The lawsuit alleges that Omnicare billed Medicare and other government-sponsored health plans for hundreds of thousands of invalid prescriptions.
The federal government on Tuesday joined a whistleblower civil lawsuit alleging that Omnicare, Inc. and parent CVS Health Corp. fraudulently billed invalid prescriptions to federal healthcare programs for hundreds of thousands of drugs dispensed to elderly and disabled customers.
"Omnicare put at risk the health of tens of thousands of elderly and disabled individuals living in assisted living and other residential long-term care facilities by dispensing drugs for months, and sometimes years, without obtaining current, valid prescriptions from doctors," Manhattan U.S. Attorney Geoffrey S. Berman said in a media release.
"A pharmacy’s fundamental obligation is to ensure that drugs are dispensed only under the supervision of treating doctors who monitor patients’ drug therapies," Berman said. "Omnicare blatantly ignored this obligation in favor of pushing drugs out the door as quickly as possible to make more money."
CVS issued a statement saying: "We do not believe there is merit to these claims and we intend to vigorously defend the matter in court. We are confident that Omnicare’s dispensing practices will be found to be consistent with state requirements and industry-accepted practices."
The lawsuit, which intervenes in two private False Claims Act whistleblower suits, alleges that, from 2010 through 2018, Omnicare, the nation's largest provider of pharmacy services to long-term care facilities, failed to get new prescriptions from patients' doctors after the old ones had expired or run out of refills.
Instead, Omnicare allegedly assigned a new number to the old prescription and kept on dispensing drugs for months, and sometimes years, after the prescriptions had expired. The company billed Medicare, Medicaid, and TRICARE for these "rollover" prescriptions, DOJ said.
CVS acquired Omnicare in 2015, and DOJ said the retail pharmacy giant "thereafter assumed an active role in overseeing OMNICARE's operations" that allowed the allegedly fraudulent practices to continue.
"Omnicare repeatedly disregarded prescription refill limitations and expiration dates that would have triggered doctor visits to evaluate whether the drug should be renewed, choosing instead to push drugs out the door as fast as possible based on stale, invalid prescriptions," DOJ said.
"Omnicare managers exerted pressure on overwhelmed pharmacy staff to fill prescriptions quickly so that Omnicare could submit claims and collect payments. Many pharmacies had to process and dispense thousands of orders each day," the complaint said.
The suit also alleges that in some cases Omnicare would assigned a fake number of authorized refills to a prescription – usually 99 allowable refills for Medicare patients – to allow for continuous refilling.
Senior management at Omnicare and CVS were aware of the scheme, the suit alleges, but they failed to begin to address the problem until after they learned of a DOJ investigation.
The suit quotes an Omnicare compliance officer's internal email, which stated: "An issue that I am running into more and more in multiple states concerns the ability of our systems to allow prescriptions to continue to roll after a year to a new prescription number without any documentation or pharmacist intervention."
In addition to the alleged fraud, the suit claims that Omnicare's alleged illegally dispensing of drugs to the elderly and disabled people living in residential facilities exposed them to a significant risk of harm, in part because assisted living facilities often do not have physicians on staff to monitor drug therapies.
"Many of the prescription drugs dispensed by Omnicare without valid prescriptions treat serious, chronic conditions, such as dementia, depression, and heart disease," DOJ said. "They include antipsychotics, anticonvulsants, cardiovascular medications, anti-depressants, and other drugs that can have dangerous side effects and need to be closely monitored by doctors, particularly when taken in combination with other drugs by elderly patients."
The 150-bed facility in Dearborn, Michigan is expected to open by mid-2021.
A joint venture between Beaumont Health and Universal Health Services has broken ground on a $40 million mental health hospital in Dearborn, Michigan, the two companies announced.
The 150-bed hospital will be located across the street from Beaumont Hospital, Dearborn, and is expected to open by mid-2021.
UHS, which operates more than 200 behavioral health hospitals across the country, will be the majority owner of the joint venture and will oversee operations and management of the hospital.
