The Fairfield-based nonprofit is trying to determine if the secured access to the personal records of any of its more than 850,000 members in 14 counties has been compromised.
Medi-Cal managed services provider Partnership HealthPlan of California announced on its website that it had been hacked.
Now, the Fairfield-based nonprofit is trying to determine if the secured access to the personal records of any of its more than 850,000 members in 14 counties has been compromised.
Local media are reporting that a ransomware group known as Hive is claiming to have stolen private data, and PHC published a statement on its website acknowledging that it has "recently became aware of anomalous activity on certain computer systems within its network."
The (Santa Rosa) Press Democrat published a screenshot purportedly from Hive claiming that the "stolen data includes...850,000 unique records of name, SSN, date of birth, address, contact, etc." along with 400 gigabytes of data stolen from PHC's file server.
"We are working diligently with third-party forensic specialists to investigate this disruption, safely restore full functionality to affected systems, and determine whether any information may have been potentially accessible as a result of the situation," the statement said.
"Should our investigation determine that any information was potentially accessible, we will notify affected parties according to regulatory guidelines."
Because of the hack, PHC said it can't receive or process Treatment Authorization Requests. As a result, the company said that procedures scheduled within the next two weeks for inpatient admission or for urgent services can proceed as scheduled and the TARs can be submitted retroactively.
The FBI last August issued a Flash Report on Hive ransomware, which surfaced in June 2021 and "likely operates as an affiliate-based ransomware, employs a wide variety of tactics, techniques, and procedures (TTPs), creating significant challenges for defense and mitigation."
"After compromising a victim network, Hive ransomware actors exfiltrate data and encrypt files on the network. The actors leave a ransom note in each affected directory within a victim’s system, which provides instructions on how to purchase the decryption software. The ransom note also threatens to leak exfiltrated victim data on the Tor site, "HiveLeaks."
9th Circuit Court rules that plaintiffs failed to make their case on UBH's "inconsistent" medical necessity determinations.
A federal appeals court has dealt a blow to mental healthcare advocates.
The 9th U.S. Circuit Court has overturned a district court ruling that plaintiffs failed to demonstrate that United Behavioral Health made medical necessity determinations for mental health and substance abuse that were inconsistent with generally accepted standards of care.
The plaintiffs in Wit v. United Behavioral Health, led by Legal Action Committee, said they were "disappointed with the ruling, as it will allow insurers to determine whether substance use disorder and mental health treatment services are medically necessary using their own proprietary guidelines - even when they deviate from generally accepted standards of care - and deny services based on the insurer and health plan's financial interests."
LAC said that before the 2019 Wit decision, UBH used guidelines that differed from standards set by the American Society of Addition Medicine, LOCUS, and CALOCUS criteria and denied services to treat often life-threatening emergencies.
"As a result of the Ninth Circuit’s decision, thousands of individuals who were supposed to have their addiction and mental health care claims reprocessed under generally accepted standards of care will now be left without any remedy," LAC attorney Sika Yeboah-Sampong said.
"This ruling is particularly devastating as we see escalating rates of suicide and record-breaking overdose deaths nationwide.” As our country continues to face these crises that are leaving so many without access to life-saving care, we urge the full Ninth Circuit to review this flawed decision."
The complaint alleges that USHW possessed unclaimed property as early as 2001 but did not file mandated reports with the state until 2018.
California Attorney General Rob Bonta has filed a complaint against U.S. HealthWorks Inc., claiming that the Los Angeles-based national chain of occupational and urgent care clinics knowingly withheld from the state millions of dollars in unclaimed overpayments.
The complaint, filed this month in Los Angeles County Superior Court, alleges that USHW's actions and its failure to timely refund the overpayments is a violation of the state's Unclaimed Property Law and the California False Claims Act.
“Let’s get one thing straight: corporate evasion is corporate fraud,” Bonta said. “Companies don’t get to pick and choose when to follow the law because it serves their benefit. When companies cheat the State of California, they cheat the people of California.”
