Oxygen equipment provider Lincare pays $5.25M to settle Medicare Advantage fraud suit


The word fraud framed by other words

One of the country’s largest suppliers of oxygen and respiratory equipment has agreed to pay $5.25 million to settle allegations that it violated anti-kickback laws by reducing copayments for certain Medicare Advantage members.

Lincare has also entered into a corporate integrity agreement with the Office of Inspector General, the Department of Justice announced last week.

The settlement resolves allegations filed by former billing supervisor Brian Thomas, who worked for nearly a decade at the Florida-based company. In his 2015 complaint, which was later joined by federal prosecutors, Thomas claimed Lincare waived copays for Humana’s Medicare Advantage members beginning in December 2011 after the insurer contracted with Apria Healthcare to be an exclusive in-network provider of medical equipment.

In his complaint, Thomas said Lincare matched network benefits by reducing copays from Humana beneficiaries from 30% to 13% to align with copays from Apria. Humana was left paying for a higher charge using government funds.

Lincare was purchased by The Linde Group, a German industrial gas company, for $3.8 billion in 2012. The government alleged Lincare continued the scheme through 2017.

It’s the second major settlement for Lincare, which operates about 1,000 locations across the country. In May, the company paid $875,000 to settle a class action lawsuit from employers who had their information stolen during a data breach.




Caught in the Theranos Wreckage

The high-profile investors, including Ms. DeVos and Mr. Murdoch, collectively invested about $600 million in the company Theranos

Even some of the world’s richest people may get duped, according to newly unsealed documents in a lawsuit filed on behalf of investors in the failing blood-testing company Theranos.

High-profile investors who collectively lost hundreds of millions of dollars included Walmart’s Walton family, the media mogul Rupert Murdoch, as well as Betsy DeVos, the secretary of education and her relatives.

The list of investors, which was first reported by The Wall Street Journal, came to light as part of a class-action lawsuit brought in 2016 by Robert Colman, a retired Silicon Valley investment banker, who claims that Theranos misled investors about its business and technology.

Theranos, founded by Elizabeth Holmes when she was a 19-year-old Stanford University dropout, promised to revolutionize the lab industry using a few drops of blood from a simple finger-prick to look for everything from diabetes to cancer, at a fraction of the cost of a traditional blood test.

The company became a Silicon Valley fairy tale, with investors awarding the privately held company a valuation of around $9 billion. But the story began to unravel in October 2015 after The Wall Street Journal, owned by Mr. Murdoch’s News Corp., began questioning whether the tests worked. Theranos became the subject of federal investigations into its testing and claims of proprietary technology, which were called “nanotainers.” Much of the time the company had to resort to using conventional blood testing methods, unable to get federal approval for any test but one for Herpes.

Theranos and its founder also became embroiled in a series of lawsuits, involving investors as well as one of its key partners, Walgreens, a large drugstore chain, where it offered its tests. The company reached a settlement with Walgreens last August.

In March, the Securities and Exchange Commission charged Ms. Holmes with fraud, accusing her of exaggerating and lying about her technology to attract investors. As part of the S.E.C. action, Ms. Holmes agreed to pay $500,000, give up control of her company, and is barred from serving as an officer or director of any public company for 10 years. She and Theranos did not admit nor deny the allegations.

Theranos still faces the class-action lawsuit, and may still be subject to a criminal investigation by the United States attorney in San Francisco. The company’s future is unclear. The company did not respond to requests for comment.

Theranos had always boasted a star-studded list of investors and directors — its board included the former secretaries of state George P. Shultz and Henry A. Kissinger, two former United States senators, and Gen. Jim Mattis, the current secretary of defense. But while some high-profile investors’ links to Theranos had been previously known, the new documents provide a detailed list of financial amounts.

The Walton family invested about $150 million in 2014 through two separate entities, according to the investor list. Mr. Murdoch put in about $125 million, and the extended family of Ms. DeVos invested about $100 million.

“It’s obvious that they are highly disappointed in them as a company and as an investment,” said Greg McNeilly, the chief operating officer of The Windquest Group, the holding company of Ms. DeVos and her husband. Mr. McNeilly said the $100 million was a joint investment across multiple generations and branches of her family, and described the share held by Ms. DeVos and her husband as “minor.”

