Tag: 2017 News

Weak patient admissions that plagued U.S. hospital operators in the June quarter are likely to persist through 2018, as patients fret about soaring out-of-pocket costs and the future of Obamacare remains uncertain. Companies including HCA Healthcare Inc, the largest for-profit hospital operator, and Tenet Healthcare Corp have reported dismal quarterly results and cut their forecasts for the year.

According to the report in Reuters Health, high-deductible health plans – which shift initial medical costs to patients, but have lower monthly premiums – are becoming popular, resulting in patients pushing back non-emergency surgeries.

Tenet saw weakness in elective procedures including orthopedics, Eric Evans, the company’s president of hospital operations, said earlier this month. “That does play into the story of deductibles rising and changing behaviors.”

Also, HCA, Tenet, and rivals such as Community Health Systems Inc enjoyed a surge in admissions in 2014 and 2015, thanks to the Affordable Care Act, popularly known as Obamacare. But with big insurers reducing exposure to the program since last year, results for hospital operators are suffering in comparison, analysts said.

HCA is expected to grow at a compound annual rate (CAGR) of 4.8 percent through this year and the next, down from 6.7 percent growth over the last three years. Tenet’s CAGR is expected to plunge to 0.2 percent from 21 percent.

“I think the seasonality is changing, somewhat, where the fourth quarter is really shaping up to be the biggest quarter because of all the people deferring things until their co-pays are deductible,” said J.P. Morgan analyst Gary Taylor.

High-deductible plans have been around for over a decade but have become more popular as wage rises fail to keep up with rising medical costs, said Bret Schroeder, healthcare expert at PA Consulting Group. Participation in high-deductible plans in the five years through January 2016 has risen about 76 percent, according to lobby group America’s Health Insurance Plans.

While this has been a problem for all hospital operators, HCA, with its well-capitalized balance sheet and strong cash flow, is best positioned to weather the storm, analysts said. But for Tenet and Community Health, these problems add to piles of debt, which they have been trying to repay by selling assets.

Thomas S. Powers M.D. – a physician at Open Care Medical Clinic in Santa Ana, who claimed to specialize in anti-aging and preventive medicine, cosmetic medicine, stress management, pain management, addiction recovery, weight management and regenerative medicine – was accused of poor record keeping by the medical board eight years ago.

In a newer case filed last October, the board accused Powers of prescribing himself pain medication and more sloppy record keeping that led to him overprescribing medications to four patients, including the one who passed away.

By April 5 2017, Powers and his attorney John D. Martin signed off on the medical board’s license probation order due to what they acknowledged was “gross negligence” and “repeated negligence” in the treatment of four patients, overprescribing them powerful medications, failing to keep adequate records of the prescriptions he wrote them and prescribing himself the muscle relaxer carisoprodol and suboxone, a highly addictive substance that is nonetheless used to treat substance abuse addiction. One of those patients died.

During the 2017 probation imposed for the new offense, the Medical Board records said that Powers “shall not order, prescribe, dispense, administer, furnish, or possess any controlled substances listed in Schedules II and III, except anabolic steroids; and is prohibited from supervising physician assistants and advanced practice nurses,” the Medical Board added that failure to adhere by those conditions could lead to license revocation proceedings.

Powers did not last long on his newly imposed  probation.

Kimberly Kirchmeyer, the Medical Board’s executive director, reported his probation violations in the new August 18, 2017 Cease Practice Order saying that “The Respondent has failed to comply with Condition No. 3, Controlled Substances – Abstain From Use, by testing positive for marijuana on July 30, 2017, and Aug. 6, 2017, and failing to check in daily for 10 days,  

Accordingly Powers is now prohibited from engaging in the practice of medicine. It will be up to the board to decide if and when Powers can resume a medical practice in California.

United States Attorney General Jeff Sessions announced in July that Powers was among 13 others in Southern California and more than 400 defendants nationwide charged in federal court in Los Angeles with being part of the largest health-care fraud operation ever undertaken, with false billings totaling about $1.3 billion.