USHW ran 78 occupational and urgent care clinics in California. In 2018, USHW was bought by Select Medical, and the clinics were renamed Concentra.
Officials at Select Medical declined to comment on the merits of the complaint, citing a company policy against commenting on ongoing litigation. However, the company said it is prepared to vigorously defend itself in court.
The complaint alleges that USHW possessed unclaimed property as early as 2001 but did not file mandated reports with the state until 2018 after being notified of the Attorney General’s investigation.
Under the Unclaimed Property Law, intangible property that remains unclaimed by the true owner for more than three years after it became payable or distributable, must be reported and then remitted to the state.
The UPL also mandates 12% interest per year on property that should have been reported or remitted to the state. Even when USHW filed reports with California, the company underreported the unclaimed property it held in 2018, 2019, 2020, and 2021, the complaint alleges.
Bonta said USHW violated the CFCA when it failed to report its unclaimed property holdings, and thus knowingly concealing millions of dollars due to the state. Although USHW’s unreported property claims were repeatedly brought to management’s attention, management declined to comply and report the property so as to avoid an audit by state authorities, the complaint alleges.
The investment will fund technology that allows CalOptima to provide same-day authorizations and timely claims payments.
CalOptima has launched a $100 million, five-year "strategic vision" to assess the social needs of its nearly 880,000 Medi-Cal members in Orange County, provide them with same-day care authorizations and pay claims to providers in "real time."
"The changes articulated in the new vision will help reduce delays and barriers to care for our members, as well as attract more providers to work with CalOptima," said Andrew Do, board chair for Orange-based CalOptima. "Understanding the life changes in our members will also allow CalOptima to help our members address insecurities in their daily needs that may impact their physical and mental health."
An recent American Medical Association survey of more than 1,000 doctors found that 93% of physicians reported delayed access to care for patients whose treatment required prior authorization. The survey also noted that physicians and their staff average almost two business days each week completing prior authorizations.
The $100 million earmarked for the initiative will fund technology that allows CalOptima to provide same-day authorizations and timely claims payments will also facilitate data sharing with providers and stakeholders through a health information exchange.
When the system launches, CalOptima will be the first Medi-Cal plan to use real-time claims processing. CalOptima's "cloud-first" strategy will also include cyber-security controls to maintain HIPAA compliance and measures to prevent cyber-attacks, the payer said.
To address care needs for the county's homeless population, CalOptima in December 2021 joined the Orange County Interagency Council on Homeless Health Care and will launch a joint Street Medicine Program to support homeless Medi-Cal members.
Street Medicine will provide health and social services "designed to meet individuals where they are" and will work with CalOptima's Clinical Field Teams, outreach workers and mobile teams, linking homeless people to a medical home to reduce emergency department use and manage chronic conditions.
Founder and CEO Sigal Atzmon vows that "Medix will reinvent the way American people access and consume healthcare."
London, England-based telehealth and health services management provider Medix this month opened its U.S. headquarters in New York as part of an ambitious campaign to create a virtual footprint across the nation.
In a press release announcing the provider's U.S. launch, Medix Group CEO and founder Sigal Atzmon said that "Medix will reinvent the way American people access and consume healthcare."
"By using AI and data that enable us to better understand our customers, we help people navigate the healthcare system in a very different, simplified and personalized way and provide a reliable, one-stop shop for their medical needs. We are here to bring the future of healthcare to Americans, today," she said.
In an email exchange with HealthLeaders, Atzmon talked about Medix's aggressive plans for expansion in the U.S.
HealthLeaders: Your company boasts that it is disruptive. How is it disruptive, what is it disrupting, and why is the disruption needed?
Atzmon: We fundamentally change the way healthcare is delivered and consumed. There are solutions in the market for specific diseases, broader wellness support tools and enablers of access to medical networks and professionals. Medix addresses a market need.
