The defendants allegedly tried to cash in on lawsuits filed around the country relating to the TVM implants and the alleged harm they caused women.
A physician and a surgical funding facilitator have been indicted for their alleged role in a nationwide scheme to cheat women plaintiffs in a class-action suit involving transvaginal mesh implants, the Department of Justice said.
Wesley Blake Barber, 49, of Detroit, Michigan, the owner of Surgical Assistance Inc. and Medical Funding Consultants LLC, and Christopher Walker, MD, 49, a licensed urogynecologist and the owner of MedSurg Holdings LLC, in Orlando, Florida, were arrested on Friday and charged in a six-count indictment filed in the Eastern District of New York.
The charges include one count of conspiracy to commit wire fraud, three counts of wire fraud, one count of conspiracy to violate the Travel Act and one count of violating the Travel Act, DOJ said.
The indictment alleges that Barber and Walker tried to cash in on lawsuits filed around the country relating to the TVM implants and the alleged harm they caused women.
Women in the lawsuits who had their TVMs surgically removed got larger settlements than women who did not. So, the two defendants allegedly lured the women into having surgical procedures to remove the TVMs, after allegedly lying to them about the risks of the TVM implants and the need to incur huge debts and travel long distances to undergo the surgeries.
Walker also allegedly paid kickbacks and bribes to Barber in exchange for the referral of these women for surgeries, DOJ said.
Observers say the support for the bill from senior leaders in both parties also means that its prospects are solid for clearing an otherwise dysfunctional Senate in some form.
The Senate Health Committee on Thursday unveiled a sweeping bipartisan proposal that aims to address surprise medical bills, improve transparency, and reduce the cost of prescription drugs and the overall cost of healthcare delivery.
"Republicans and Democrats in the United States Senate have announced this proposal of nearly three dozen specific bipartisan provisions that will reduce the cost of what Americans pay for healthcare," Committee Chairman Lamar Alexander (R-Tenn.) said in prepared remarks.
"These are common sense steps we can take, and every single one of them has the objective of reducing the healthcare costs that you pay for out of your own pocket," Alexander said, adding that his committee hopes to have the legislation on the Senate floor by July.
Sen. Patty Murray (D-Wash.), a co-sponsor of the Lower Health Care Costs Act of 2019, said the draft legislation addresses "important issues like surprise medical billing, drug prices, maternal mortality, and vaccine hesitancy," and that the rare bipartisan effort demonstrates that "we can make progress when both sides are at the table ready to put patients and families first."
The fact that an otherwise gridlocked, deeply partisan Senate could work together on sweeping legislation such as this demonstrates that both parties are hearing the frustrations from their constituents.
"There's one issue I hear a lot about from Tennesseans, and it is, 'What are you going to do about the health care costs I pay for out of my own pocket?'" Alexander said. "Well, we've got an answer."
Observers say the support for the bill from senior leaders in both parties also means that its prospects are solid for clearing Senate in some form.
"Folks should take this package seriously," Dean Rosen a former Republican senior health adviser and a partner at Mehlman Castagnetti Rosen & Thomas, told NPR.
"When you have a chairman and a ranking member that have worked together on a bipartisan package in the committee of jurisdiction, it always gives more weight to the product," he said.
Stakeholders Respond
Tom Nickels, executive vice president of the American Hospital Association, mostly praised the Act but raised concerns "about several of the proposals that would allow the government to intrude into private commercial contracts between providers and insurers."
"Specifically, banning so-called 'all or nothing' clauses could lead to even more narrow networks with fewer provider choices for patients, while adversely affecting access to care at rural and community hospitals," Nickels said in prepared remarks.
On surprise medical bills, Nickels said the AHA's "preferred solution is simple: patients should not be balance billed for emergency services, or for services obtained in any in-network facility."
"They should therefore have certainty regarding their cost-sharing obligations based on an in-network amount," he said. "We strongly oppose approaches that would impose arbitrary rates on providers, along with untested proposals such as bundling payments, which would be unworkable and would do nothing to solve the issue of surprise billing.
Matt Eyles, president and CEO of America's Health Insurance Plans, said the payer lobbylargely agrees with the proposals put forward in the Act and would work with the committee in the coming weeks.
