Tag: 2021 News

The United States has filed a complaint under the False Claims Act against a Vacaville company alleging one of its owners and seven skilled nursing facilities systematically paid money to referring physicians to induce those physicians to make patient referrals, in knowing and willful violation of the federal Anti-Kickback Statute.

The complaint in intervention, which was filed in United States District Court in Los Angeles late Monday, names as defendants Paksn Inc.; Prema Thekkek, one of its owners; and seven skilled nursing facilities owned by Thekkek and/or operated by Paksn.

The United States alleges that the defendants entered into medical directorship agreements with certain physicians that purported to provide compensation for administrative services, but in reality, were vehicles for the payment of kickbacks to induce the physicians to refer patients to the seven facilities.

The Anti-Kickback Statute prohibits offering or paying anything of value to encourage the referral of items or services covered by federal health care programs.

Those seven facilities are four facilities in Hayward – Bay Point Healthcare Center, Gateway Care & Rehabilitation Center, Hayward Convalescent Hospital, and Hilltop Care & Rehabilitation Center – as well as Martinez Convalescent Hospital, Park Central Care & Rehabilitation Hospital in Fremont, and Yuba Skilled Nursing Center.

The United States specifically alleges that the defendants hired certain physicians who promised in advance to refer a large number of patients to the nursing facilities, paid physicians in proportion to the number of expected referrals, and terminated physicians who did not refer enough patients.

On one occasion, a Paksn employee told Thekkek that two physicians were being hired because “they are promising at least 10 patients for $2000 per month.” On another, Thekkek complained that if Paksn’s employees did not pay medical directors promptly every month, “[t]hese doctors will not give us patients.” On a third occasion, a Paksn employee told Thekkek that because “lately there are no real referrals” from one of the medical directors, “i am planning to say goodbye to him.”

This case was initially filed in December 2015 by Trilochan Singh, who was previously employed as Paksn’s vice president of operations and chief operating officer, under the whistleblower provisions of the False Claims Act. Those provisions authorize private parties to sue on behalf of the United States for false claims and share in any recovery. The Act permits the United States to intervene and take over the lawsuit, as it has done here in part. Those who violate the Act are subject to treble damages and applicable penalties.

The case is captioned United States of America ex rel. Trilochan Singh v. Paksn, Inc., et al., CV15-9064.

When San Francisco police seized seven kilos of powder-filled baggies containing the deadly opioid fentanyl last week, the city’s police chief warned the bust contained “enough lethal overdoses to wipe out San Francisco’s population four times over.”

But, according to a report published in The Guardian, drug addiction experts say the haul may represent just a tiny fraction of the massive volume of the powerful synthetic drug that is flooding California, after being mostly an east coast phenomenon for years.

The evidence is in the rapidly surging death rates. The number of deaths from fentanyl overdoses jumped by more than 2100% in California in five years, state figures show. Overdoses of synthetic opioids (mostly fentanyl) killed nearly 4,000 residents in the state last year, according to the most recent estimate from the US Centers for Disease Control and Prevention.

In San Francisco, drug users are dying at a rate of nearly two a day, many on the streets of the city’s Tenderloin District.

In San Diego, fentanyl is coursing through the homeless population, according to experts and recent media reports. Santa Clara county saw the number of fentanyl deaths more than double last year, KQED reported, with victims on average younger than in previous years.

“Fentanyl has moved west,” said Dr Daniel Ciccarone, a professor specializing in addiction medicine at the University of California, San Francisco. Ciccarone said the lab-made drug was barely seen in western states before 2017. Instead, he said, it used to be distributed by drug trafficking networks supplying the east coast, who often slipped it into heroin supplies without telling users.

In a paper released this month, Ciccarone describes the explosion of accidental overdose deaths occurring west of the Mississippi as part of a “fourth wave” of the opioid crisis.

In California, the drug is being sold under its own name, as powders or tablets. It’s also being mixed with stimulants, like methamphetamines.

Fentanyl is so powerful that a quantity small enough to fit under a fingernail can be deadly within minutes. Dr Aimee Moulin, a professor of emergency medicine at the University of California, Davis medical center in Sacramento, said she was seeing adolescents as young as 13 overdose on counterfeit opioid pills available for home delivery over the internet.

“The potency is so high that a decimal point difference in the concentration can be lethal,” she said.

Fentanyl is an attractive product for drug cartels because it can be cheaply manufactured in foreign clandestine laboratories and substituted for more expensive drugs like the white-powdered heroin commonly sold on the east coast or pressed into counterfeit pills sold as OxyContin or Percocet, according to the 2020 National Drug Threat Assessment from the US Drug Enforcement Administration.

The Sinaloa cartel and Jalisco New Generation cartel from Mexico have been taking over production and distribution from prior sources, which included China, the report said.