We provide a one-stop solution of accessible and quality care with personalized navigation, combining digital health and AI with human interaction. We can do this across an individual's life, including prevention, medical case management, rehabilitation and mental health. We put healthcare back in the hands of the consumer, all supported by a range of digital, AI and personal care support. We believe that consumers should be able to access care 24/7, regardless of location or demographic. There should be no barriers to accessing affordable, quality healthcare – that’s where we come in.
HealthLeaders: Why is the US market attractive for you?
Atzmon: We have had a footprint in the U.S. for some time now. However, with the U.S. healthcare system being more fragmented than ever amid an enhanced, post-pandemic demand, we know the time is perfect right now for us to make this substantial entry into the U.S. market.
With 300 million people covered by health insurance, along with a substantial number who are without insurance, we know our solutions will help people. There is a growing demand for virtual and smart personalized care and COVID has shown the increased importance and relevance of digital care. We are here to help as many people as we can with our one stop solution.
HealthLeaders: What do you believe your company can do in the US that existing companies in this space cannot or are not doing now?
Atzmon: We see some great offerings in the U.S. market and the potential for new ones to be developed, but they are niche and siloed. Healthcare and the needs of consumers are holistic and universal, and our solution has already proven to millions of customers that we provide a great user experience and ensure that individuals are getting the best care. Over the years, we have consistently provided better medical outcomes with a great customer experience by empowering our customers and their doctors.
We believe our one-stop solution, with a focus on care over cost, is a unique differentiator - placing consumers at the heart of all that we do and ensuring they receive the very best care and support. Our relentless passion to make a difference in people’s lives, our global footprint and over 15 years in business will ensure we are well-positioned to navigate the barriers and challenges that many startups would typically experience. We are proud to combine our local and global experience, with our deep understanding of the U.S. healthcare landscape as we launch our new North American headquarters.
HealthLeaders: Do you anticipate any partnerships with US companies?
Atzmon: Yes, absolutely. We see the opportunity to partner with companies in the U.S. There are a number of verticals that we are already targeting and are in discussions with various potential strategic partners where we believe there will be mutual benefit to help improve access to great healthcare for consumers.
HealthLeaders: What is your long-term goal for Medix over the next 5-10 years? How many states will you be in?
Atzmon: We are working very hard to become the world's leading and preferred healthcare partner by improving accessibility and affordability of quality of care. Our goal is to put the tools and solutions we have into the hands of every American and to be in a position where we can demonstrate that healthcare outcomes have improved, consumers are happier and that great quality healthcare has no barriers. Worldwide, we are on a mission to democratize healthcare, reduce unwarranted healthcare variations and inequality of care.
We will be in every state and have already established our New York headquarters. We are also already looking to expand into Latin America later this year and will be establishing additional locations as we expand further.
California Insurance Commissioner Ricardo Lara has sent a Notice to insurance companies doing business in California, urging the payers to voluntarily divest from investments in Russia that could support Vladmir Putin's war efforts in Ukraine.
"California stands with the world community in rejecting Russia’s invasion of Ukraine and its assault on freedom and equality," Lara said. "Insurance companies must send a loud and clear message of solidarity with the people of Ukraine and the global community by withdrawing any financial support for the Russian regime."
The request is voluntary, for now.
Lara said he will use all remedies available under California insurance law to push the industry to demonstrate that they will hold Russia accountable.
"If insurance companies do not voluntarily act now to dispose of direct investments in Russia, I will explore all options to compel them to follow through,” he said.
Lara noted that California can wield significant clout as the nation’s largest insurance market and the fourth largest insurance market in the world. Investments by insurance companies are a major source of global capital, with California investing a substantial portion of approximately $370 billion in premium collected annually from consumers.
"We must not tolerate California consumers’ insurance premiums funding an authoritarian regime that invades a sovereign government, terrorizes its population, and is an enemy of free expression, speech, assembly, press, and equality for LGBTQ+ people, women, and ethnic and religious minorities," Lara said.
