DOJ announces New Jersey Medicare and Virginia Medicaid fraud schemes

The U.S. Department of Justice (DOJ) announced that (1) a New Jersey woman has pled guilty in a $1 million Medicare fraud scheme that deceived seniors into unnecessary DNA tests, and (2) three Bristol, Virginia individuals have been indicted for fraudulently billing over $350,000 to Virginia Medicaid for services under the Virginia Medicaid Intellectual Disability (ID) waiver program that were not provided.

New Jersey fraud

Sheila Kahl, 44, admitted that she wrongfully accessed protected health information (PHI) and paid kickbacks to healthcare professionals on behalf of a Medicare fraud scheme involving a purported non-profit, The Good Samaritans of America. Sentencing is scheduled for March 14, 2017.

A DOJ press release from the District of New Jersey, based on the criminal information and court statements, alleged that from July 2014 through December 2015, Seth Rehfuss, 42, of Somerset, New Jersey, Kahl, of Point Pleasant, New Jersey and others used. The Good Samaritans of America as front to present information about genetic testing to seniors in low-income housing projects.

In order to convince senior citizens to submit to genetic testing, Rehfuss allegedly used fear-based tactics, including suggesting the senior citizens would be vulnerable to heart attacks, stroke, cancer and suicide if they did not have the genetic testing. Rehfuss also allegedly claimed that the genetic testing allowed for “personalized medicine.”

Rehfuss was previously charged on December 2, 2015. The pending criminal complaint against Rehfuss contains mere allegations, and he is considered innocent unless and until proven guilty.

Virginia fraud

A grand jury, sitting in the Western District of Virginia, charged Deborah Branch, 64, Melissa Harr, 49 and Bryan Harr Sr., 40, with one count of health care fraud, one count of conspiracy to commit health care fraud, and two counts of wire fraud.

According to a DOJ press release from the Western District of Virginia, the indictment alleged that Melissa and Bryan Harr Sr., hired Branch to work with one of their children, who suffers from intellectual and physical disabilities and qualifies for services paid for by Virginia Medicaid, under the Virginia Medicaid’s ID waiver program. Branch was allegedly paid through two different Virginia Medicaid contractors.

The indictment further alleged that from January 2010 until September 2015, Branch submitted time sheets claiming she was providing services for Harr’s disabled son when she was not. In exchange for assisting Branch in getting paid for work she did not do, Branch allegedly paid the Harrs approximately $200 every two weeks. Virginia Medicaid paid out $350,641.02 to two different Virginia Medicaid contractors, Public Partnerships, LLC and ResCare (formerly known as Creative Family Solutions), based on Branch’s time sheets, of which $207,854.43 was paid to Branch.

CMS updates its Medicare and Medicaid drug spending dashboards

As part of its effort to provide additional information on, and increase transparency in the cost of prescription drugs, CMS has updated both its Medicare and Medicaid drug spending dashboards to include information from 2015. According to a CMS press release, the medications presented as part of the 2015 Medicare Drug Spending Dashboard represents a very large proportion of Medicare spending, including 34 percent of all Part D spending and 69 percent of Part B drug spending, which was similar to the 2014 drug dashboard. A second, contemporaneous CMS press release notes that the medications presented as part of the 2015 Medicaid Drug Spending Dashboard represent approximately 41 percent of Medicaid covered outpatient drug spending in 2017.

Total program spending

For total program spending, the Medicare dashboard shows five drugs with the highest Part D and Part B drug spending, respectively, in 2015 compared to their spending in 2014. For example, the dashboard shows that Lantus (insulin) was a top-five drug in terms of costs in Medicare Part D between 2014 and 2015, as was Havroni, a new drug to treat Hepatitis C.

