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Tag: 2014 News

Van Nuys DME Supplier Faces 30 Years After Guilty Plea

A North Hollywood woman who worked in the health care industry pleaded guilty this week to federal charges for orchestrating a scheme that submitted nearly $25 million in fraudulent bills to Medicare for services and supplies, including power wheelchairs and diagnostic tests that were medically unnecessary and sometimes were never provided.

Susanna Artsruni, 46, who formerly owned a durable medical equipment (DME) company and worked at a number of medical clinics in Los Angeles, pleaded guilty before United States District Judge Margaret M. Morrow. Artsruni, to one count of health care fraud and one count of money laundering.

In a plea agreement filed last year, Artsruni admitted that she defrauded Medicare in a number of ways. In one part of the scheme, Artsruni had physicians’ assistants at three Los Angeles medical clinics sign prescriptions and orders for medically unnecessary DME and diagnostic tests that were later referred to other Medicare providers that billed for the equipment and tests. Artsruni also caused the three clinics to bill Medicare for medically unnecessary services. Further, Artsruni fraudulently billed Medicare on behalf of her own DME supply company, Midvalley Medical Supply in Van Nuys, for medically unnecessary DME based on referrals from one of the three medical clinics. In total, Artsruni caused more than $24.8 million in fraudulent claims to be submitted to Medicare, which paid more than $9.2 million on the bogus bills.

Artsruni also admitted that she wrote checks totaling more than $35,000 from the Midvalley bank account to three corporations that had no connection to the medical industry and apparently had not provided any legitimate business services to Midvalley. Artrsuni admitted that she wrote these checks to conceal the nature of the funds as the proceeds of health care fraud and used the three corporations to launder these funds.

At the time that she worked at two of the clinics and wrote one of the checks to launder the proceeds of her fraud, Artsruni was free on bond in another health care fraud case (United States v. Artsruni, CR08-209-CAS). Although the terms of her pre-trial release in the 2008 case dictated that she not commit crimes and forbid her from working at medical facilities, Artsruni concealed her activities from her pre-trial services officer and engaged in the fraudulent conduct that led to most of the losses suffered by Medicare in the second case.

As a result of her guilty pleas, Artsruni faces a statutory maximum sentence of 30 years in federal prison. Judge Morrow is scheduled to sentence Artsruni on April 14. A second defendant in the case, Erasmus Kotey, a physician’s assistant who worked with Artsruni in a medical clinic on North Vermont Avenue in Los Angeles, is scheduled to go on trial before Judge Morrow on April 8.

The case against Artsruni and Kotey is the product of an investigation by the Federal Bureau of Investigation; the U.S. Department of Health and Human Services, Office of Inspector General; and IRS-Criminal Investigation.

2013 Was Record Year for Health Care Fraud

ABC News reports that federal prosecutors filed a record number of health care fraud cases last fiscal year, perhaps reflecting the greater emphasis the government has placed on combating the crime costing taxpayers billions of dollars per year. According to Justice Department statistics obtained through a Freedom of Information Act request by a Syracuse University-based nonprofit group that tracks federal spending, staffing and enforcement activities, prosecutors pursued 377 new federal health care fraud cases in the fiscal year that ended in October. That was 3 percent more than the previous year and 7.7 percent more than five years ago.

Southern Illinois led the nation on a per-capita basis in such cases filed, with the government pursuing 10.1 prosecutions per 1 million people, which was more than eight times the national average.

The latest numbers, while not necessarily showing that the white-collar crime is on the rise, may reflect a greater emphasis by authorities, predominantly the FBI and the Department of Health and Human Services, to root out the wrongdoing, said Susan Long, who is an associated professor of managerial statistics at the school and the co-director of the nonprofit, the Transactional Records Access Clearinghouse. “Clearly the numbers suggest this is an area the (Obama) administration is not ignoring,” Long said Wednesday.

