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Tag: 2016 News

New NFL Federal Concussion Case Abruptly Withdrawn

The federal court case brought by 38 former National Football League players seeking to force the NFL to recognize chronic traumatic encephalopathy (CTE) as a covered disease under workers’ compensation has been withdrawn.

Instead of pursuing their joint case, the players will file separate workers’ compensation claims in individual states, according to their lawyer.

The U.S. District Court for the Southern District of Florida in Ft. Lauderdale, Judge Beth Bloom dismissed the suit (Gaiter et al. v. National Football League) without prejudice.

The plaintiffs’ lawyers – Tim Howard and Miguel Amador of Howard & Associates in Tallahassee – voluntarily withdrew their complaint. They explained that the players have decided to proceed with filing state claims. “We are going forward aggressively state-by-state as that is the least risky approach to secure the recoveries for our clients,” Howard told Insurance Journal.

Earlier, on Dec. 5, Judge Bloom had stayed the case pending a decision on whether it should be transferred to the federal court in Pennsylvania that is handling multidistrict litigation involving concussions and the NFL.

The U.S district court in eastern Pennsylvania, under U.S. District Judge Anita B. Brody, oversaw a consolidation of concussion lawsuits against the NFL and reached a settlement valued at as much as $1 billion in potential benefits for more than 22,000 former players. Earlier this month, the U.S. Supreme Court let stand that concussion settlement, deciding against hearing complaints by some former players that the settlement is inadequate and unfairly treats current versus future brain injuries differently.

The workers’ compensation case brought in federal court did not have a great chance of succeeding, according to lawyers reached after the complaint was filed but before it was withdrawn.

“The first real hurdle here is that it is questionable as to whether a federal court is even the proper forum to determine a state workers’ compensation issue. The answer is most likely no,” Justin R. Parafinczuk, a civil trial attorney and partner with the Florida firm Koch Parafinczuk & Wolf, P.A., told Insurance Journal.

He said the complaint essentially asked the federal court to declare CTE a compensable occupational disease under workers’ compensation laws that vary by state.

“This request would basically strip the defendants’ rights to defend themselves at a traditional worker’s compensation hearing, where the plaintiff or, as referred to in worker’s compensation, the claimant would have the burden to prove these allegations to a worker’s compensation judge, and the defendants would be able to present all available defenses,” he said. This would require the federal court to do an “extensive analysis of the worker’s compensation laws of every state where a defendant resides,” something he said the court would be “highly unlikely” to undertake.

The other hurdle was the players’ Collective Bargaining Agreement, under which CTE is not recognized.

Santa Rosa Taxi Company Fined in Misclassification Case

California Labor Commissioner Julie A. Su announced that Santa Rosa taxi company A-C Transportation Services, Inc., has agreed to settle its $522,300 citation for refusing to provide its 30 drivers with workers’ compensation insurance coverage and for misclassifying them as independent contractors.

Owners Kevin and Jennifer Kroh, also doing business as Healdsburg Cab Company, agreed to pay a fine of $200,000 in installments, with final payment in June 2021. If they default on the payments the agreement is void and the full $522,300 judgement will be due. The company also agreed to cease all operations as of December 31, 2016.

The agreement comes after the taxi company was issued a Stop Order judgment in October by a Sonoma County Superior Court judge for continuing to refuse to provide workers compensation insurance as required by law.

The California Labor Commissioner’s Office launched its investigation into A-C Transportation Services in March of 2014 and found that it had failed to provide workers’ compensation insurance coverage as required by law from 2011 through 2014 and was misclassifying drivers as independent contractors.

A citation for $522,300 was issued and appealed by A-C Transportation claiming their drivers were independent contractors who leased taxi cabs from the businesses.

In January 2015, the Labor Commissioner affirmed the citation and determined that the taxicab drivers were employees and not independent contractors.

A-C Transportation Services then filed a petition to review the administrative decision in Sonoma County Superior Court. On September 16, the Court found that there was substantial evidence to support the Labor Commissioner’s determination and denied the petition.

When A-C Transportation continued to operate and refused to secure workers’ compensation insurance, the Labor Commissioner requested the court to intervene and issue a Stop Order. On October 19, a Sonoma County Superior Court Judge issued a Stop Order judgment. On December 7, both parties reached an agreement to resolve the case.

