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Comp Lawyer to Serve 10 Years for $26M Fraud

Tshombe Anderson, 55, of Grand Prairie, Texas, was sentenced to 120 months in federal prison and ordered to pay $26,572,458.93 in restitution for his role in a scheme he ran along with his family members to fraudulently obtain more than $26 million from the Department of Labor, Office of Worker’s Compensation Programs.

Anderson pleaded guilty in August 2017 to one count of conspiracy to commit health care fraud.  Anderson agreed to forfeit $375,000 seized from his residence, a 2015 Mercedes, and his share of the $8,383,075 that was seized from 25 bank accounts. Anderson has been in custody since the time of his arrest in August 2015.

In addition to Anderson, his sister Lydia Bankhead, 63, his wife Brenda Anderson, 47, and his niece Lydia Taylor, 30, were also charged in the indictment returned in September 2015 and pleaded guilty to their roles in the scheme.  

“Tshombe Anderson and others conspired to defraud the U.S. Department of Labor’s Office of Workers’ Compensation Programs of more than $26 million. Anderson stole patient information from over 200 injured federal workers and then used the information to fraudulently bill OWCP, enriching himself and others with taxpayer dollars intended for the treatment of injured federal workers. We will continue to work with our law enforcement partners to safeguard all Department of Labor programs,” said Steven Grell, Special Agent in-Charge of the Dallas Regional Office of the U.S. Department of Labor, Office of Inspector General.

According to plea documents in the case, Tshombe Anderson worked as an attorney for Union Treatment Centers (UTC).  Anderson and his wife, Brenda Anderson, opened a durable medical equipment company called Best First Administration (BFA).  BFA was formed, initially, to provide durable medical equipment to patients referred to BFA from UTC.  In July 2011, Tshombe Anderson and Brenda Anderson disassociated from UTC.

In April 2013, Tshombe Anderson agreed with Bankhead to open Union Medical Supplies and Equipment (UMSE).  In August 2013, Tshombe Anderson opened Skycare Medical Supplies and Equipment (SMSE).  Both companies were created in order to submit claims that were inappropriate to OWCP.  The same medical information that BFA had received from UTC was used and billed to the same universe of claimants for duplicate, unwanted durable medical equipment that was not medically necessary, using outdated medical information.  

Tshombe Anderson continued to do so despite knowing that they were billing OWCP for items that were not associated with the claimant’s injuries and that claimants were often refusing or rejecting the durable medical equipment for which their company had billed.  

Tshombe Anderson had access to the operating accounts for UMSE and routinely transferred large sums of cash from those accounts for his personal use or to launder through business accounts for a shell company called American Federal Union Claims Advocates, as well as accounts associated with his law office.

Court Dismisses Injured Worker RICO and Qui Tam Claims

Attorneys for injured workers continue to attempt to make a federal Racketeering case out of workers’ compensation claims administration, and so far have failed in the 6th and 9th Circuits. Yet they are unrelenting despite lack of success. They have just suffered another legal setback in the 6th Circuit.

The latest case involves Mark Marusza who suffered a serious work-related accident in fall 2011.

He filed a federal civil action claiming that defendant Accident Fund Insurance Company neglected to pay their share of Marusza’s medical bills, which resulted in Medicare paying for a portion of his bills. Accident Fund likewise refused to pay Nancy Gucwa – Marusza’s long-term, live-in girlfriend – for the attendant care she provided.

Marusza and Gucwa alleged in their federal court case that (1) Accident Fund and the defendant physicians defrauded Marusza, Gucwa, and others of benefits, in violation of the Racketeer Influenced and Corrupt Organizations Act; (2) Marusza is entitled to double damages under the Medicare Secondary Payer Act; (3) the defendant doctors tortiously interfered with Marusza’s contractual relationship and/or business expectancy by inducing Accident Fund to deny his benefits; and (4) Accident Fund falsely imprisoned Marusza by requiring him to attend an examination with a neuropsychologist.