An illustration of the anti-fraud push came last May, when 89 people in eight cities – including 14 doctors and nurses – were charged for their alleged roles in separate Medicare scams that collectively billed the taxpayer-funded program for roughly $223 million in bogus charges. Because such fraud is believed to cost the Medicare program between $60 billion and $90 billion each year, Attorney General Eric Holder and Health and Human Services Secretary Kathleen Sebelius partnered in 2009 to increase enforcement by allocating more money and staff and creating strike forces in fraud hot spots around the country.

Medicare fraud has morphed into complex schemes over the years, moving from medical equipment and HIV infusion fraud to ambulance scams as crooks try to stay a step ahead of authorities. The scammers have also grown more sophisticated using recruiters who are paid kickbacks for finding patients, while doctors, nurses and company owners coordinate to appear to deliver medical services that they are not.

For decades, Medicare has operated under a pay-and-chase system, paying providers first and investigating suspicious claims later. Federal authorities are using new technology designed to flag suspicious claims before they are paid, but the system still is relatively new.

While “frankly surprised” by his office’s distinction as the per-capita leader in health-care fraud prosecutions, southern Illinois U.S. Attorney Stephen Wigginton said every U.S. attorney enjoys discretion in prioritizing which crime issues to combat, taking into account regional demographics and Holder’s desires. But Wigginton said he placed special emphasis on going after health-care defrauders since he began overseeing his district more than three years ago. Since then, Wigginton’s office has increased such investigations each year. Last year, more than 30 people were indicted for allegedly scamming a Medicaid program meant to allow individuals to stay in their homes instead of entering a nursing home. “I think we’re very focused and strategic,” said Wigginton, whose office also has taken a lead nationally in cracking down on fraudulent time-share marketing and the St. Louis region’s increasing struggles with heroin use.

Researchers Link Chronic Back Pain and Brain Changes Causing Obesity

Chronic low back pain often goes hand in hand with obesity. A new study published in the journal Pain and summarized by Reuters Health hints that changes in the brain’s reward systems could be one reason why. The finding follows earlier research that showed people with chronic low back pain often have changes in the areas of the brain that are associated with food and pleasure. “Patients who suffer from chronic low back pain might be at risk of overeating, especially from the highly palatable energy dense food,” Dr. Paul Geha told Reuters Health in an email.  “I would advise them to stay away from a diet rich in such foods (such as fries, pudding etc.) and develop habits of eating from healthier choices.”

Geha led the new study at the Yale University School of Medicine in New Haven, Connecticut. He and his colleagues recruited 18 people with chronic low back pain and 19 healthy participants to serve as a comparison group. The participants were first instructed to taste and rate how much they liked four samples of pudding that were made with different amounts of fat. The procedure was repeated with orange-flavored drinks that contained various amounts of sugar. Participants returned on a different day and were told to eat as much of their favorite pudding as they liked. Then they rated how full they felt.

During the first session, people in both groups rated the puddings similarly for flavor, but those with back pain didn’t like them as much as the healthy participants did. The pain-free participants rated the puddings between “like moderately” and “like very much” and the back pain patients rated them between “like slightly” and “like moderately.” People in both groups liked the orange drinks about the same.

On the return visit, the researchers found that healthy participants who liked the pudding more ended up eating more of it. But that wasn’t the case among people with back pain. Healthy people also reported feeling less hungry when they ate more calories of pudding – but again, that association didn’t occur among back pain patients, the researchers reported in Pain.

Geha said people with chronic back pain might not be able to derive as much pleasure from eating as others. “Chronic low back pain is very common in the U.S.,” Dr. Naum Shaparin told Reuters Health in an email. “Low back pain, in general, is one of the most common reasons for a doctor’s visit, both in the office and the emergency department.”

Shaparin is the director of Pain Service at Montefiore Medical Center in Bronx, New York, and was not involved in the new study.

He said people with back pain are often asked about nausea, anxiety and a range of other health problems – but not about satiety and pleasure derived from food. The theory, he said, has always been that these patients gain weight as a result of a lack of physical activity related to their pain. “This study, however, proposes the argument that chronic low back pain affects a patient’s relationship with food such that the patient’s pleasure from eating is decreased and the patient’s ability to know when to stop eating is also decreased, thereby leading to overeating and weight gain,” Shaparin said.

