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Tag: 2018 News

Florida Urged to Adopt California IMR Process

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In a research report published Tuesday, Florida TaxWatch analyzed California’s IMR process and determined that asking doctors, rather than attorneys and judges, to resolve disputed medical claims could save millions of dollars for Florida’s workers’ compensation system.

California lawmakers authorized IMR in 2012 with the expectation that IMR would reduce workers’ compensation disputes once doctors, attorneys, and other participants came to understand which services could be approved because they meet evidence-based medicine standards. In 2016, the IMRO processed nearly 250,000 applications, a slight decrease from 2015. Of those, 69 percent (172,452) were determined to be eligible for review. Concurrently, 176,002 cases were decided through the IMR process, involving 343,141 treatment request decisions.

In 2016, 167,563 (95.2 percent) of the 176,002 California cases decided using IMR were for applications that listed representation (attorney) for the injured worker. For those cases where the injured worker had representation, the results of the utilization review were upheld in 86.6 percent of the cases. This is similar for those cases where the injured worker did not have representation (84.1 percent).

The reports concludes by saying “California’s successful workers’ compensation reform suggests that replacing Florida’s dispute resolution process with the IMR process used in California might produce similar results in Florida.”

“Anytime you can replace a judicial review process that can take more than six months with a non-judicial review process that can take 30 days or less, it is something to, at least, take a look at,” TaxWatch Vice President for Research Robert G. Nave, one of the report’s authors, told Watchdog.org Wednesday.

An IMR process could reduce the average time to resolve workers’ comp disputes in Florida from 231 days to about 30, as it has in California, the nonpartisan, nonprofit government fiscal monitor claims in its analysis.

According to the report, adopting an IMR process could save Florida businesses $22.6 million annually and, more importantly, dramatically reduce, if not eliminate, attorney fees – which amounted to more than $400 million during the 2016-17 fiscal year.

Taxwatch’s analysis suggests the state could trim back or potentially even eliminate the 31 administrative judges in its Office of the Judges of Compensation Claims, which has annual $13.3 million budget.

More than 30 percent of reviewed California cases in 2016 involved opioid prescriptions with doctors approving access only 9.5 percent of the time. “Treatment providers who consistently prescribe opioids contrary to the established best practices governing the use of opioids run a greater risk of identification as a result of IMR,” the TaxWatch analysis says.

“If the state policymakers want to continue to grow Florida’s economy,” TaxWatch President and CEO Dominic M. Calabro said in the report’s introduction, “it is imperative that the Legislature take the IMR process into consideration.”

Such a proposal is certain to be resisted by the Florida Justice Association, which represents trial lawyers and has opposed attempts to cap attorney’s fees in the past.

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Medical Device Makers Plead Guilty in KIckback case

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Minnesota-based medical device manufacturer ev3 Inc. has agreed to plead guilty to charges related to its neurovascular medical device, Onyx Liquid Embolic System, and pay $17.9 million. Covidien LP, whose parent acquired ev3, separately paid $13 million to resolve False Claims Act allegations resulting from its alleged payment of kickbacks in connection with another medical device, the Solitaire mechanical thrombectomy device.

ev3 will plead guilty to a misdemeanor charge in connection with the company’s distribution of adulterated Onyx, in violation of the Food, Drug and Cosmetic Act. As part of the criminal resolution, ev3 will pay a criminal fine of $11.9 million and will forfeit $6 million.

According to the plea agreement, Onyx was approved by the U.S. Food and Drug Administration (FDA) as a liquid embolization device that is surgically injected into blood vessels to block blood flow to arteriovenous malformations in the brain. The FDA has approved Onyx only for use inside the brain.

Despite the FDA’s limited approval of Onyx, from 2005 to 2009, ev3 sales representatives encouraged surgeons to use Onyx in large quantities for unproven and potentially dangerous surgical uses outside the brain. The company’s sales force continued to tout unapproved and potentially dangerous uses of Onyx even after FDA officials told ev3 executives that they had specific safety concerns regarding uses of Onyx outside the brain at a 2008 meeting. FDA officials told ev3 executives that a study would be required to gain approval for uses of Onyx outside the brain and to ensure that the benefits of the device outweighed the risks.

