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Tag: 2019 News

Feds Hold First Hearing on Drug Prices

Powerful committees in the U.S. Congress held hearings on Tuesday on insulin affordability and high prescription drug prices, an issue both chambers have said is a top priority for the year.

The House Oversight Committee, chaired by Democratic Representative Elijah Cummings, and the Senate Finance Committee, chaired by Republican Senator Chuck Grassley, brought in patient advocates and health policy experts to discuss the burden of high drug costs on consumers and sky-rocketing prices.

Both committees also focused on insulin, which those with type 1 diabetes and some with type 2 diabetes depend on.

High prescription drug costs have consistently polled as a top voter concern and have been a top priority of the administration of U.S. President Donald Trump.

It remains unclear whether Democrats, who control the U.S. House of Representatives, and Republicans, who control the U.S. Senate, will find a bipartisan way to address rising drug costs.

The annual cost of insulin for treating a type 1 diabetes patient in the United States nearly doubled from 2012 to 2016 to $5,705 from $2,864, according to a recent study.

Cummings earlier this month sent letters to 12 pharmaceutical companies asking for detailed information on their pricing practices. He focused on medicines whose costs rose the most over the last five years, including several diabetes medications.

Democrats in the Senate and House earlier this month, including Cummings, also introduced a series of bills aimed at bringing down drug costs. No Republicans have signed onto the legislation.

Ron Wyden, the ranking member of the Senate Finance Committee, said in a statement that the committee invited the heads of several large drug companies to testify on Tuesday, but none were willing to come.

9th Circuit Clarifies Employer Liability Provision of Comp Policy

In three separate California state civil lawsuits, performers in the pornographic film industry sued Cybernet Entertainment, LLC for negligence, negligence per se, breach of the implied covenant of good faith and fair dealing, negligent supervision, and negligent hiring and/or retention.

They alleged, in essence, that Cybernet did not take adequate steps to protect its performers and prevent the spread of sexually transmitted diseases and HIV during pornographic shoots, causing injury. The plaintiffs alleged that Cybernet did not provide adequate personal protective equipment, such as condoms, to performers; did not test certain performers; and otherwise violated California regulations meant to prevent the spread of STDs and HIV in pornographic shoots.

The state-court plaintiffs’ causes of action for intentional/fraudulent misrepresentation and conspiracy to commit fraud alleged that Cybernet and others made various false representations concerning the safety of Cybernet shoots (e.g., that protection could be used on request) to the plaintiffs to induce them to participate in those shoots.

Cybernet Entertainment filed a third-party complaint in federal court against State Compensation Insurance Fund seeking a declaration that State Fund had a duty to defend Cybernet in the three state court actions filed against Cybernet under a Workers’ Compensation and Employer’s Liability Insurance Policy.

The district court held that State Fund did not have a duty to defend Cybernet. Cybernet appealed. The ruling was affirmed in the unpublished case of Seneca Insurance Company Inc. v State Compensation Insurance Fund.

The court considered whether two policy exclusions bar coverage under the Employer’s Liability portion of the Policy for the claims asserted in the State Court Actions.

Exclusion 4 provides that coverage under the Employer’s Liability portion of the Policy does not extend to “any obligation imposed by a workers’ compensation . . . law.” Exclusion 5 provides that coverage under the Employer’s Liability portion of the Policy does not extend to “damages or bodily injury intentionally caused or aggravated by” Cybernet.

The acts and injuries alleged in the negligence causes of action fall within the compensation bargain because the gravamen of each is that Cybernet did not maintain a safe workplace. The remedy for such workplace-safety claims is workers’ compensation.

Exclusion 5 bars coverage for the intentional tort claims.

Because either Exclusion 4 or Exclusion 5 bars coverage under the Employer’s Liability portion of the Policy for each of the causes of action alleged against Cybernet in the state court actions, State Fund did not have a duty to defend Cybernet in those actions.

CVS, Aetna and Apple Launch “Attain” Health App

Aetna, a CVS Health business, announced the launch of Attain, a unique health experience designed by Aetna in collaboration with Apple.

Using  an Apple Watch, the Attain app will provide Aetna members personalized goals, track their daily activity levels, recommend healthy actions, and ultimately reward them for taking these actions to improve their well-being. Reward opportunities include the ability for eligible users to earn their Apple Watch through their participation in the program.

This launch builds on the 2016 collaboration between Aetna and Apple in which 90 percent of participants reported a health benefit from their use of Apple Watch.