Federal Judge Rejects NFL Settlement

The judge presiding in the proposed $765 million settlement between the N.F.L. and more than 4,500 retired players who sued the league and accused it of hiding the dangers of concussions has raised significant questions about whether there will be enough money to pay for all of the payouts, medical tests and treatment. Judge Anita B. Brody of the United States District Court for the Eastern District of Pennsylvania rejected the proposed settlement because the league and the plaintiffs’ lawyers had not produced enough evidence to persuade her that $765 million would cover the potential costs for 18,000 retirees over the 65-year life of the agreement. “I am primarily concerned that not all retired N.F.L. football players who ultimately receive a qualifying diagnosis or their related claimants will be paid,” Brody wrote.

The lawyers for the players have said that economists and actuaries have said there will be sufficient money available.

“Unfortunately, no such analyses were provided to me in support of the plaintiffs’ motion,” Brody said. “In the absence of additional supporting evidence, I have concerns about the fairness, reasonableness and adequacy of the settlement.”

The judge’s ruling will probably force the plaintiffs’ lawyers and the N.F.L. to provide documents proving that there will be enough money to pay for the retired players’ claims. If the judge remains unconvinced, the league and the lawyers could increase the size of the settlement, change the amount of the payouts or limit who might be eligible. Even if the league and the lawyers for the players convince the judge that there will be enough money to go around, her ruling on Tuesday will undoubtedly delay when players may get paid. The proposed settlement that the judge reviewed, which was released last week, was to form the basis for mailings sent to retired players. The players would then have several months to approve the settlement, or opt out of it.

None of this means the settlement is off, however. There are tweaks that can be made and, as Christopher Seeger, co-lead counsel for the plaintiffs said in a statement, “analysis from economists, acutaries and medical experts” will prove that the settlement will take care of the players in question.

“We are confident that the settlement will be approved after the Court conducts its due diligence on the fairness and adequacy of the proposed agreement,” Christopher Seeger, co-lead counsel for the plaintiffs, said in a statement. “Analysis from economists, actuaries and medical experts will confirm that the programs established by the settlement will be sufficiently funded to meet their obligations for all eligible retired players. We look forward to working with the Court and Special Master to address their concerns, as they rightfully ensure all class members are protected.

“We believe this is an extraordinary settlement for retired NFL players and their families, and have received overwhelming support as they have learned about its benefits. We look forward to finalizing this agreement so they can soon begin taking advantage of its benefits.”

Florida-based lawyer Sia Nejad, who specializes in insurance defense, says this rejection is a matter of wanting the NFL to “show its work.” “At this point, it seems that Judge Brody is doubting that the $765 million is sufficient to cover the players and that some of the parameters to qualify for portions of the settlement monies are too narrow or restrictive. Bottom line, she wants the lawyers to ‘show their work’ because she’s doubting the fairness of the agreement.”

Researchers Study Best Treatment for Herniated Discs

Lumbar disc surgery is one of the most commonly performed operations in the United States, although rates vary considerably in different regions. Past studies have suggested that surgery provides faster pain relief and recovery for patients with herniated discs, compared to nonsurgical treatment. However, it has been difficult to determine the true effects of surgery – especially because of the high number of patients who cross over from nonsurgical treatment to surgery. This tends to underestimate the true benefits of surgery.

For patients with herniated discs in the lower (lumbar) spine, surgery leads to greater long-term improvement in pain, functioning, and disability compared to nonsurgical treatment, concludes an eight year follow-up study in the journal Spine. “Carefully selected patients who underwent surgery for a lumbar disc herniation achieved greater improvement than non-operatively treated patients,” according to lead author Dr. Jon D. Lurie of Dartmouth-Hitchcock Medical Center and the Geisel School of Medicine and colleagues. The results add to the evidence for surgical treatment of herniated discs – but also show that nonsurgical treatment can provide lasting benefits for some patients. The study has been posted ahead of print on the journal website; it will be published in the January issue of Spine.

