Tag: 2018 News

A psychiatrist who practices at a Santa Ana clinic has been arrested on federal charges that allege he issued prescriptions for dangerous and addictive narcotics, such as the opioid oxycodone, without a medical purpose.

Dr. Robert Tinoco Perez, 56, of Westminster, was arrested Friday by special agents with the Drug Enforcement Administration.

Perez was named in a 14-count indictment returned by a federal grand jury on June 27. The indictment charges Perez with selling prescriptions to drug customers, as well as to brokers who sold the drugs obtained from filling the prescriptions and split the profits with Perez.

Perez wrote prescriptions for “patients” he had never met or examined, including an undercover officer, according to the indictment. Perez and his co-conspirators allegedly created fictitious medical records for drug customers to provide justification for their prescriptions.

The drugs alleged to have been prescribed illegally by Perez included oxycodone and hydrocodone (both opioid pain medications), amphetamine salts (sold primarily under the brand name Adderall), and alprazolam (sold primarily under the brand name Xanax).

Perez is also charged with possession with intent to distribute nearly one ounce of methamphetamine.

Perez pleaded not guilty and was ordered to stand trial on August 21.

Perez’s license to practice had been placed on probation for 35 months last December, due to his ill treatment of patients, family members, an Orange County judge and a Medical Board of California investigator, according to state officials.

The order for Dr. Robert T. Perez went into effect on Dec. 8. That was after Perez and his Santa Ana attorney Lee J. Retros had signed a letter in September accepting the medical board’s allegations and punishment against the psychiatrist, which includes seeing a psychiatrist. State records cited Perez’s behavior toward numerous people and care and treatment of a patient identified as M.M..

Perez had additional proceeding filed against him by the Medical Board in May 2018. It alleges three causes of discipline – sexual exploitation, sexual misconduct and unprofessional conduct – because Perez had sex with a patient he went on to marry. The Board also claims he failed to adhere to terms of his December 2018 probation. He failed to complete the educational courses required by the probation.

A second defendant charged in the federal criminal indictment – William Jason Plumley, 40, of Huntington Beach – is alleged to have sold both prescriptions written by Perez and the drugs filled from his prescriptions. Plumley already is in federal custody on a previous indictment alleging that he sold methamphetamine.

In the escalating battle over U.S. prescription drug prices, Reuters Health reports that major pharmaceutical companies are scrambling to limit the economic damage from a new U.S. insurer tactic that coaxes patients away from expensive drugs.

In recent years, insurers have tried to guide patients toward less expensive treatments by making them pay a higher portion of a drug’s costs. Drugmakers responded by dramatically raising the financial aid they offer, in the form of “copay assistance” cards – similar to a debit card – that reduce what consumers need to pay when they place their pharmacy order.

Express Scripts Holding Co and CVS Health, which manage prescription drug coverage for large U.S. employers, say these payments shield consumers from drug costs, making it easier for manufacturers to raise those prices. Insurers have to make up the difference.

This year, Express Scripts and others introduced a new “copay accumulator” approach for its corporate customers. The programs prevent copay card funds from counting toward a patient’s required out-of-pocket spending before insurance kicks in on expensive specialty drugs, such as arthritis and HIV treatments.

As an example, a patient whose medicine costs $1,000 per month might be required to pay that amount until they reach a deductible of $2,000 set by their insurer. A copay card from the drugmaker would cover most, or all, of those costs for the patient and it would count towards the deductible.  When the deductible is reached, the insurance begins to pay.

But if the insurance plan is using an accumulator, the patient could still have to pay the $2,000 out of pocket when their copay card expires or runs out of money. Some more aggressive accumulator programs will also draw more money than a drugmaker expected to pay off a copay card when the card is detected.

These tactics could force the drugmaker to keep paying the out of pocket costs. Otherwise the patient could move to an equivalent drug if one is available or abandon their prescription because it is too expensive.

Drugmakers are working on ways to counter copay accumulator programs, fearing that more employer health plans will adopt them in 2019.  

They include new payment options to evade detection by the pharmacy benefits managers (PBMs) so that a patient still benefits from the financial aid, said Matthew Turner, who is working with drugmakers as director of patient affordability at TrialCard, which operates copay cards for companies. He would not provide details of how those arrangements work.

Drugmakers are also taking a tougher stance when negotiating prices or new discounts for payers, according to insurance industry executives and pharmaceutical consultants.

They have reason for concern. A survey by the National Business Group on Health (NBGH), which represents large corporate employers, showed that 17 percent of respondents said they were currently using a copay accumulator program. Another 18 percent of respondents are considering using one next year or in 2020.