According to the criminal information, ev3’s management also set-up a system of sales quotas and bonuses that incentivized sales representatives to sell Onyx for unapproved uses and trained the sales force how to instruct physicians on unapproved uses of the device.

Covidien acquired ev3 in 2010, subsequent to the course of criminal conduct covered by the plea agreement. Covidien was acquired by Medtronic in 2015. Although Medtronic played no role in the criminal conduct, the company has agreed as part of the ev3 criminal resolution to implement new compensation structures to ensure the sales force responsible for marketing Onyx is not incentivized to sell the device for unapproved uses. Medtronic has also agreed to conduct compliance monitoring related to the Onyx sales and marketing components.

Covidien separately has agreed to pay $13 million to resolve its civil liability for allegedly paying kickbacks to induce the use of its Solitaire mechanical thrombectomy device. The Solitaire device is intended to restore blood flow and retrieve a blood clot in certain stroke patients.

The United States alleged that Covidien caused false claims to be submitted to Medicare and Medicaid by paying kickbacks to hospitals and institutions to induce them to use Covidien’s Solitaire device. Specifically, the United States alleged that after receiving FDA clearance for the Solitaire device, Covidien launched a registry to pay hospitals and institutions to collect data about user experiences with the device.

For about two years beginning in August 2014, Covidien paid a fee to hospitals and institutions that participated in a registry each time they used a new Solitaire device and reported certain clinical data about their practices for treating stroke patients to Covidien. Covidien solicited certain hospitals and institutions for the registry in order to convert their business from the competitor’s product and/or persuade them to continue using Covidien products, and knowingly and willfully used the registry as a means of increasing device sales.

The civil lawsuit was filed by Jeffrey Faatz, who worked for Covidien from 2012 to 2014, under the qui tam, or whistleblower, provisions of the False Claims Act. The Act allows private parties to sue on behalf of the government for false claims and to share in any recovery. As part of today’s resolution, Mr. Faatz will receive $2,015,000. The case is captioned United States ex rel. Doe v. Covidien PLC et al., Civil Action No. 8:15-cv-01796 AG (JCGx) (C.D. Cal.).

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Vanguard Dismisses Lien Stay Law Challenge

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The federal courtroom battle over the survival of the new automatic stay law governing liens filed by indicted medical providers, which has been mostly unsuccessful litigation, has now been dismissed.

Dr. Eduardo Anguizola, while facing multiple counts of insurance fraud filed by Orange County prosecutors, is one the plaintiffs who claims Labor Code 4615 – the automatic lien stay law – violates the procedural component of the due process clause because it immediately stays all liens without notice or a hearing.

Other plaintiffs were Vanguard Medical Management, One-Stop Multi-Specialty Medical Group and related entities.

Soon after this suit was filed, Governor Brown signed AB 1422 into law which was adverse to his federal claim. AB 1422 contains a new LC 4615 subsection (e) which reads “The automatic stay required by this section shall not preclude the appeals board from inquiring into and determining within a workers’ compensation proceeding whether a lien is stayed pursuant to subdivision (a) or whether a lien claimant is controlled by a physician, practitioner, or provider.”

In October, 2017 the federal court issued a restraining order against the DIR. It limited stays to instances where the lien claimant was given proper notice, and required a hearing before the WCAB should any of them claim they should not be subject to a stay. It was a partial victory for plaintiffs who sought more restraint.

In February 2018, the plaintiffs filed two new motions, one asking the court to hold the DWC in contempt, and the other, alternatively to reconsider its December 2017 ruling. The court denied both motions.

The defendants also filed a motion to dismiss certain claims in the First Amended Complaint. The court granted the motion, and last April, dismissed the first, second, third, fourth, and fifth claims (except for the facial due process component of the fourth claim for relief) without prejudice. As to the sixth and seventh claims for relief (the Supremacy Clause claim and the Takings Clause claim), the Court dismissed those claims with prejudice. The plaintiffs have until May 17 to file a Second Amended Complaint.

Things have not gotten any better for the lien claimants since then.