Purdue Pharma Accused of PBM “Quid Pro Quo” Payments

With more attention on the impact of opioid addiction and the role of overprescribing, drug companies have come under more scrutiny for suspicious and sometimes unsavory marketing practices.

A lot of the spotlight has been directed toward Purdue Pharma, the makers of OxyContin. A company that already paid $20 million in a settlement with 27 states, attorneys general across the country many years ago.

Unsealed court documents indicate that the drug manufacturer went to great lengths to stop preauthorization of OxyContin in West Virginia despite concerns from public health officials.

The warning signs of what would become a deadly opioid epidemic emerged in early 2001. That’s when officials of the state employee health plan in West Virginia noticed a surge in deaths attributed to oxycodone, the active ingredient in the painkiller OxyContin.

They quickly decided to do something about it: OxyContin prescriptions would require prior authorization. It was a way to ensure that only people who genuinely needed the painkiller could get it and that people abusing opioids could not.

But an investigation by STAT claims that Purdue Pharma, the manufacturer of OxyContin, thwarted the state’s plan by paying a middleman, known as a pharmacy benefits manager, to prevent insurers from limiting prescriptions of the drug. The financial quid pro quo between the painkiller maker and the pharmacy benefits manager, Merck Medco, came to light in West Virginia court records unsealed by a state judge at the request of STAT, and in interviews with people familiar with the arrangement.

The strategy to pay Merck Medco extended to other big pharmacy benefit managers and to many other states, according to a former Purdue official responsible for ensuring favorable treatment for OxyContin. The payments were in the form of “rebates” paid by Purdue to the companies. In return, the pharmacy benefit managers agreed to make the drug available without prior authorization and with low copayments.

“That was a national contract,” Bernadette Katsur, the former Purdue official, who negotiated contracts with pharmacy benefit managers, said in an interview. “We would negotiate a certain rebate percentage for keeping it on a certain tier related to copay or whether it has prior authorization. We like to keep prior authorization off of any drug.”

Katsur said prior authorization programs do little to eliminate inappropriate prescribing by “bad doctors” and usually just create needless paperwork for doctors working in the best interest of patients. She said some doctors simply won’t deal with the hassle of a prior authorization program, resulting in some legitimate patients not getting the medication they need.

“You don’t want to make it harder for a doctor to prescribe when they are doing the right thing,” she said.

In addition to keeping OxyContin from being subject to prior authorization, the rebates paid to pharmacy benefit managers were used to guarantee favorable status for OxyContin on their listings of approved drugs, Kastur said. PBMs commonly place drugs in different tiers on these lists, called formularies. Some tiers are more restrictive and require higher copayments. Purdue wanted OxyContin placed in the least restrictive tier – and succeeded.

The relationship with Merck Medco was so important that Purdue moved Katsur to New Jersey so she could be close to Merck’s national headquarters, she said.

It is common for drug companies to pay rebates to gain preferential treatment from companies hired by insurance plans to manage prescription drug benefits, but in this case the arrangement removed a key safeguard in the system that may have slowed the growth of OxyContin as it became a national bestseller that eventually peaked at annual sales of $3 billion.

The former Merck Medco was purchased by Express Scripts in 2012. A spokesman for Express Scripts said no one currently at the company had knowledge of the West Virginia contract. A spokesman for Purdue Pharma said the company had no comment.

In McDowell County, where the court records from a state lawsuit against Purdue were unsealed, the local sheriff said prescription pill abuse is so rampant that the county plans to file a new lawsuit against painkiller makers.

Drugmakers Use Flawed (or Fraudulent?) Generic Drug Trials

Last year, the European Medicines Agency banned about 700 medicines across Europe after an investigation revealed data tampering in some trials of generic drugs in India. The questionable trials were conducted by “contract research organizations” or CROs in India on behalf of major international durgmakers located in other countries around the world.

International medical experts said that volunteers undergoing back-to-back clinical trials endangers the health of patients participating. It can also compromise clinical data gathered through these trials, on the basis of which drugmakers seek approval to sell generic medicines around the world.

“The time gap between participation in two different trials should be 90 days minimum,” said Stephanie Croft, a lead inspector at the WHO. “When [data] is incomplete or incorrect it could pose a serious risk to patients.”

