30 July 2015


Original Story: catalyst.phrma.org

New data raises even more questions about how hospitals are using for-profit pharmacies to expand a little known program called 340B. This program was designed to allow qualifying hospitals and clinics receiving certain federal grants to access deeply discounted pharmaceuticals so they can more easily provide medicines for their uninsured or vulnerable patients. An Oklahoma health care lawyer is reviewing the details of this case.

Unfortunately, there are not sufficient safeguards in place to ensure that hospitals qualifying for the program are true safety net hospitals providing a disproportionate share of charity care to low-income, uninsured patients.[1]

Now, new data shows the majority of hospitals that are aggressively expanding use of this program through for-profit pharmacies are actually providing below average levels of charity care.

For-profit pharmacies became officially involved in the 340B program for the first time in 1996, when the Health Resources and Services Administration (HRSA) allowed hospitals or other 340B entities without an in-house pharmacy to extend their ability to obtain prescriptions at 340B prices through use of a contract with an outside pharmacy. A Charleston health care lawyer assists clients with health care matters involving pharmaceuticals, public health, and health insurance.

These pharmacies are typically traditional retail pharmacies (including some large chain drug stores) and are known as contract pharmacies. In 2010, HRSA dramatically expanded the 340B program by allowing all 340B entities – regardless of whether or not they had a pharmacy on site – to have an unlimited number of contract pharmacies. HRSA also currently allows these pharmacies and hospitals to keep the profit from patients buying medicines at full cost even though the hospitals received steep 340B discounts for the medicines. There is no current requirement for hospitals to reinvest these profits from the 340B program into programs that help uninsured or vulnerable patients access the medicines they need.

Hospitals qualifying for 340B through their disproportionate share percentage (DSH hospitals) account for more than 80 percent of 340B sales volume.[2] This new data shows the majority of these hospitals taking advantage of the contract pharmacy program provide less charity care as a percent of the hospital’s costs than the average for all hospitals—including for-profit hospitals. A New Delhi pharmaceutical attorney is following this story closely.

More specifically, 61 percent of 340B DSH hospitals with more than one contract pharmacy provide charity care that is less than 3.5 percent of costs, which is the national average for all hospitals. And almost one-in-five (18 percent) of these hospitals provide charity care that represents less than one percent of costs. This data suggests that some hospitals may be using contract pharmacy arrangements to benefit the hospital, rather than the uninsured or vulnerable patients the program was intended to help.

In addition to this data, a recent Department of Health and Human Services Office of the Inspector General report found most of the 15 DSH hospitals they sampled did not pass along the 340B discounts to uninsured patients.[3] With the majority of these hospitals providing so little charity care and evidence suggesting hospitals and for-profit pharmacies are using the program to generate profits, it is time to ask whether the current contract pharmacy program is working to improve access to prescription medicines for uninsured or vulnerable patients.

[1] Alliance for Integrity and Reform of 340B, "Unfulfilled Expectations: An analysis of charity care provided by 340B hospitals," Spring 2014 (Available at: http://340breform.org/userfiles/Final%20AIR%20340B%20Charity%20Care%20Paper.pdf)

[2] Data from Apexus Update 2015 – 340B Coalition Winter Meeting.

[3] U.S. Department of Health and Human Services, Office of Inspector General, Memorandum Report: Contract Pharmacy Arrangements in the 340B Program, OEI005—13-00431, February 4, 2014.

28 July 2015


Original Story: freep.com

One of the region's last independent hospitals has filed for bankruptcy but plans to stay open.

The physician-owned Doctors Hospital of Michigan in Pontiac listed debts between $10 million and $50 million in its Chapter 11 petition filed this week in U.S. Bankruptcy Court in Detroit. A Detroit business bankruptcy attorney is reviewing the details of this case.

It is the second bankruptcy declaration in a decade for the struggling 105-year-old hospital, which was known as North Oakland Medical Centers during its last bankruptcy in 2008. Years earlier, it was called Pontiac General Hospital.

Hospital officials said Friday that their hospital is losing money and weighed down by debt that the business inherited as part of the hospital's 2008 sale to a private physicians' group. Flint-based McLaren Health Care system was a minority partner in that deal; McLaren's stake was bought out three years later by a group of 42 doctors.

The hospital's single off-site location, Waterford Ambulatory Care Center, closed earlier this month due to "cash-flow constraints" but could reopen in the future, said attorney Max Newman of Butzel Long, who is representing Doctors Hospital.

Doctors Hospital itself remains open and there are no plans to close, said hospital CEO John Ponczocha,

Hospital officials say they hope to reorganize the business's finances in bankruptcy so that it can potentially continue as an independent hospital. The hospital has about 200 full-time-equivalent employees.