The Medicaid dashboard also shows the trend in total drug spending for the five drugs with the highest aggregate drug spending in 2015. Of the top five, Harvoni and Abilify (aripiprazole, a brand name anti-psychotic drug) had total drug spending greater than $2 billion in 2015, with annual total program spending for Abilify greater than $1.7 billion for each of the past five years. Also, spending for Lantus/Lantus Solostar (insulin glargine, a brand name diabetes drug) was $1.4 billion and spending for Vyvanse (lisdexamfetamine dimesylate, a brand name attention deficit hyperactivity disorder drug) and Humira/Humira pen (adalimumab, a brand name drug used for rheumatoid arthritis) was approximately $800 million each.

Highest total spending (Part D)

The Medicare dashboard shows that the five Part D drugs with highest total spending in 2015 were:

  • Spiriva (tiotropium bromide, a brand name chronic obstructive pulmonary disease treatment);
  • Advair Diskus (fluticasone/salmeterol, a brand name asthma and chronic obstructive pulmonary disease treatment);
  • Crestor (rosuvastatin calcium, a brand name cholesterol drug)
  • Lantus/Lantus Solostar (insulin glargine, a brand name diabetes drug); and
  • Harvoni (ledipasvir/sofosbuvir; a brand name Hepatitis C virus treatment).

Advair Diskus and Crestor were also among the top five drugs with the highest Part D spending in 2014, but Spiriva, Lantus, and Harvoni were not. Harvoni was introduced in October 2014 and in 2015 had just over $7 billion in spending. Sovaldi (sofosbuvir), another drug for treating Hepatitis C, had the highest spending in 2014, but was not among the top five drugs in 2015, with $1.3 billion in spending.

Highest total spending (Part B)

The Medicare dashboard shows the top five Part B drugs with highest total spending were:

  • Lucentis (ranibizumab, a brand name drug for wet age-related macular degeneration);
  • Remicade (infliximab, a brand name rheumatoid arthritis drug);
  • Neulasta (pegfilgrastim, a brand name white blood cell stimulator for use with cancer treatments);
  • Rituxan (rituximab, a brand name cancer treatment); and
  • Eylea (aflibercept, a brand name drug for wet age-related macular degeneration).

These were the same five drugs with the highest Part B spending in 2014. Each of these drugs contributed more than $1 billion in spending for the Medicare Part B program.

Unit cost

The Medicare dashboard lists the top five drugs with the largest increases in average cost per unit from 2014 to 2015 in the Part B and D programs. Glumetza (metformin HCl, a diabetes treatment) had the largest increase in cost per unit at over 380 percent and had total spending increases from $34.3 million to $153 million. All five of these Part D drugs had increases in cost per unit of more than 100 percent. Among Part B drugs, mitomycin (a generic chemotherapy agent), had the largest increase in average Part B cost per unit at 163 percent and had total spending increases from $5.9 million to $15.8 million. The other four Part B drugs had smaller, but still significant increases, approximately 25 to 40 percent.

The Medicaid dashboard shows the top five drugs with the largest increases in average cost per unit from 2014 to 2015. Ativan (lorazepam, a brand name drug used for anxiety) had the largest increase in cost per unit at 1,264 percent and a spending increase from $1.7 million to $5.3 million. All five of the drugs had increases in cost per unit of more than 400 percent.

High cost per prescription fill

The Medicaid dashboard shows the top five drugs selected for high costs per prescription fill (i.e., greater than or equal to $1,000) in 2015. Advate (antihemophilic factor [recombinant], a brand name hemophilia treatment) had an average cost per fill of $20,828 and was associated with total program spending of $354 million. In comparison, Prezista (darunavir ethanolate, a brand name HIV antiviral) had an average cost per fill of $1,259 and total program spending of $335 million. NovoSeven RT (coagulation factor VIIa [recombinant], a brand name hemophilia treatment) had the highest average cost per fill at $67,098 and $298 million in program spending.

Voters say Rx drug costs and better provider networks are top priorities

Health care is not playing a major role in the 2016 election campaign, finishing last or near the bottom of the list of voter issues, according to the October 2016 Kaiser Health Tracking Poll. Instead, the most important issues to the public are the presidential candidates, the economy and jobs, foreign policy, immigration, and social issues.