Yet, some of the “volunteers” in India who participate in drug studies for international drugmakers who use Indian CROs are “addicted” to the money and find ways to violate the rules and do not wait the required 90 days between participating in clinical drug trials.

Half of more than a dozen volunteers interviewed by Reuters across four cities – Chennai, Hyderabad, Bengaluru, and New Delhi – said they waited much less than 90 days between trials. In the past three-to-four years, they said they spent several months at a time in different cities so that they could participate in as many studies as possible.

One volunteer, Vasudeva Prakash, a former mechanic, said he was never asked by CROs, and their ‘agents’ who approached him for studies, about whether he had recently taken part in another trial.

“Everybody does it. Once you start getting the money, it’s very hard to quit. It’s like an addiction,” said Prakash.

He said after the first study, he began to regularly receive messages on his phone and Facebook, often from agents working on behalf of CROs, informing him about ongoing clinical trials where volunteers were required. Such messages included three key things: the city where the trial was being conducted, the total pay offered, and the “blood loss”, or the amount of blood the volunteer will need to provide.

Prakash provided Reuters with documentation proving he underwent trials with short gaps at Apotex Research Pvt Ltd, owned by Canadian drugmaker Apotex Inc; Lotus Labs, owned by U.S. generics giant Actavis; Ethics Bio Lab, owned since last year by U.S. drugmaker Par Pharmaceutical Inc; and India’s Semler Research Center Pvt Ltd, among others.

In addition to the questionable status of volunteers, several CROs have been accused of outright data tampering. For example, CRO, Quest Life Sciences, was found last year to have manipulated clinical data on certain trials, according to inspection reports from the WHO and the UK’s medicines authority.

Several large international drugmakers, including Teva Pharmaceutical Industries Ltd and Mylan NV, rely on CROs in India to carry out tests on cheaper versions of branded drugs. The aim of these so-called “bioequivalence” studies is to gauge whether non-branded drugs are equally safe and effective. The faster the trials are undertaken, the faster the drugs can come to market.

In the wake of trial data manipulation scandals at CROs in the past three years, many large drugmakers including Swiss firm Novartis, have been shifting more critical trials back to the United States and Europe, according to consultants and industry executives.

International and local regulators have struggled to keep its oversight in line with the growth of an industry that expanded rapidly in the 2000s, as drugmakers shipped clinical trial work to India to save money. The market is estimated to have crossed $1 billion in 2016, according to consultants Frost and Sullivan.

Are There Compensable Consequences from NSAID Use?

A new study published in the American Journal of Epidemiology and summarized in Ruters Health says that regular use of pain relievers over many years may increase the risk of hearing loss.

Researchers analyzed long-term data on almost 56,000 U.S. women and found using non-steroidal anti-inflammatories (NSAIDS) like naproxen (Aleve) and ibuprofen (Motrin) as well as acetaminophen (Tylenol) for six years or more was tied to a greater risk of hearing problems than taking these drugs for a year or less.

“Hearing loss is extremely common in the United States and can have a profound impact on quality of life,” said senior study author Dr. Gary Curhan, a researcher at Harvard University and Brigham and Women’s Hospital in Boston.

Risks of the painkillers in the study go beyond hearing loss and patients should do their best to avoid long-term use, Curhan added by email.

“Even though these medications are sold without requiring a prescription, they do have potential side effects, one of which is a higher risk of hearing loss; they have also been shown to be associated with a higher risk of hypertension (high blood pressure) and other important medical conditions,” Curhan said.

“They are generally safe when taken in usual doses for short periods of time,” Curhan noted. “However, there should be strong justification for long-term use.”

Women in the study who used NSAIDs at least twice a week for six years or more were 10 percent more likely to report hearing loss than participants who used these drugs for less than one year.

With acetaminophen, regular users for at least six years were 9 percent more likely to report defective hearing than short-term users, researchers report in the American Journal of Epidemiology.

Researchers did not find a statistically meaningful association between hearing loss and the duration of aspirin use.

Aspirin has been linked to ringing in the ears in the past, and Vicodin, a painkiller that contains acetaminophen, has been tied to hearing loss with overuse, noted Dr. Jennifer Derebery of the House Ear Clinic and the University of California, Los Angeles.