Federal prosecutors specifically alleged that Powers authorized prescriptions for patients he never examined, receiving payments from another defendant, Newport Beach resident Anthony Paduano, who allegedly got about $1.2 million for referring the prescriptions to a local pharmacy that billed more than $4.8 million to TRICARE, the healthcare system for military personnel and other Department of Defense employees.

According to court records filed in San Diego by federal authorities, a small pharmacy in Utah and a doctor’s office in Tennessee have been implicated in an alleged kickback scheme that used San Diego County Marines to defraud the military’s health insurance provider out of at least $67 million.

The story published in the San Diego Tribune claims the allegations add to a growing number of investigations into fraudulent prescriptions of compound medications – high-priced drugs custom-made by pharmacists to tailor to a patient’s specific needs. The investigations have led to arrests in similar cases across the country and a change in how TRICARE – which serves 9.4 million active, retired and reserve military and their families – pays for such drugs.

In just the first four months of 2015, the costs of claims to TRICARE for compounded drugs surged to more than $1 billion, according to the insurer. Federal investigators say in court documents that a chunk of those claims came from a pharmacy in Bountiful, Utah, that was issuing prescriptions to patients in Southern California.

No arrests have been made in the San Diego-based investigation, which is ongoing. But federal authorities described their investigation in a sealed search warrant affidavit filed in March that was obtained by The San Diego Union-Tribune and a complaint filed publicly by the U.S. Attorney’s Office as part of a civil asset forfeiture case against a Tennessee couple.

The pharmacy at the center of the probe was formerly known as The Medicine Shoppe, a franchise opened by noted compound pharmacist Kort Delost in 1993. The former president of the Utah Pharmacist Association and Young Pharmacist of the Year for Utah sold the business in 2014 to two people, who are identified in court documents only by the initials T.S. and W.W.

The pharmacy, in the town just north of Salt Lake City, had a license to ship medications to California, according to the complaint.

The vast majority of the prescriptions were authorized by emergency room physicians who served as medical directors for Choice MD, a medical practice in Cleveland, Tenn., owned by Jimmy and Ashley Collins, the court documents allege. The practice offers everything from primary care to therapeutic massage to Botox, according to its website. The physicians are not named and only referred to by their initials, S.V. and C.L. One of the doctors also signed off on prescriptions written by a nurse practitioner, the complaint states.

Authorities say The Medicine Shoppe billed TRICARE for 2,721 compound prescriptions authorized by S.V. from December 2014 to May 9, 2015, resulting in more than $47 million in reimbursements. During the same period, the doctor wrote three non-compounded prescriptions for TRICARE patients.

Investigators say the specialized drugs went to a network of Southern California Marines who were recruited by fellow Marines to participate in a medical study. The Marines were paid $100 to $300 a month to talk to the doctors over the phone in a telemedicine exam, the affidavit states. TRICARE allows telemedicine consultations, but they must be held in places such as a doctor’s office, not at home.

Investigators tracked some $45 million linked to The Medicine Shoppe that moved around in bank accounts owned by the Collinses and several entities in their control, including $4.4 million allegedly paid to unnamed recruiters during the first half of 2015, the affidavit states.

Prosecutors allege the Collinses laundered the illegal proceeds by buying four properties in Tennessee, including a farm and a shopping center called Colony Square, for a total of nearly $5.7 million.

In a motion asking a San Diego judge to dismiss the forfeiture, lawyers for the Collinses complained that the details of the allegations were sealed, making it difficult for them to respond to the claims of wrongdoing. The judge ordered the government to file the allegations publicly, which prosecutors did last week.

In the motion to dismiss, the lawyers also denied their clients were involved in any kind of healthcare fraud.

In mid-2015, The Medicine Shoppe changed its name to Prescriptions Plus Pharmacy. A photo on the pharmacy’s Facebook page shows workers changing out the sign on the building front, with the announcement: “New name, same great people! Beginning a new chapter.”

The pharmacy changed hands again in October 2016 and has been renamed Bountiful Drug, recapturing the pharmacy’s original name when it opened in 1910.