Under the JV, Fox said Beaumont Health and UHS will provide specialized care for patients, along with medical residencies, clinical training and the telehealth services.
The 100,00-square-feet hospital will double Beaumont's capacity for inpatient mental health care. Beaumont Health plans to transition its existing inpatient mental health services to the new hospital, with expanded programs that serve adult, pediatric and geriatric patients.
Beaumont Health CEO John Fox said in a media release that the hospital will house psychiatric clinical training and outpatient programs that will improve access to mental health services across southern Michigan.
"Our mental health plans extend beyond the walls of the new facility," he said. "The new hospital will help us coordinate the entire continuum of services for comprehensive inpatient and outpatient mental health care, clinical training and innovative new approaches to accessing care."
Beaumont Health and UHS also plan to implement a comprehensive telemedicine program to support its nine emergency rooms and other patient care settings across the system.
Michigan has seen a 33% increase in suicides since 1999 and it is one of the leading causes of death in the state, according to the National Institute of Mental Health and the Centers for Disease Control and Prevention.
SEC filing shows the for-profit health system sold the hospitals for $350 million.
Investor-owned Tenet Healthcare Corp. is selling its two remaining acute care hospitals in Tennessee to Memphis-based non-profit Methodist Le Bonheur Healthcare, the two health systems announced.
The deal includes the 519-bed Saint Francis Hospital – Memphis, the 196-bed Saint Francis Hospital – Bartlett, six MedPost urgent care centers, and physician practices affiliated with the two hospitals, the health systems said.
Tenet’s Conifer Health Solutions subsidiary will continue to provide revenue cycle management services to the hospitals after the sale is finalized.
The deal is expected to be completed in 2020 after clearing regulatory review.
Financial terms were not disclosed. However, the Memphis Commercial Appeal, citing an Securities & Exchange Commission filing by Tenet, said the sale price was $350 million.
"Consistent with our mission, the addition of Saint Francis hospitals will increase access to high quality healthcare, expand services and enhance the delivery of care to improve the overall health of the communities we serve," said Michael Ugwueke, President and CEO of Methodist Le Bonheur, which currently operates six hospitals in West Tennessee.
Ugwueke says the acquisitions mesh with Methodist Le Bonheur's broader plans by providing improved access to primary, specialty, and charity care, increased investment in medical technology, and by developing improved strategies population health outcomes.
"We look forward to creating a more dynamic team of physicians, nurses and staff dedicated to delivering compassionate high-quality care to anyone who walks through our doors, regardless of their ability to pay," Ugwueke said.
With the sale, Dallas-based Tenet's footprint in Tennessee will shrink to include one surgical specialty hospital in Nashville, and more than two dozen surgical centers, urgent care centers, and other outpatient care venues across the state.
In the third quarter of 2019, Tenet reported that it doubled its adjusted net income to $61 million, but saw its net loss reach $233 million.
The company reported an adjusted EBITDA of $631 million, up 9.4% year-over-year, while its net operating revenues from the hospital operations segment increased 2.3%.
Tenet also completed a $4.2 billion debt refinancing, increasing its borrowing capacity by $1.5 billion.
The IHI president emeritus wants healthcare providers to reach beyond the hospital walls and embrace the 'moral determinants of health.'
ORLANDO – Patient safety guru Donald Berwick, MD, is urging healthcare providers to take quality, access, and equity of care a step further and embrace a sweeping, global movement that grounds care delivery on moral convictions.
"At last, I think we're starting to recognize the inescapable importance of the social determinants of health," Berwick said here Wednesday at the keynote address of the 31st Institute for Healthcare Improvement National Forum.
"But now we need to go one very hard step further. We need to call out, not just the social determinants of health, but also the moral determinants of health, because without that we are not going to find the will to act," he said.
To the rousing applause of thousands of forum attendees, the IHI president emeritus and senior fellow used the dais to propose "a new campaign for our quality movement, founded on a shared commitment to act on what really matters to the people of our nation, to all the people of the world, boundaries, notwithstanding."