On November 28, the plaintiff lien claimants signed a Stipulation for Voluntary Dismissal of the Case. The parties agreed that “This stipulation and dismissal completely terminate the above-entitled action against all parties. Each party will bear its own attorneys’ fees and costs. The preliminary injunction currently in effect will be dissolved as of the filing of this stipulation of dismissal.”  Pursuant to the stipulation of the parties, Judge Wu signed an Order to Dismiss With Prejudice.

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CVS/Aetna Proposed Merger Faces Court Scrutiny

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A federal judge who has been asked to sign off on the U.S. government’s decision to approve CVS Health Corp’s acquisition of insurer Aetna Inc said Tuesday he was “less convinced” than the government that the companies had struck a deal that ensured the merger was legal under antitrust law.

According to the report by Reuters, Judge Richard Leon of the U.S. District Court for the District of Columbia had complained last week in a hearing that the two sides had treated him as a “rubber stamp” for the agreement. CVS closed the $69 billion transaction last week and began the integration process.

“At this stage, I am less convinced of the sufficiency of the government’s negotiated remedy than the government is,” he wrote in the order issued on Tuesday.

The Justice Department approved the merger of CVS, a pharmacy chain and benefits manager, and Aetna on condition that the health insurer sell its Medicare Part D drug plan business to WellCare Health Plans Inc (WCG.N). That sale was completed last month.

Also in the order, Leon asked the government and the companies to file a brief by Dec. 14 to show why their integration should not be halted while he considers whether or not to approve the consent decree reached in October.

Most consent agreements that the antitrust agencies strike with companies to resolve competitive concerns are approved by federal courts with little fuss under the 1974 Tunney Act, which requires courts to ensure the agreements are in the public interest.

Companies generally do not wait for final court approval before closing their transactions.

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Jury Convicts Advanced Radiology Administrator

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A jury has convicted Gonzalo Paredes, 62, of 51 felony counts of paying illegal kickbacks to a doctor for patient referrals and fraudulently billing workers’ compensation insurance companies in the California workers’ compensation system.

The jury reached their verdict on Thursday, November 29, after a nine-day trial.

This prosecution resulted from Operation Backlash, a large-scale, joint federal and state investigation into multi-million dollar fraud and illegal kickbacks in the state workers’ compensation system. Paredes was the office administrator for Advanced Radiology of Beverly Hills, owned by radiologist Dr. Ronald Grusd.

Earlier this year, the U.S. Attorney’s office convicted Grusd on 39 felony fraud counts for paying kickbacks for patient referrals from multiple clinics in San Diego and Imperial counties, resulting in fraudulent bills to insurance companies of over $22 million for medical services. Grusd was sentenced to 10 years in federal prison.

The scheme in San Diego involved Advanced Radiology paying a local chiropractor money in exchange for the referral of patients. This allowed Advanced Radiology to treat the patients and then bill several million dollars to insurance companies.

As the office administrator for Advanced Radiology, Paredes helped negotiate the kickback deals with the chiropractor and facilitated the kickback payments to the chiropractor and those working with him. “When law enforcement became aware of the scam, we began following the trail of dirty money and it took us in many different directions,” DA Summer Stephan said.

“This criminal network bought and sold patients like cattle and they cashed in on the backs of people who trusted them with their health. They conspired to illegally game the system on a level that we’ve not seen before, but the game is over.”

Paredes faces a maximum of 43 years and four months in state prison. His sentencing is set for February 1 in Department 1803 of the San Diego Superior Court downtown.

The District Attorney’s Office partnered with the FBI, California Department of Insurance, and U.S. Attorney’s Office in the investigation and prosecution of Paredes.

Insurance fraud in California is a $15 billion-a-year problem. It’s the second-largest economic crime in America, exceeded only by tax evasion.

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EU Agency Says Evidence “Thin” on Medical Marijuana

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The European Monitoring Centre for Drugs and Drug Addiction (EMCDDA) was established in 1993. It is one of the EU’s decentralised agencies.