Ibuprofen is less commonly recognized by the public as a potential cause of hearing damage, Derebery, who wasn’t involved in the study, said by email.

Previous research has found a similar link between painkillers and hearing loss in men, though studies to date have yet to explain how the drugs might impact hearing, said Dr. Wilko Grolman, a researcher at the University of Utrecht in the Netherlands who wasn’t involved in the study.

However, the study is observational and doesn’t prove these painkillers cause hearing impairment.

“The hearing loss was self-reported and not measured objectively with hearing tests,” Dr. David Haynes, a researcher at Vanderbilt University Medical Center in Nashville who wasn’t involved in the study, said by email.

FDA Issues Medical Device Cybersecurity Guidance

The Food and Drug Administration released its recommendations for how medical device manufacturers should maintain the security of internet-connected devices, even after they’ve entered hospitals, patient homes, or patient bodies.

First issued in draft form last January, this guidance is more than a year in the making. The 30-page document encourages manufacturers to monitor their medical devices and associated software for bugs, and patch any problems that occur. But the recommendations are not legally enforceable – so they’re largely without teeth.

The FDA has been warning the health care industry for years that medical devices are vulnerable to cyberattacks. It’s a legitimate concern: researchers have managed to remotely tamper with devices like defibrillators, pacemakers, and insulin pumps. In 2015, FDA warned hospitals that the Hospira infusion pump, which slowly releases nutrients and medications into a patient’s body, could be accessed and controlled through the hospital’s network. That’s dangerous to patients who could be harmed directly by devices altered to deliver too much or too little medication. It also means poorly secured devices could give hackers access to hospital networks that store patient information – a situation that’s ripe for identity theft.

“In fact, hospital networks experience constant attempts of intrusion and attack, which can pose a threat to patient safety,” says Suzanne Schwartz, the FDA’s associate director for science and strategic partnerships, in a blog post about the new guidelines. “And as hackers become more sophisticated, these cybersecurity risks will evolve.”

The FDA issued an earlier set of recommendations in October 2014, which recommended ways for manufacturers to build cybersecurity protections into medical devices as they’re being designed and developed. The current guidance focuses on how to maintain medical device cybersecurity after devices have left the factory. The guidelines lay out steps for recognizing and addressing ongoing vulnerabilities. And they recommend that manufacturers join together in an Information Sharing and Analysis Organization (ISAO) to share details about security risks and responses as they occur.

Most patches and updates intended to address security vulnerabilities will be considered routine enhancements, which means manufacturers don’t have to alert the FDA every time they issue one. That is, unless someone dies or is seriously harmed because of a bug – then the manufacturer needs to report it. Dangerous bugs identified before they harm or kill anyone won’t have to be reported to the FDA as long as the manufacturer tells customers and device users about the bug within 30 days, fixes it within 60 days, and shares information about the vulnerability with an ISAO.

This attempt to secure medical devices is just the beginning, says Eric Johnson, a cyber security researcher and dean of the Vanderbilt University business school, in an email to The Verge. The FDA’s Schwartz agrees, writing in a blog post: “This is clearly not the end of what FDA will do to address cybersecurity.”

DEA Targets Pharmacies for “Suspicious” Opiod Orders

A drug distributor owned by Cardinal Health Inc has agreed to pay $10 million to resolve claims it failed to alert the U.S. Drug Enforcement Administration to suspiciously large orders of addictive painkillers by New York-area pharmacies.

The settlement with Kinray LLC, a New York City-based pharmaceutical distributor, disclosed in papers filed late Thursday in federal court in Manhattan, comes amid efforts by U.S. authorities to combat the nation’s opioid drug epidemic.

The settlement was secured by the office of Preet Bharara, the U.S. Attorney for the Southern District of New York, who has increasingly turned his sights toward the growing opioid drug epidemic.

The Kinray settlement came after a DEA investigation of pharmacies in New York and elsewhere that had ordered unusually large and frequent shipments of oxycodone or hydrocodone, according to a lawsuit filed earlier this week.

From January 2011 and May 2012, Kinray shipped the drugs to more than 20 New York pharmacy locations in amounts that were many times greater than the distributor’s average sales of controlled substances to all of its customers, the lawsuit said.

Kinray ignored numerous “red flags” and did not report any suspicious orders to the DEA despite requirements that it do so for such highly regulated drugs, the lawsuit said.