The researchers analyzed data from the Spine Patient Outcomes Research Trial (SPORT), one of the largest clinical trials of surgery for spinal disorders. In SPORT, patients meeting strict criteria for herniated discs in the lumbar spine underwent surgery or nonsurgical treatment such as physical therapy, exercise, and pain-relieving medications. Patients with herniated discs experience back pain, leg pain (sciatica), and other symptoms caused by pressure on the spinal nerve roots. The current analysis included eight-year follow-up data on 1,244 patients treated at 13 spine clinics across the United States. About 500 patients were randomly assigned to surgery (a procedure called discectomy) or nonsurgical treatment, although patients were allowed to “cross over” to the other treatment. For the remaining patients, decisions as to surgery or nonsurgical treatment were left up to the patients and their doctors. Standard measures of pain, physical functioning, and disability were compared between groups.

Consistent with previous data from SPORT, patients assigned to surgery tended to have better outcomes. However, because many patients did not actually undergo their assigned treatment, the differences based on “intention to treat” were not statistically significant. When outcomes were compared for patients who actually underwent surgery versus nonsurgical treatment, significant differences emerged. On a 100-point pain scale, pain scores averaged about 11 points lower in the surgery group. Measures of physical functioning and disability showed similar differences. Surgery also led to greater improvement in some additional outcomes, including the bothersomeness of sciatica symptoms, patient satisfaction, and self-rated improvement.

While average outcome scores were better with surgery, many patients had significant improvement with nonsurgical treatment. After eight years, about one-third of patients who were clinically indicated for surgery have chosen not to have operative treatment.

SPORT Principal Investigator Dr. James N. Weinstein said this is significant and shows the important role that shared decision making plays in the process: “Every patient in the SPORT study went through shared decision-making, during which they reviewed objective information about the risks and benefits of their treatment options. This allowed them to make an informed choice, in line with their own values. That about a third of these patients have continued to be satisfied with their choice is in large part due, I believe, to their being active participants in the initial decision-making process” Weinstein said.

The long-term follow-up results from SPORT show that, for patients with confirmed herniated lumbar discs, “[S]urgery was superior to non-operative treatment in relieving symptoms and improving function.” Dr Lurie and coauthors note that the peak benefits are achieved within six months after surgery and persist through eight years.

However, many patients treated without surgery “also showed substantial improvements over time,” the researchers write. They add that patients who crossed over to surgery were more likely to be dissatisfied with their symptoms, felt like their symptoms were getting worse, and had initially worse physical function and disability.

Analyst Predicts Third Wave of Asbestos Claims

In forecasting serious asbestos-related claims, some of the country’s largest insurers and consultants appear to be ignoring relevant changes in medical knowledge, demographics and even social media. As a third wave of costly asbestos-related claims strikes the nation in the years ahead, many insurers will be swamped with “unexpected” reserve charges, according to “A Third Wave in Asbestos Liabilities Lies Ahead,” a new study by Assured Research, a New Jersey-based firm that analyzes the property/casualty insurance industry.

“In studying asbestos-related claims, we’re seeing evidence of outdated actuarial models,” explains Assured president William Wilt. “Since they’re based on 30-year-old epidemiological and demographic data, they can’t accurately forecast asbestos-related claims. Some insurers also seem to be ignoring advances in medical knowledge and diagnosis – and the changing behaviors of consumers and personal injury lawyers.”

The first wave of claims came from asbestos miners and millers; the second from people who handled asbestos regularly, such as plumbers, shipbuilders and carpenters. The third wave will be dominated by lung cancer claims which are ostensibly lower quality than those of mesothelioma because the cancer was predominantly caused by smoking rather than asbestos. Nevertheless, large numbers of even lower-quality claims could raise pressure on defendants anxious to settle and minimize nuisance suits. Moreover, recent literature illustrates researchers’ rising awareness of the malignant synergies between asbestos and smoking. Further, researchers are finding that short but intense exposures to asbestos can lead to asbestos illnesses.