"There's a number of potentials here," Newman said. "It could be purchased, it could merge with somebody. But at this point, the effort is going to be primarily to keep it running as a standalone entity."

The bankruptcy filing lists Wisconsin Physicians Service Insurance Co. as the hospital's largest creditor with about $6.4 million. Long said there are also significant loans from hospital insiders which are outstanding but not on the list. A Detroit hospital litigation attorney is following this story closely.

There are few independent hospitals left in southeast Michigan. Several formerly independent hospitals have been absorbed into larger systems, including Garden City Hospital (now a part of for-profit Prime Healthcare Services) and Mercy Memorial Hospital in Monroe (now part of the nonprofit ProMedica Health System).

Another independent hospital, Crittenton Hospital in Rochester, has a pending deal to join the St. Louis-based Ascension Health system.

Doctors Hospital of Michigan

• Original hospital dates to 1910

• Formerly known as North Oakland Medical Centers and Pontiac General Hospital

• Currently owned by a physicians group and is for-profit.

• Has about 200 full-time-equivalent employees

• Last filed for bankruptcy in 2008

27 July 2015


Original Story: nytimes.com

The health insurer Anthem said on Friday that it had agreed to acquire its rival Cigna for $48.3 billion in a deal that would further concentrate the United States market to just a few major players.

The combined company would have estimated revenue of about $115 billion and serve more than 53 million people with medical coverage. An Atlanta healthcare litigation attorney is following this story closely.

A flurry of deals are reshaping the industry. Earlier this month Aetna agreed to acquire Humana, the smallest of the big five insurers, for $37 billion in cash and stock. If both transactions are completed, the number of major health insurers in the United States will shrink to three.

Health insurers are seeking to consolidate to gain greater scale to reduce costs and capitalize on growing opportunities in the government and individual markets. A major force has been the Obama administration’s health care overhaul, which has bolstered revenues. But greater transparency in pricing and less generous funding of government plans have also put profit margins under pressure.

Alex Cullen, an analyst with Forrester Research, said that the challenge for all health insurers was moving from “a plan and claim-centric model to a customer-centric model.” Making that transition while completing a merger will be difficult, he said. An Atlanta healthcare litigation lawyer is reviewing the details of this case.

“I would expect a lot of angst within Anthem management on how to execute on a customer-centric strategy,” Mr. Cullen said.

Anthem said on Friday that it expected to achieve nearly $2 billion in annual cost savings as a result of the merger. Anthem said there would be one-time charges of $600 million over a two-year period associated with the merger.

“We believe that this transaction will allow us to enhance our competitive position and be better positioned to apply the insights and access of a broad network and dedicated local presence to the health care challenges of the increasingly diverse markets, membership, and communities we serve,” Joseph R. Swedish, the Anthem chief executive, said in a news release.

Mr. Swedish will oversee the combined insurer.

Anthem, based in Indianapolis, operates Blue Cross plans in 14 states and has a strong presence in offering Medicaid plans. Cigna, based in Bloomfield, Conn., is best known for offering plans through employers and selling other kinds of insurance like dental and disability. A Birmingham healthcare lawyer represents clients in business operations and representative matters.

Unlike Cigna, Anthem has been a major presence on the public insurance marketplaces created by the federal health care law.

The recent appetite for deals among insurers was recently whetted by the Supreme Court’s upholding of the portion of the Affordable Care Act that subsidizes consumers who buy policies through the government’s online marketplace.

Under the terms of the deal, Anthem said it would pay $103.40 a share in cash and 0.5152 share in Anthem stock, or $188 a share. That represents a 38.4 percent premium to Cigna’s closing price on May 28, before news of Anthem’s interest emerged. Based on Cigna’s most recent disclosure of shares outstanding, the deal would value its equity at $48.3 million. Including the assumption of debt, Anthem said the deal would value Cigna at $54.2 billion.

After the deal is completed, Anthem shareholders will own 67 percent of the combined company, while the remaining 33 percent will be owned by Cigna shareholders.

David M. Cordani, the Cigna president and chief executive, will serve as president and chief operating officer of the combined company. The Anthem board of directors will also be expanded to 14 members and will include Mr. Cordani and four independent directors from Cigna.

The transaction is subject to shareholder and regulatory approval, and it is expected to close in the second half of 2016. A Pittsburgh healthcare lawyer represents physicians, hospitals, health systems, long-term facilities and other health care providers in a broad range of health care matters.

The deal has long been foretold. Anthem went public with its offer last month, saying that it had been in talks with Cigna over a possible combination since August.

It is possible that regulators in the United States could block some mergers: Antitrust officials at the Justice Department and the Federal Trade Commission have shown an increasing willingness to do so if they believe the alliances could hurt consumers.

