Tag: 2020 News

A licensed acupuncturist was sentenced to 30 months in prison for fraudulently billing Amtrak’s health care plan for $7.1 million in acupuncture, massages and facials that either were medically unnecessary or were never provided.

Guiqiong Xiao Gudmundsen, 53, a.k.a. “Kimi” Gudmundsen, of Anaheim Hills, was sentenced and also ordered her to pay $2,683,903 in restitution to Amtrak.

Back in October 2019, Gudmundsen pleaded guilty to one count of health care fraud and one count of money laundering.

Gudmundsen owned Healthy Life Acupuncture Center, which operated in Riverside and Los Angeles. From January 2008 until December 2015, Gudmundsen recruited Amtrak employees to visit Healthy Life and then, among other things, billed the Amtrak health care plan for acupuncture, which she knew wasn’t being provided.

She billed the health plan for medically unnecessary services such as massages and facials, as well as for work-related injuries she knew the Amtrak plan did not cover. Gudmundsen also provided medical services to non-Amtrak health care plan participants and then billed the plan for it under the name of an actual Amtrak plan participant.

Gudmundsen regularly waived co-payments, co-insurance, and deductibles for Amtrak health care plan participants, something the plan did not permit. She double billed to other insurance plans, and she provided services to returning patients falsely billed as “new patients” in order to take advantage of higher reimbursement rates.

During the course of the scheme, Gudmundsen billed Amtrak’s health care plan in amounts comparable to large research hospitals and medical institutions that dwarfed other acupuncturists, court papers state. In 2013, Gudmundsen was ranked 32nd in the United States among health care providers for the amount billed to the Amtrak health care plan – above Johns Hopkins Hospital in Baltimore, which was ranked 39th, according to court documents.

Finally, she knowingly and routinely funneled her ill-gotten gains through bank accounts opened in the names of a shell company and her relatives.

Gudmundsen’s “entire business model was based on fraud, infiltrating all the services that she provided (and those she did not provide),” prosecutors wrote in their sentencing memorandum.

This matter was investigated by Amtrak Office of Inspector General, IRS Criminal Investigation, and the U.S. Department of Labor’s Employee Benefits Security Administration.

Pharmacy giant Walgreens has agreed to pay $7.5 million to settle a consumer protection lawsuit, accusing the company of allowing a phony pharmacist to handle over 745,000 prescriptions. The lawsuit was filed and settled on Monday jointly by the Alameda County and Santa Clara County District Attorneys’ Offices in Alameda County Superior Court.

The settlement comes just over a year after the Mercury News revealed a California State Board of Pharmacy investigation alleging Walgreens stores in Fremont, Milpitas and San Jose allowed Kim Thien Le to perform pharmacist duties for more than a decade without ever having a pharmacist’s license.

During Le’s more than 15 years as both an intern pharmacist and a pharmacist, she handled more than 100,000 prescriptions for controlled substances such as oxycodone, fentanyl, morphine, and codeine, officials said.

“Walgreens failed to vet Ms. Le thoroughly when it promoted her to positions requiring a license and failed to make sure that its internal systems were strong enough to prevent an employee from evading them,” a statement from the Alameda County District Attorney’s Office said.

After the state investigation began, Walgreens “undertook a re-verification of the licenses of all our pharmacists nationwide,” Walgreens spokesman Jim Cohn said in an email.

He also noted that Le’s employment with the company ended in October 2017, but did not offer further comment on the settlement, which had been under negotiation between prosecutors and the company.

Under the settlement, Walgreens will also be required to create a verification program, post proof that all of its employees are licensed if their position requires one, conduct annual audits, and submit an annual compliance report to the Alameda County DA’s office, Lin said.

This settlement is not the first legal fallout since the revelations about the investigation came to light.

The California Attorney General’s office in July charged Le with false impersonation, identity theft and obtaining money, labor or property by false pretenses. The case is still pending in Alameda County courts. Le has pleaded not guilty to all charges.

The Walgreens stores involved could have received a range of disciplines for their part in the case, from a reprimand up to suspension or revocation of their pharmacy licenses, officials said previously.

But Becerra’s office ultimately required Walgreens to pay a $335,000 civil penalty and $19,500 to cover the Department of Justice’s investigation costs, and to admit to the truth of the claims in the state board’s investigation, according to State Board of Pharmacy documents reviewed by this news organization.

Teresa Drenick, a spokeswoman for the Alameda County DA’s office, said of the $7.5 million settlement money from Walgreens, the two DA’s offices will split roughly $250,000 to cover investigative costs, while about $250,000 will go to the state’s Consumer Protection Trust.

The remaining $6,992,500 is evenly divided between the two DA’s offices to be used for consumer protection and enforcement in the future.

The California Department of Justice sued Johnson & Johnson in May 2016, after a years-long multistate investigation revealed the company had neglected to inform both patients and doctors of possible severe complications from its mesh products and misrepresented the frequency and severity of risks the products posed. The products are permanent surgical implants designed to treat stress urinary incontinence and pelvic organ prolapse in women.

After a nine-week trial, a San Diego Superior Court Judge issued the 128 page Statement of Decision requiring Johnson & Johnson to pay $343.99 million in penalties. Additional injunctive terms may be added after further briefing.

The suit filed by the California Department of Justice is one of several the company has faced worldwide regarding the mesh products.  This judgment marks the first time a court of law has issued findings of fact and ruled that Johnson & Johnson did indeed engage in illegal false and deceptive business practices.

The lawsuit alleged that Johnson & Johnson misrepresented the safety of these products by concealing and misleading consumers about the possibility of serious and irreversible complications caused by mesh, including permanent pain with intercourse, loss of sexual function, chronic pain, permanent urinary or defecatory dysfunction, and potentially devastating impact on overall quality of life.