Savings can be substantial for employers when accumulators coax patients to switch to a drug for which they receive the highest rebate. For instance, rebates to PBMs for Humira and Enbrel can differ by as much as $1,000 per prescription, according to Michael Rea, CEO of Rx Savings Solutions.

Insurance Commissioner Jones announced he has issued an order that every insurer licensed to write workers’ compensation insurance in the State of California must report their federal income tax savings annually through a rate filing in light of the new tax law.

The recent revision to the Federal Tax Schedule for 2018 reduced the corporate tax rate from 35 percent to 21 percent. Jones says “That means that nationally insurers will now be able to retain even more of policyholder premiums as profit.”

He is referring to the “Tax Jobs and Cuts Act of 2017” signed into law by President Trump on December 22, 2017.

“Any savings to insurers should be passed along to California businesses,” said Commissioner Jones.

Thus, Jones’ order will require each insurer to submit a rate filing to report the dollar amount of their tax savings by December 31, 2018, and on a yearly basis through December 31, 2020.  Insurers will need to provide details about how those savings impact their rates.

The insurer must also provide a detailed explanation if they have determined that there is no rate impact, stating why the reduction in the federal corporate tax rate does not affect their rates.

The Order is broadly written to include tax savings from earnings having nothing to do with workers’ compensation lines of insurance in California. It pertains to profits from any line of insurance, or an business enterprise of an insurance company, as though that would pertain to setting a premium for workers’ compensation insurance risk in the California marketplace.

Nonetheless, Jones maintains that “This order will allow my department to examine workers’ compensation insurers’ savings and rates and provide transparency to the public. I urge insurers to pass these savings along to policyholders.”

Jones has no rate making authority over worker’s compensation insurance pricing in California. Thus it would seem that the outcome of this study would lead to no particular regulatory action other than “transparency” which is already available for most insurance companies that are publicly held. All publicly held corporations are required to file regular certified financial statements with the Securities and Exchange Commission that provide detailed financial and tax information. The Commissioner – and the public – can review this historical and current information at any time.

Federal officials are charging 601 people in the largest bust of health care fraud in U.S. history. Southern California criminal cases named a total of 33 defendants. Nine new defendants being charged as part of Operation “Spinal Cap.” The scheme was spearheaded by Michael Drobot, the former owner of Pacific Hospital in Long Beach.

In the cases announced in Operation Spinal Cap Daniel Capen, 68, of Manhattan Beach, an orthopedic surgeon, has agreed to plead guilty to conspiracy and illegal kickback charges. Capen accounted for approximately $142 million of Pacific Hospital’s claims to insurers, on which the hospital was paid approximately $56 million.

Timothy Hunt, 53, of Palos Verdes Estates, another orthopedic surgeon who referred spinal surgery patients to Capen and other doctors, has agreed to plead guilty to a conspiracy charge involving his receipt of illegal kickbacks stemming from various financial relationships with Pacific Hospital and related entities.

George William Hammer, 65, of Palm Desert, the former chief financial officer of the physician management arm of Pacific Hospital, has agreed to plead guilty to tax charges based on the fraudulent classification of illegal kickbacks in hospital-related corporate tax filings.

Lauren Papa, 52, of Tarzana, a chiropractor, has agreed to plead guilty to a conspiracy charge involving her receipt of illegal kickbacks to refer patients to a neurosurgeon with the understanding that the neurosurgeon would perform the surgeries at Pacific Hospital.

Tiffany Rogers, 53, of Palos Verdes Estates, an orthopedic surgeon, was named in an indictment unsealed Wednesday in connection with receiving illegal kickbacks to refer patients for spinal surgeries at Pacific Hospital.

Brian Carrico, 64, of Redondo Beach, a chiropractor – along with Performance Medical & Rehab Center, Inc., which was partially owned by Carrico; and One Accord Management, Inc., which Carrico wholly owned – were charged in connection with the receipt of illegal kickbacks to influence the referral of patients to Pacific Hospital. An indictment unsealed Wednesday alleges that these defendants and other co-conspirators were responsible for approximately $80 million in claims submitted to the federal workers’ compensation program and were paid approximately $56 million in connection with patients that Performance Medical referred to Pacific Hospital.

William Parker, 64, of Redondo Beach, was charged in a separate indictment unsealed on Wednesday in connection with the same kickback scheme involving Carrico and his companies.