The Attain app claims to be the first of its kind – designed specifically to offer users a personalized experience that combines their health history with the power of the Apple Watch to help them achieve better health and well-being.

After users have joined Attain, they will have the additional option to share their Attain program data and health history with Apple, enabling Apple and Aetna to collaborate, and over time, continue to improve the Attain experience. Through analytics and machine learning, the collaboration will lead to new features for Attain, offering more personalized recommendations designed to give greater context and decrease barriers to health care.

The developers say user privacy and data security are at the heart of Attain. A completely voluntary program, members determine what information they want to share and can discontinue using Attain at any time. All Attain health data is encrypted on the device, in transit, and on Aetna and Apple’s servers, where it will be stored in a highly secure environment using industry-leading practices fully in compliance with HIPAA.

Information from this program will not be used for underwriting, premium or coverage decisions.

Health history data is tightly regulated by the U.S. government, and Apple and Aetna had to enter into what is known as a business associate agreement in order for Aetna to share it with the Apple. Access to regulated data is necessary for some of the functions of the app, such as recommending age-appropriate exercise or a lower-cost option for scheduled lab tests or MRI imaging tests.

The Attain rewards platform builds off a program developed by Vitality Group, a model that has demonstrated that incentives linked to the Apple Watch are associated with increased, sustained activity. A recent study from RAND corporation found an average 34 percent increase in activity levels for participants using the rewards platform incorporated in Attain with Apple Watch, compared to those without these incentives – leading to an additional 4.8 days of activity per month.

Interested Aetna members are encouraged to sign up at to be notified when the App becomes available for download.

Tuolumne County Worker Sentenced

The Tuolumne County District Attorney’s Office announced the conviction of a Social Services Department employee for workers’ compensation insurance fraud.

Janice Richardson was employed as a personal care assistant provider for Tuolumne County and reported an on the job injury in April of 2014.

The alleged injuries arose from a motor vehicle collision Richardson was involved in during her scheduled work hours and in the performance of her duties.

Richardson filed a workers’ compensation injury claim and as a result, received medical treatment and workers’ compensation benefits.

During a subsequent investigation, it was alleged Richardson presented false statements and material misrepresentations during a deposition before the Workers’ Compensation Appeals Board. Richardson misrepresented facts as it related to her physical abilities and limitations associated with her injury.

On June 25, 2018, Richardson pleaded no contest to Insurance Fraud, in violation of Penal Code section 550(b)(2), in that she unlawfully and knowingly made a statement containing false and misleading information in support of her claim to obtain workers’ compensation insurance benefits.

Richardson was sentenced to three years probation, ordered to pay a fine of $1,000.00 to the workers’ compensation fraud account and ordered to pay restitution in the amount of $27,500.00 to the County of Tuolumne for reimbursement of workers’ compensation benefits and investigation costs.

This case was a joint investigation by Probe Information Services, the Tuolumne County District Attorney’s Office and the Amador County District Attorney’s Workers’ Compensation Fraud Unit.

The Fraud Unit investigates insurance fraud cases in Amador, Tuolumne, Stanislaus and Calaveras Counties through a grant provided by the California Department of Insurance.

WCRI Publishes Opioid Dispensing Study

A new study, Correlates of Opioid Dispensing, published by the Workers Compensation Research Institute (WCRI) identifies characteristics of injured workers and their employers that are associated with differences in opioid dispensing rates.

The study analyzed a range of possible correlates, including worker (age, gender), injury (type of injury), industry (industry group and employer’s payroll size), and location (county-level opioid dispensing rate, urban-rural classification, and health insurance coverage rate) characteristics. The following are some sample findings from the study:

Industry: For the same injuries, workers employed in mining and construction who received pain medications were more likely to receive opioids, as well as to receive opioids on a longer-term basis and at higher doses.
Location: Injured workers residing in counties with higher amounts of opioids dispensed per person and those residing in rural and very rural counties were more likely to receive opioid prescriptions.
Worker’s Age: Older workers were more likely to receive opioid prescriptions compared with younger workers.
Injury Type: A higher proportion of workers who sustained fractures, carpal tunnel, and neurologic spine pain received at least one opioid prescription for pain relief.

The data used for this analysis included 1.4 million pain medication prescriptions filled within 18 months postinjury for injuries that occurred between October 1, 2014, and September 30, 2015, in 27 states.

The states are Arkansas, California, Connecticut, Delaware, Florida, Georgia, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maryland, Massachusetts, Michigan, Minnesota, Missouri, Nevada, New Jersey, New York, North Carolina, Pennsylvania, South Carolina, Tennessee, Texas, Virginia, and Wisconsin.