Other prominent investors, according to the list, included the Cox family; the Atlanta billionaires who own the media conglomerate Cox Enterprises and who invested $100 million; and a company affiliated with Mexican billionaire Carlos Slim that put in about $30 million. Robert K. Kraft, the owner of the New England Patriots, invested $1 million.

Representatives for Mr. Kraft, the Walton family, Cox Enterprises and News Corp. declined to comment.



Court sets speedy 340B lawsuit schedule, siding with AHA


Dive Brief:

  • The American Hospital Association and other parties’ request for an expedited brief schedule for the group’s lawsuit over CMS cuts to the 340B program was agreed to by the U.S. Court of Appeals for the District of Columbia Circuit Tuesday, despite the government’s request for more time to respond to the lawsuit.
  • U.S. District Judge Rudolph Contreras dismissed the initial lawsuit in December, saying the groups did not have standing to sue because the cuts hadn’t yet taken effect. On January 11, AHA and the other groups appealed the decision, and then asked the court to expedite the case citing the immediate impact the cuts have on 340B hospitals’ ability to provide services to underserved communities.
  • Attorneys for the Department of Justice argued the compressed briefing schedule would not give adequate time for the government to prepare its brief and coordinate with affected agencies.

Dive Insight:

The lawsuit concerns a HHS final rule that took effect at the start of the year changing the amount 340B hospitals are paid for drugs to 22.5% less than the average sales price. Last year, hospitals paid the average price plus 6%.

“America’s hospitals and health systems are pleased that the U.S. Court of Appeals has accepted our expedited brief schedule in our appeal to reverse the significant cuts to the 340B Drug Savings Program, which for over 25 years has played a vital role in helping hospitals stretch scarce federal resources to expand and enhance patient services and access to care for vulnerable communities without any cost to the government,” Melinda Hatton, general counsel for the American Hospital Association, told Healthcare Dive.

AHA is joined in the lawsuit by America’s Essential Hospitals, the Association of American Medical Colleges, Eastern Maine Healthcare Systems (Brewer, Maine), Henry Ford Health System (Detroit) and Adventist Health System’s Park Ridge Health (Henderson, North Carolina).

The groups argue the cuts will hurt 340B hospitals’ budgeted operations, bond covenants and other items necessary to provide community care, and say the reimbursement change exceeds HHS’ authority.

“For 340B hospitals, the ability to provide care to their communities is tied to receipt of third-party reimbursements; constriction in the flow of Medicare revenues to 340B hospitals will increasingly constrict funds for medical care for all their patients, most particularly those who are poor and underserved and most reliant on these services,” the groups wrote in their request to expiate the appeal brief schedule.

AHA noted that it is actively exploring other options to address the cuts.

“We will continue to pursue our legislative and legal strategies to reverse these cuts, and expect to prevail in holding the agency accountable for overstepping its authority,” Hatton said.

The Court of Appeals set the the brief schedule to conclude by April 2, appearing to allow AHA’s request that oral arguments to occur by May, prior to the summer recess. “Otherwise the next opportunity for argument would be in September, which would likely significantly delay the resolution of this action,” the plaintiff attorneys had argued.



Federal judge approves Ascension Health’s $29.5M settlement in class-action pension lawsuit


Image result for ascension health lawsuit


Ascension Health, a Catholic health system based in St. Louis, will pay $29.5 million to settle a class-action lawsuit alleging the health system and subsidiary Wheaton Franciscan Services in Glendale, Wis., violated the Employee Retirement Income Security Act, which governs employee pensions.

The lawsuit, filed in April 2016, alleged Wheaton erroneously treated its pension plan as a “church plan” exempt from ERISA.

The parties entered a class-action settlement agreement Sept. 1, 2017, and the court preliminarily approved the settlement Sept. 13, 2017. The court gave final approval to the proposed settlement after holding a fairness hearing on Jan. 16.

The parties inked the settlement agreement about three months after the U.S. Supreme Court held church-affiliated hospitals do not have to comply with ERISA.



Lawsuit filed against ObamaCare insurer over coverage


Lawsuit filed against ObamaCare insurer over coverage

The insurance carrier Centene misled enrollees about the benefits of its ObamaCare exchange plans and offered far skimpier coverage than promised, according to a class-action lawsuit filed Thursday.