The district court dismissed each claim under Federal Rule 12(b)(6) for failure to state a claim. Plaintiffs appealed and the United States Court of Appeals affirmed in the partially published case of Gucwa v. Lawley 2018 U.S. App. LEXIS 942.

The district court found that Marusza lacked standing because his personal injury does not qualify as an injury to “business or property” as contemplated by the RICO statute.

The Court affirmed the dismissal. In Jackson v. Sedgwick Claims Mgmt. Servs., Inc., an en banc panel of this court expressly held that “racketeering activity leading to a loss or diminution of benefits the plaintiff expects to receive under a workers’ compensation scheme does not constitute an injury to ‘business or property’ under RICO.” 731 F.3d 556, 566 (6th Cir. 2013) (en banc).

The district court also dismissed Marusza’s claim under the Medicare Secondary Payer Act because he had not alleged financial harm. The Court of Appeals again affirmed.

Because the Medicare Secondary Payer Act is not a qui tam statute, the financial injury suffered by the government does not confer standing upon other parties. Stalley v. Methodist Healthcare, 517 F.3d 911, 919 (6th Cir. 2008). Private plaintiffs must suffer their own individual harm; for instance, a private plaintiff may allege that they were paid less by Medicare than they would have been paid by the primary payer.

FDA in Favor of First Cannabis-Derived Drug

An advisory panel to the U.S. Food and Drug Administration unanimously voted in favor of approving the first cannabis-derived medicine in the country, a childhood epilepsy treatment developed by GW Pharma. According to the story in Reuters, the drug, Epidiolex, is derived from cannabidiol (CBD), one of the hundreds of molecules found in the marijuana plant, and an FDA decision is expected by June 27.

The syrup contains less than 0.1 percent of tetrahydrocannabinol (THC), the substance that makes people high.

The FDA panel found that the drug’s benefits outweighed the risks to treat patients aged 2 years and older with Dravet Syndrome (DS) and Lennox-Gastaut Syndrome (LGS), rare childhood-onset forms of epilepsy that are among the most resistant to treatment.

The agency does not have to act on the recommendations of its experts, but usually does.

“The overall tone of the meeting was positive, with the FDA having identified no obstacles to approval,” Cantor Fitzgerald analyst Elemer Piros said, adding that he expects the drug will be approved much before June 27.

The panel’s backing comes after the FDA staff on Tuesday gave a favorable review, citing three clinical studies that showed the drug reduced frequency of seizures in patients with the disease when added to a current therapy.

Analysts said an approval will also confirm the therapeutic benefits of CBD. “This should aid CBD in being efficiently rescheduled by the Drug Enforcement Administration.” Under the U.S. federal law, marijuana is considered to have no medicinal value.

However, the FDA panel highlighted the limited association between the use of CBD and elevated liver enzymes, which Cantor Fitzgerald’s Piros believe could lead to a boxed warning label, the severest form of FDA warning.

It is estimated there are about 14,000-18,500 patients with LGS, and 1 in 40,000 sufferers of Dravet Syndrome in the United states, for which there is no approved treatment. Some LGS patients have to wear helmets to avoid brain injuries from “drop seizures” that cause loss of muscle strength.

Ambulance Co. Employee to Serve 36 Months for $1.1M Fraud

A former employee of a Southern California ambulance company was sentenced to 36 months in prison for his role in a scheme that resulted in more than $1.1 million in fraudulent claims to Medicare.

Aharon Aron Krkasharyan, 54, of Los Angeles, was sentenced by U.S. District Judge George H. Wu, who also ordered Krkasharyan to pay $484,556 in restitution to Medicare, jointly and severally with his co-conspirators, who await sentencing. On Nov. 27, 2017, Krkasharyan pleaded guilty to one count of conspiracy to commit health care fraud.

Krkasharyan was employed as the Quality Improvement Coordinator for Mauran Ambulance Inc. (Mauran) of San Fernando, an ambulance transportation company operating in the greater Los Angeles area that provided non-emergency services to Medicare beneficiaries, many of whom were dialysis patients.