The study was authored by WCRI’s Dr. Vennela Thumula and Te-Chun Liu. WCRI received funding from the Centers for Disease Control and Prevention/National Institute for Occupational Safety and Health to support this study. To learn more about this study or to purchase a copy, visit WCRI’s website at

Insurers Form Blockchain Network With IBM

CVS Health Corp’s Aetna and a host of other health insurers announced that they have partnered with IBM Corp to create a blockchain network aimed at cutting costs in the healthcare industry.

Big Blue is joined in this effort by Aetna (acquired last November by pharmacy and health plan provider CVS Health), health plan provider Anthem, Health Care Service Corporation (the largest customer-owned health insurance provider in the U.S.) and PNC Bank. These providers combined account for close to 100 million healthcare plans.

IBM said additional members will join the Health Utility Network in the coming months, including other health organizations, healthcare providers, startups, and technology companies.

The aim is to create an inclusive blockchain network that can benefit multiple members of the healthcare ecosystem in a highly secure, shared environment. The goal is to allow the blockchain network to enable healthcare companies to build, share and deploy solutions that drive digital transformation in the industry.

The collaboration members intend to use blockchain to address a range of industry challenges, including promoting efficient claims and payment processing, to enable secure and frictionless healthcare information exchanges, and to maintain current and accurate provider directories.

However, IBM is far from the only tech firm trying to leverage the immutability and transparency of blockchain for the siloed and fragmented healthcare industry. Other prominent names in blockchain healthcare include Change Healthcare, Hashed Health, Guardtime, Gem and SimplyVital – to name a few.

In such a busy space it’s not surprising IBM is faced with some consortia competition. For example, in April of last year, Humana and United Health Group, two of the largest health insurers, teamed up on a blockchain pilot with data providers Quest Diagnostics, Multiplan and Optum.

Another healthcare blockchain called ProCredEx launched in November last year. It focuses on storing and sharing the credentials of medical and dental practitioners and is expected to save time and costs within the industry.

Outside of healthcare, PNC Bank has been public about its blockchain activities, joining a group of banks exploring Ripple’s xCurrent payment system for cross-border transactions.

So. Cal. Attorney Arrested For Trafficking Opioids

Members of a federal task force have arrested an attorney on narcotics distribution charges after detectives spent months following the woman and monitoring her drug sales on Craigslist. Prosecutors allege she illegally sold oxycodone pills after offering drugs for sale.

Jackie Ferrari, 36, a resident of Downey, who investigators believe recently started a new job at a Beverly Hills law firm, was arrested late Friday without incident by law enforcement officers affiliated with the High Intensity Drug Trafficking Area (HIDTA) Task Force, which operates under the direction of the Drug Enforcement Administration.

The criminal complaint filed on January 15 and unsealed this week specifically charges Ferrari with one count of distributing a controlled substance.

The affidavit in support of the complaint states that a law enforcement source with a long history of purchasing narcotics from Ferrari made a buy earlier this month in which Ferrari sold the informant 50 oxycodone pills for $1,200. Ferrari subsequently sent the informant and other likely customers a text message that she “recently obtained a new supply of oxycodone and [had] other drugs available for sale,” according to the affidavit.

The investigation into Ferrari began after a 22-year-old woman died in August of a fentanyl overdose, and text messages on the victim’s phone initially indicated she may have purchased the narcotics from Ferrari. While investigators currently do not believe that Ferrari sold the narcotics that led to the overdose death, they have continued to investigate her based on evidence that she is a large-scale trafficker in opiates via the website Craigslist.  

The affidavit also notes that records obtained from Craigslist pursuant to a subpoena demonstrate Ferrari’s long history of posting advertisements for the sale of narcotics using coded names such as “roxy dolls” (i.e., Roxicodone, a short-acting version of oxycodone), “Chinese **White** Rice” (i.e., “China white” or powdered heroin, which is often mixed with fentanyl) and “Black Rice” (i.e., black tar heroin).

Ferrari waived the option of a preliminary hearing and was released on $25,000 bond, said Thom Mrozek, a spokesman for the U.S. attorney’s office. If convicted of the charge in the criminal complaint, Ferrari would face a statutory maximum sentence of 20 years in federal prison.

OCDA Charges Max Matos M.D., and Jeff Catanzarite D.C.