Non-health issues lead the way

According to the Tracking Poll, the most important issues among Democrats, Independents, and Republicans can be broken down as follows:

  • Among Democratic voters, the presidential candidates are the most important issue (36 percent), followed by the economy and jobs (30 percent), foreign policy (14 percent), social issues (12 percent), health care (9 percent), and immigration (9 percent).
  • Among Independent voters, the economy and jobs are the most important issue (29 percent), followed by the presidential candidates (27 percent), foreign policy (22 percent), immigration (8 percent), social issues (7 percent), and health care (6 percent).
  • Among Republican voters, the economy and jobs (34 percent) and foreign policy (34 percent) tied for the most important issues, followed by the presidential candidates (23 percent), immigration (20 percent), social issues (8 percent), and health care (5 percent).

Top health care issues

When asked to prioritize their health care concerns, the public said that making sure that high-cost drugs for chronic conditions are affordable (74 percent), government action to lower prescription drug prices (63 percent), and making sure health plans have sufficient provider networks of doctors and hospitals (57 percent) were the most important.

Additional health care concerns were by the public as follows:

  • Protecting people from high prices when they visit an in-network hospital but are seen by an out-of-network doctor (54 percent).
  • Making information comparing quality of care by doctors and hospitals more available (53 percent).
  • Making information about the price of visits, tests, and procedures more available (50 percent).
  • Making information about what doctors and hospitals are covered under different health plans more available (49 percent).
  • Helping people with moderate incomes pay high out-of-pocket costs (44 percent).
  • Repealing the requirement that nearly all Americans have insurance or pay a fine (38 percent).
  • Repealing the entire Patient Protection and Affordable Care Act (ACA) (37 percent).

Public health care option

The poll also examined the public’s view on a public health care option to compete with private plans in the ACA marketplaces. When asked if they favored a public health insurance option to compete with private insurance plans in the ACA marketplaces, 70 percent favored the public option (34 percent strongly favoring and 36 percent somewhat favoring) and 23 percent were opposed (15 percent strongly opposed and 8 percent somewhat opposed).

However, when asked if they favored a “government administered” public health insurance option the results were less favorable, with 54 percent in favor (25 percent strongly in favor and 29 percent somewhat in favor) and 41 percent opposed (27 percent strongly opposed and 14 percent somewhat opposed).

In addition, 21 percent of those in favor shifted their opinion to opposing the public option after hearing the argument that doctors and hospitals would be paid less. Likewise, 27 percent of those in favor shifted to opposing the public option after hearing that the government plan would have an unfair advantage over private insurers.

The ACA’s future

The poll continued to show that Americans’ view of the ACA is divided down political party lines. The majority of Democrats (76 percent) had a favorable view of the ACA, while most Republicans (83 percent) expressed an unfavorable view. Independents also leaned negative, with 52 percent expressing an unfavorable view.

Highlight on Colorado: 2016 report on effects of marijuana legalization

On November 8, 2016, nine states will have legalization of marijuana for either medical or recreational use on the ballot. Five of those states will consider the recreational use of marijuana, including California, Massachusetts, Maine, Arizona, and Nevada. Before these states “go to pot,” perhaps they should consider the results of a 2016 study by the Colorado Department of Public Safety.

The study was mandated by the Colorado General Assembly. It required the Division of Criminal Justice in the Colorado Department of Public Safety to conduct a study of the impacts of Colorado’s 2013 legalization, particularly as they relate to law enforcement activities.

Public Safety

The study found that the total number of marijuana arrests decreased by 46 percent between 2012 and 2014, from 12,894 to 7,004. As a share of all arrests in Colorado, marijuana was responsible for 6 percent of all arrests in 2012 and 3 percent in 2014. The number of marijuana arrests decreased by 51 percent for Whites, 33 percent for Hispanics, and 25 percent for African-Americans.