The latest agreement stemmed from a 2012 settlement with the DEA in which its facility in Lakeland, Florida, was suspended from selling painkillers and other drugs for two years, according to Cardinal.

The 2012 deal only resolved administrative aspects of the case, not potential fines Cardinal Health faced in Florida or elsewhere. The Dublin, Ohio-based company has set aside $44 million to cover those potential liabilities.

Cardinal Health, which announced its $1.3 billion acquisition of Kinray in 2010, said on Friday it continues to work with the U.S. Justice Department to resolve the matter.

As part of the settlement, Kinray admitted and accepted responsibility for failing to report suspicious orders to the DEA, according to court papers.

The case is U.S. v. Kinray LLC, U.S. District Court, Southern District of New York, No. 16-cv-09767.

New MACI Knee Cartilage Surgery Shortens RTW Time

A new study published in the American Journal of Sports Medicine and summarized in a report by Reuters Health claims that patients receiving a graft of their own knee cartilage cells may be better off returning to full weight bearing after six weeks instead of the standard eight.

Knee surgery patients put on a six-week recovery track were able to get back to work and other activities like sports more quickly, and even reported slightly better results at 24 months than those who had followed an eight-week recovery plan after surgery, researchers report in the American Journal of Sports Medicine.

People with damaged cartilage in their knees can undergo so-called matrix-induced autologous chondrocyte implantation, or MACI, surgery to fix the defects that cause pain and swelling.

In the two-stage MACI surgery, healthy cartilage is collected from unaffected parts of the damaged knee and sent to a lab where it’s used to grow more cartilage on a scaffold-like material. The surgeon then implants this graft into the damaged parts of the knee where it’s expected to integrate with surrounding cartilage.

Standard practice has been to keep weight off the knee for at least eight weeks and up to three months for fear of damaging the delicate new tissue. But there’s evidence that the forces of weight and movement promote growth by the cartilage cells, the authors write, so putting some weight on the implant earlier might help speed recovery of the knee.

“The regimens employed internationally were very conservative in fear of overloading the early repair tissue and jeopardizing the final outcome,” lead author Jay Ebert told Reuters Health by email.

Besides the obvious lifestyle benefits of shorter recovery times, there are clinical benefits as well, said Ebert, of the University of Western Australia in Crawley. Returning to walking more quickly may reduce the amount of muscle lost and the level of joint stiffness after surgery, he said.

To explore whether people could heal as well from surgery if they only kept off of their feet for six weeks instead of eight, the study team recruited 37 MACI surgery patients between 2010 and 2014.

The participants were randomly assigned to an eight-week return to weight-bearing group or an accelerated six-week recovery group.

Overall, the results were good for both groups. There were two cases of graft failure, both in the eight-week recovery group.

The two groups had similar results on all tests of knee function, with the accelerated group performing slightly better. For instance their repaired knees, on average, had returned to 94 percent of the peak strength of the undamaged knee, compared to 88 percent in the eight-week recovery group.

The MRI scans showed the patients in the faster recovery group had significantly better healing on two out of eight visible measures, compared with the eight-week group.

Overall, 83 percent of patients in the eight-week group were satisfied with their surgery, while 88 percent of patients in the six-week group reported being satisfied.

Allstate Targets Fake LA Law Offices

Allstate went before a judge and jury to put an end to the illegal ownership, kickbacks and fraudulent operation of multiple law offices in the Los Angeles area that were owned, operated and controlled by unlicensed people posing as lawyers.

The verdict in a Los Angeles County Superior Court resulted in a judgment worth more than $11.5 million in favor of Allstate.

“Submitting even one false insurance claim is fraud and insurance fraud is a crime,” says Allstate’s Senior Field Vice President Phil Telgenhoff. “Fraud drives up the cost we all pay for insurance by stealing millions of dollars from insurers. This cannot and will not be tolerated in California or anywhere.”

Allstate alleged Christina Chang, Christine Suh and other unlicensed persons knowingly engaged in a fraud scheme in which they used the identity of practicing lawyers to create eight phony or “sham” law offices to make false, fraudulent or misleading claims against insurance companies so that settlement payments could be converted to their own use.

