice, he began secretly reviewing and collecting sealed qui tam complaints that were not assigned to him. Further, Wertkin has admitted that after he left the Department of Justice, he used the stolen information to improperly solicit clients that were the subject of the sealed complaints.

He is scheduled to be sentenced on March 14, 2018 at 2:15 pm by federal judge Maxine M. Chesney ...

The Ventura County Interagency Pharmaceutical Crimes Unit is a task force comprised of members from the Ventura County Sheriff’s Office, Simi Valley Police Department, the District Attorney’s Office Bureau of Investigation, and the California Highway Patrol.

The primary mission of the task force is combating the transfer of legal prescription medication to the illegal market.

In addition, the task force works to identify and stop new trends of abuse among the younger population and investigates overdose deaths due to both prescription medication and illicit drug use.

An investigation by the Ventura County Interagency Pharmaceutical Crimes Unit began in November when authorities received a tip from a doctor based in Ventura County, according to a report published in the Ventura County Star..

The doctor had been visited by Jennifer Williams, 49, of Calabasas, who was seeking a prescription for controlled substances, authorities said.

The doctor later looked up Williams' prescription history in a database and found she had visited multiple physicians throughout Southern California in an attempt to acquire prescriptions.

Research conducted by investigators revealed that Williams had visited 80 doctors within the past year from Orange County to Santa Barbara County, with 25 doctors being in Ventura County.

Over the course of those visits, Williams obtained approximately 1,100 doses of lorazepam and 3,600 doses of the prescription painkillers oxycodone and hydrocodone, authorities said.

On Jan. 24, detectives detained Williams outside an urgent-care facility in Thousand Oaks. While she was detained, investigators found paperwork documenting recently prescribed pain medication from multiple doctors, according to authorities.

Williams was taken into custody on suspicion of obtaining a controlled substance by fraud, deceit or misrepresentation.

The Ventura County District Attorney's Office filed 11 counts of the above charge against Williams and she has pleaded not guilty, according to court records ...

Three American Indian tribes in South Dakota have sued the country’s top opioid manufacturers and distributors, accusing them of concealing and minimizing the addiction risk in tribal communities that have been devastated by such drugs.

"The effect of opioids on South Dakota Tribes has been horrific," said Brendan Johnson, the former U.S. Attorney for South Dakota, who filed the lawsuit along with Tim Purdon, the former U.S. attorney for North Dakota. "This epidemic has overwhelmed our public health and law enforcement services, drained resources for addiction therapy and sent the cost of caring for children of opioid-addicted parents skyrocketing."

Three tribes - Rosebud Sioux Tribe, Flandreau Santee Sioux Tribe and the Sisseton Wahpeton Oyate - sued 24 manufacturers and distributors, including Purdue Pharma, Teva Pharmaceuticals, Allergan PLC, McKesson Corp., Cardinal Health and AmerisourceBergen Corp. But the attorneys allege the opioid epidemic has wreaked havoc on all of South Dakota’s nine tribes.

The 106 page complaint filed in the United States District Court for the District of South Dakota alleges the opioid industry failed to comply with federal prescription-drug laws intended to prevent the diversion of prescription opioids and prevent their abuse. The lawsuit accuses the companies of violating federal Racketeer Influenced and Corrupt Organizations (RICO) laws, deceptive trade practices, and fraudulent and negligent conduct.

Kaelan Hollon, spokesperson for Teva Pharmaceuticals, released a statement saying the company is working to educate communities and health-care providers and comply with federal and state regulations. A Pharma spokesman said "we vigorously deny these allegations." The company is "deeply troubled by the prescription and illicit opioid abuse crisis, and ... dedicated to being part of the solution," its statement says.

Hundreds of cities, states and counties have filed lawsuits against opioid drug manufacturers and distributors, among them seven counties in West Virginia, which has the highest prescription drug overdose rate in the nation. In April, the Cherokee Nation in Oklahoma became the first tribe to do so.