Analysts have said that antitrust regulators would probably allow only some deals to go forward, and that they could stop others if they decided that too much power was being concentrated in too few hands.

The question remains what UnitedHealth Group, the largest health insurer in the United States, will now do.

UBS and Credit Suisse and the law firm White & Case advised Anthem, while Morgan Stanley and the law firm Cravath, Swaine & Moore advised Cigna.

24 July 2015


Original Story: nytimes.com

EDGEWOOD, Ky. — Zach Wayman says he first contracted hepatitis C several years ago by sharing needles with other heroin addicts. He went into rehab and was successfully treated for the virus. But he relapsed into addiction and reinfected himself, testing positive for hepatitis C again this spring.

“Pretty much everybody in my rehab has it,” said Mr. Wayman, 25, who started abusing pain pills at 18 and switched to heroin a few years later.

Mr. Wayman is part of an epidemic affecting young intravenous drug users across the country, particularly in Appalachia, where opiate abuse exploded in the late 1990s and never subsided. And that has health officials concerned, not just because the hepatitis C virus can lead to liver failure, cancer and sometimes death, but also because its spread can foretell another deadly disease: H.I.V., which can also be transmitted by shared needles.

Earlier this year, in Scott County, just 90 miles from here in rural southern Indiana, more than 160 people tested positive for H.I.V., and 86 percent of those people were also found to have hepatitis C. Most of those infected had shared needles to inject a prescription opiate called Opana.

In May, the Centers for Disease Control and Prevention reported a sharp increase in reported cases of hepatitis C among young adults in Kentucky, Tennessee, Virginia and West Virginia. While rates of acute hepatitis C, which is very costly to treat, have risen around the country, Kentucky’s rate was more than seven times the national average.

And the numbers most likely do not even begin to capture the problem, according to the C.D.C., which estimates that only one in every 10 cases is reported, partly because people with hepatitis often have no symptoms.

“It’s definitely the tip of a much larger iceberg,” said John Ward, director of the division of viral hepatitis at the C.D.C.

The agency estimates that more than three million people nationally have hepatitis C, which caused more than 15,000 deaths in 2013. Left untreated, the virus inflames and may eventually scar the liver, making it less effective at filtering toxins and other crucial functions. It sometimes leads to liver failure and liver cancer, and is the most common reason for liver transplants.

Reminded of the H.I.V. dangers that an hepatitis C epidemic can portend, counties and cities across this region are scrambling to contain the spread of both viruses, including by establishing programs where addicts can exchange dirty needles for clean ones.

Here in northern Kentucky, St. Elizabeth Healthcare, a regional hospital system, confirms up to 10 new cases of hepatitis C daily, said Deborah Henson, an infection control practitioner. Each positive test result starts a chain of events now all too familiar: St. Elizabeth reports it to the Northern Kentucky Health Department, which tracks down infected individuals to investigate how they contracted the virus and to try to keep them from spreading it. Some continue sharing needles and abusing drugs, while others make their way to hepatitis specialists whose caseloads are exploding.

They often learn that their insurance, if they have any, will not cover the treatment — highly effective new drugs cost at least $84,000 for a typical 12-week course. The cost of the new hepatitis drugs is so high that state Medicaid programs and many private insurers say that even treating a fraction of the infected population is breaking the bank.

Last year, Kentucky spent more than $50 million, about 7 percent of its total Medicaid budget, providing two of the new hepatitis C drugs, Sovaldi and Harvoni, to just 861 people, said Dr. John Langefeld, chief medical officer at the state’s Department for Medicaid Services. Sovaldi has a list price of $84,000 for a typical 12-week course of treatment; Harvoni, made by the same company, Gilead Sciences, has a list price closer to $100,000. Gilead offers discounts to Medicaid programs, but “it doesn’t do much to offset the significant cost factor,” Dr. Langefeld said.

In all, about 16,000 Kentucky Medicaid beneficiaries had a diagnosis of hepatitis C last year, up from 8,000 in 2013. That partly reflects the expansion of Medicaid under the Affordable Care Act to include more low-income adults, Dr. Langefeld said. But the state’s opiate problem, and increased testing of people who have injected drugs, are also factors, he and other health officials said. Kentucky will soon start providing hepatitis C tests at all its county health departments, just as it does for H.I.V.

Medicaid beneficiaries here are covered by private managed-care plans, each with its own rules for who can get the new hepatitis drugs. But patients generally need proof of Stage 3 or 4 fibrosis, or scarring of the liver, and cannot have used illicit drugs for at least six months, Dr. Langefeld said.