AM Best Information Services recently reported, U.S.-based insurers’ direct investments exposed to Ukraine and Russia include nearly $2 billion in bonds, and indirect investments in businesses that derive a share of earnings from Russia may be more substantial.
New research finds that 1-in-3 mental health consultations are done via telehealth.
The use of telehealth for outpatient services has ebbed and flowed with the COVID-19 epidemic, with the notable exception of mental health services.
That's according to a new study conducted by the Kaiser Family Foundation and Kaiser Health News and released Tuesday which found that mental health and substance abuse telehealth services accounted for 36% of all mental health visits nationwide between March and August 2021.
Before the pandemic, telehealth represented less than 1% of mental health and substance abuse outpatient care before the pandemic. During the pandemic's peak between March and August 2020, however, telehealth accounted for 40% of mental health and substance use outpatient visits and 11% of other visits.
"Since then, in-person care has returned and telehealth visits have dropped off to represent 5% of other outpatient care visits, those without a mental health or substance use claim in the March-August 2021 period," the study said. "However, telehealth use has remained strong for mental health and substance use treatment, still representing 36% of these outpatient visits."
At the pandemic's peak between March and April 2021, telehealth represented 13% of all outpatient visits. One year later, however, as in-person care resumed, telehealth use shrank to 8% between March and August 2021.
"While many continue to envision an expanded role for telehealth in the delivery of care following the pandemic, there remains considerable uncertainty in what services will be available, where and how providers will be able to practice, how benefits will be structured, and how providers will be paid," the researchers said.
Among the other findings in the study:
Telehealth use for mental health or substance use continues to grow as a share of all telehealth visits
Mental health and substance use visits are a growing share of both telehealth visits and outpatient visits overall, but the trend is much more pronounced for telehealth.
Between March-August 2021, 39% of telehealth outpatient visits were primarily for a mental health or substance use diagnosis compared to 24% a year earlier, and 11% two years earlier.
Among all outpatient visits (in-person and over telehealth), the share with a mental or substance use diagnosis grew from 4% in March-August 2019 to 8% during the pandemic, and has remained at 8% in March-August 2021.
The study authors said the usage reflects the tremendous increase in need for mental health services as a result of the pandemic, social distancing and economic turmoil.
Rural people are more likely to use telehealth for mental and substance use visits
More than half (55%) of rural patients relied on telehealth to receive outpatient mental health and substance use services between March and April 2021, compared to 35% in urban areas, a pattern that is sharply contrasted with other outpatient services, where there was a similar rate across urban and rural areas (5% v. 6%)
Non-elderly adults regularly use telehealth to access mental health and substance use services
Between March-August 2020, outpatient telehealth for mental health and substance use were delivered at a similar rate among children and the elderly, and a slightly lower rate among non-elderly adults. In the most recent period, 58% of all mental health or substance use outpatient visits, and 62% of these visits performed via telehealth, were among people aged 19-64.
Telehealth use is significant across major mental health and substance use disorder conditions
Nearly one-third (29%) of outpatient visits for major mental and substance use conditions were delivered over telehealth during this period, including for substance use disorders such as opioid-related disorders (29%) and alcohol-related disorders (29%).
For mental health needs, more than one-in-three outpatient visits were delivered by telehealth (for example, 35% and 38% of outpatient visits were over telehealth for depression or anxiety, respectively).
The public plan acknowledged problems with its grievance resolution process, but called the fine excessive.
L.A. Care Health Plan, the nation's largest publicly operated health plan, has been fined $55 million by two state agencies for its "deep-rooted, systemic failure" to act on enrollee grievances.
“The magnitude of L.A. Care’s violations, which has resulted in harm to its members, requires immediate action,” Department of Managed Health Care Director Mary Watanabe and Department of Health Care Services Director Michelle Baass said in a joint statement.
“Our investigations found several operational failures at L.A. Care, which have significantly impacted the health and safety of some of the state’s most vulnerable health care consumers. This action is necessary to protect the plan’s members, and to get L.A. Care to make serious changes to repair the plan’s operations.”