While drafting the bill, Alexander said the committee solicited comments from the right-leaning American Enterprise Institute, the left-leaning Brookings Institution, Republican and Democratic governors and state insurance commissioners, doctors, hospitals, patients, and innovators. The legislation is expected to be marked up by the end of June.
The maker of ready-to-use IV bags and preloaded syringes has been repeatedly cited for safety concerns at its four manufacturing plants over the past dozen years.
A federal judge in Illinois has slapped a permanent injunction against PharMEDium Services LLCin the wake of the Lake Forest-based drug maker's repeated safety lapses at compounding pharmacies in four states.
"PharMEDium exposed patients across the United States to risk of receiving a harmful drug, which we find unacceptable," Acting Food and Drug Administration Commissioner Ned Sharpless, MD, said in a media release.
"We will continue to take appropriate enforcement actions when compounding pharmacies and outsourcing facilities produce drugs under substandard conditions or use inappropriate practices that could lead to serious harm to patients," Sharpless said.
Under a consent decree that came with Wednesday's injunction, PharMEDium cannot make or distribute its drugs from its Memphis, Tennessee plant until the FDA approves a corrective action.
PharMEDium President Scott Aladeen and Warren Horton, the company's vice president for Quality and Research and Development, were named in the permanent injunction as the people responsible for compliance with the consent decree.
PharMEDium had already shuttered its Cleveland, Mississippi plant in the wake of publicity surrounding the safety lapses.
Under the injunction, the company's Sugar Land, Texas, and Dayton, New Jersey plants must also hire independent compliance inspectors, FDA said.
PharMEDium is a major national supplier of ready-to-use IV bags and prefilled syringes. The safety concerns raised by the FDA and the ensuing plant closures greatly disruptedthe supply of critically needed drugs to the nation's hospitals.
In a complaint filed this week by the Department of Justice at the request of the FDA, federal officials accused PharMEDium of violating the Federal Food, Drug, and Cosmetic Act "by distributing adulterated, misbranded, and unapproved new drugs in interstate commerce."
The FDA said in its complaint that "PharMEDium's drugs were adulterated because they were prepared, packed, or held under insanitary conditions whereby they may have been contaminated with filth or rendered injurious to health and because PharMEDium failed to comply with current good manufacturing practices."
The allegedly adulterated drugs included oxytocin and morphine sulfate.
The FDA said that PharMEDium also "distributed unapproved new drugs and misbranded drugs because PharMEDium failed to comply with all of the requirements for drugs compounded in a registered outsourcing facility."
Since 2013, the FDA said it has inspected PharMEDium's compounding pharmacies and found numerous infraction that resulting in a 2018 warning letter. The company had been previously warned of similar concerns about unsanitary conditions in 2007, FDA said.
PharMEDium Responds
Gabe Weissman, a spokeman for PharMEDium, said in an emailed response to HealthLeaders that the injunction is the end result of discussions that the drugmaker held with federal regulators.
"Those discussions have concluded and the now filed Consent Decree, which permits commercial operations to continue at PharMEDium’s Dayton, New Jersey and Sugar Land, Texas compounding facilities and allows administrative operations to continue at the Lake Forest, Illinois headquarters, represents an important step forward in our journey to sustainable compliance," Weissman said. "We look forward to satisfying all aspects of the Consent Decree, including requirements pertaining to the Memphis facility."
"During a period of rapid regulatory changes for 503B Outsourcing Facilities, PharMEDium has spent the last several months implementing substantial improvements centered on demonstrating our commitment to patient safety and applicable current Good Manufacturing Practice (cGMP) requirements," Weissman said.
"PharMEDium is committed to the highest standards of safety and quality. We will always evaluate and invest in efforts to achieve full regulatory compliance and best meet the needs of our customers and patients they serve."
California-led defenders of the ACA say the plaintiffs are asking the court 'to do what Congress—after years of debate and deliberation—repeatedly refused to do: dismantle the entire Affordable Care Act.'
The Trump Administration and Texas-led states hoping to see the Affordable Care Act repealed judicially don't have the standing to gut the bill in its entirety, intervening Democratic attorneys general from 21 states said in a brieffiled Wednesday.
The California-led defenders of the ACA told the 5th U.S. Circuit Court of Appeals that the plaintiffs are asking "this Court to do what Congress—after years of debate and deliberation—repeatedly refused to do: dismantle the entire Affordable Care Act."