“Medical evidence is mounting,” says Wilt, “that there is no ‘lower limit’ below which asbestos fibers cannot cause mesothelioma. Meanwhile, the people most likely to make asbestos claims are living longer – long enough, in some cases, to be diagnosed with asbestos-related disease.”

Asbestosis may be easier to diagnose today, thanks to high-resolution CT-scans, but Assured Research believes the third wave will be dominated by lung cancer claims. Personal injury lawyers are finding it easier than ever to prospect for new claimants, while a new recommendation from the U.S. Preventive Services Task Force recommends annual CT scans for all current and formers (heavy) smokers between the ages of 55 and 80 – some 10 million people.

“We believe this third wave will be aided by the growing prevalence of social media sites such as Google and YouTube which have lowered the cost of prospecting for claimants by lawyers,” says co-author and Managing Director Alan Zimmermann. “If you need convincing, type the name of any well-known asbestos law firm into a search engine and see how fast they come back to you with offers of direct conversations.”

“The confluence of outdated actuarial models, shifts in life expectancies, medical knowledge, social media, and now recommended screening,” Wilt says, “can’t be good news for insurers that are funding higher than expected claims on a pay-as-you-go basis.”

National Nurses United Claims Medical Bills are Bloated with Waste, Profiteering and Fraud

National Nurses United, with close to 185,000 members in every state, is the largest union and professional association of registered nurses in U.S. history. A report from NNU claims that an epidemic of sky-rocketing medical costs has afflicted our country and grown to obscene proportions. Medical bills are bloated with waste, redundancy, profiteering, fraud and outrageous over-billing. Much is wrong with the process of pricing and providing health care.

The latest in this medical cost saga comes from new data released last week. In a news release, NNU revealed that fourteen hospitals in the United States are charging more than ten times their costs for treatment. Specifically, for every $100 one of these hospitals spends, the charge on the corresponding bill is nearly $1,200.  NNU’s key findings note that the top 100 most expensive U.S. hospitals have “a charge to cost ratio of 765 percent and higher — more than double the national average of 331 percent.” They found that despite the enactment of “Obamacare” — the Affordable Care Act — overall hospital charges experienced their largest increase in 16 years. For-profit hospitals continue to be the worst offenders with average charges of 503 percent of their costs compared to publically-run hospitals (“…including federal, state, county, city, or district operated hospitals, with public budgets and boards that meet in public…”) which show more restraint in pricing. The average charge ratios for these hospitals are 235 percent of their costs.

NNU claims that the needless complications of the vast medical marketplace have provided far too many opportunities for profiteering. Numerous examples of hospital visit bills feature enormous overcharges on simple supplies such as over-the-counter painkillers, gauze, bandages and even the markers used to prep patients for surgery. That’s not to mention the cost of more advanced procedures and the use of advanced medical equipment which are billed at several times their actual cost. These charges have resulted in many hundreds of millions of dollars in overcharges.

When pressed for answers, many hospital representatives are quick to defer to factors out of their control. It’s the cost of providing care they might say, or perhaps infer that other vague aspects of running the business of medical treatment add up and are factored into these massive charges. Cost allocations mix treatment costs with research budgets, cash reserves, and just plain accounting gimmicks. These excuses shouldn’t fly in the United States. Few in the medical industry will acknowledge the troubling trend. One thing is undeniably certain however — the medical marketplace is not suffering for profits. Health-care in the United States is a nearly 3 trillion dollar a year industry replete with excessive profits for many hospitals, medical supply companies, pharmaceutical companies, labs and health insurance vendors.

The U.S. spends more on health care than the next ten countries combined — most of which cover almost all of their citizens.The United States spends $8,233 per person, per year according to a 2012 figure from the Organization for Economic Co-operation and Development (OECD). The average expenditure of the thirty three other developed nations OECD tracked is just $3,268 per person.  It gets worse. Harvard’s Malcolm Sparrow, the leading expert on health care billing fraud and abuse, conservatively estimates that 10 percent of all health care expenditure in the United States is lost to computerized billing fraud. That’s $270 billion dollars a year!

