Tag: 2020 News

75 year old Egisto Salerno, M.D., an internal medicine physician practicing in San Diego, was sentenced to 18 months in custody for causing the illegal distribution of an opioid pain medication commonly known as Norco or Vicodin.

He is a 1976 graduate of the National University of La Plata Faculty of Medicine in Argentina, and licensed in California on January 4, 1982. He surrendered his California medical license on May 25, 2018 and is no longer licensed to practice medicine in California. He stipulated to surrender his license to resolve disciplinary actions then pending against him for gross negligence.

Salerno, whose medical practice was located at 5532 El Cajon Boulevard, pleaded guilty in January, admitting that he signed prescriptions for 78,544 pills that lacked a legitimate medical purpose and were outside the usual course of professional medical practice.

Salerno also admitted that an undercover federal agent who visited Salerno’s office on six occasions received six hydrocodone prescriptions.

In a separate instance, on a date when the undercover agent did not visit Salerno’s office and the doctor did not see him, Salerno acknowleged that a prescription was improperly issued by him in the name used by the undercover agent. After the prescription was issued, Salerno ginned up and signed a progress note in the “patient” chart for the purported visit that did not occur.

The prescription was then picked up by another as part of a larger scheme to divert these pills. That scheme involved two medical assistants in Salerno’s practice who falsified medical records and sold prescriptions that Salerno had pre-signed to a co-defendant though the “patients” identified on those prescriptions did not even see Salerno.

In fact, as Salerno acknowledged, many of those in whose names these prescriptions were written were deceased or jailed at the time the prescriptions were written.

The pills were, in turn, diverted to the “capper” or patient recruiter, who also arranged to bring homeless and other individuals to Salerno’s office and paid them to secure these prescriptions from Salerno. Others assisted the patient recruiter by transporting the purported patients to Salerno’s office and then to pharmacies to pick up the pills. In turn, pills were sold in San Diego and delivered to a pharmacy in Mexico for cash.

As the plea documents show, the criminal activity occurred between November 2014 and February 2018. Seven other defendants have been convicted in this case including Salerno’s two medical assistants – April J. Cervantes and David D. Apple; the lead patient “recruiter” – Stephen Toney; and Toney’s associates – Shalina D. Latson, Lonnell Ligon, LaJuan D. Smith and Amber N. Grabau.

Defendant David D. Apple, one of Salerno’s medical assistants, will be sentenced on December 2, 2020.

Public health experts are hoping one or several vaccines for COVID-19 will be ready by 2021. Close to 200 vaccines for the disease are under study, and several candidates have moved to phase III human studies.

To help speed up development and fund the trials, the U.S. has set up Operation Warp Speed, a partnership with the Department of Health and Human Services, the FDA and other federal agencies. Its goal is to deliver 300 million doses of a safe, effective vaccine by January 2021. These companies are included in the program: AstraZeneca, Janssen (Johnson & Johnson), Moderna, Novavax, Pfizer and Sanofi/GSK.

British pharmaceutical giant AstraZeneca on Monday said its potential Covid-19 vaccine has produced a similar immune response in older and younger adults. AstraZeneca, which is developing its potential Covid-19 vaccine in collaboration with the University of Oxford, said adverse responses to the vaccine among the elderly were also found to be lower.

The announcement is likely to boost hopes of a Covid vaccine being developed before the end of the year.

Pfizer, one of the front-runners in the quest for a COVID-19 vaccine, has more than one vaccine candidate, being developed together with the German company BioNTech. It said its candidate vaccine looks safe, and the company expects to have data soon on how well it protects people against the coronavirus.

The US Department of Health and Human Services and Department of Defense announced a $1.95 billion agreement with Pfizer to produce 100 million doses of the vaccine. The deal also allows the US government to acquire an additional 500 million doses.