"It is no secret that the plaintiffs, and their new-found allies in the federal Executive Branch, oppose the ACA as a policy matter," the interveners wrote. "But they can articulate no plausible legal ground for the breathtakingly broad policy change that they ask this Court to uphold under the guise of constitutional adjudication."
Specifically, the intervening AGs argued that:
The Texas-led plaintiffs have no standing to challenge the individual mandate, because no plaintiffs were injured by the provision when Congress eliminated the tax penalty for failing to buy insurance.
Despite a U.S. District Court ruling invalidating the individual mandate (along with the rest of the ACA) the provision is constitutional and similar to other laws passed by Congress.
Even if the lower court's ruling on the unconstitutionality of the individual mandate is upheld, the provision could still be severed from the ACA because Congress sought to keep every other provision of the ACA when it cut the tax to zero.
The 5th Circuit announced that it will hold oral arguments the week of July 8.
U.S. District Judge Reed O'Connor last December declared the entire ACA invalid, as the plaintiff states had requested. The ruling was appealed to the Fifth Circuit by the California-led coalition.
Since O'Connor's ruling, Wisconsin and Maine left the plaintiff coalition after Democratic AGs took office in those states following the November general elections.
Initially, the Trump Administration's DOJ offered a partial defense of the ACA, arguing that most of the sprawling healthcare legislation should remain intact, even if the ACA's individual mandate were to be struck down in light of Congress zeroing out its tax penalty.
O'Connor's ruling invalidating the ACA went much further than what DOJ had urged. Earlier this year, however, DOJ reversed course and notified the appeals court that it agrees with the plaintiffs' argument and O'Connor's ruling, and would entirely abandon its partial defense of the ACA.
Defenders of the ACA say a repeal of the sweeping law could adversely affect 133 million people, including 17 million children, with pre-existing conditions. In addition, invalidating the law would challenge the coverage of more than 12 million people who became insured under the ACA's Medicaid expansion.
HealthLeaders reached out to all nine hospitals that received an 'F' from The Leapfrog Group and offered them an opportunity to respond to the failing grade. Three hospitals responded.
Of the more than 2,600 acute care hospitals scored in The Leapfrog Group's spring 2019 hospital safety grades, nine received an "F," placing them in the bottom 1% of hospitals scored.
Some hospitals that made the list conceded that they faced problems, but said they're working to correct issues identified by The Leapfrog Group survey. In some instances, the hospitals noted that they receive passing grades in performance audits from other sources, and that their lack of participation in The Leapfrog Group survey may have played a role in their failing grade.
In a statement sent to HealthLeaders, Leapfrog Group said its Hospital Safety Grade is calculated predominantly with data from the Centers for Medicare and Medicaid Services.
While hospitals do not receive an "F" if they did not participate in the survey, Leapfrog said participation in the survey "gives hospitals the opportunity to report additional information about their safety measures."
Patients admitted to a "D" or "F" hospital face nearly double the risk as those admitted to an "A" hospital, according to Leapfrog's metrics.
HealthLeaders reached out to all nine hospitals and offered them an opportunity to respond to the failing grade. Three hospitals responded, and their statements are listed below.
1. Hurley Medical Center
"As a premier public hospital, Hurley Medical Center remains committed and dedicated to patient safety as a continuous goal, and constantly evaluates and measures processes in place, along with best practices to continuously improve the safety of the comprehensive services we provide to patients," said Laura Jasso, administrator of marketing and community relations for Hurley Medical Centerin Flint, Michigan.
"Although we declined to participate in the Leapfrog survey, Hurley Medical Center participates and receives quality and safety reports from multiple reputable organizations on a continuous basis including Blue Cross Blue Shield, Michigan Health & Hospital Association, Centers for Medicare & Medicaid Services, The Joint Commission and the American College of Surgeons to name a few," Jasso added.
2. UPMC Chautaqua
"Quality and safety for our patients is the foundation of our mission at UPMC Chautauqua," said Brian Durniok, interim president at UPMC Chautauqua in Jamestown, New York. "We continuously strive to enhance our care by adopting best practices. For example, over the past year, UPMC Chautauqua has reduced falls by 18%, reduced seven day readmissions by 37%, and has had zero colon surgical site infections in the past 12 months."