Walmart, CVS and the other companies that were sued went to a federal judge in Oklahoma in June and argued that Cherokee tribal courts do not have jurisdiction over them. The judge has not ruled on whether the case will remain in tribal court or be transferred to U.S. District Court

Thus far no California workers' compensation carrier, or self-insured employer has initiated litigation to recover for the long term costs of claims made by an addicted claimant. One workers' compensation defense attorney, Nigel Scott Baker Esq.,reports that he is investigating the feasibility of filing litigation on behalf of California self-insured employers and carriers. He has a copy of many of the civil complaints filed in various venues against drugmakers, and is communicating with national attorneys involved in those cases ...

More nonmedical provider companies are finding themselves ensnared in health-care fraud lawsuits, and paying out multimillion-dollar settlements, as business interests clash with clinical priorities at the doctor’s office.

A recent settlement between the Department of Justice and Kool Smiles, a pediatric dental chain, for $23.9 million over alleged False Claims Act violations for the dental chain’s Medicaid claims is emblematic of this trend as it also involved the dental chain’s affiliate, dental management company Benevis, a nonprovider entity that also facilitates the purchase and sale of dental clinics.

The DOJ alleged Kool Smiles used a combination of bonus and disciplinary actions to push dentists to perform more procedures and obtain additional reimbursements, while ignoring concerns from its dentists about overutilization of treatments.

More FCA actions are focusing on nonprovider entities that are associated or transact business with health-care providers, according to health-care fraud attorneys who spoke with Bloomberg Law.

Daniel R. Miller, a shareholder with Berger & Montague PC in Philadelphia who represents whistleblowers in FCA litigation, told Bloomberg Law that the increase in nonprovider fraud scrutiny from investigators and whistleblowers "is driven by private equity finding profit centers in health care," Miller said. These entities "treat health care like a retail store in a shopping mall instead of letting providers make decisions based purely on patients’ needs," he said.

But while applying pressure or influence on affiliates to hit quotas and increase revenue is uncontroversial in many business settings, applying pressure on an affiliated medical provider to hit quotas or bill for certain procedures can run afoul of the FCA, even if the nonprovider entity isn’t the company submitting bills to Medicare or Medicaid.

Miller said that nonprovider entities "claim that they aren’t running afoul of the law because they aren’t directly making clinical decisions," but if that nonprovider affiliate "set[s] revenue goals and quotas high enough, you incentivize clinicians to conduct medically unnecessary procedures."

Hanging an FCA case on medical necessity alone can be tricky for the DOJ and whistleblowers, especially with recent court decisions that have cast some allegations of medically unnecessary care as simply differences of medical opinion. One federal trial court said allegations of medically unnecessary hospice claims to Medicare essentially amounted to differences in professional medical judgment between defendant AseraCare’s clinicians and the government’s expert witnesses.

The DOJ appealed the AseraCare decision and is awaiting a ruling from the U.S. Court of Appeals for the Eleventh Circuit. Defendants facing medical necessity allegations increasingly will couch these as ‘battle of the experts’ cases. These are the types of court fights the DOJ would rather avoid, particularly because the risk of bad case law is high.

Benevis took that exact approach in a statement concerning its settlement. Benevis characterized the substance of the allegations as "professional disagreements between qualified dentists in determining the appropriate level and cost of the care." Benevis said it was "disappointed that reasonable disagreement between dentists can become a FCA case."
...

Understanding MSA trends - and the CMS review process - can assist workers compensation carriers and administrators as they identify cost drivers. This NCCI 2018 research update builds on a September 2014 study that NCCI conducted on MSAs and is based on data from approximately 11,500 MSAs submitted to CMS between September 2009 and December 2015.