The EMCDDA exists to facilitate a more evidence-informed understanding of issues that are important for developing better drug-related policies and actions across Europe. In a new series of reports, it turns its attention to cannabis, a substance with a long history of use that has recently emerged as a controversial and challenging issue in both European and wider international drug policy debates.

Cannabis is the most commonly used illicit drug in Europe. It is also the drug about which both public attitudes and the political debate are most polarized. Interest in this area is rapidly growing, prompted by some quite dramatic international developments in the ways in which some countries and jurisdictions are now regulating this substance.

In this report, EMCDDA examined the evidence for, and practice of, making cannabis or cannabis-based medicines available for therapeutic purposes. The new 48 page EMCDDA report concluded that the evidence is still thin on the medical use of cannabis. The Lisbon-based EMCDDA said in its first report on the topic that so far there were “important gaps in the evidence“.

One of the most commonly reported reasons patients use cannabis for medical purposes in the United States is to treat chronic pain that is not caused by cancer (chronic non-cancer pain, CNCP). This includes neuropathic pain, arthritis, back pain, neck and shoulder pain, and headaches.

A review of studies on the effects of cannibis on CNCP showed a “Small (but statistically significant) effect compared with placebo.” Other areas of medical use were also reviewed. For example, other medical uses, such as sleep disorders, anxiety disorders, depression, degenerative neurological disorders, and inflammatory bowel disease the evidence was rated as “insufficient.”

The short-term adverse effects of medical cannabinoids and cannabis have been evaluated in the clinical trials reported in this study. In general, the short-term adverse events reported were similar to those of other commonly used medicines and related to symptoms such as dizziness, dry mouth, disorientation, nausea, euphoria, confusion and somnolence. Serious adverse events were rare.

There is less evidence about the risks of long-term medical use of cannabinoids, but in general those reported are similar to those reported for short-term use. Over time, more people report adverse events, but these are generally mild to moderate.

A handful of regulated pharmaceuticals use chemicals derived from cannabis, such as GW Pharmaceuticals’ Sativex which is approved for treating symptoms of multiple sclerosis. But cannabis itself and most products made from it are governed by countries’ individual criminal laws on illegal drugs, which may or may not allow medicinal use.

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Charges Dropped in Applicant – Hit Man Case

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According to a report in the Fresno Bee, Antoian Griffin, will not stand trial on a felony charge of a trying to pay a hit man $200,000 to kill a lawyer because the Fresno County District Attorney’s Office has dropped the charge of solicitation for murder.

The motion to dismiss was submitted one day after the key witness, Curtis McAfee, invoked his right against self-incrimination and declined to testify against defendant Antoian Griffin. After the judge appointed a lawyer for McAfee, McAfee testified.

McAfee said he was remaining silent because a Fresno police detective called him before Wednesday’s hearing and threatened to arrest him if he did not testify against Griffin. McAfee told the judge he could not identify the detective because the man in the telephone call never identified himself.

Assistant District Attorney Steve Wright said dropping the charge was the right thing to do.

“After presenting evidence during the preliminary hearing and hearing from the witnesses that testified in court up to that point, the prosecutor handling the case came to the conclusion that the evidence did not support proceeding any further, so he complied with his ethical and moral obligations by dismissing the case,” Wright said.

Defense attorney Miles Harris said the charge should never have been filed because McAfee is “a mentally unstable individual with a history of making these kinds of claims.”

McAfee and Griffin know each other because McAfee, whom Harris described as “a self-proclaimed paralegal,” had helped Griffin with some legal paperwork involving a workers’ compensation case, Harris said.

It was a strange ending to a criminal case in which Griffin’s lawyer contended that Griffin never threatened a lawyer from the McCormick Barstow firm, nor does he have the money to hire a hit man. Griffin, 57, survives on a $910 monthly disability check, court records show.

In addition, Harris contended law enforcement was duped by McAfee, saying McAfee made up the story. McAfee lacks credibility, Harris said, because he has a criminal record that includes a conviction for making criminal threats.

The target in the alleged murder plot works for McCormick, Barstow, Sheppard, Wayte & Carruth and specializes in personal injury, product liability, medical malpractice and other areas of civil litigation. He is identified in court papers and was identified during Wednesday’s hearing. The Bee is not identifying him because of concern for his family’s safety.