Berwick urged healthcare providers to embrace his unabashedly progressive agenda that looks beyond their own immediate needs and margin pressures, and actively confronts the root causes of the vast social and moral issues that ultimately affect the health of humanity, such as a lack of access to food, shelter, healthcare, and hope.
"The campaign that I would envision would consist of those actions, those goals, those investments that that moral compass points to," he said. "They are what we must work on or must choose to work on if we're going to be true to that moral core. Our project then becomes to improve the social determinants of health that our moral determinants illuminate."
Berwick outlined seven steps to make it happen.
Commit to human rights: "First, declare a commitment to achieve U.S. ratification of key human rights treaties," he said. "The U.S. technically has ratified the Universal Declaration of Human Rights, but we have not ratified subsequent covenants or treaties, especially pertaining to the right to health and healthcare. We need to join the global human rights community formally and now."
Push for universal coverage: "Second, make healthcare unequivocally a human right in this nation," he said. "At this moment this country still has 30 million people without health insurance. It is time to end that cruel embarrassment. This quality movement should stand foursquare, vocally for universal health coverage in the United States of America now."
Combat climate change: "Third, we need to restore American leadership to the fight to reverse climate change," he said. "The evidence is overwhelming. Our nation is not doing its job to reverse that imminent tragedy. It may be too late I fear, but we have to try. Neither healthcare nor the quality movement can responsibly be a bystander."
Back criminal justice reform: "Fourth, please let's achieve radical reform in our nation's criminal justice system," he said. "We have more people in prison per capita in this nation than any other nation on Earth, except Russia. ... The people who are incarcerated are overwhelmingly people of color by a factor of six or eight. This is the cruelest form of racism in our nation in our time. It is as erosive of health and well-being for entire generations as the most toxic bacteria or the most sinister cancer. We have to fix it."
Encourage inclusive immigration policies: "Fifth, we've got to end policies of exclusion and achieve meaningful immigration reform in this nation," he said. "I have had it up to here with cruelty at our borders."
Take poverty head-on: "Sixth, we need to end hunger and homelessness in America," he said. "That ought to offend every sensibility of a civilized and compassionate people; the claim that our rich nation cannot assure food and clothing and shelter to absolutely everyone. ... that claim is insane. And let me be clear, this absolutely requires a big dose of redistribution of wealth in America. It means once and for all ending the practice of blaming people who are less fortunate."
Defend civil institutions: "Finally, seventh, we need to restore order and dignity and equity toward democratic institutions," he said. "Most of all, assure the right of every single person's vote to count equally. ... When the institutions no longer serve mercy and compassion and health and shared well-being the rules must change. I believe deeply that America's project and democracy, however fragile however sometimes wandering or maddening it can become, it's still the best route to the communities that we want."
An age-friendly health system uses an evidence-based framework called the 4Ms to improve outcomes, shorten hospital stays, and meet the expectations of older patients.
ORLANDO — The Institute for Healthcare Improvement (IHI) has joined with the nation's major hospital associations to expand a program that promotes and recognizes providers of "age friendly" care.
The initiative, Age-Friendly Health Systems, uses evidence-based framework called the 4Ms: what matters to older adults; medication that is age friendly; attending to mentation, including delirium, depression, and dementia; and mobility, so seniors can maintain function.
Funded by a $6 million grant from The John A. Hartford Foundation, the initiative is in partnership with the American Hospital Association and the Catholic Health Association of the United States.
"We have a big problem in this country with an aging population," Mate says. "In some communities that we're working with now the growth of the over-65 population is upwards of 80% while every other demographic is shrinking."
"We started with five systems. We didn't give them a cheat sheet on how to do it. They invented it themselves, how to implement the specific care guidelines," Mate says. "From those five systems, two years later, we've now reached 450 healthcare systems, both hospitals and ambulatory practices all over the country."
As of November, 284 hospitals and other care venues have earned the level-one designation as Age-Friendly Health System participants, and Mate says IHI aims to expand age-friendly care to 1,000 hospitals and other healthcare venues by the end of 2020.