CMS's processing times have declined since 2012 and more recently hit their lowest level since 2010. In 2015, the average MSA processing time was about 70 days, which is the lowest average processing time between 2010 and 2015. This is in sharp contrast to 2011 and 2012, when average processing times were much longer. Median processing times appear to be longer for the largest MSA submissions than for smaller MSA submissions.

Estimated future drug costs are the main reason for CMS requiring increases of MSA amounts. CMS generally requires larger percentage increases to MSAs when the submission amounts are smaller. For example, CMS has requested an average 51% increase when the submitted MSA is under $25,000, while it has only requested an average 6% increase when the submitted MSA exceeds $200,000. Across all sizes of submitted MSAs, estimates of future prescription drug costs for injured workers are the main reason that CMS requires increases.

The gap between approved and submitted MSAs appears steady between 2013 and 2015 mainly because of the decrease between approved and submitted prescription drug amounts. While the gap between approved and submitted amounts for Medicare Parts A and B amounts (covering hospital stays, office visits, and related services) appears stable between 2010 and 2015, the same could not be said for Part D amounts (covering prescription drug services). The gap between prescription drugs approved and submitted MSA amounts was rather large between 2010 and 2012, but has significantly decreased since then and appears to be stable since 2013. This stabilization is the main contributor to the steadiness in the overall MSA amounts between 2013 and 2015.

The larger the MSA, the larger the share of drug costs. Prescription drug shares typically increase as the MSA gets larger. MSA settlements above $100,000 are typically associated with more serious injuries, such as back injuries, limb or finger amputations, burns, or head trauma. Many of these claimants are experiencing chronic pain or depression, so it is not surprising that the majority of MSA settlement costs are for prescription drugs.

Most MSAs are for claimants who are Medicare-eligible at time of settlement. About 64% of claimants are eligible for Medicare, not because of age but because they have been on Social Security Disability for at least two years. Another 29% of claimants are eligible due to age, and about 7% are likely to become eligible within 30 months.

The largest percentage of MSA submissions occur four years after the work-related accident. Submissions gradually decrease after that, but it is not uncommon to have a submission 20 or 25 years after an accident. Very few MSAs are submitted in the same year as the accident.

Overall, MSAs represent more than 40% of total submitted workers compensation settlement costs. On average, 22% of the total settlement is for the portion of the MSA covering Medicare Part D (prescription drugs) and 20% is for the portion of the MSA covering Medicare Parts A and B (hospital stays, office visits, and related services). About 58% of the submitted total workers compensation settlement is for costs other than MSAs, typically including indemnity coverage, medical costs not covered by Medicare, and other expenses such as attorney fees.

More than half of MSA submissions involve an attorney. About 54% of the time, MSA claimants seek assistance from an outside attorney when establishing their MSA arrangements. About 46% do not. The involvement of outside legal counsel does not vary much based on whether the total submitted settlement amount is large or small ...

Television Center, Inc. (TCI) owns a three-story commercial building located in Hollywood, California. In 2011, TCI contracted with Chamberlin Building Services (CBS), a licensed contractor, to wash the building’s windows. Decedent Salvador Franco, worked as a supervisor/window cleaner for CBS.

CBS and its employees made all decisions about how the window-washing would be accomplished. The window-washing equipment used on the job was owned, inspected, and maintained by CBS.

It was CBS’s policy that two connectors were required when rappelling off a building: one primary line and one safety line. However, late in the morning of the first day of this contract, Franco attached his line to only a single connector - an angle iron bracket supporting the air conditioning unit on the roof, attached to a small piece of wood - which was not an acceptable anchor point. The bracket to which he attached his line failed, and Franco fell to his death.

Plaintiffs Luz Elena Delgadillo, Christian Franco, and Valeria Franco are the surviving wife and children, respectively, of Salvador Franco. Decedent’s family received workers’ compensation benefits following his death.

Plaintiffs sued TCI for negligence and negligence per se, alleging that decedent was fatally injured because TCI failed to install structural roof anchors,in violation of sections 7325 through 7332 of the Labor Code, and section 3286, subdivision (a)(4), of title 8 of the California Code of Regulations, giving rise to causes of action for negligence and negligence per se.