In a statement released to HealthLeaders, L.A. Care said it brought the issue to state regulators and agreed that corrective action was needed – and has been taken -- to fix the plan's grievance process.
However, the payer said, "we disagree about the amount of the proposed fine as being disproportionate to the value L.A. Care brings to our members and our network of safety net and community providers."
"While L.A. Care anticipated and was prepared to pay a substantial financial penalty, we are surprised and disappointed with the unprecedented size of the state’s proposed financial penalty of $55 million," the statement read. "The proposed penalties seem arbitrary and unnecessarily punitive. L.A. Care will contest the financial penalties through the available processes."
California health plans must acknowledge receipt of non-urgent grievances within five days, resolve the grievance within 30 days, and send a written resolution to the member.
L.A. Plan, with more than 2.5 million members in Los Angeles County, was fined $35 million by DMHC and $20 million by DHCS after regulators identified thousands of violations of the plan's handling of enrollee grievances, the processing of requests for authorization, and inadequate oversight and supervision of its contracted entities regarding timely access.
L.A. Care had self-disclosed to DMHC in 2021 that it had identified more than 67,000 instances where the plan failed to timely respond for several of its business lines, including Medi-Cal. L.A. Plan self-reported 41,500 violations to from January 2019 through October 2021.
L.A. Care also self-disclosed that it had a backlog of 9,125 authorization requests to the DMHC and 8,517 to the DHCS for a three-month period in 2021. State regulators also identified 92,854 instances in which prior authorization requests were not processed timely from January 1, 2019 through October 13, 2021.
L.A. Care said that -- based on a review of penalties assessed of other healthcare organizations – "these proposed penalties are several times higher than what would be in alignment with previous state sanctions."
"What the state does not seem to factor into their equation is that a financial penalty of this magnitude creates yet another financial hurdle for a public health plan that is a crucial part of the health care safety net in Los Angeles County. L.A. Care is already striving to meet the needs of low-income county," the plan said.
Baass acknowledged L.A. Care's cooperation in the audit, but added that "the scope and breadth of its violations indicate deep-rooted, systemic failures that threaten the health and safety of its members. Our actions today send a strong message that California will hold L.A. Care accountable for providing quality care to its members.”
Jumpstart Nova founder Marcus Whitney speaks with HealthLeaders about the fund, why it's needed, and the metrics they'll use to measure success.
By some estimates, there are nearly 785,000 companies in the nation's healthcare sector, but only 35,000 – less than 5% – are Black-owned.
Jumpstart Nova, a newly launched, Nashville-based venture capital start-up, hopes to change that.
Touting itself as "the first venture fund in America to invest exclusively in Black founded and led companies at the forefront of healthcare innovation," Jumpstart Nova is backed by $55 million in assets, well oversubscribing its initial $30 million goal.
The need is there, Jumpstart says on its homepage, because "decades of chronic underinvestment in great Black healthcare founders (has) created an opportunity for a fund to focus on and invest in them, exclusively."
Jumpstart Nova founder and managing partner Marcus Whitney speaks with HealthLeaders about the fund, why it's needed, and the metrics they'll use to measure success. This interview was edited for brevity and clarity.
HealthLeaders: Are you targeting a particular area of healthcare for investment?
Marcus Whitney: It's broad. I would have said before we pulled the whole fund together that we wouldn't do anything in life sciences. But we did come out of the gate with a cell and gene therapy commercialization company.
We've got a specific list of the types of companies that we're looking for and we put those on our website and in the criteria section.
HL: You stress that you are Black-founded and led. Why is this important?
Whitney: It's two big things. The first is healthcare is almost like a utility. It's one of the few universally used services in America. When you look at the percentage of the population that Black people make up in America, and then you look at leadership in the healthcare industry, there's a pretty big delta between those two percentages.