"Our recent integration into UPMC has given us access to some of the best clinical systems and practices in the world and will only help us better care for our patients," Durniok added. "Historically, UPMC Chautauqua has not been an active participant in the Leapfrog survey, and, as such, Leapfrog has relied on secondary sources for data acquisition, which lowers our score. Given the importance of our quality efforts, we will be providing Leapfrog with our data in the future."
3. St. John's Episcopal Hospital
"Since we started reporting in 2016, our grade moved from an F to a D for Spring 2017, Fall 2017, and Spring 2018," said Renee Hastick-Motes, vice president of external affairs for St. John's Episcopal Hospitalin Far Rockaway, New York. "When the methodology changed and new criteria was added to the calculation, in addition to the algorithm pulling data from 2015, our grade shifted back. We look forward to a better grade in the fall. Our patients' safety is always our first priority, to ensure that, we have invested in various new systems and developed new processes."
On Leapfrog's Fall 2018 list, 17 hospitals that earned "F" grades. Two of the nine failing hospitals on this latest list, including St John's Episcopal, received an "F" last fall.
CMS approved waiver extensions, where states submitted changes to their applications that included disenrollment and other penalties, without first hearing public comment.
The approval process for Medicaid waiver amendments lacks transparency and allows states to propose significant changes to their Medicaid Section 1115 applications without detailing the potential effects on enrollees, a new federal review shows.
"CMS does not require amendment applications to include how the changes may affect beneficiary enrollment or report on concerns raised in state public comments," the Government Office of Accountability report released to the public on Friday stated.
"However, states have proposed major changes—such as work and community engagement requirements—through amendments, raising concerns that major changes to states' demonstrations are being approved without a complete understanding of their impact," GAO said.
Forty-three states operate part of their Medicaid program under a 1115 waiver, which amounted to $108 billion in federal spending in 2016, almost one-third of Medicaid's total expenditures. From January 2017 through May 2018, CMS approved applications for a new demonstration, extension, amendment, or a combination of these in 23 states, GAO said.
Demonstrations typically last about five-years but some states have operated parts of the Medicaid programs under demonstration status for decades, GAO said.
GAO examined in detail proposed changes to waiver applications from Kentucky and Indiana that had "substantial potential effects for some beneficiaries," including new eligibility and work requirements, and found inconsistencies in what CMS required from the two states.
"CMS did not require either state to solicit public input, though both states opted to hold a public comment period on the proposed changes concurrent with CMS's review," GAO said.
"Further, CMS reviewed Indiana's proposed changes against limited transparency requirements but did not do so for Kentucky. Indiana submitted a final version of its application summarizing public input and the state's response, while Kentucky did not."
The Affordable Care Act requires CMS to establish transparency guidelines for Section 1115 demonstrations and extensions, but the law did not address amendments, which are subject to transparency guidelines put down by the Department of Health and Human Services in 1994, GAO said.
To improve transparency, GAO recommended that CMS develop policies to ensure transparency when states propose major changes to pending demonstration applications, and when they propose amendments to existing demonstration projects.
The hospital made public a CMS on-site inspection that detailed unsanitary and dangerously inadequate disinfection efforts with patient rooms, and medical equipment.
Five months after a scathing report detailing substandard care and unsanitary conditions prompted the ouster of top executives at Baylor St. Luke's Medical Center, the new leadership at the beleaguered Houston hospital has provided an update on its corrective action plan.
"I promised to take all steps necessary to put the hospital back on the path to excellence and to earn the trust of our patients, their families and our community," St. Luke's President Doug Lawson said in an open letter posted Friday on the hospital's Website.
"In this short time, we have accomplished much – but clearly have much more to do," said Lawson, who took over in February.
"New hospital leadership began stepping into place in mid-January, and we immediately began to address a range of improvement areas across the hospital. We then participated in a full-scale review of every aspect of our operations by experts from the Centers for Medicare & Medicaid Services," Lawson said.
Lawson made public the findings of the 203-page CMS report, which details medication errors, bungled surgeries, unsanitary conditions in the hospital kitchens, dangerously inadequate disinfection of patients' rooms, and medical equipment that posed "immediate jeopardy" to patients that were observed by auditors inside the hospital in late March.