TCI moved for summary judgment, contending that plaintiffs’ suit was barred by Privette v. Superior Court (1993) 5 Cal.4th 689 (Privette) and subsequent cases. The trial court agreed and granted summary judgment for TCI.

The Court of Appeal affirmed in the unpublished case of Delgadillo v. Television Center, Inc.

The "Privette doctrine" holds that when a property owner hires an independent contractor, the property owner is not liable for injuries sustained by the contractor’s employees unless the owner's affirmative conduct contributed to the injuries.

In the present case, the undisputed evidence was that TCI did not direct how the window washing should be done nor otherwise interfere with the means or methods of accomplishing the work.

Accordingly, summary judgment was properly granted ...

A six-year-old lawsuit against California’s State Compensation Insurance Fund, EK Health services - their utilization review vendor - and over a dozen utilization review physicians, recently settled. The case was filed by Electronic Waveform Lab, Inc., maker of H-Wave® - a physician prescribed drug-free medical device that helps those with chronic pain.

In 2011, Electronic Waveform Lab filed a lawsuit against EK Health and eleven Utilization Review Physicians alleging improper conduct in denying the H-Wave® Electrotherapy Device in Utilization Review. The lawsuit was amended to add State Compensation Insurance Fund and three additional Utilization Review Physicians as a party to the action and the case proceeded in federal court with a third amended complaint..

The case alleged, for the first time ever, a RICO statue violation accusing the groups of conspiring to deny physician treatment requests for the FDA cleared H-Wave® device, which can be prescribed by doctors as an alternative to opioids. The parties reached a confidential financial settlement in October 2017.

H-Wave®, a device made by Electronic Waveform Lab, Inc. of Huntington Beach, California, claimed that California’s State Compensation Insurance Fund, allegedly conspired with their contracted utilization review vendor and their independent contractor physicians who are responsible for approving or denying the use of any device for patients on a case-by-case basis, to deny all H-Wave® requests no matter what the medical necessity issues were.

As a result of the litigation settlement, State Fund, EK Health and EK Health’s Utilization Review Physicians will now recognize that Home H-Wave® is a drug-free treatment option, medically necessary in appropriate circumstances, and may be approved for use by injured patients pursuant to current evidence-based medicine and prevailing guidelines.

Authorization requests that prescribe Home H-Wave® should be evaluated on a case-by-case basis, focusing on the needs of the injured patient.

This could be perceived as a big win for medical device makers which deal with denials from claims adjusters on a daily basis. With today’s widespread focus on the national opioid epidemic, this case is encouraging for patients and their physicians who are demanding alternative treatments for chronic pain.

H-Wave, a scientifically-reviewed device that uses electrotherapy to treat chronic pain and speed recovery from injury, has been used by physicians and their patients for more than 35 years.

Most patients who are prescribed H-Wave have been suffering with chronic pain for more than 500 days and have exhausted other conservative treatments, according to the company. Besides being prescribed by doctors for work-related injuries or pain, H-Wave is currently used by more than 70 professional sports teams. More than 200,000 thousand people have been prescribed H-Wave over the last 35 years ...

Male rats exposed to very high levels of the kind of radiation emitted by cellphones developed tumors in the tissues around their hearts, according to a draft report by U.S. government researchers on the potential health risks of the devices.

Female rats and mice exposed in the same way did not develop tumors, according to the preliminary report from the U.S. National Toxicology Program (NTP), a part of the National Institute of Environmental Health Sciences.

Reuters Health reports that the findings add to years of research meant to help settle the debate over whether cellphone radiation is harmful.

Although intriguing, the findings can not be extrapolated to humans, NTP scientists and the U.S. Food and Drug Administration (FDA) said on Friday. They noted that the animal studies were meant to test extreme exposures to cell phone radiation, and that current safety limits on cellphone radiation are protective.