Then, I would say that innovation has now finally arrived in healthcare and everyone recognizes that, to improve that cost-quality ratio as well as to address significant health equity issues, we're have to innovate and we're not able to do that with our existing systems.
Venture capital is an important component of healthcare innovation. So, for those two reasons, we need more Black-owned and led healthcare companies because there is no avenue where diversity, equity, and inclusion are most important than healthcare. It has the most to do with the change that we're looking to make in the healthcare system to make it more equitable for all, but also we want to bring as many diverse minds into the healthcare innovation ecosystem to solve problems for everyone.
Limiting where we're getting our ideas from or who's building those companies to certain demographics is not good for any of us. We're taking on the challenge of focusing on this one demographic, but you've got to find venture funds that are focusing on others and more broadly looking at underrepresented groups to level the playing field for the benefit of everybody.
HL: Do you think that your fund would be particularly receptive to entrepreneurs who address social determinants of health?
Whitney: What we are most in a good position to do is to get to know the ecosystem of Black founders in the healthcare space and support them broadly in any way that we can, but also find the ones that are qualified -- specifically because of our knowledge, our background, our network, our existing strategic, and limited partners -- to help those companies be successful.
We anticipate that some of these companies, because they're Black-founded, are going to have personal stories that drove them to create the businesses. Some of those personal stories will absolutely have to do with health inequities, and so they'll be driven and passionate about solving those problems. We want to back to those founders, but we also think they're going to be founders who are going to create solutions that are going to be great for problems that all people are struggling with today. For us, it's about understanding and being able to best support this group of founders that have been chronically underinvested in.
HL: Provide an example of one of Jumpstart's entrepreneurs who might otherwise be left behind.
Whitney: The founder's name is Derrelle Porter. He is an MD/MBA from Penn who worked at McKinsey and spent two decades working in pharma in senior leadership positions and strategy and commercialization at AbbVie, Amgen, and Gilead.
He has launched a company called Cellevolve Bio, a cell and gene therapy commercialization company. This company is incredible, a new type of biotech at scale to bring cell and gene therapies to market, something that nobody's figured out how to do. When you look at his background, how uniquely qualified he is for this, his understanding of the space, he's incredible. Getting funding at the seed stage is very difficult but we were able to be the lead investor, take a board seat, and push his seed round across the line to get it closed.
Some of it is meeting these founders at these critical inflection points where they need someone who will step up and lead and say "I'm backing this person. I'm going to put capital in. I'm going to take a board seat. They're going to be great." Then, others will follow along.
HL: Ultimately this is about private equity and making money. How will you measure success in five years?
Whitney: We see the social component as built in but not something that we are going to quantitatively measure. We will qualitatively measure that. Our quantitative measurements are the success of the fund and the success of the companies and the success of the founders that we invest in.
We were clear about that on the onset. It's very easy with this type of a company and investment thesis to move to an "impact investing mindset," but that's not our mindset. We're a healthcare venture capital fund. We have a very specific look through to what the makeup of the funding team needs to be and we believe that, just because of the chronic underinvestment of the teams that have this particular makeup, it's ripe with fantastic opportunities for investment.
The byproduct of that is that we're going to get different types of companies leading in different ways, solving different problems. In the end, there will be some great social benefits from that.
HL: Does making this about the bottom line simplify your message?
Whitney: We don't we don't want to say this is just about giving people a chance. We're trying to grow an institution that we think can be incredibly successful. So, we have one single goal ultimately, which is find the best Black-founded and led healthcare companies in the market, successfully invested in those companies, and support the for great outcomes, period. We think there will be tremendous byproducts as a result of us being successful in that one clear goal.
The payout is 40% higher than the $4.55 billion deal that was vacated by a federal court in December, and does not protect the Sackler family from criminal charges.
OxyContin maker Purdue Pharma and the Sackler family will surrender $6 billion for their central role in fueling the deadly and ongoing opioid epidemic that has claimed the lives of 840,000 Americans since 1999.