Charges were filed against Max Humberto Matos M.D.,Jeffrey Scott Catanzarite D.C., Ronald Lee Martin and Veronica Martin by Orange County prosecutors . They were released on bail on January 8, and an arraignment is scheduled in Orange County Superior Court on February 18, at 8:30 am.

The Felony Complaint in case 18CF3512 alleges that Jeffrey Scott Catanzarite is a California licensed chiropractor, who incorporated the Center for Better Health, A Medical Group, Inc., as a Medical Professional Corporation. He operated a medical clinic in Costa Mesa, and Riverside California, that provided treatment to workers’ compensation claimants.

Between 2008 and 2016, he operated the Center for Better Health under the name Southland Spine and Rehabilitation Medical Center, Inc..

To comply with the laws of Medical Professional Corporations, Catanzarite listed himself at all times as a 49-percent owner of Center for Better Health/Southland Spine, while also holding the positions of President and Secretary.

In 2012, Catanzarite promoted Max Humberto Matos, M.D., a treating physician for Center for Better Health/Southland Spine to be its Vice President, Medical Director and gave him a 51 percent ownership interest on paper. But prosecutors allege that despite Matos’s listed ownership interest, Catanzarite was the sole actual owner of Center for Better Health/Southland Spine, controlling its finances, and being responsible for making all substantive decisions.

Catanzarite employed Ronald Lee Martin and Veronica Martin through their company Priority One Health Resources, to run Center for Better Health/Southland Spine’s marketing department.

The Center for Better Health/ Southland Spine allegedly contracted to pay Grupo Medlegal LA and subsequently Medlegal Network, Inc. $1000 for each patient provided to Center for Better Health/Southland Spine for which it could bill workers’ compensation insurers. It typically paid Grupo Medlegal LA and Medlegal Network, Inc. $4,000 per week for 4 patient referrals.

The defendants also contracted to pay Providence Scheduling, for each patient provided to Center for Better Health/Southland Spine for which it could bill insurers. They typically paid Providence Scheduling Inc. $10,000 to $15,000 every 45 days for patient referrals.

Prosecutors claim that between January 3, 2011, and October 13, 2015, Catanzarite paid Grupo Medlegal LA $92,014.66 and Medlegal Network, Inc. $1,324,219.68 for unlawful patient referrals.

Prosecutors allege a number of crimes as a result of the defendants failure to disclose this information to a list of worker’s compensation insurance carriers and third party administrators who paid benefits on these claims.

Eight Indicted in $123M Compound Med Fraud

A Riverside County judge has unsealed indictments against eight people accused of operating an international conspiracy to defraud the California workers’ compensation system of more than $123 million.

In March 2017, the Riverside and San Bernardino County District Attorney’s Offices began an investigation into Blue Oak Medical Group. The evidence was presented to a Riverside County criminal grand jury which, after hearing six weeks of testimony, handed down indictments on Jan. 17, 2019.

The indictments, which were unsealed by Superior Court Judge O.G. Magno on Tuesday, name Kenneth Amodeo, 60, of Agoura Hills; Rosa Bernal, 46, of Covina; Shannon Devane, 41, of Downey; Janek Hunt, a 44-year-old Estonian national; Edgar Lozano, 52, of Porter Ranch; Matthew Rifat, 49, of El Cajon; Hector Sandoval, 54, of Sherman Oaks; and Munir Uwaydah, a 52-year-old Lebanese national.

Amodeo is a pharmacist, Rifat is an attorney, and Uwaydah is a physician whose license currently is not active. Uwaydah has been under indictment in Los Angeles County in a related case since 2015.

The next court date for Amodeo, Bernal, and Lozano is Feb. 6, 2019, for arraignment and the next court date for Devane, Hunt, and Rifat, is Feb. 26, 2019, for a trial readiness conference. Defendants Sandoval and Uwaydah are not in custody and arrest warrants have been issued.

The eight defendants in this case are charged with a variety of counts including conspiracy, fraud, and money laundering and sentence-enhancing white-collar crime allegations.

Amodeo, Bernal and Lozano were each being held in lieu of $4.7 million bail at the Smith Correctional Facility in Banning; Devane and Rifat were each being held in lieu of $4.7 million at the Robert Presley Jail in Riverside; and Hunt was being held in lieu of $4.7 million at the Byrd Detention Center in Murrieta. Arrest warrants are pending against Sandoval and Uwaydah, neither of whom were in custody.