"The results point to remaining housekeeping, maintenance, and patient safety issues that in no way meet our standards, expectations or commitments to our community," Lawson said. "We are taking seriously every opportunity for improvement and we are addressing the findings with urgency. We are confident that the next review will reflect our commitments and accomplishments."
In his letter, Lawson said the alarming conditions detailed by CMS inspectors "did not occur overnight, nor were they the result of any single factor."
"CMS reviewers found deficiencies in the areas of hospital governance, infection control, and food services," Lawson said, adding that the hospital did not contest the CMS findings.
"We take the issues CMS identified seriously and we owe it our patients and their families to correct them immediately – and we have already started to do so through our internal quality program," he said.
The hospital this week filed acorrection plan with CMS and Lawson pledged to "continue to work with our leaders, physicians and CMS to achieve full regulatory compliance."
"We are committed to adhering to safe practices and operations – it is foundational to our organization," he said.
The plaintiff claims that an employee at the hospital gave the person who assaulted her personal information about her, and that the assailtant assaulted her again after she was discharged.
A sexual assault victim has filed a lawsuit against the hospital that treated her.
The Missouri plaintiff claims that an x-ray technician at Atchison Hospital in Atchison, Kansas passed along confidential information about her to the person who allegedly sexually assaulted her in May 2017, resulting in ongoing harassment and a second sexual assault six months after the woman was discharged, according to a complaint filed in U.S. District Court in Topeka, Kansas.
The suit further alleges that managers and medical staff at the hospital soon became aware of the confidentiality breach, but that "no meaningful corrective action was taken."
The alleged assailant was not identified in the suit, and no details were provided on the status of any criminal investigation against that person.
The suit is seeking undisclosed punitive and compensatory damages from the hospital for invasion of privacy, negligence, and breach of fiduciary duty.
According to the suit, the victim identified her attacker to hospital staff while they were administering a rape kit on May 26, 2017, and that the victim adamantly told staff that her Health Insurance Portability and Accountability Act-protected information could not be shared with anyone outside the immediate care team.
However, the information collected from the victim was stored on an unsecured electronic health record, where it later was allegedly improperly accessed by an x-ray technician, who allegedly passed the information on to the alleged perpetrator of the sexual assault.
The information included "facts relating to plaintiff's private life that were not at that time known in the community, contained in a public record, or otherwise available to the public," the complaint said.
"After obtaining plaintiff's confidential and private health information … plaintiff's assailant relentlessly harassed plaintiff through text messages, social media, and phone calls," the complaint said. "Such communications were highly threatening and contained graphic language and pornographic content. The assailant also stalked Plaintiff in public and at her home."
The x-ray technician also allegedly sent text messages to the plaintiff and worked "in coordination" with the assailant by "repeatedly hounding and harassing plaintiff by phone and text," the complaint said.
On Nov. 2, 2017, the x-ray technician was fired for disclosing the information, following a complaint by the plaintiff and an internal investigation by the hospital. However, the suit alleges that Atchison Hospital gave the technician "a positive reference," which allowed her to get a new job at a nearby hospital.
In a letter to the plaintiff, attached to the complaint, Atchison Hospital CEO John Jacobson, apologized, said the hospital had launched an internal investigation as soon as it learned of the breach, and fired the technician shortly thereafter.
"Once we learned of this incident and your concerns, the hospital took immediate action," Jacobson said in the Nov. 2, 2017 letter, adding that the hospital had taken steps to ensure such breaches would not occur again.
On Nov. 4, 2017, the plaintiff said she was sexually assaulted a second time by the same assailant, the complaint said.
Atchison Hospital Responds
In an email to HealthLeaders, Atchison Hospital Marketing Director T.C. Roberts offered the following statement.
"Patient confidentiality at Atchison Hospital and our ability to protect personal information is a top priority of ours. While we are limited with what we can share related to this situation, we are deeply disturbed by the actions of this former employee. In fact, when we were made aware of this situation, we took immediate steps to investigate and within two days, we terminated this individual’s employment.
In addition, we reviewed this specific situation to understand what could be done differently in the future and as a result, immediately implemented changes to our internal controls, including even stricter accessibility requirements to our Health Information Management (HMI) department. We are committed to doing everything possible to provide a safe and caring environment for our patients, and paramount to that is confidentiality and privacy around personal medical information."