Mate says 117 providers have earned level-two designation for exceptional program outreach to older adults over at least three months.
"It's created quite a buzz," he says. "There are some really interesting systems that are taking this under their wing and making it their strategy."
In building the 4Ms framework, Mate says, researchers were surprised to find that solid, evidence-based care models for older adults were already being used in many places.
"Of the 17 highly evidenced models, 13 or 14 of them were in place in systems in total discoordination," he says. "The left hand was not talking to the right hand, that kind of stuff."
The researchers studied the evidence-based models, extracted key ingredients, and spoke with those who initiated the models, Mate says.
"We found that there were 90 different things that these models encompassed," he says. "We distilled them down to 13 different concepts. There were a lot of redundancies, but then we said we can't build a national campaign around 13 things."
"We asked the creators to give us a handful, and that's how we got to these 4Ms," he says, adding that the 4Ms have been "extremely resonant" among providers.
"If you put in the clinical interventions around them, it saves money, improves care for older adults," he says.
"So, if you reduce exposure to the opioids and benzodiazepines in the medication column, it reduces mobility problems for older adults and it reduces delirium incidents among older adults," he says, "and those things translate into real money and hospital length-of-stays declines."
The bill would fix a regional calculation that forces accountable care organizations to measure their performance against themselves and disproportionately impacts rural providers.
Rural healthcare stakeholders are rallying around bipartisan legislation newly introduced in Congress that would eliminate an inadvertent methodological flaw known as the Affordable Care Act's "rural glitch."
The Accountable Care In Rural America Act, H.R. 5212, introduced by Republican Rep. Jodey Arrington of Texas and Democrat Rep. Suzan DelBene of Washington, would amend Title XVIII of the Social Security Act to improve the benchmarking process for the Medicare Shared Savings Program.
The bill's Senate sponsors are Republican Sen. Pat Roberts of Kansas and Democratic Sen. Catherine Cortez Masto of Nevada.
Since 2017, a glitch in the ACO reimbursement formula has inadvertently punished rural health care providers, even as they reduce costs, according to the bill's sponsors. That's because, under the current formula, reimbursement rates are based on a comparison of the per-patient costs of a region's ACO with the operating costs of non-ACO regional peers.
In many rural areas, an ACO may be the major provider with no peers for comparison. As a result, rural ACOs that have a lower spending benchmark often get a smaller savings bonus than do their urban counterparts that compete against more providers.
The bill would fix the glitch by excluding the ACO's beneficiaries when calculating the per-patient costs of a region.
"Fixing the rural glitch is a practical and meaningful change that will make the program fairer, especially for rural providers who can be disproportionately impacted by the current benchmark methodology," DelBene said.
"This change will also make it fairer for providers who are already delivering efficient care like those in Washington state," she said. "I believe fixing the rural glitch will encourage more providers to participate in the ACO program which will be a benefit to seniors and taxpayers alike."
Brock Slabach, senior vice president for member services at the National Rural Health Association, says the bill stands a good chance of passing because it has bipartisan support, is budget neutral, faces no organized opposition, and "it's an easy correction."
"This is commonsense legislation, so opposition would be negligible. I don't know how anyone could oppose this because all it does is make the process fair," he said.
The bill has the support of 13 stakeholder groups, including the American Hospital Association and the American Medical Association, who complained that the glitch makes it harder for rural providers to achieve savings even when they improve quality and reduce costs on par with their urban colleagues.
"No ACO should be placed in a less favorable financial position due to their geography alone, and design flaws that discourage ACOs from operating in rural areas should be eliminated," the stakeholders said in a letter to the Congressional sponsors.
"Today, the regional adjustment includes an ACO's own beneficiaries in the regional calculation," the letter said. "While this has minimal impact for ACOs in urban areas with a lot of provider competition, the impact is significant in rural areas where an ACO covers a large number of the region's fee-for-service beneficiaries."
The co-founders of the start-up allegedly enriched themselves by fraudulently inflating revenues and the extent and effect of their advertising.