Based on information found in publically filed documents, the defendants used the sham clinics to take advantage of thousands of patients by prescribing nearly all of them the same high priced cocktail of unnecessary medications, regardless of the patients’ condition. Many of the medications were produced by pharmacies under the control of the defendants and the patients often received little, if any, of the medicine they were prescribed.

The defendants funneled the fraudulently obtained proceeds from the scam through a network of shell companies, ultimately sending the money to co-conspirators throughout Southern California, Europe, and the Middle East.

The investigation in this case involved multiple agencies including the Riverside County District Attorney’s Office, the San Bernardino County District Attorney’s Office, the Orange County District Attorney’s Office, and the California Pharmacy Board.

The cases, RIF1990022 and RIF1990023, are being prosecuted by Riverside County Deputy District Attorneys Matthew Murray, Erika Mulhere, and Kristen Allison of the DA’s Insurance Fraud Team, and San Bernardino County Deputy District Attorney Michael Chiriatti.

Cal Med Board Investigating 450 Physicians

The Medical Board of California has launched investigations into doctors who prescribed opioids to patients who, perhaps months or years later, fatally overdosed, according to a report by Kaiser Health News.

The effort, dubbed “the Death Certificate Project,” has sparked a conflict with physicians in California and beyond, in part because the doctors being investigated did not necessarily write the prescriptions leading to a death. The project is one of a kind nationally, although a much more limited program is operated by North Carolina’s board.

So far, the board has launched investigations into the practices of about 450 physicians and referred the names of 72 nurse practitioners, physician assistants and osteopathic physicians to their respective licensing boards. To date, the regulators have formally accused at least 23 doctors of negligent prescribing, and more accusations are expected.

Using terms such as “witch hunt” and “inquisition,” many doctors said the project is leading them or their peers to refuse patients’ requests for painkiller prescriptions – no matter how well documented the need – out of fear their practices will come under disciplinary review.

The project, first reported by MedPage Today, has struck a nerve among medical associations. Dr. Barbara McAneny, the American Medical Association president and an Albuquerque, N.M., oncologist whose cancer patients sometimes need treatment for acute pain, called the project “terrifying.” She said “it will only discourage doctors from taking care of patients with pain.”

The influential California Health Care Foundation also has pushed back against the project, saying it could harm patients.

Unusually aggressive for the board, the program is a reaction to the by now well-known phenomenon of physicians overprescribing opioids. Nationally, a host of policy changes and educational efforts have driven down the rate of opioid prescriptions in recent years.

The goal of California’s program, quietly launched four years ago, is not necessarily to link a doctor’s specific prescription to a specific patient’s death – although many of the cases do – but to find doctors whose patterns of prescribing are so dangerous they may lead to patients’ ultimately fatal addictions.

Kimberly Kirchmeyer, executive director of the Medical Board of California, defended the project. She said the effort has found patterns of “gross negligence,” incompetence and excessive prescribing.

“I understand their frustrations,” she said of the complaining doctors, “but we do have to continue our role with consumer protection.” She noted that part of the point of the project is to educate doctors and, through probation requirements, change the behavior of those who prescribe excessively. “That’s education that could potentially save patients in the future,” said Kirchmeyer, whose agency licenses some 141,000 doctors.

Some consumer groups consider the board’s bold effort to find overprescribing doctors not aggressive enough.

“It’s long overdue,” said Carmen Balber, executive director of the nonprofit Consumer Watchdog. The board should investigate opioid-related deaths that occurred more recently, she said: “They need to get their act together and speed things up.”

McAneny, of the AMA, noted that prescribing practices now deemed unacceptable came out of public policies years ago that “compelled doctors to treat pain more aggressively for the comfort of our patients.” Also, payers have measured quality of care by whether their patients answered surveys about whether their pain was well-controlled.

Similarly, Dr. David Aizuss, a Los Angeles ophthalmologist who is president of the California Medical Association, said state and federal guidelines that took effect in 2014 and 2016 impose much more stringent prescribing precautions than “what was going on six or seven years ago.”

The crackdown on doctors has created fear, said Dr. Robert Wailes, a pain medicine specialist in Encinitas and chair of the California Medical Association’s Board of Trustees. “What we’re finding is that more and more primary care doctors are afraid to prescribe and more of those patients are showing up on our doorsteps,” he said.

Officially, the CMA stops short of saying the medical board should stop the project, perhaps to avoid any perception that the association condones overprescribing. But it has asked the board to hire an independent reviewer to assess the criteria the board is using to decide which physicians to investigate, and whether physicians in certain specialties or regions of the state are being targeted more than others.