However, the two 10-year, $25 million studies - the most comprehensive assessments of health effects and exposure to radiofrequency radiation in rats and mice to date - do raise new questions about exposure to the ubiquitous devices.

In the studies, about 6 percent of male rats whose entire bodies were exposed to the highest level of cell phone radiation developed schwannomas - a rare type of tumor - in nerve tissue near their hearts, while there were no schwannomas in animals that were not exposed to radiation.

"The intriguing part of this is the kind of tumors we saw were similar to tumors noted for quite some time in some epidemiological studies in heavy duty cellphone users," John Bucher, a senior scientist with NTP, said in a telephone interview.

"Of course, these were in the nerves in the ear and next to the brain, but the tumor types were the same as we saw in the heart."

Dr. Otis Brawley, chief medical officer of the American Cancer Society, noted that the studies were negative for common tumors.

"These draft reports are bound to create a lot of concern, but in fact they won’t change what I tell people: the evidence for an association between cellphones and cancer is weak, and so far, we have not seen a higher cancer risk in people," he said in a statement on Twitter.

Brawley said if cellphone users are concerned about this data in animals they should wear an earpiece.

Unlike ionizing radiation such as that from gamma rays, radon and X-rays, which can break chemical bonds in the body and are known to cause cancer, radiofrequency devices such as cellphones and microwaves emit radiofrequency energy, a form of non-ionizing radiation.

The concern with this type of radiation is that it produces energy in the form of heat, and frequent exposure against the skin could alter brain cell activity, as some studies have suggested.

In the NTP study, rats and mice were exposed to higher levels of radiation for longer periods of time than what people experience with even the highest level of cellphone use, and their entire bodies were exposed all at once, according to the draft report.

Bucher said the effect likely only showed up in the male rats because they were larger, and likely absorbed more radiation than the female rats or mice.

Cellphones typically emit lower levels of radiation than maximum levels allowed, the draft report said.

Cellphone radiation quickly dissipates, so the risk, if any, would be to areas of the body in close proximity to the device emitting the radiation, Bucher said.

He said the findings are intended to help inform the design of future cell phone technologies. The study looked at only 2G and 3G frequencies, which are still commonly used for phone calls. It does not apply to 4G or 5G, which use different frequencies and modulation, he said.

NTP, a part of the National Institutes of Health, will hold an external expert review of its findings on March 26-28.

Dr. Jeffrey Shuren, head of the FDA’s radiological health division, said there is not enough evidence to say cellphone use poses health risks to people.

"Even with frequent daily use by the vast majority of adults, we have not seen an increase in events like brain tumors," he said in a statement. "We believe the current safety limits for cellphones are acceptable for protecting the public health."

Asked what the public should take from the study, Bucher said, "I wouldn’t change my behavior based on these studies, and I haven‘t."

Nevertheless, the findings are potentially a concern for device makers, especially the world’s three biggest smartphone sellers, Apple Inc, Korea’s Samsung Electronics Co Ltd and China’s Huawei Technologies [HWT.UL].

The CTIA, the trade association representing AT&T Inc, Verizon Communications Inc, Apple Inc, Sprint Corp, DISH Network Corp, and others, said on Friday that previous studies have shown cellphone RF energy emissions have no known heath risks.

"We understand that the NTP draft reports for its mice and rat studies will be put out for comment and peer review so that their significance can be assessed," the group said ...

New York Attorney General Eric T. Schneiderman announced that his office has filed a lawsuit against Insys Therapeutics, Inc., a company that sells a highly addictive fentanyl drug called Subsys.

Although Subsys was approved by the Food and Drug Administration to treat excruciating cancer-related breakthrough pain, the complaint alleges that Insys recklessly marketed the drug for much wider use, covering a much broader set of patients.