In terms of court filings, the study found that the total number of marijuana-related filings declined 81 percent between 2012 and 2015, from 10,340 to 1,954. The filings fell 69 percent for juveniles 10 to 17 years old, 78 percent for young adults 18 to 20 years old, and 86 percent for adults 21 or older. In terms of organized crime, between 2012 and 2015, there were 88 filings that were related to some marijuana charge. The most common marijuana industry-related crime in Denver was burglary, accounting for 63 percent of marijuana crime related to the industry in 2015.

Traffic safety data was limited, but the study noted that the number of summons issued by the Colorado State Patrol for Driving Under the Influence in which marijuana or marijuana-in-combination with other drugs was involved decreased 1 percent between 2014 and 2015 (674 to 665).

In terms of assessing diversion of marijuana to other states, from January 1, 2014, to August 30, 2015, the study found that there were 261 drug-related interdiction submission in which Colorado was the initiating state. Of those 261 submissions, 169 (65 percent) were for marijuana/hashish.

Public Health

According to the National Survey on Drug Use and Health, administered by the Substance Abuse and Mental Health Services Administration, the current prevalence rates for marijuana usage in the past 30 days have increased significantly for young adults (18 to 25 years old), from 21 percent in 2006 to 31 percent in 2014. Marijuana use by adults (26 years or older) also increased significantly, from 5 percent in 2006 to 12 percent in 2014. In comparison, the study cited a 2014 telephone survey in Colorado that found 14 percent of adults reported marijuana use in the past 30 days and 33 percent of current users reported using daily.

According to the study, hospitalizations with possible marijuana exposures, diagnoses, or billing codes per 100,000 hospitalizations increased from 803 per 100,000 before commercialization (2001-2009) to 2,413 per 100,000 after commercialization to 2,413 per 100,00 after commercialization (2014- June 2015).  The number of calls to poison control mentioning marijuana exposure increased from 44 calls in 2006 to 227 calls in 2015.

Youth Impact

The study noted that in 2013, a Healthy Kids Colorado Survey (HKCS) found that 80 percent of high school students did not use marijuana in the past 30 days. The HKCS showed, however, that marijuana use increased by grade level and that Colorado youth use marijuana at a higher rate then the national average. The perception of health risk of using marijuana is also declining among Colorado youth, according to the HKCS.

The number of juvenile marijuana arrests increased 5 percent, from 3,234 in 2012 to 3,400 in 2014, according to the study. The number of White juvenile arrests decreased from 2,198 in 2012 to 2,016 in 2014 (-8 percent). The number of Hispanic juvenile arrests increased from 778 in 2012 to 1,006 in 2014 (+29 percent). The number of African-Amercian juvenile arrests increased from 205 in 2012 to 324 in 2014 (+58 percent).

The study noted that data on drug tests from the Division of Probation Services showed that the percent of the 10- to 14-year-old group testing positive for tetrahydrocannabinol (THC — the chemical responsible for most of marijuana’s psychological effects) one or two times increased from 19 percent in 2012 to 23 percent in 2014, while the percentage testing positive three or more times went from 18 to 25 percent.

Colorado Department of Education data showed that the drug suspension rates increased from 391 (per 100,00 students) in the 2008-09 school year to 506 in 2009-10. In addition, the drug expulsion rate was 65 in 2008-09, increasing to 90 in 2009-10, and decreasing to 50 in 2014-15.

Revenue Data

The study also noted that in December 2015 there were 2,538 licensed marijuana businesses in Colorado, with 70 percent located in Denver, El Paso, Pueblo, and Boulder. The total tax revenue, licenses, and fees from these businesses increased from $76,152,468 in 2014 to $135,100,465 in 2015 (+77 percent). The excise tax revenue dedicated to school capital construction assistance totaled $35,060,590 in 2015.

Conclusions

The study found that because data was only available through 2014, it was too soon to draw any definite conclusions about the potential effects of marijuana legalization or commercialization on public safety, public health, or youth outcomes. In addition, the study noted that the lack of pre-commercialization data, the decreasing social stigma, and challenges to law enforcement combine to make it difficult to translate the early findings into definitive statements of outcomes.