CWCI Study Says UR/IMR Process Working as Intended

In 2003, the Legislature reformed the workers’ compensation medical care delivery system by repealing the PTP’s presumption of correctness and implementing an objective standard of care determined by evidence-based medicine guidelines. The result was the creation of a Medical Treatment Utilization Schedule (MTUS),  a dynamic series of medical treatment guidelines designed to create a “standard of care” by which proposed medical treatment would be evaluated.

In late 2012, another round of reforms began to take shape in the form of Senate Bill 863. The inability of the adversarial and judicial systems in workers’ compensation to effectively implement the standard of medical care intended by the prior reforms through the adoption of the Medical Utilization Treatment Schedule and utilization review led to the creation of a new medical dispute resolution process: independent medical review. A common principle of both UR and IMR is the process of evaluating requests for medical tests and treatments for medical necessity, efficacy, and appropriateness.

And this week the CWCI published a report that compiled data on utilization review and independent medical review decisions from a variety of sources. According to the study, “due to the availability of the MTUS and other evidence-based medical guidelines, three out of four medical treatment requests are approved by claims adjusters without the need for additional oversight, with 25 percent of the treatment requests requiring elevated utilization review.”

IMR upheld 78.9 percent of all reviewed elevated UR decisions, while overturning 21.1 percent, with a majority of the UR decisions upheld in all 14 medical service categories. As was the case in elevated UR, pharmacy-related IMR decisions were by far the most prevalent, accounting for one third of all IMR determinations. Of those pharmacy-related reviews, 78 percent upheld the UR decision, while 22 percent overturned the prior UR decision. Consultations, laboratory services, and tests and measurement had the highest percentage of overturned UR decisions following IMR (50 percent, 34.2 percent and 35.3 percent respectively). Among the high-volume IMR requests, durable medical equipment, which accounted for 1 out of 10 IMR determinations, had the lowest percentage of UR modifications (13.2 percent), while 85 percent of all IMR decisions on physical medicine upheld the UR determinations.

Physical medicine practitioners accounted for the largest proportion of the reviewers (43 percent), followed by occupational medicine specialists (20 percent), orthopedists (14 percent) and family practitioners/internal medicine specialists (10 percent). No other medical specialty accounted for more than 5 percent of the IMR reviewers.

Thus, the CWCI study concludes “The fact that only a small proportion of medical treatment requests are modified or denied shows that UR/IMR are serving as intended, as an exception process.” Federal and group health plans typically use a shared risk model to balance supply and demand for medical services. Medicare, Medicaid and almost all group health programs use mandatory utilization review, along with supply-side controls such as fee schedules, closed provider panels, highly regulated pharmaceutical formularies, explicit limits on specific procedures and therapies and prohibitions on experimental procedures and equipment and demand-side controls such as co-payments and deductibles, contractually based limitations on services. Because cost controls such as co-payments and deductibles cannot be used in the workers’ compensation system, cost containment programs are typically limited to the use of fee schedules, medical treatment guidelines, partial limits on specific procedures and utilization review.

However, the study presents alarming data on opioid pain medication use. UR and IMR pharmaceutical reviews represent 43 and 25 percent of all decisions respectively. In terms of pharmaceutical control, a chronic pain management guideline was implemented within the MTUS in July 2009 for the purposes of providing better oversight controls on the use Schedule II and Schedule III opioids and other pain management therapies. Researchers found that between 2009 and 2012, Schedule II and Schedule III opioids have essentially remained at one quarter of all California workers’ compensation outpatient prescriptions and 30 percent of total prescription drug expenditures. This data compiled on UR and IMR decisions suggests that between one-third to one-half of the UR and IMR pharmacy reviews involved opioids or compound drug requests. The authors have also separately documented the high rate of Schedule II opioid prescriptions for minor back pain, strains of the extremities and mental health disturbances, a questionable use of these highly addictive and dangerous pain medications.