Four former executives at Outcome Health have been charged with fraud in an alleged $1 billion scheme that cooked the books on revenues and lied to investors and clients about the reach of its advertising inventory, the Department of Justice said.
An indictment alleging wire fraud, bank fraud, mail fraud, and related charges was unsealed this week in a federal court in Chicago against:
Rishi Shah, 33, of Chicago, the co-founder and CEO of Outcome Health, known as ContextMedia before January 2017;
Shradha Agarwal, 34, of Chicago, co-founder and president of Outcome Health;
Brad Purdy, 30, of San Francisco, COO/CFO; and
Ashik Desai, 26, of Philadelphia, executive vice president of business operations and chief growth officer.
Also indicted were Kathryn Choi, 29, of New York, and Oliver Han, 29, of Chicago, both former analysists at the company.
The indictment alleges that, from 2011 to 2017, the alleged schemers at privately held Outcome – which provides physician waiting rooms with video screens featuring health tips and drug ads – sold tens of millions of dollars of advertising inventory that did not exist, mostly to drug companies. Despite these under-deliveries, Outcome allegedly still billed clients as if it had delivered in full.
Using the claims of the bogus inventory, the scheme allegedly inflated financial statements that the former executives used to raise nearly $1 billion in debt and equity financing in 2016 and 2017.
To conceal the alleged fraud, the indictment claims that the former executives and employees allegedly falsified affidavits and proofs of performance to make it appear the company was delivering advertising content to the number of screens in its clients' contracts.
The scheme also allegedly inflated patient engagement metrics regarding how frequently patients engaged with Outcome’s tablets, and altered studies presented to clients to make it appear that the campaigns were more effective than they were.
The company's outside auditor signed off on the 2015 and 2016 revenue numbers because Purdy, Desai, Choi and Han allegedly fabricated data to conceal the under-deliveries, the indictment says.
The former executives allegedly used the inflated revenue figures to raise $110 million in debt financing in April 2016, $375 million in debt financing in December 2016 and $487.5 million in equity financing in early 2017.
The $110 million debt financing allegedly resulted in a $30.2 million dividend to Shah and a $7.5 million dividend to Agarwal. The $487.5 million equity financing allegedly resulted in a $225 million dividend to Shah and Agarwal.
Shah and Shradha resigned in 2018 after Outcome reached a fraud settlement with investors. In October, thecompany agreed to pay $70 million to the federal government to resolve fraud allegations.
The health system is looking for ways to address a projected $80 million net loss in 2020.
Two months after entering a joint clinical agreement with the University of Minnesota, M Health Fairview is considering layoffs that could trim 500 positions – about 2% of its staff – from the payroll.
StarTribune.com, citing internal memos from University of Minnesota President Joan Gabel and Fairview Health CEO James Hereford, said the staff cuts is one of several strategies contemplated over the past several weeks to address a projected $80 million net loss in 2020.
"The decision by Fairview to lay off employees is incredibly difficult," Gabel wrote. "There are sound financial reasons why this action is necessary, but it does not lessen the pain employees will feel or the concern that patients may have due to this news."
Other strategies to improve margins could include reducing operations at the health system's Bethesda rehabilitation hospital and shuttering the financially struggling St. Joseph's Hospital in downtown St. Paul, the newspaper reported.
Hereford did not dispute the newspaper's report but declined to provide further details in a statement to HealthLeaders.
"Healthcare is facing an affordability crisis and we must transform," he said. "We are rethinking everything we do to prepare for a future where we approach healthcare differently. This change requires innovation, courageous leadership and, inevitably, choices. We will do what's right for our most important constituents: our patients."
The staffing cuts would likely take effect in early 2020, and most would target unfilled positions, as opposed to layoffs. The potential closure of St. Joseph's could occur within the next three years. The money losing hospital was converted in 2017 to a mental health hospital. St. Joseph's lost $32 million in 2017 and $44 million in 2018, the newspaper reported.