As part of his plea, Krkasharyan admitted that between June 2011 and April 2012, he conspired with other Mauran employees to submit claims to Medicare for ambulance transportation services for individuals who did not need such services. Krkasharyan also admitted that he and his co-conspirators instructed Mauran emergency medical technicians to conceal the patients’ true medical conditions by altering paperwork and creating fraudulent reasons to justify the ambulance services.

Krkasharyan was charged along with Toros Onik Yeranosian, 55, the former owner of Mauran; Oxana Loutseiko, 57, the former general manager of Mauran; and Maria Espinoza, 47, a former employee of a Los Angeles dialysis treatment center. Yeranosian, Loutseiko and Espinoza each pleaded guilty and are pending sentencing. The former dispatch supervisor at Mauran, Christian Hernandez, 37, who was previously charged in the case, has also pleaded guilty and awaits sentencing.

According to court documents, during the course of the conspiracy, Mauran submitted over $28 million in claims to Medicare. Krkasharyan’s co-defendants admitted that at least $6.6 million of those claims were false and fraudulent claims for medically unnecessary transportation services. Medicare paid at least $3.1 million on those false and fraudulent claims.

The case was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the United States Attorney’s Office for the Central District of California. The case was investigated by the FBI and HHS-OIG. Trial Attorneys Alexis D. Gregorian and Jeremy R. Sanders of the Fraud Section prosecuted the case.

Amazon Scraps Plan to Enter Pharmacy Business

Amazon Business, which sells bulk items to business customers, has shelved its plan to sell and distribute pharmaceutical products after considering it last year, according to people familiar with the matter.

Instead, CNBC reports that the company has found that business to be more challenging than expected. The setback illustrates the challenges of getting into the medical supply and pharmaceutical space, even for a company as big as Amazon. .

The change in plan comes partly because Amazon has not been able to convince big hospitals to change their traditional purchasing process, which typically involves a number of middlemen and loyal relationships, and perhaps illegal incentives as have been demonstrated in national civil and criminal litigation.

Moreover, Amazon would also need to build a more sophisticated logistics network that can handle temperature-sensitive pharmaceutical products, according to these people.

Still, Amazon hasn’t completely ruled out getting into the pharma distribution space eventually. Multiple reports have speculated that the company will someday add a direct-to-consumer prescription drug business. Amazon Business could also reconsider getting into the pharma space once it gains more scale, multiple people said.

Meanwhile, the company continues to explore other health-care projects through different teams across the company, including Alexa and the secretive Grand Challenge team, sometimes referred to as “1492.”

Amazon has started a secret skunkworks lab dedicated to opportunities in health care, including new areas such as electronic medical records and telemedicine. Amazon has dubbed this stealth team 1492, which appears to be a reference to the year Columbus first landed in the Americas.The stealth team, which is headquartered in Seattle, is focused on both hardware and software projects.

Amazon has been selling medical products like glucometers, gloves and stethoscopes to medical clinics for several years. It now has the necessary licensing in 47 out of 50 states and the District of Columbia, according to its website.

But Amazon has struggled to land contracts with large hospital networks, despite convening an advisory board that includes major hospital executives, according to two people familiar. These groups of hospitals have long-standing contracts with distributors, like Cardinal Health and McKesson. Many hospitals also own a stake in entities called group purchasing organizations that negotiate on their behalf, leveraging their collective negotiating power.

The CNBC report points out that that the health-care supply chain is well-entrenched and will be hard to break into, according to one expert. “The hospital and health-care systems have entangling alliances with their existing purchasing and supply chain partners,” said Tom Cassels, head of strategy and business development at Leidos Health. “It’s very difficult to replicate the Amazon buying experience in health care,” he said.

But, in an industry that is now well known for marketing, by some, by way of illegal kickbacks and perks, one must be left to wonder if that is yet another discovered or undiscovered impediment for the Amazon platform.