The civil settlement was announced Thursday by attorneys general from nine states that had challenged a 2021 settlement of $4.55 billion, and which was vacated by a federal judge in December. The new settlement still must be approved by a federal bankruptcy court and the U.S. Court of Appeals for the Second Circuit.
Among the many stipulations in the deal, the Sackler family must apologize for their role in creating the opioid epidemic, which until now they have steadfastly refused to do.
In exchange for the money and the other stipulations of the settlement, the Sacklers will be given immunity from further civil litigation. However, the deal does not shield them from potential criminal prosecution.
California, Connecticut, Delaware, Maryland, Oregon, Rhode Island, Vermont, Washington, and the District of Columbia objected to and ultimately appealed the plan. The U.S. Department of Justice also appealed.
Connecticut Attorney General William Tong, who led the effort to overturn the earlier settlement, called the new deal "both significant and insufficient—constrained by the inadequacies of our federal bankruptcy code."
"But Connecticut cannot stall this process indefinitely as victims and our sister states await a resolution. This settlement resolves our claims against Purdue and the Sacklers, but we are not done fighting for justice against the addiction industry and against our broken bankruptcy code," Tong said.
Purdue 'Pleased With the Settlement'
Purdue Pharma issued a statement saying it was "pleased with the settlement achieved in mediation, under which all of the additional settlement funds will be used for opioid abatement programs, overdose rescue medicines, and victims. With this mediation result, we continue on track to proceed through the appeals process on an expedited schedule, and we hope to swiftly deliver these resources."
Thursday's announcement marks the second multibillion dollar opioid settlement in recent weeks. In late February, drugmaker Johnson & Johnson and drug wholesalers AmerisourceBergen, Cardinal Health and McKesson agreed to pay a combined $26 billion to resolve their role in the epidemic.
However, the settlements are dwarfed by the cost of opioid epidemic. The Centers for Disease Control and Preventionhas estimated that the "economic burden" of opioid epidemic is $78.5 billion a year, which includes the costs of healthcare, lost productivity, addiction treatment, and criminal prosecutions.
The settlement keeps intact provisions of the Purdue bankruptcy plan forcing the company to be dissolved or sold by 2024 and banning the Sacklers from the opioid business globally.
Under the new settlement:
The Sackler family must pay up to $6 billion to the bankruptcy estate – $1.7 billion above the initial bankruptcy plan. The payments will be spread over 18 years, with larger payments frontloaded so states receive more money, sooner as compared to the previous bankruptcy plan.
The Sackler family must allow institutions to remove the family name from buildings, scholarships, and fellowships.
Responding to state requests, mediator Judge Shelley C. Chapman urged the Bankruptcy Court to require members of the Sackler family to participate in a public hearing where victims and their survivors would be given an opportunity to directly address the family.
Purdue must make public additional documents previously withheld as privileged legal advice, including legal advice regarding advocacy before Congress, the promotion, sale, and distribution of Purdue opioids, structure of the Purdue Compliance Department and its monitoring and abuse deterrence systems, and documents regarding recommendations from McKinsey & Company, Razorfish, and Publicis related to the sale and marketing of opioids.
States reserve the right to object to nonconsensual third-party releases, including advising the court that agreement to the settlement does not indicate belief that those releases that remain in the Purdue bankruptcy plan are legal. The settlement also preserves the right of the states to file amicus briefs arguing against nonconsensual third-party releases if the case makes it to the U.S. Supreme Court.
In a separate settlement in October, 2020, Purdue Pharma agreed to pay $8 billion and dissolve as a company in a deal to settle civil and criminal charges. Purdue pled guilty 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, for violations that occurred between 2007 and "at least March, 2017," DOJ said.
Under the earlier bankruptcy plan, Stamford, Connecticut-based Purdue Pharma was renamed "Knoa Pharma LLC," will dedicate resources to addiction treatment and relief, and will be overseen by a public board of trustees.
A copy of the mediator's report is available here. A copy of the motion for approval which includes the settlement term sheet is available here.