"The affordability crisis that consumers are facing right now — it really does demand and give energy to the necessity of health care delivery transformation," Hereford told the paper. "Health care has played the blame game and tried to deflect and say its been somebody else's fault. We're not going to do that."
The Assistance Fund is the third foundation to settle allegations of conspiring with drug makers.
An Orlando-based foundation will pay the federal government $4 million to settle allegations that it funneled kickbacks from three drug companies to induce Medicare patients to use the companies' multiple sclerosis drugs, the Department of Justice said.
According to federal prosecutors in Boston, The Assistance Fund was supposed to be open to any Medicare patient with multiple sclerosis. Instead, a DOJ complaint alleged that TAF conspired with MS drug makers Teva, Biogen, and Novartis to use the fund as a conduit for money from those manufacturers to patients taking their MS drugs.
"The conspiracy enabled the pharmaceutical companies to ensure that Medicare patients did not consider the high costs that the companies charged for their MS drugs," DOJ said. "The conspiracy also minimized the possibility that the companies’ money would go to patients taking competing MS drugs made by other companies."
The $4 million settlement was based on an analysis of TAF's ability to pay after review of its financial condition, DOJ said.
TAF is the third foundation to settle allegations of kickbacks in the last month. The other two foundations – Chronic Disease Fund, Inc. doing business as Good Days from CDF, and Patient Access Network Foundation – paid $2 million and $4 million, respectively, to resolve the alleged violations of the False Claims Act, federal prosecutors in Boston said.
Under the federal Anti-Kickback Statute, drug makers are prohibited from paying, directly or indirectly, any remuneration to induce Medicare patients to purchase the companies’ drugs.
The statute also prohibits third parties, such as co-pay foundations, from conspiring with pharmaceutical companies to violate the Anti-Kickback Statute.
"TAF cared more about helping its big pharma donors make money than about helping individual patients in need of life changing assistance," said Joseph R. Bonavolonta, Special Agent in Charge of the FBI Boston Division.
TAF, which describes itself as an independent charitable patient assistance foundation, issued a statementclaiming that the kickback allegations occurred under previous management.
"TAF will continue its normal operations, pursuing its work to help patients and families facing high medical out-of-pocket costs by providing financial assistance for their copayments, coinsurance, deductibles, and other health-related expenses," the company said.
Over the past decade, TAF said it has provided financial help to more than 78,000 people living with live-threatening and chronic diseases through its 60 disease programs.
TAF also entered a three-year Integrity Agreement with the Department of Health and Human Services Office of the Inspector General that requires, among other things, that TAF implement measures designed to ensure its independence, and that its interactions with drug maker donors are legal.
If the Senate passes the stopgap, President Trump is expected to sign it.
With a federal government shutdown looming at midnight, the Senate is expected today to vote on a continuing resolution to fund the federal government until December 20.
The stopgap measure, which passed the House 231-192 on Tuesday, includes a provision that would delay for one month the $4 billion in hospital disproportionate share cuts for hospitals.
The stopgap is expected to be signed by President Donald J. Trump.
The American Hospital Association issued a statement called the “temporary delay is a step in the right direction toward ensuring hospitals can continue to care for the most vulnerable in our communities."
"Until a more sustainable, permanent solution is reached, we continue to urge that these cuts be delayed for at least two fiscal years," AHA said.
CNN reports that the Senate had hoped to pass the resolution Wednesday, but the effort got bogged down for procedural reasons. Senate aides told the cable news network that objections had been resolved.
"Nothing is easy," Sen. John Thune, R-South Dakota, told CNN.
In September, the Centers for Medicare & Medicaid Services released its final rule for instituting $4 billion in cuts to DSHs at the start of fiscal year 2020, which is October 1. CMS first introduced these cuts in 2017 and has received significant push-back from DSH advocates since.
Bruce Siegel, MD, CEO of America's Essential Hospitals, said earlier this year that "the trajectory of the cuts — $44 billion over six years — simply would be unsustainable for essential hospitals, which already operate with no or narrow margins and high levels of uncompensated care."