DWC Updates Formulary List

DWC Administrative Director George Parisotto has issued an Order updating the Medical Treatment Utilization Schedule (MTUS) Drug Formulary effective May 15, 2018 pursuant to Labor Code section 5307.29.

The Administrative Director’s update Order adopts changes to the MTUS Drug List including the following:

– Addition and deletion of drugs for treatment of Eye Disorders to coordinate with the updated ACOEM Eye Disorders Guideline which was adopted into the MTUS
– Designation of “Exempt/Non-Exempt” status for drugs added for treatment of Eye Disorders
– Designation of “Special Fill” status for drugs added for treatment of Eye Disorders
– Update of guideline reference symbols for Ankle and Foot Disorders and Eye Disorders
– Designation of an additional corticosteroid as eligible for the “Special Fill”

The brand name of the corticosteriod now designated for 4 day special fill is Celestone, and the generic name is Betamethasone. It is used for a number of diseases including rheumatic disorders such as rheumatoid arthritis among others. It is available as pill, by injection, and as a cream.

“Special Fill” means the policy set forth in section 9792.27.12 allowing dispensing of identified Non-Exempt drugs without prospective review where the drug is prescribed or dispensed in accordance with the criteria set forth in subdivision (b) of section 9792.27.12.

Two of these requirements are that the drug is prescribed at the single initial treatment visit following a workplace injury, provided that the initial visit is within 7 days of the date of injury; and that the prescription is for a supply of the drug not to exceed the limit set forth in the MTUS Drug List.

The updated MTUS Drug List and the Administrative Director Order is posted on the DWC MTUS drug formulary web page. Further updates to the MTUS Drug List will be made on a quarterly, or more frequent, basis.

GE Ships Off-the-Shelf Biotechnology Factories

Interest in medicines, which use engineered viruses to carry healthy genetic material into the cells of sick people, has exploded recently as the first wave of gene-fixing drugs reach the market. That has left some drug companies scrambling for sufficient capacity at a time when the industry is also grappling with shortages of DNA-carrying viral vectors.

And now General Electric, the powerhouse industrial company, is raising its bet on biotechnology with the launch of prefabricated manufacturing units for producing virus-based gene and cell therapies, novel anti-cancer treatments and vaccines.

GE, better known for making jet engines and turbines, sees an opportunity in the fast-growing field. It aims to build on its existing expertise in biotech manufacturing by delivering a “factory-in-a-box” service specifically for viral vector-based medicine.

The U.S. conglomerate already makes off-the-shelf modular factories for other complex biological medicines, such as monoclonal antibodies.

Its so-called KUBio factories are cheaper and faster to construct than traditional factories, offering GE a way to win business for its growing life sciences business. Depending on the factory design and the drug being made, an equivalent KUBio could reduce build costs by as much as 50 percent, according to the company.

Taiwanese manufacturer of biologics, JHL Biotech, recently upped the ante and ordered an entire high-tech pharmaceuticals factory. Made by GE in Germany, Sweden and the U.S., the components for the world’s largest single-use modular plant for making biopharmaceuticals, recently left Europe for JHL’s new site in Wuhan, the capital of China’s Hubei Province.

GE Healthcare’s KUBIo includes everything from bioprocessing equipment to the building and overall project coordination. The modules at the site arrive 80 to 90 percent pre-equipped with the heating, ventilating, and air conditioning (HVAC) system, the clean room, most of the utility equipment, and all of the piping necessary to run the plant.

When the sixty-two completed KUBio modules that make up the factory reach the destination at Wuhan’s Biolake Science Park , they will help JHL make affordable biologics for markets where they are otherwise prohibitively expensive.

Biologics, also called biopharmaceuticals, are a new class of medicines made from strings of complex proteins. They are now leading the charge against disease and represent the fastest growing class of drugs. They range from synthetic insulin to medicines that can be used to treat cancer, rheumatoid arthritis and other diseases.