In San Diego, the cases include Marco Antonio Chavez, a licensed medical doctor specializing in psychiatry, was charged with 30 counts of health care fraud in connection with over $928,000 in bills he submitted to TRICARE for services he never provided. He was also charged with five counts of aggravated identity theft and one count of obstruction of a federal audit..

Four defendants, including two chiropractors, a physical therapist and an acupuncturist, were charged with conspiracy to commit health care fraud and honest services fraud and to pay unlawful kickbacks stemming from their operation of R.I.S.E. Medical Center. According to the indictment, R.I.S.E. operated several “Wellness Centers” in San Diego County, including Bonita and Oceanside, and offering a range of services including physical therapy, diagnostic tests, massages, chiropractic treatments, and acupuncture..

Joserodel Zavala Candelario, a chiropractor and owner of R.I.S.E., imposed quotas for non-reimbursable services and treatments, allegedly telling staff that they were expected to provide a certain number of diagnostic tests, “no matter what”; to “grab patients in lobbies to put into provider schedules”; and to ply patients with complimentary treatments so R.I.S.E. could continue to fraudulently bill TRICARE and Medicare.  

In addition, Candelario was also charged with paying a patient recruiter over $18,000 to refer TRICARE patients to the R.I.S.E. clinic. The recruiter, Mariam Reyes, was charged separately with conspiring to solicit and receive kickbacks.

In a separate indictment, Candelario was charged with participating in a scheme to defraud California Workers’ Compensation insurers and R.I.S.E. patients by receiving illegal kickbacks and bribes to refer patients to certain providers. According to the indictment, Candelario paid kickbacks to his co-schemers through a front company in exchange for referrals of Workers’ Compensation patients, and then concealed these kickbacks through sham “marketing” agreements.

One of Candelario’s co-schemers, Boris Dadiomov, was charged separately for his role in the fraudulent conspiracy. As a result of their unlawful cross-referral kickback scheme, Candelario and the other schemers received over 500 illegal patient referrals and submitted over $6.6 million in false billings to insurance companies.

Larry Tripplett was a professional football player who played defensive tackle for the Indianapolis Colts from 2002 to 2006, then played for the Buffalo Bills from 2006 to 2008, and played briefly for the Seattle Seahawks in 2008. In his six-year career, Triplett played approximately 110 games of professional football, but only played two games in California.

In 2009, Tripplett filed a claim for workers’ compensation benefits, alleging injury to multiple body parts throughout the course of his National Football League (NFL) career. Each of the defendant football teams and insurers denied his claim. Both Buffalo and Seattle disputed California jurisdiction. Trial proceeded on the jurisdiction issue.

At that trial, Tripplett testified about his hiring by Indianapolis, explaining that his agent David Dunn, who was located in Newport Beach, negotiated all of his contracts. Tripplett asserted he was living in Los Angeles when he signed his Indianapolis contract in his agent’s Newport Beach office. At the end of Tripplett’s cross-examination, he moved to “‘elect against the Indianapolis Colts. Since jurisdiction was not contested by the Colts even prior to this trial, over the objection of the Indianapolis Colts, the Court allowed the election.’”

The matter proceeded to a further trial against Indianapolis. However, after Tripplett was provided with a copy of that agreement, showing he and his agent, Joby Branion, had signed separate copies of the signature page, he acknowledged “I honestly don’t remember” where he signed the agreement. Tripplett also testified that although he “put a lot of trust in [his] agent” to negotiate his employment agreements, and “whatever he advised me to do, that’s what I signed,” it was Tripplett himself who “had the final say.”

The WCJ found that the WCAB had jurisdiction over the claim. The WCAB granted the petition for reconsideration and reversed the WCJ’s finding of jurisdiction based on Tripplett’s hiring in California. The Court of Appeal affirmed the dismissal in the unpublished case of Tripplett v. WCAB.

Tripplett relies on Labor Code section 3600.5(a), which specifies that “[i]f an employee who has been hired or is regularly [employed] in the state receives personal injury . . . arising out of . . . [such] employment outside of this state, he . . . shall be entitled to compensation according to the law of this state,” and 5305, which specifies the WCAB has “jurisdiction over all controversies arising out of injuries suffered outside the territorial limits of the state in those cases where . . . the contract of hire was made in this state.”

But when courts have grappled with the issue of determining the location at which an injured employee was hired for purposes of workers compensation law, they have done so by applying traditional principles of contract formation.

Here, Tripplett’s agent’s negotiation of terms to be included in a written employment contract was not sufficient to bind Tripplett to anything. And because those negotiations were the only contract-related activity that took place in California, there is no basis to conclude the contract was formed in this state.