In testimony Wednesday, Fresno police officer Kyle Novak and Cpl. Jacob Dellone said Griffin targeted the lawyer because he had represented another lawyer who once represented Griffin in a workers’ compensation lawsuit. After Griffin lost the lawsuit, he sued both lawyers, court records show.

In June, Judge Mark Snauffer dismissed the suit against the two lawyers, ruling that Griffin had no evidence to support his claim of civil conspiracy.

According to Novak and Dellone, a tipster, later identified as McAfee, called McCormick Barstow two times on Sept. 27 to warn the law firm that Griffin had put “a contract out” on the lawyer and was offering $200,000 to kill him. The caller asked the lawyer not to call police because he feared Griffin would find out. The caller then hung up. In addition, Novak testified that the lawyer never mentioned any threat by Griffin.

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California Startup Wins FDA Pain Device Challenge

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Eight medical device makers, including a California startup that uses virtual reality to treat chronic pain, topped an innovation contest aimed at addressing the opioid crisis, the U.S. Food and Drug Administration said on Friday.

As part of the FDA’s ongoing commitment to address the opioid crisis, the FDA’s Center for Devices and Radiological Health (CDRH) launched an Innovation Challenge in May 2018. The challenge was intended to spur the development of medical devices, including digital health technologies and diagnostic tests, that could provide new solutions to detecting, treating and preventing addiction, addressing diversion and treating pain.

The goal was to provide additional incentives for medical device developers to invest in products that can address the addiction crisis and advance the development of innovative, safe and effective technologies. We received more than 250 applications from medical device developers.

Silicon Valley-based startup CognifiSense, which is developing the virtual reality therapy, and iPill Dispenser, which uses a biometrically controlled mobile app that aims to cut overconsumption by dispensing pills based on prescriptions, were among the winners of the FDA’s contest.

The company is developing VR Neuropsychological Therapy or VRNT, a proprietary VR software platform that provides psychological and experiential training to chronic pain patients to normalize their pain perception.

VR distraction therapy utilizes the immersive power of VR to create high cognitive load. It consists of entertaining games or experiences which focus the user on another task and away from the pain. Distraction therapy has been shown to be effective in providing short-term relief in acute pain. Immersive video games that shift the user’s focus from the pain are known as “distraction therapy”.

VRNT differs from distraction therapy in that it specifically targets the brain’s “neuroplasticity”, or ability to change over time.

Overall eight submissions were selected. The following selected proposals include therapeutic and diagnostic medical devices intended to treat opioid use disorder, detect and treat overdose, dispense medication and treat pain:

– Brainsway, Ltd (Brainsway Deep Transcrainal Magnetic Stimulation (DTMS) Device)
– Avanos (Pain therapy Device)
– iPill Dispenser (iPill Dispenser)
– Masimo Corporation (Overdose Detection Device)
– ThermoTek, Inc. (NanoThermTM and VascuTherm TM Systems)
– Milliman (Opioid Prediction Service)
– Algomet Rx, Inc. (Rapid Drug Screen)
– CognifiSense, Inc. (Virtual Reality Neuropsychological Therapy)

The FDA received over 250 applications for the innovation challenge, which seeks to prioritize the approval of novel medical devices including digital health technologies such as mobile medical apps.

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Claimants Failure to Respond Dooms FEHA Case

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Christine McKellar began her 16-year employment with Cedars-Sinai Medical Center in 2000. Cedars-Sinai terminated her employment in April 2016.

Before she was terminated, several of McKellar’s physicians authored a number of “to whom it may concern” letters sent to Cedars-Sinai attempting to excuse her from work for unspecified medical reasons. Several of them were written by Gayle K. Windman, Ph.D. from the office Dr. Thomas Curtis claiming she was disabled for “emotional stress complications.”One of them said she was disabled because of “EMOTIONAL STRESS COMP.”

Because none of the notes sent on McKellar’s behalf contained sufficient information to satisfy Cedars-Sinai’s leave policies, Cedars-Sinai sent McKellar a series of letters detailing the specific information it needed from her to process her request for leave.