The sustained high rate of Schedule II and Schedule III opioids and the high rate of pharmacy-related UR and IMR decisions suggest an opportunity for stronger pharmaceutical utilization and cost controls. A forthcoming CWCI study will compare new trends in Schedule II and Schedule III opioid use in California workers’ compensation and compare California utilization and cost factors against an alternative closed formulary method used in other states.

Santa Barbara Doctor Known as “Candy Man” Pleads Guilty

A Santa Barbara physician was remanded into custody this week after he pleaded guilty to 11 federal drug trafficking charges for writing prescriptions for powerful painkillers for “patients” who were drug addicts.

Julio Gabriel Diaz, 65, who operated the Family Medical Clinic in Santa Barbara prior to his arrest two years ago, pleaded guilty to 10 counts of distributing controlled substances without a legitimate medical purpose and one count of distributing controlled substances to a minor (which, under federal law, is a person under 21).

Diaz pleaded guilty before United States District Judge Cormac J. Carney, who is scheduled to sentence the defendant on June 2. Diaz, who will be held in jail until his sentencing, faces a maximum statutory sentence of 200 years in federal prison and fines of up to $10 million.

“Dr. Diaz was, quite simply, acting as a common drug dealer,” said United States Attorney André Birotte Jr. “The diversion of powerful painkillers from legitimate medical uses to the hands of drug abusers is a dangerous practice that fuels addiction and causes overdoses. Far too many of the illegal prescription drugs that find their way to street users come from doctors who, like Julio Diaz, choose to betray their Hippocratic oath.”

In a plea agreement filed last year in United States District Court, Diaz admitted distributing narcotics such as oxycodone, methadone, hydrocodone, alprazolam, fentanyl and hydromorphone in 2009 and 2010. Diaz admitted that he distributed or dispensed the narcotics “while acting and intending to act outside the usual course of professional practice and without a legitimate medical purpose.” Court documents previously filed in this case, as well as civil lawsuits, link Diaz to fatal drug overdoses. However, he was not specifically charged with causing any deaths, nor did he specifically admit causing any deaths during today’s hearing.

The investigation into Diaz was conducted by the Drug Enforcement Administration and the Santa Barbara Police Department, which received the assistance of the California Medical Board.

Liberty Mutual Sells Comp Business to AFG

American Financial Group, Inc. today announced that it has reached a definitive agreement to acquire Summit Holdings Southeast, Inc. and its related companies (together, “Summit”), from Liberty Mutual Insurance in an all-cash transaction. Based in Lakeland, FL, Summit is a leading provider of workers’ compensation solutions in the Southeastern United States, with approximately $520 million of premium written. Following the transaction, Summit will continue to operate under the Summit brand as a member of AFG’s Great American Insurance Group.

Under the terms of the transaction, AFG will pay Liberty Mutual Insurance an estimated $250 million at closing. The purchase price will be subject to adjustment between signing and closing for, among other things, changes in Summit’s GAAP tangible book value. AFG’s total capital investment in Summit will be approximately $400 million, inclusive of a capital contribution by AFG at closing. The transaction is expected to close in the first or second quarter of 2014, following customary regulatory approvals. AFG will not use any external financing in the acquisition.

Carl H. Lindner III, Co-Chief Executive Officer of AFG, commented, “Summit has an excellent long-term track record of underwriting outperformance. We value its underwriting discipline, talented management team and value-based service model. Their business model fits well with our Property and Casualty Group’s strategic focus and complements our Great American Insurance Group specialty workers’ compensation offerings available through our other specialty P&C businesses. We look forward to welcoming Carol Sipe, Summit Group’s President and CEO, and her team to the AFG family.”

American Financial Group is an insurance holding company, based in Cincinnati, Ohio with assets of approximately $40 billion. Through the operations of Great American Insurance Group, AFG is engaged primarily in property and casualty insurance, focusing on specialized commercial products for businesses, and in the sale of fixed and fixed-indexed annuities in the retail, financial institutions and education markets. Great American Insurance Group’s roots go back to 1872 with the founding of its flagship company, Great American Insurance Company.

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