The start of Moderna’s Phase 3 trial of its mRNA-1273 vaccine was announced just last August. It will involve 30,000 adults at 89 clinical research sites around the country. It is the first Phase 3 trial begun under Operation Warp Speed, according to the National Institutes of Health.

Novavax, a biotechnology company based in Gaithersburg, Maryland, announced the launch of its phase three trial in the United Kingdom on September 24, which will evaluate the vaccine in up to 10,000 people, both with and without underlying conditions. Up to 400 participants will also be vaccinated against the seasonal flu as part of a sub-study that will help determine whether it is safe to give patients both vaccines at the same time.

On September 23, Johnson & Johnson, based in New Jersey, announced the launch of a phase three ENSEMBLE trial to evaluate the safety of the vaccine – and how well it works – among up to 60,000 adults from a variety of countries. The trial will include “significant representation” from older populations and those with underlying conditions that make them more susceptible to COVID-19.

On October 12, Johnson & Johnson announced that it has paused these trials for an independent safety review due to an unexplained illness in a participant.

Marsh has published an Insight Report on the effects of COVID-19 on the Workers’ Compensation industry so far. Here are some of the highlights of its report.

Some six months after the World Health Organization declared a pandemic, many of the most dire predictions about COVID-19’s impact on workers’ compensation systems have not been realized. Claims of COVID-19 exposure in the workplace have been outpaced by a decline in other types of reported occupational injuries, and the workers’ compensation insurance market remains competitive.

Industry observers have forecast that workers’ compensation premium volume will drop by as much as 10% to 20% in 2020 and will likely not continue to grow in 2021 as the labor market remains challenging. Despite this negative premium growth and a number of changes to state regulations or directives regarding the compensability of COVID-19 claims, Marsh anticipates the impact to insurer profitability to be less drastic and for the line to normalize fairly quickly.

The National Council on Compensation Insurance (NCCI), Workers’ Compensation Insurance Rating Bureau of California (WCIRB), and other industry observers have published sizable initial ranges of estimated claims losses from COVID-19. But a large influx of COVID-19 claims have not yet materialized, with limited exceptions in health care. And initial analysis shows that the average severity of COVID-19 claims is lower than expected.

Telemedicine will play an increasingly important role in workers’ compensation, potentially even after the pandemic subsides and workplaces largely transition to a new normal. Amid the pandemic, employers are reporting a variety of benefits and practical applications for telemedicine, including to facilitate triage and claim intake, initial injury assessments follow-up visits, and injury rehabilitation.

Prior to the pandemic, employers had expressed interest in telemedicine but had not widely adopted its use in workers’ compensation, in part because laws in some states limited its use. Since COVID-19 emerged as a threat, however, many states have eased restrictions and encouraged employers and claims administrators to use telemedicine, which can offer many benefits to employers and workers, including the ability to avoid crowded waiting rooms and lengthy commutes.

The explosion of telemedicine in workers’ compensation during the pandemic also mirrors its greater use by primary care physicians and others in group health settings. As employees become more familiar with telemedicine’s benefits during the pandemic, they may expect it to remain a readily available option post-COVID-19 — including as a means for receiving care following workplace injuries.

The Department of Justice announced a global resolution of its criminal and civil investigations into the opioid manufacturer Purdue Pharma LP, and a civil resolution of its civil investigation into individual shareholders from the Sackler family. The resolutions with Purdue are subject to the approval of the bankruptcy court.

Purdue Pharma has agreed to plead guilty in federal court in New Jersey to a three-count felony information charging it with one count of dual-object conspiracy to defraud the United States and to violate the Food, Drug, and Cosmetic Act, and two counts of conspiracy to violate the Federal Anti-Kickback Statute.

The criminal resolution includes the largest penalties ever levied against a pharmaceutical manufacturer, including a criminal fine of $3.544 billion and an additional $2 billion in criminal forfeiture.

For the $2 billion forfeiture, the company will pay $225 million on the effective date of the bankruptcy, and, as further explained below, the department is willing to credit the value conferred by the company to State and local governments under the department’s anti-piling on and coordination policy.