The ruling notes that “complications could be so severe that mesh removal would be necessary but, unlike other implants, removal is difficult and harmful and can take multiple surgeries; J&J also knew that some of the most severe complications of mesh can be irreversible.”

The Judge also wrote the marketing for the products “repeatedly touted mesh’s benefits while misrepresenting, downplaying, and concealing its potential for serious, long-term complications.”

From 2008 to 2014, Johnson & Johnson sold more than 470,000 pelvic mesh products nationally, including more than 30,000 in California. Worldwide, more than 2 million women have had these mesh products implanted in their bodies.

The court affirmed that Johnson & Johnson and its subsidiaries Ethicon Inc. and Ethicon US LLC, violated California’s Unfair Competition Law and False Advertising Law.

Johnson & Johnson has faced over 35,000 personal injury lawsuits related to its pelvic mesh products. It has settled similar claims with the state of Washington for $9.9 million and with a coalition of 42 other states for $117 million.

Mitchell International released its Industry Trends Report for the fourth quarter of 2019.

The Casualty Edition, “The Power of Advanced Reporting Analytics” has been a hot topic for a few years now, and for good reason. More than half of analytics leaders reported a correlation between their organization’s analytics initiatives and seeing a “significant improvement” in their competitive standing. In the coming year, more than three quarters of that same group plan to expand or modernize their IT infrastructure to support analytics, according to a study from Forbes and Cisco.

In the insurance industry specifically, claims organizations are seeing varying results with their analytics programs. According to a McKinsey report, while more than half of CEOs at a variety of major P&C insurance carriers that they surveyed consider analytics a top priority, only one in six responded that analytics was making a large impact. The reasons for these struggles varied, including lack of alignment with strategic goals, poor integration and adoption or poor data quality.

When analytics is implemented correctly, it can have a significant positive impact on the claims process. As evidenced by the McKinsey study, getting analytics right can be challenging.  The report outlined a few tips on how to use analytics effectively to make improvements in the claims process itself and to support a claims organization’s operations.

Within the claims process, claims organizations should be looking for different ways to highlight actionable insights for adjusters to react to and use throughout the process.

Use analytics to surface key findings in the claim to help give adjusters the full picture so they can improve decision making. For example, technology can help analyze if a claimant has been seeking treatment outside of the set treatment timeline, or if a bill was submitted for treatment that was unrelated to the injury. These types of analytics provide immediate information to adjusters so they can make more informed decisions, ultimately having a direct effect on the claim outcomes.

Implementing predictive analytics into the claims process could help claims organizations to accurately predict the severity of a claim or the types of symptoms typically associated with a type of injury. These types of predictions allow claims organizations to accurately triage claims to the right adjuster or group of adjusters to help make sure the claims are handled appropriately from the start.

Analyzing provider behavior and surfacing key insights for adjusters can help them to understand when a certain provider might be charging above the industry averages on a certain treatments, or treatments that may not be necessary for certain injuries. Questionable billing or treating practices can be further scrutinized by adjusters and nurses, or ultimately referred to the Special Investigations Unit. Implementing these types of provider analytics help claims organizations to be more confident that they are paying a fair amount on claims across the board, and that the injured workers are getting the right treatments.

Jay Brome began his employment at the California Highway Patrol in 1996. During his nearly 20-year career he was openly gay. He claims that other officers subjected him to derogatory, homophobic comments; singled him out for pranks; repeatedly defaced his mailbox; and refused to provide him with backup assistance during enforcement stops in the field.

As a result, Brome feared for his life during enforcement stops, experienced headaches, muscle pain, stomach issues, anxiety and stress, and became suicidal by early 2015. In January 2015, he went on medical leave and filed a workers’ compensation claim based on work-related stress.

Brome’s workers’ compensation claim was resolved in his favor on October 27, 2015. He took industrial disability retirement on February 29, 2016, ending his employment with the Patrol.

On September 15, 2016, Brome filed an administrative complaint with the Department of Fair Employment and Housing. He filed a lawsuit the next day, asserting four claims under the Fair Employment and Housing Act for the conduct he alleged in his workers’ compensation claim.

The CHP sought summary judgment, contending Brome’s claims were untimely because he did not file his administrative complaint within one year of the challenged actions, as required under former section 12960, subdivision (d).

However, because the crux of his case concerns circumstances that occurred before his medical leave began in January 2015, he asserted that exceptions to the one-year deadline were applicable. He argued that the filing of his workers’ compensation claim should stop the clock on his one-year filing deadline during the pendency of his compensation claim. The legal doctrine is known as “equitable tolling.”

The trial court granted summary judgment in favor of the Patrol, holding that Brome’s claims were filed after the statute of limitations expired and a reasonable jury could not have concluded they were timely based on an exception to the deadline.

The Court of Appeal reversed in the published case of Brome v California Highway Patrol.

The equitable tolling doctrine operates to suspend or extend a statute of limitations as necessary to ensure fundamental practicality and fairness. In the case of McDonald v. Antelope Valley Community College Dist. (2008) 45 Cal.4th 88, the California Supreme Court held that the deadline for filing an administrative claim under the Act could be tolled while a plaintiff is voluntarily pursuing alternate remedies.

The time for filing a claim pursuant to the Act may be tolled where the plaintiff can establish three elements: timely notice, and lack of prejudice, to the defendant, and reasonable and good faith conduct on the part of the plaintiff.

It will be the jury’s job to reconcile the evidence at trial, and summary judgment was not justified.