MedPageToday reports that a group of clinicians and researchers has petitioned the FDA to delay fully approving any COVID-19 vaccines before clinical trials have been completed, calling the notion of approval to stimulate vaccination rates “backward logic.”

The group, led by Linda Wastila, BSPharm, MSPH, PhD, professor of pharmaceutical health services research at the University of Maryland School of Pharmacy, includes 27 petitioners, including 16 experts outside the U.S., primarily based in Europe.

“The message of our petition is ‘slow down and get the science right — there is no legitimate reason to hurry to grant a license to a coronavirus vaccine.’ We believe the existing evidence base — both pre- and post-authorization — is simply not mature enough at this point,” they wrote in a blog post published in The BMJ.

“If the FDA listens to us, they won’t give serious consideration to approving a COVID-19 vaccine until 2022. Our first request is that the FDA require manufacturers to submit data from completed phase III trials — not interim results. Trials by vaccine manufacturers were designed to follow participants for two years, and should be completed before they are evaluated for full approval, even if they are now unblinded and lack placebo groups. These phase III trials are not simply efficacy studies; they also are necessary and important safety studies,” the group wrote.

Full approval is not necessary to address public health, they argued, because the emergency use authorizations that the FDA has already issued for three vaccines are substantial enough to provide adequate vaccine access.

However, full approval may convince more people to get vaccinated, the group tacitly acknowledged. “While approval might lead to increased public confidence in COVID-19 vaccines, as well as provide legal support for employer-instituted vaccine mandates, to approve a medical product for these reasons is outside FDA’s regulatory purview. Approval decisions must be driven by the safety and efficacy data,” they wrote in the blog post.

The group also asked the FDA to hold off approval until the agency:

– – Confirms there is substantial evidence that clinical effectiveness outweighs harms among special populations
– – Requires a “thorough” safety analysis of spike proteins produced in situ after vaccine administration, including studies on spike proteins’ “full biodistribution, pharmacokinetics, and tissue-specific toxicities”
– – Completes vaccine biodistribution studies “from administration site and safety implications of mRNA translation in distant tissues”
– – Comprehensively investigates all severe adverse reactions reported after vaccination
– – Examines the safety of people taking more than two doses
– – Includes gene delivery and therapy experts in its Vaccines and Related Biological Products Advisory Committee
– – Enforces “stringent conflict of interest requirements to ensure individuals involved in data analysis and decision making” related to Biologics License Applications lack such conflicts with the vaccine manufacturers

The group submitted their petition June 1, calling on FDA to provide an answer by June 11 in part “to allow Petitioners the opportunity to seek emergency judicial relief should the instant Petition be denied,” they stated. Group members also plan to lobby Congress, according to an email from the group to MedPage Today.

“Approving a COVID-19 vaccine now risks setting a precedent of lowered standards for future vaccine approvals. The ‘FDA approved’ seal must represent a high bar — and premature licensure of a COVID-19 vaccine could seriously damage public confidence in regulatory authorities, particularly if long-term safety issues were to emerge following licensure,” they wrote in the blog post.

The U.S. Department of Justice signaled its continued focus on enforcement of the federal Physician Payment Sunshine Act, when it announced the second major settlement involving Sunshine Act allegations in just over six months. Under the settlement, which also resolves claims asserted in a qui tam lawsuit,

Medicrea International, a French medical device manufacturer, and its American affiliate, Medicrea USA Inc.agreed to pay $1 million to resolve allegations that it failed to fully report certain payments and transfers of value under the Sunshine Act as well as $1 million to resolve alleged violations of the federal Anti-Kickback Statute and federal False Claims Act.

The California Attorney General also announced that California will receive nearly $93,000 from this settlement.

The settlement agreement arise from allegations that during an ex-U.S. medical professional society meeting in 2013 in Lyon, France, Medicrea provided meals, alcoholic beverages, entertainment, and coverage of travel expenses to U.S.-based physicians to induce these physicians to purchase or order Medicrea’s spinal devices, resulting in the submission of false claims to the government, and failed to fully report such payments and transfers of value to the Centers for Medicare & Medicaid Services as required under the Sunshine Act.

The Sunshine Act requires manufacturers of certain products that are reimbursed by Medicare, Medicaid, or the Children’s Health Insurance Program to track and annually report all payments and other transfers of value made to certain healthcare providers and U.S. teaching hospitals, collectively referred to as “covered recipients,” unless an exception applies. See 42 U.S.C. § 1320a-7h; see also 42 C.F.R. § 403.904.

In 2020, the U.S. DOJ announced a settlement with medical device manufacturer Medtronic USA Inc.for $9.2 million to resolve allegations that: the company paid kickbacks to induce a neurosurgeon to use its products; and failed to accurately report payments to this neurosurgeon in violation of the Physician Payments Sunshine Act.