The new owner, pharmacist Mary Rogers, said Friday the business is “not associated” with the old owners and that she was not permitted to discuss the investigation.

Mylan has finalized a $465 million settlement with the U.S. Justice Department, resolving claims it overcharged the government for its EpiPen emergency allergy treatment, which became the center of a firestorm over price increases.

Reuters reports that the U.S. Attorney’s Office in Massachusetts revealed the accord 10 months after Mylan said it reached a deal resolving claims it misclassified the EpiPen as a generic rather than a branded product, underpaying rebates to state Medicaid programs as a result.

The investigation followed a whistleblower lawsuit filed under the False Claims Act that rival drugmaker Sanofi filed in 2016, two years after it first raised the matter with investigators.

As a result of the settlement, Sanofi will receive $38.7 million as a reward, authorities said.

“Bringing closure to this matter is the right course of action for Mylan and our stakeholders to allow us to move forward,” Mylan Chief Executive Heather Bresch said in a statement.

Mylan shares gained 1 percent to $30.76 on the Nasdaq.

Sanofi did not immediately respond to a request for comment.

The EpiPen, which Mylan acquired in 2007, is a handheld device that treats life-threatening allergic reactions by automatically injecting a dose of epinephrine.

Mylan came under fire last year after raising the price of a pair of EpiPens to $600, from $100 in 2008, and listing it with Medicaid as a generic product even though it is listed with the U.S. Food and Drug Administration as a branded one.

The price increase enraged consumers and put the drugmaker at the center of the ongoing debate over the high cost of prescription medicines in the United States.

Mylan has since offered its own generic version for about $300 in response to the furor.

The Justice Department settlement centered on claims that Mylan misclassified the EpiPen as a generic product, which under Medicaid does not require the same level of rebates as brand-name products.

The $465-million settlement has previously come under attack by members of Congress in both parties who have called it too small.

An analysis by the U.S. Department of Health and Human Services’ Office of Inspector General released in May found the U.S. government may have overpaid for EpiPens by as much as $1.27 billion between 2006 and 2016.

The Division of Workers’ Compensation has suspended five more medical providers from participating in California’s workers’ compensation system, bringing the total number of suspended providers to 32.

DWC Acting Administrative Director George Parisotto issued Orders of Suspension against the following providers:

1) Leovigildo Sayat, a physical therapist in Lompoc who in October 2015 pled guilty in US District Court for the Central District of California as a co-conspirator in a $15 million scheme to defraud Medicare by billing for physical therapy services never provided.

2) Alexander Kiev Martinez, a durable medical equipment provider in El Centro, who in April 2016 pled guilty in San Diego Superior Court for referring patients in a bribery scheme involving $25 million in improper claims for medical services and devices billed to California workers’ compensation insurance companies.

3) Robert Gogatz, a chiropractor in Murrieta who last May pled guilty in Riverside Superior Court to 16 counts of insurance fraud.

4) Robert Alva Rose, a physician in Irvine who pled guilty in Orange County Superior Court on September 15, 2015 to two misdemeanors related to his qualifications as a medical provider.

5) Paul Barkal, a physician in San Diego who surrendered his license to the Medical Board of California on October 17, 2005.

AB 1244 (Gray and Daly) requires the DWC Administrative Director to suspend any medical provider, physician or practitioner from participating in the workers’ compensation system in cases in which one or more of the following is true:

– The provider has been convicted of a felony or misdemeanor involving fraud or abuse of the Medi-Cal or Medicare programs or the workers’ compensation system, fraud or abuse of a patient, or related types of misconduct;
– The provider has been suspended due to fraud or abuse from the Medicare or Medicaid (including Medi-Cal) programs; or
– The provider’s license or certificate to provide health care has been surrendered or revoked.

The Department of Industrial Relation’s (DIR’s) fraud prevention efforts are posted online, including frequently updated lists for physicians, practitioners and providers who have been issued notices of suspension, and those who have been suspended pursuant to Labor Code §139.21(a)(1).

The department recently added a new web page with information on lien consolidations and the Special Adjudication Unit.