Evidence presented at trial showed that several California lawyers were paid $3,000 per month for the use of their names and law licenses. None of the licensed lawyers had significant direction or control over the operation of the fake law offices or the making and processing of claims.

Chang and Suh rented office space, hired staff, opened firm bank accounts, obtained clients, made demands to insurance companies for settlement and negotiated settlements, all in the name of licensed California attorneys, falsely making it appear as if a lawyer represented the client and claimant.

The evidence also showed Chang and Suh used remote check-cashing facilities including liquor stores and small local markets to convert the settlement proceeds into untraceable cash from deposits into client-trust accounts.

Allstate contended Chang and Suh knowingly concealed the fact that the law offices were owned, operated and controlled by unlicensed persons, all in violation of California’s Insurance Frauds Prevention Act.

“This is one of the first times I’ve seen this elaborate of an effort with setting up fake law offices and trying to defraud the industry,” says Telgenhoff. “We have seen this type of operation before with shady medical clinics across the country, but this takes the scam to a different level. Rest assured, we will fight fraud wherever it lives.”

Is Federal Comp a Lucrative “Luxury” Medical Fraud Target?

Forest Park Medical Center (FPMC) in Dallas and other Texas cities was touted as a “Luxury” hospital with a “spa-like atmosphere,” which did not accept lower-paying Medicare, Medicaid, or “in-network” managed-care insurance rates, but did allow for physician ownership, As such, it rapidly attracted the attention of physician investors and their referrals

The patients were primarily ones with high reimbursing out-of-network private insurance benefits or benefits under certain federally-funded programs. As such, it was free to set its own prices for services and was generally reimbursed at substantially higher rates than in-network providers. FPMC’s strategy was to maximize profit for physician investors by refusing to join the networks of insurance plans for a period of time after its formation, allowing its owners and managers to enrich themselves through out-of-network billing and reimbursement.

But, rather than leave money on the table, FPMC’s owners, managers, and employees also attempted to sell patients with lower reimbursing insurance coverage, namely unwitting Medicare and Medicaid beneficiaries, to other facilities in exchange for cash.

Yet worker’s compensation patients were included in the clientele accepted by this “Luxury” facility. According to the indictment, the hospital accepted the referral of patients with high reimbursing, out-of-network private insurance benefits, and benefits under certain non-Medicare and Medicaid federally-funded programs, such as the Federal Federal Employees’ Compensation Program also known as federal workers compensation.

Included in the 21 professionals indicted this December were Iris Kathleen Forrest, 56, of Dallas who was a worker’s compensation preauthorization specialist who allegedly received approximately $450,000 in bribe and kickback payments in exchange for referring patients, including those she was preauthorizing, to FPMC or to surgeons who performed medical procedures, including surgeries, at the hospital. And Royce Vaughn Bicklein, 44, of San Antonio, Texas was a worker’s compensation lawyer who received approximately $100,000 in bribe and kickback payments in exchange for referring patients, including his clients, to FPMC or to surgeons who performed medical procedures, including surgeries, at the hospital.

Although the typical arrangement in Texas would call for the carve-out of Medicare and Medicaid programs, the intent being to avoid the possibility of running afoul of the Department of Health and Human Services Office of Inspector General, (“HHS OIG”), what many fail to appreciate is the manifold number of federal healthcare programs which could be implicated. Each federal department has its own OIG. Federal worker’s compensation and federal employees health insurance benefits are guarded by the United States Department of Labor OIG. Military plans, or TRICARE, is protected by the Department of Defense OIG.

That’s what initially triggered federal jurisdiction at Forest Park, according to the indictment. The bribes and kickbacks included more than $10 million to TRICARE, more than $25 million to the Department of Labor FECA healthcare program, and more than $60 million to the federal employees’ and retirees’ FEHBP healthcare program. As a result of the bribes, kickbacks, and other inducements, from 2009 to 2013, FPMC allegedly billed such patients’ insurance plans and programs well over half of a billion dollars.

What would be illegal, if the prosecutors can make their case, is the alleged $40 million in bribes and kickbacks paid for referring certain patients to FPMC.

But what is interesting in this very ugly fraud case, is the inclusion of federal workers’ compensation claimants among those who were to be treated at a luxury hospital with a spa like atmosphere that bills at substantially higher rates than in-network providers. The question to be answered for taxpayers is how did this happen in the first place?