Feds spell out how 'spread pricing' is calculated in medical loss ratios.
The Centers for Medicare & Medicaid Services on Wednesday issued new guidelines for medical loss ratios for Medicaid and CHIP managed care plans.
Under existing regulations, MLR regulations for those managed care plans mandate that they exclude prescription drug rebates from the actual claims costs used to calculate an MLR. Federal law requires plans to report MLRs of 85%, with only 15% of the money used for overhead and profits.
The new guidance spells out that "prescription drug rebates" means "any price concession or discount received by the managed care plan or by its PBM, regardless of who pays for it," CMS said. Money kept by PBMs under spread pricing is excluded from the claims costs used to calculate a managed care plan's MLR.
CMS Administrator Seema Verma said the new guidance comes as states raise concerns that Medicaid managed care plans aren’t accurately reporting their pharmacy benefits spread when they calculate MLRs.
"The market for prescription drugs is convoluted and opaque," Verma said in a media release.
"States are increasingly reporting instances of spread pricing in Medicaid, including cases in Ohio and Texas, and I am concerned that spread pricing is inflating prescription drug costs that are borne by beneficiaries and by taxpayers," she said.
The new guidance comes as PBMs find themselves in the crosshairs of the White House. President Donald Trump last year pledged to attack soaring drug costs as part of a broader effort to curb U.S. healthcare spending.
Under spread pricing, PBMs keep some of the money paid to them by health plans for prescription drugs instead of passing the full payments on to pharmacies. That creates a spread between the money the health plans pay the PBMs, and the money the PBMs pay pharmacies for beneficiaries' prescriptions.
Middlemen PBMs can charge plans more than what they paid the pharmacy, which the Trump Administration says raises Medicaid costs for taxpayers.
States have also complained that PBMs can pay pharmacies for generic prescriptions based on lower benchmarks than the benchmarks used for charging Medicaid and CHIP managed care plans for the same drugs.
Verma said the guidance issued Wednesday will ensure that health plans monitor spread pricing appropriately.
"PBMs cannot use spread pricing to upcharge health plans and increase costs for states – spread pricing must be monitored and accounted for, and not used to inflate profits," she said.
CMS said the guidance does not conflict with a recent proposed rule from the Department of Health and Human Services' Office of the Inspector General dealing with safe harbor provisions for prescription drug rebates.
That's because the guidance issued Wednesday would apply only to "items of additional value that must be deducted from the amount of claims cost used for calculating an MLR," CMS said.
Xellia becomes Civica's first supplier partner and will produce antibiotics in short supply in U.S. hospitals.
Civica Rx and Xellia Pharmaceuticals have signed a supply agreement under which Xellia will make antibiotics for Civica's member health systems, the two companies announced Wednesday.
The supply agreement, which includes the antibiotics Vancomycin and Daptomycin, marks the first time that non-profit Civica has launched the production of generic drugs – and the initial medications to be supplied – since the company was established in mid-2018 to address chronic drug shortages.
Civica has committed to partnering with suppliers to deliver 14 essential generic medications this year.
To meet the demand, Xellia, headquartered in Copenhagen, Denmark, will expand its manufacturing and sales within the United States. Xellia produces its own pharmaceutical ingredients, and finished injectable drugs for bacterial and fungal infections.
"We thank Xellia for helping to lead the way in efforts to reduce chronic generic drug shortages in the U.S., including treatments for serious infections caused by bacteria that are resistant to other antibiotics," Martin VanTrieste, president and CEO of Lehi, Utah-based Civica, said in amedia release.
"By helping to stabilize the supply of Vancomycin and Daptomycin, we will have a direct impact on patient safety and public health by providing consistent access to antibiotics that are important treatment options in the management of difficult-to-treat and life-threatening infections," VanTrieste said.
Xellia will make drugs for Civica under Xellia's Abbreviated New Drug Application and Civica labeling and New Drug Code.
"We are honored to work with Civica, an innovator in addressing generic drug shortages," said Carl-Aake Carlsson, CEO Xellia Pharmaceuticals. “Our collaboration also supports Xellia's long-term ambition of mitigating anti-infective drug shortages across the U.S."
