Cosmetic drug companies scarred by misbranding

A district court enjoined two individuals and two New Jersey drug companies from distributing unapproved injectable skin whitening drugs. In addition to preventing Flawless Beauty LLC and RDG Imports LLC from distributing the unapproved and misbranded drugs, the injunction requires the companies to recall and destroy all of the unapproved and misbranded injectable skin whitening drugs. The companies and individuals agreed to settle the case and be bound by a permanent injunction.

Complaint

According to the complaint, in addition to making skin whitening claims, the companies’ skin whitening drug products make other unsubstantiated therapeutic claims. For example, some of the products asserted that the drugs “contribute to good liver function” and “clinically treat degenerative brain & liver diseases including Parkinsons.” The complaint also identified public health risks associated with the companies purportedly sterile injectable skin whitening drugs—nerve or blood vessel damage, blood-borne infection, superficial skin infection, cellulitis, abscess formation, and toxic systemic reactions.

The complaint asserted that the products were misbranded because they contained false or misleading information, including the false implication of FDA approval. Other labeling issues identified in the complaint include improper directions for use and the absence of “Rx” on the label.

Injunction. Until the companies meet specific remedial measures, the injunction requires them to stop importing, receiving, manufacturing, preparing, processing, packing, labeling, holding, and/or distributing unapproved drugs. The companies have 20 days to meet the mandate to recall and destroy the unapproved drugs.

Fraudulent medical evaluations earn psychologist 25-year prison term

A former clinical psychologist received a 25-year prison sentence and was ordered to pay $93 million in restitution to HHS and the Social Security Administration (SSA) for his participation in a scheme to obtain over $550 million in fraudulent federal disability payments. In addition to the prison sentence, the clinical psychologist was ordered to pay restitution of over $93 million to the SSA and HHS.

The scheme was initiated by an SSA administrative law judge (ALJ) who reassigned, to himself, pending disability cases associated with a particular attorney. The ALJ contacted the attorney and urged him to provide either physical or mental medical documentation supporting disability determinations, regardless of the actual disability status of the claimants. In cases where medical documentation was required, the clinical psychologist participated in the scheme. The clinical psychologist signed medical evaluation forms prepared by the attorney, without reviewing those forms. The attorney paid the ALJ more than $609,000 for granting benefits in his cases and nearly $200,000 to the clinical psychologist for his participation. The attorney received over $7 million in attorney’s fees.

As a result of the scheme, the SSA paid more than $550 million in lifetime benefits to claimants. The ALJ and the attorney pleaded guilty, receiving sentences of four and 12 years, respectively. Subsequently, the attorney absconded from electronic monitoring and is now considered a fugitive.

House committee gives its approval to Medicare Advantage telehealth bill

A bill—The Increasing Telehealth Access in Medicare (ITAM)—aimed at improving access to Medicare Advantage telehealth services received approval from the House Ways and Means Committee on September 13, 2017. The unanimous approval came alongside the committee’s unanimous passage of a bill (H.R. 3726) to simply physician self-referral prohibitions and a bill (H.R. 3729) to continue Medicare add-on payments for ambulance services.

ITAM

The bipartisan bill, Increasing Telehealth Access in Medicare (ITAM) (H.R. 3727), introduced by Representatives Diane Black (R-Tenn) and Mike Thompson (D-Calif), seeks to encourage the use of telehealth by making it a basic benefit—rather than a supplemental service—for Medicare Advantage beneficiaries. Although critics of telehealth warn that the service presents a risk of overutilization in a fee-for-service reimbursement model, proponents of the new ITAM bill note that by pairing telehealth with Medicare advantage, that concern is “flipped on its head.”

Telehealth

A related bill, in the Senate, known as the Furthering Access to Stroke Telemedicine Act (S. 431), would permit any site exclusively administering acute care stroke treatment to be included in the list of eligible Medicare sites for telemedicine services, without regard for the site’s geographic location. In May of 2017, the Senate Finance Committee unanimously passed the Creating High-Quality Results and Outcomes Necessary to Improve Chronic (CHRONIC) Care Act (S. 870), a bill designed to expand telehealth access for Medicare beneficiaries with chronic conditions while increasing the incentives for accountable care organizations (ACOs) to provide those services.

Kusserow on Compliance: Oncology remains high federal enforcement priority

Oncology continues to be a high enforcement priority for the DOJ, OIG, FBI, and CMS.  The latest fraud investigation by the DOJ involves CCS Oncology, large and prominent providers of cancer care. The reported question being investigated relates to possible billing irregularities involving Medicare and Medicaid. As with most cases related to oncology irregularities, the predication was by a “whistleblower.” The complaint alleges CCS billed for more expensive procedures than were actually performed, billed for procedures that never were performed, and performed medically unnecessary procedures on patients, among other violations, according to the source. The stream of cases is long enough to outline key factors that have led to settlements with the DOJ and OIG. Compliance Officers, whose portfolio of responsibilities include oncology services may wish to review the following to ensure none of these factors are at work in a manner that may trigger investigation.

Common Oncology Enforcement Issues

  1. Employees knowingly submitted false records to Medicare and Medicaid to increase revenue
  2. Claims submitted for services performed without required physician supervision
  3. Offering unnecessary treatments and services to patients
  4. Recruitment and treatment of terminal patients that should have been referred to hospice care
  5. Re-treatment of patients in excess of prescribed dosage limits
  6. Claims for services when physician reviews had not taken place
  7. Claims where treatment occurred without prior required IGRT scan
  8. Physicians allowed registered nurses to fill out prescriptions for medications
  9. Offering inducements (“kickbacks”) to patients by waiving their co-pays
  10. Conducting not necessary fluorescence in situ hybridization (FISH) tests for bladder cancer
  11. Filing payment claims for GAMMA functions by improperly trained physicians and staff
  12. Seeking payments for tests whose results doctors had not reviewed
  13. Billing E&M services on the same day as a related procedure
  14. Double and over-billing Medicare for services that lacked supporting documentation
  15. Improperly billing for radiation treatment without proper physician supervision
  16. Submitting false claims for magnetic resonance imaging (MRI) services
  17. Billing for services that were not documented in the patients’ medical records
  18. Billing twice for the same services
  19. Misrepresentation of the level of a service provided to increase reimbursement
  20. Routinely waived patient copayments as an inducement, then billing Medicare for them.
  21. Claims for services not performed, medically necessary, and/or properly documented
  22. Claims for services rendered to patients referred by physicians benefiting from referral
  23. Purchasing cancer treatments from unlicensed sources for oncology practice
  24. Diluting patients’ chemotherapy treatments and delivering in a manner designed to extend period of treatment time
  25. Claims for medically unnecessary or properly documented intensity-modulated radiation therapy (IMRT)
  26. Unsupported add-on claims for “special treatment procedures” and “specialty physics consults”
  27. Violating the Stark Laws and Anti-Kickback statute by rewarding referring physicians