Purdue has also agreed to a civil settlement in the amount of $2.8 billion to resolve its civil liability under the False Claims Act. Separately, the Sackler family has agreed to pay $225 million in damages to resolve its civil False Claims Act liability.

The resolutions do not include the criminal release of any individuals, including members of the Sackler family, nor are any of the company’s executives or employees receiving civil releases.

While the global resolution with the company is subject to approval by the bankruptcy court in the Southern District of New York, one important condition in the resolution is that the company would cease to operate in its current form and would instead emerge from bankruptcy as a public benefit company (PBC) owned by a trust or similar entity designed for the benefit of the American public, to function entirely in the public interest.

As part of the plea, Purdue will admit that it conspired to defraud the United States by impeding the lawful function of the DEA by representing to the DEA that Purdue maintained an effective anti-diversion program when, in fact, Purdue continued to market its opioid products to more than 100 health care providers whom the company had good reason to believe were diverting opioids and by reporting misleading information to the DEA to boost Purdue’s manufacturing quotas.

In addition, Purdue will admit to conspiring to violate the Federal Anti-Kickback Statute. Purdue made payments to two doctors through Purdue’s doctor speaker program to induce those doctors to write more prescriptions of Purdue’s opioid products. Similarly, from approximately April 2016 through December 2016, Purdue made payments to Practice Fusion Inc., an electronic health records company, in exchange for referring, recommending, and arranging for the ordering of Purdue’s extended release opioid products – OxyContin, Butrans, and Hysingla.

The DOJ resolution does not resolve claims that states may have against Purdue or members of the Sackler family, nor does it impede the debtors’ ability to recover any fraudulent transfers.

Applied Underwriters, Inc. and Applied Risk Services, Inc. filed a lawsuit against the Insurance Commissioner of the State of California and others in U.S. District Court for the Eastern District of California, asserting five claims under the U.S. Constitution.

Applied and its affiliates primarily write workers’ compensation insurance through multiple insurance companies in all fifty states in the United States,and have done so since 2002. California Insurance Company (“CIC”) is the largest of those companies and was formed in 2004. Since that time, CIC has grown into a company with over a billion dollars in assets and over $600 million in capital and surplus.

Applied Underwriters and Applied Risk Services allege that the California Department of Insurance acted in bad faith and abused its authority under state law in ways that have caused substantial harm to the companies.

Disputes between the CDI and Applied Underwriters has a longstanding history. The current dispute arose in January 2019, after a $920 million sale to company founder Steve Menzies, who was an indirect owner of 11.5% of CIC’s shares was announced.

The California Department of Insurance says it must sign off on the deal because one of Applied’s subsidiaries, California Insurance Co., is domiciled in the state. It subsequently denied approval of the sale.

The California Department of Insurance placed California Insurance Company into a conservatorship, allegedly under false pretenses and has abused its authority by trying to force Applied Underwriters to relinquish its rights in connection with the Department’s unlawful actions.

In the year long period that CIC has been in conservation, Applied Underwriters claims the CDI has “refused to resolve matters in good faith,” and has instead demanded that Applied “subject itself to jurisdiction, give up its right to bring this and other lawsuits, and bind itself to other onerous terms.”

The complaint says that up until this week, Insurance Commissioner Lara and his representatives continued to “propose unfair and preposterous terms under the constant threat that if Applied and others did not agree, they would seek court approval for a rehabilitation plan that would be ‘even worse.’”

That rehabilitation plan, originally due in August, was filed October 19.

According to Applied Underwriters, the rehabilitation plan “effectively eliminates CIC’s business in California, and other states, requires CIC to transfer its business to a new insurer of the Commissioner’s choosing, and leaves just a shell CIC with all of its obligations to other reinsurers and affiliates under its contracts and no source of revenue to meet its obligations.”