GE is also stepping up operations within the wider supply chain that is needed to deliver cell therapies like Novartis’ Kymriah and Gilead Sciences’ Yescarta, both of which were approved in 2017 for treating certain blood cancers.

Last year, for example, GE Healthcare bought British-based Asymptote, a specialist in freezing, preserving and transporting large volumes of living cells. Overall, GE says it expects to have a $1 billion-a-year gene and cell therapy business by 2025.

The are now more than 700 viral vector-based therapies in clinical trials, spurring demand for biologically secure bioreactors to churn out products. Since most such treatments are targeted therapies designed for small patient populations, GE is betting that drug companies will prefer its flexible small-scale KUBio units to large traditional factories.

Travelers Streamlines Digital Claims

The Travelers Companies, Inc. announced its newest digital capabilities to improve the claim experience for injured employees. The additions provide increased access to medical professionals after a workplace injury.

MyTravelers® for Injured Employees, the company’s web-based and mobile-friendly self-service tool for workers compensation claims, offers two-way messaging between an injured employee and a Travelers Claim Nurse professional. This digital tool provides access to a full claim team, including claim and medical professionals, and helps keep injured employees more engaged in the process to help accelerate their recovery.

Two-way document sharing will also be added to the MyTravelers for Injured Employees tool. Injured employees will be able to easily upload important materials related to their claim, including state workers compensation forms, work status reports, mileage trackers and medical reports. This new feature will make it easier and faster for injured employees to exchange information with Travelers so they can move forward through the claim process more efficiently.

The company also announced the addition of a telemedicine capability, enabling qualified injured employees to conduct appointments with a physician via a secure video connection on their computer or smartphone. By delivering clinical health care from a distance, telemedicine may offer a cost-effective alternative to emergency room visits while also providing access to care when it is not readily available.

“We continually look for new ways to deliver a better workers compensation claim experience for someone who has been injured on the job,” said Rich Ives, Vice President of Workers Compensation Claim at Travelers. “Our latest capabilities not only speed up access to medical care and make it easier to communicate, but they also address our customers’ top concerns — the health of their employees and the rising costs of health care.”

“We know that better outcomes are achieved when injured employees are closely engaged in their claims, and our new digital capability makes it easier than ever for someone to stay involved in the process while focusing on their recovery,” said Vinny Armentano, Senior Vice President of Claim at Travelers.

Travelers says it offers a range of workers compensation services that benefit injured employees and their employers: The Early Severity Predictor® model helps predict which injured employees are most at risk for chronic pain; the ConciergeCLAIM® Nurse program helps injured workers with the workers compensation process; and the Cultural Advantage services provide Spanish-speaking claim and medical professionals to bridge language barriers.

Gynecologist Disciplined for Sexual Misconduct Now Comp Doctor

Dr. Anthony Steven Bianchi, MD currently still holds a California license as a physician. His office location is 6042 N Fresno Street, Suite 101 in Fresno.. He now claims to practice Occupational Medicine at this address which the Associated Press claims to be a clinic evaluating and treating workers’ compensation cases in its expose of sexual misconduct in medicine.

The Disciplinary Records of the Medical Board of California provide great detail on his tawdry history with female patients. The details of his behavior are alleged in great detail in these state documents, and they should not be read by anyone who reacts badly to graphical detail.

Disciplinary charges were first filed against Bianchi by the Medial Board of California in 2012. According to the allegations of a December 2012 First Amended Accusation, he engaged in sexual misconduct with female patients as a gynecologist dating back to 2009. His activities with two of them were specific in the Accusation.

On November 13, 2013, Bianchi and his attorney signed a Stipulated Settlement and Disciplinary Order. He admitted that the Medical Board could make a prima facie case against him based upon the Complaint. He was placed on probation which included that he undergo a complete psychiatric evaluation, enter into psychotherapy, and complete a Professional Boundaries Program. He was placed on probation for a period of five years from the date of the Disciplinary Order. Thus his probation would end on December 20, 2018.