The lawsuit, filed in federal court in Washington state, claims customers who bought Centene’s ObamaCare plans had trouble finding in-network doctors or hospitals and often found that doctors who were advertised as in-network actually were not.

ObamaCare requires plans to meet certain minimum requirements.

Centene covers about 10 percent of the ObamaCare individual market and is one of the largest insurance carriers that participates on the exchanges.

As many other insurers have pared back their ObamaCare exchange plans, or completely left the market, Centene has expanded. In some areas of the country, Centene is the only insurer offering plans for ObamaCare customers.

Centene markets its signature product — its three-tiered Ambetter plans — in at least 15 states, and covers more than 1.4 million customers.

According to the lawsuit, Centene targets low-income customers who qualify for substantial government subsidies “while simultaneously providing coverage well below what is required by law and by its policies.”

A spokeswoman for the company told The Hill they have not been served papers and only learned of the lawsuit Thursday morning.

“We believe our networks are adequate. We work in partnership with our states to ensure our networks are adequate and our members have access to high quality health care,” Marcela Manjarrez Hawn said in an email.

Narrow networks — insurance plans that limit which doctors and hospitals customers can use — are not uncommon, as they are cheaper than more expansive plans. But the lawsuit says Centene went far beyond the norm.

“Centene misrepresents the number, location and existence of purported providers by listing physicians, medical groups and other providers — some of whom have specifically asked to be removed — as participants in their networks and by listing nurses and other non-physicians as primary care providers,” the lawsuit claims.

According to the lawsuit, customers found the provider network Centene said was available was “largely fictitious. Members have difficulty finding — and in many cases cannot find — medical providers who will accept Ambetter insurance.”

The suit was filed on behalf of two Centene customers, but seeks class-action status to represent all customers who purchased Centene plans on the ObamaCare exchange.


Sutter Health destroyed 192 boxes of evidence in antitrust case, judge says


Dive Brief:

  • A California superior court judge ruled that Sutter Health intentionally destroyed 192 boxes of documents that were involved in a lawsuit involving employers and labor unions that alleged the health system abused its market power and charged inflated prices, reported California Healthline.
  • The United Food and Commercial Workers and its Employers Benefit Trust initially filed the case in 2014 alleging that Sutter Health required health plans to include all Sutter hospitals in networks.
  • San Francisco County Superior Court Judge Curtis E.A. Karnow said that Sutter knew the evidence “was relevant to antitrust issues” and the company was “grossly reckless.” A Sutter spokeswoman told California Healthline that the incident was a “mistake made as part of a routine destruction of old paper records.”

Dive Insight:

The recent ruling doesn’t put Sutter Health in a great light. The nonprofit system of 24 hospitals based in Sacramento reportedly destroyed documents related to the case —  and its actions miffed the judge in the case.

Of course, this issue goes beyond destroying records, Sutter Health and California. The case involves a growing health system that allegedly increased prices to employers and employees while gaining a larger market foothold.

Mergers and acquisitions continue to become a common way for health systems to reduce costs, resolve inefficiencies and gain a larger market share. However, having one system own a large part of the healthcare market also inflates healthcare prices. Brent Fulton, assistant adjunct professor at Petris Center in the School of Public Health, University of California, Berkeley, recently wrote in a Health Affairs article “reviews of studies of hospital markets have found that concentrated markets are associated with higher hospital prices, with price increases often exceeding 20% when mergers occur in such markets.”

Sutter Health holds more than 45% of the healthcare market share in six Northern California counties. That gives the system leverage over employers. If employers don’t come to an agreement with Sutter Health, employees have limited options in those counties. Sutter Health charges about 25% higher than other California hospitals, according to the University of Southern California.

Those costs are higher if that care is considered out-of-network. Last year, Sutter Health allegedly asked employers to waive their rights to sue and to agree to arbitration following a court ruling that employers and health plans can seek class-action status in a lawsuit pertaining overcharges against Sutter Health. Those who didn’t agree were threatened to lose access to discounted in-network prices and pay higher out-of-network costs.

The court filing states the parties should not expect further orders in the case until after mid-December. Industry experts are awaiting the results as the trend of M&A continues and stakeholders question who the activity is benefiting: the companies or the patient?


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Sutter Health to employers: Waive rights to sue or pay the price



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