Additionally, the company allegedly engaged in a pattern of deceptive and illegal conduct by downplaying the drug’s risks of addiction, bribing doctors to prescribe the drug, and lying to healthcare providers to skirt their authorization process.

As a result, the Attorney General’s office is seeking penalties and disgorgement of all revenues accumulated during the period of misconduct—up to $75 million.

"At a time when the opioid epidemic was ravaging New York, Insys Therapeutics allegedly marketed a drug illegally by blatantly disregarding the grave risks of addiction and death that opioids pose," said Attorney General Schneiderman.

"As we allege, Insys showed a wanton disregard for the law and the lives of New Yorkers and we will hold them accountable. My office will continue to fight the opioid crisis at every level and hold corporations that prioritize profits above New Yorkers’ health and wellbeing to account."

In late 2012, the FDA approved Subsys for the specific, limited treatment of breakthrough cancer pain in opioid-tolerant patients. Its purpose was to provide relief to cancer patients who were suffering from excruciating pain.

Beginning in 2012, Insys allegedly ignored this limited approval and instead broadly targeted many types of providers and patients, and represented that the drug was appropriate for flares of mild pain. Insys also downplayed Subsys’ risk of addictiveness.

The company further directed its sales representatives to urge providers to prescribe Subsys in high doses, which were more expensive than lower doses. A 30-unit prescription of the lowest strength medicine costs approximately $700, while a prescription for the highest strength costs over $3500.

Additionally, the complaint alleges that Insys sales representatives called on medical offices that employed providers who had been arrested for illegal opioid distribution.

In furtherance of their deceptive and illegal scheme, Insys allegedly formed a business unit devoted solely to securing prior authorization from health plans for as many patients as possible. Insys trained its prior authorization staff to imply that patients had cancer pain, even when they did not.

Additionally, Insys allegedly bribed prescribers to write prescriptions for Subsys. The company paid certain providers between $3000 and $5000 to act as "speakers," at sham promotional events and implored its sales staff to obtain a "return on investment" on those payments by increasing prescription numbers.

According to Insys' latest quarterly filing published in November, the company has received subpoenas from at least 15 other states and has already settled lawsuits filed by Oregon, Illinois, New Hampshire and Massachusetts.

...

Drs. Aytac Apaydin and Stephen Worsham, urologists based in Northern California, will pay $1.085 million to resolve allegations that they submitted and caused the submission of false claims to Medicare for image guided radiation therapy (IGRT) that was referred and billed in violation of the physician self-referral law (commonly known as the "Stark Law") and the Anti-Kickback Statute.

Drs. Apaydin and Worsham own and operate Salinas Valley Urology Associates (SVUA) in Salinas, California. They also owned Advance Radiation Oncology Center (AROC), located in Salinas, California, which dissolved in 2016. IGRT is used to treat patients who are diagnosed with cancer, including prostate cancer patients.

The Anti-Kickback Statute and the Stark Law are intended to ensure that a physician’s medical judgment is not compromised by improper financial incentives.

The Anti-Kickback Statute prohibits offering, paying, soliciting, or receiving remuneration to induce referrals of items or services covered by federal health care programs, including Medicare. The Stark Law forbids health care providers from billing Medicare for certain services referred by physicians who have a financial relationship with the entity performing the service, unless an exception applies.

The United States alleged that Drs. Apaydin and Worsham knowingly caused eight urologists in Monterey and Salinas, California (the "Lessee Urologists") to violate the Anti-Kickback Statute and the Stark Law. Drs. Apaydin and Worsham allegedly solicited the Lessee Urologists to enter into lease agreements with AROC under which the Lessee Urologists could bill for, and thereby profit from, their referrals of IGRT performed at AROC.

The United States also alleged that Drs. Apaydin and Worsham violated the Stark Law by improperly billing Medicare for their own IGRT referrals to AROC, despite the fact that AROC and SVUA were separate entities and their financial arrangements did not comply with any exceptions to the Stark Law.