A follow up disciplinary action was filed by the Medical Board on May 5, 2015. The Board alleged in its disciplinary action, that, while he was practicing as a gynecologist, he placed a chair against the exam room door, put his fingers into an inappropriate area of a female patients anatomy while exposing himself. This alleged patient abuse occurred in 2009 but was brought to the attention of the Board in 2013 after the victim heard about the prior discipline

These episodes led to disciplinary Orders by the state’s medical board in 2012 and in 2016. Bianchi agreed not contest the charges, and he held onto his medical license. Probation did not require him to notify any subsequent patients of his probationary status, despite the fact he was required to notify his malpractice carrier and employer.  

The AP article that uses his case as an example claims that “When the doctors are disciplined, the punishment often consists of a short suspension paired with mandatory therapy that treats sexually abusive behavior as a symptom of an illness or addiction.”.

The AP goes on to say that decades of complaints that the physician disciplinary system is too lenient on sex-abusing doctors have produced little change in the practices of state medical boards. And the #MeToo campaign and the rapid push in recent months to increase accountability for sexual misconduct in American workplaces do not appear to have sparked a movement toward changing how medical boards deal with physicians who act out sexually against patients or staffers.

The sentencing of Larry Nassar, a former doctor for the U.S. Olympic gymnastics program convicted of abusing more than 150 women and girls, has put a high-profile case of physician misconduct in the spotlight.

But across the country, most doctors accused of sexual misconduct avoid a medical license review entirely. A study last year found that two-thirds of doctors who were sanctioned by their employers or paid a settlement as the result of sex misconduct claims never faced medical board discipline.

“There’s been a failure of the medical community to take a stand against the issue,” said Azza Abbudagga, a health services researcher with nonprofit advocacy organization Public Citizen.

She published a report recently detailing sexual misconduct among physicians. Its findings showed that of the 253 doctors reported to the National Practitioner Data Bank for having been sanctioned by their respective hospitals or health care organizations for sexual misconduct, or paid a settlement that stemmed from such an allegation, 170 of them were not disciplined by state medical boards, even though all boards have access to the reports filed with the data bank.

Curing Patients NOT a Sustainable Business Model

Science and medicine are getting very close to big and meaningful breakthroughs on diseases and maladies that were once only somewhat treatable with very expensive routines of medications. Gene therapy breakthroughs have been a big part of this, with the FDA approving promising gene therapy trials, and even more exciting results coming in from around the world.

But, it is interesting to see information about how some of the health care industry thinks about all this. How they think can be a predictor on what they will eventually do.

In an April 10 report for biotech clients, Goldman Sachs delved into a pretty awkward subject – cures. Analysts noted that one-shot cures for diseases are not great for business as they’re bad for longterm profits.

The investment banks’ report, titled “The Genome Revolution,” asks clients: “Is curing patients a sustainable business model?” The answer may be “no,” according to follow-up information.

Analyst Salveen Richter and colleagues laid it out: “The potential to deliver ‘one shot cures’ is one of the most attractive aspects of gene therapy, genetically engineered cell therapy, and gene editing.

However, such treatments offer a very different outlook with regard to recurring revenue versus chronic therapies… While this proposition carries tremendous value for patients and society, it could represent a challenge for genome medicine developers looking for sustained cash flow.”

They pointed to Gilead Sciences, which markets treatments for hepatitis C that have cure rates exceeding 90 percent.

In 2015, the company’s hepatitis C treatment sales peaked at $12.5 billion.

But as more people were cured and there were fewer infected individuals to spread the disease, sales began to languish. Goldman Sachs analysts estimate that the treatments will bring in less than $4 billion this year.

Gilead’s rapid rise and fall of its hepatitis C franchise highlights one of the dynamics of an effective drug that permanently cures a disease, resulting in a gradual exhaustion of the prevalent pool of patients,” the analysts wrote.

The report noted that diseases such as common cancers — where the “incident pool remains stable” — are less risky for business.