This settlement arises from an investigation into certain financial arrangements between Medtronic and South Dakota-based neurosurgeon Wilson Asfora. The government alleged that Medtronic, at Dr. Asfora’s request and contrary to the company’s compliance policies, agreed to pay for events at Carnaval Brazilian Grill, a local restaurant owned by Dr. Asfora and his wife. Allegations in the settlement agreement claim that  Medtronic held over 130 events at Carnaval for which it paid over $87,000 to Dr. Asfora’s restaurant.

Medtronic’s sales personnel allegedly stated in internal expense reports that the events were held to discuss educational content or business information. However, the government alleged that these events were social events that included the provision of lavish meals and alcohol to social acquaintances, business partners, favored colleagues, and referral sources selected by Dr. Asfora, with little or no discussion of Medtronic products.

Immediately after the 2020 settlement, Medtronic announced that it has completed its friendly tender offer for Medicrea International. As a result of completion of the tender offer, Medtronic currently owns in excess of 90% of Medicrea’s share capital and voting rights and was expected to request the implementation of a squeeze-out procedure under French law, which will result in Medicrea becoming a wholly-owned subsidiary of Medtronic.

Less than a year later, its acquisition target was accused of a similar Sunshine Act violation.

Until these recent settlements, there had been no public enforcement actions involving Sunshine Act violations. However, following Congress’s expansion of the Sunshine Act in October 2018 to include five new categories of “covered recipients” subject to reporting requirements, the Senate Finance Committee requested that CMS review the Open Payments database for potential Sunshine Act violations.

In a case that could make the federal government reconsider how it classifies marijuana, a lawyer urged a Ninth Circuit panel Thursday to make the U.S. Drug Enforcement Administration reassess its 49-year-old position that cannabis has no accepted medical use.  The Ninth Circuit includes California, thus this is a case of significance for the issue in workers’ compensation claims for our state.

“It’s a relic of a bygone era,” attorney Shane Pennington told a three-judge Ninth Circuit panel.

According to the report in Courthouse News, Pennington represents Dr. Suzanne Sisley, an Arizona-based medical marijuana researcher, and three veterans who claim they suffer ongoing harm from the federal government’s refusal to reclassify cannabis as a drug with medicinal benefits. Their Ninth Circuit petition highlights research Sisley has conducted using marijuana to treat veterans who suffer from post-traumatic stress disorder.

Despite the fact that medical marijuana is legal in 36 states, the DEA has classified cannabis as a Schedule I drug – the most restrictive category – since 1972. Congress empowered the DEA to decide how drugs should be classified in the Controlled Substances Act of 1970. That was around the same time former President Richard Nixon declared a “war on drugs.”

The petitioners argue a five-factor test the DEA established in 1992 to determine if a drug has any medical benefit is arbitrary, leads to absurd results and contradicts the will of Congress.

But most of the Ninth Circuit hearing focused not on the wisdom of the DEA’s decision or its criteria for categorizing drugs. Rather, it focused on whether the petitioners have standing to bring their challenge in federal court.

That’s because Sisley and the veterans are challenging the denial of a petition they never filed. The one-page, handwritten petition asking the DEA to reclassify marijuana was filed by Stephen Zyszkiewicz and Jeramy Bowers in January 2020. The DEA denied the petition four months later. Zyszkiewicz and Bowers have two separate lawsuits pending over the denial in the District of Columbia.

“This is a really odd case,” Circuit Judge Willaim Fletcher, a Bill Clinton appointee, told lawyers challenging the DEA’s decision. “You appealed the denial of somebody else’s petition. I’ve never seen a case like this.”

But it’s not unprecedented, according to Matthew Zorn, another lawyer representing Sisley and the veterans.

To support his position, Zorn cited the seminal 2007 Supreme Court case, Massachusetts v. EPA, which forced the federal agency to start regulating greenhouse gas emissions to combat climate change. In that case, Massachusetts was challenging the denial of a petition filed by someone else.

“None of the judges at the D.C. Circuit or on the Supreme Court thought anything about it, that Massachusetts was filing a petition for review on another party’s petition,” Zorn said.

Drawing a distinction, Justice Department lawyer Daniel Aguilar told the panel that Massachusetts had standing in that case only because the Supreme Court found it deserved “special solicitude” as a “sovereign state.”

Responding to a question posed by Circuit Judge Daniel Collins, a Donald Trump appointee, Aguilar acknowledged the Massachusetts v. EPA court never squarely addressed the question of whether a party can challenge the denial of a petition it did not file. But he insisted that no case law exists to support that notion.

Fletcher indicated that he agrees with that position.

U.S. Circuit Judge Paul Watford, a Barack Obama appointee, suggested that allowing people to challenge decisions on petitions they didn’t file could lead to a flood of litigation. Potentially tens of millions of people allegedly harmed by the DEA’s decision could file their own challenges to the petition denial in separate circuit courts across the country, Watford said.

After 33 minutes of debate, the panel took the arguments under submission.