The Lessee Urologists previously entered into settlement agreements pertaining to their IGRT claims, under which they collectively agreed to pay the United States $900,000.

The United States’ investigation was a coordinated effort by the Civil Division of the Department of Justice, the U.S. Attorney’s Office for the Northern District of California, and the Department of Health and Human Services Office of Inspector General ...

Jose A. Guzman was operating a compactor when he was injured. He had been employed by Carmel Valley Construction as a laborer for a little less than six months.The compactor, which is used to pack down soil, hit a rock while Guzman was working on a hillside with a 45-degree slope. The compactor rose in the air, caused Guzman to fall backwards, and then fell on top of him.

The WCJ determined that Guzman sustained an injury to his back and psyche arising out of his employment, and that the psychiatric injury was caused by a "sudden and extraordinary employment condition" thus circumventing the Labor Code 3208.3 requirement for six months of employment as a prerequisite for a psychiatric injury..

In reaching this determination, the WCJ referred to the following evidence: Guzman had never been injured by having a compactor fall on him, he had never experienced such an incident before, there was no evidence that this type of injury had occurred in a similar fashion before, Guzman never had any close calls involving an injury when using a compactor, he never had an accident using a compactor before, and he never thought there was any risk of injury while using the compactor.

The WCJ concluded that "having a compactor fall on top of an employee is not something that would reasonably be expected to occur. This type of injury is not a frequent, regular, or routine part of the job. In fact, there is no evidence that having a compactor fall on an employee had ever occurred before. For this reason, it is reasonable to find that this injury was not something that could have been anticipated. This was not the type of injury that would be foreseeable."

The State Fund petitioned for reconsideration which was denied. The Court of Appeal reversed in the unpublished opinion of State Compensation Insurance Fund v W.C.A.B. and Jose Guzman

The Court noted that "the language and legislative history of section 3208.3 instruct that the Legislature’s public policy goals should be considered when determining whether an award of benefits is warranted. The Legislature made quite clear that it intended to limit claims for psychiatric benefits due to their proliferation and their potential for fraud and abuse. Therefore, any interpretation of the section that would lead to more or broader claims should be examined closely to avoid violating express legislative intent."

Guzman failed to meet his burden of proving that a "sudden and extraordinary employment condition" caused his injury. Guzman did not provide any evidence establishing that it is "uncommon, unusual, and totally unexpected" for a rock to be in soil, for a compactor to rise when striking a rock, or for an operator to become unbalanced and to fall when the compactor rises on a 45-degree hillside. Indeed, he did not introduce any evidence regarding what regularly or routinely happens if a compactor hits a rock on a slope ...

A former Tustin podiatrist is accused of insurance fraud for billing for medical services she never performed, according to prosecutors.

Dr. Renae Louise Witt, 47, of La Pine, Oregon, is awaiting extradition after being charged with seven felony counts of insurance fraud with sentencing enhancements for aggravated white collar crime over $100,000 and loss of over $65,000, according to the Orange County District Attorney's office (OCDA).

Witt is a 2003 graduate of the California School of Podiatric Medicine at Samuel Merritt University in Oakland. Her California license is still active. However public records show that she was disciplined in 2014 for "Insurance Fraud."

While practicing in Tustin between May 12, 2015, and March 31, 2017, Witt allegedly submitted fraudulent billing for services not rendered on six patients after their treatment was complete, prosecutors say.

She billed Anthem Blue Cross and Blue Cross/Blue Shield $174,395 for various medical services she never performed and deposited large sums of money from the insurance transactions into her business bank account, the OCDA alleges. Witt moved to Oregon this past Nov. 6.

Anthem Blue Cross contacted the OCDA to report potentially fraudulent billing by Witt. After an investigation by the Orange County prosecutors, Deschutes County sheriff's deputies arrested her in La Pine on Friday.

Witt could be sent to state prison for 16 years if she is found guilty, according to the OCDA ...