McKellar received all of Cedars-Sinai’s letters, but never opened, read, or responded to any of them. McKellar requested no form of accommodation from Cedars-Sinai between her cessation of work on January 6, 2016 and her termination on April 20.

Ultimately Cedars-Sinai sent her a letter explaining that she had been “separated from employment.”

McKellar alleged in six causes of action that Cedars-Sinai retaliated against her for filing a workers’ compensation claim and discriminated against her based on her claimed disability.

Cedars-Sinai filed a motion for summary judgment, arguing, among other things, that it had a legitimate non-pretextual reason to terminate McKellar’s employment. The trial court granted the motion. McKellar appealed and the court of appeal affirmed in the unpublished case of McKellar v. Cedars-Sinai Medical Center

To avoid summary judgment based on her proffered theory, McKellar needed to produce admissible evidence in the trial court that the decisions leading to McKellar’s termination were made on the basis of her disability or workers’ compensation claim.

The evidence McKellar relies on is that Cedars-Sinai sent five letters to a post office box. The necessary implication is that Cedars-Sinai should have attempted to contact McKellar some other way. The record, however, establishes that Cedars-Sinai did attempt to contact McKellar by telephone. McKellar had changed her telephone number because, she said, she did not want anyone at Cedars-Sinai to be able to contact her.

Cedars-Sinai had no obligation to reach out to someone other than its employee to determine whether that employee intended to comply with the company’s leave policy. McKellar’s argument assumes that McKellar could unilaterally require Cedars-Sinai to engage in the FEHA “interactive process” to determine effective reasonable accommodations with a representative McKellar designated without notifying Cedars-Sinai. That assumption is incorrect for a variety of reasons.

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Fake Drugmaker Gets 10 Year Sentence

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Gino Carl von Eckstein was sentenced to 10 years in prison for possessing with intent to distribute methamphetamine. Eckstein, 25, of Brisbane, Calif., pleaded guilty to the charge on September 5, 2018, after federal agents executed search warrants on his car and three residences he was using.

A federal grand jury filed an indictment on June 26, 2018, charging Eckstein with one count of intentionally possessing with intent to distribute 500 grams and more of a mixture and substance containing methamphetamine, in violation of 21 U.S.C. §§ 841(a)(1) and 841(b)(1)(A)(viii). He pleaded guilty to the charge.

Eckstein admitted that he possessed counterfeit “Adderall” pills, or pills that appeared to be Adderall, but in fact contained methamphetamine. Eckstein admitted he stored the pills in his car, at three locations in San Francisco’s Richmond District, in Brisbane, and in San Leandro. Eckstein further admitted he possessed the equipment and ingredients necessary to manufacture counterfeit Adderall pills. In total, agents allegedly found over 1,000 grams of suspected methamphetamine.

“Counterfeit pharmaceuticals are a danger to the community,” said U.S. Attorney Tse. “As this case illustrates, we are responding to the emerging threat of counterfeit pharmaceuticals in our district, particularly when the substances are laced with potentially life endangering drugs. Those individuals who put these dangerous products in our community will be prosecuted to the fullest extent of the law.”

“Producing unregulated concoctions and marketing them as a legitimate substance is criminal and dangerous. These drugs are unsafe and their use can have devastating consequences,” stated DEA Special Agent in Charge Chris Nielsen. “We will continue working with our partners to hold people accountable who threaten public health and safety by distributing counterfeit pharmaceuticals.”

In addition to the prison term, the court also sentenced the defendant to a 5-year period of supervised release. Eckstein has been in continuous custody since June 15, 2018, and will begin serving his sentence immediately.

Assistant United States Attorney Sheila Armbrust in prosecuting this case. This case is the result of an investigation by the DEA, CBP, FBI, and IRS-CI, with assistance from the San Francisco Police Department. This case was investigated and prosecuted by member agencies of the Organized Crime Drug Enforcement Task Force, a focused multi-agency, multi-jurisdictional task force investigating and prosecuting the most significant drug trafficking organizations throughout the United States by leveraging the combined expertise of federal, state, and local law enforcement agencies.

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