Karen Ruschman, a nurse practitioner at a private gastroenterology practice here, said many young adults with hepatitis C have not been able to quit heroin because treatment programs, especially those using Suboxone, a medication that suppresses opiate cravings, are expensive and hard to get into. Addicts typically “can buy heroin cheaper than they can get into a Suboxone clinic,” Ms. Ruschman said.

The vast majority of those infected with hepatitis C are baby boomers, according to the C.D.C. Most were infected decades ago, and many got it from blood transfusions that they received before 1992 when donated blood was not screened for the virus.

But most new cases are among young people, data has shown, and that raises a potential treatment problem: Those younger people tend not to qualify for the expensive new drugs, health care providers said, because the disease can take decades to progress to the point of severe liver damage.

Kentucky is not alone in rationing the drugs. A new study by researchers at Harvard found that about three-quarters of state Medicaid programs allow sofosbuvir, the main ingredient in Sovaldi, to be used only when hepatitis C has caused Stage 3 or 4 fibrosis. The study pointed out that such restrictions are at odds with the position of medical groups like the Infectious Diseases Society of America, which recommend the new treatments for all diagnosed cases.

In addition, the study’s authors wrote, “Current restrictions may violate federal Medicaid law, which requires states to cover drugs consistent with their F.D.A. labels.”

Many with hepatitis C are still in the throes of addiction, or are not far along enough in their recovery to focus on anything else. Others remain unaware of the new treatment options. Jerry Searp, who stopped injecting heroin in November 2011 and tested positive for hepatitis C a few months later, said he knew only about treatment with interferon and ribavirin, older drugs that often caused depression, fatigue, nausea and other debilitating side effects.

“They said my levels were real low,” he said, recalling a doctor’s appointment last year, “so I just keep praying about it.”

Mr. Searp, 34, of Crescent Spring, believes he knows exactly when he contracted the virus: while shooting up with a friend in a house frequented by addicts.

“I asked to use his needle and he said, ‘Hey, I’ve got hep B and C,’ ” Mr. Searp said. “And at the time it didn’t really matter to me. The desire to get high was just so great.”

Mr. Wayman, a warehouse worker, said his doctor was trying to persuade his insurer to pay for one of the new drugs, which were not yet available the first time he sought treatment. He hopes to qualify for the new treatment before December, when he will turn 26 and no longer be covered by his parents’ health insurance.

“It’s in my past and I don’t want my past to haunt me,” he said. “I’m just waiting on that phone call.”

In Crestview Hills, outside Cincinnati, Dr. Thomas Schussler has 25 patients receiving treatment for hepatitis C and another 140 patients waiting for it, typically because their insurer has not yet approved it or because they are still using drugs. Dr. Schussler said private insurance is more likely to cover the cost, but only about 20 percent of his patients have it. The success rate with the new drugs is remarkable, he said, but he added, “The problem is we’re not getting anywhere. You could eradicate this if the drugs were ubiquitous and cheap.”

Lynne Saddler, who leads the Northern Kentucky Health Department, is pursuing another avenue for getting a handle on the epidemic: starting a needle exchange so that addicts in the region might stop infecting each other. This year, the Kentucky General Assembly passed a law aimed at combating the state’s growing heroin problem, with a provision that allows local jurisdictions to open exchanges.

Louisville became the first city in Kentucky to take advantage of the new law last month. Needle exchanges are also in the works in several counties in Indiana, Ohio and West Virginia. The Northern Kentucky District Board of Health voted last month to move forward with an exchange, but it still must win approval from any city or county in which the exchange has a location. Ms. Saddler is trying to build support for it, including among opponents who believe needle exchanges only encourage drug use.

“This really is our window of opportunity,” she said. “When you lay that out for people — look, we have a statutory responsibility to prevent the spread of diseases like this and here is a very effective tool — they start getting it.”

06 July 2015


Original Story: detroitnews.com

Geraldine Parkin will face cancer doctor Farid Fata in Detroit federal court on Monday morning, as she and 24 other victims or family members of victims prepare to make statements as part of the cancer doctor's sentencing hearing. A Detroit health care lawyer has experience with multiple industry types and implications of detrimental health care practices or incidents.

"For me, I want the pleasure of looking him in the eye," says Parkin, who says her husband, Tim Parkin, is largely disabled as a result of his treatment. Fata once looked into her eyes and those of her adult children, insisting that her husband needed chemotherapy. Now she is ready to respond.

"I want to say to him, 'You gave us a life of the unknown, of misery, and now you're going to have a life behind bars.' "

The hearing, which is expected to last all week, likely will conclude with Judge Paul D. Borman sentencing Fata, who faces life in prison for his crimes. About 150 victims filed victim impact statements with the court. A Detroit medical malpractice lawyer is following this story closely.

Fata's north Oakland County cancer treatment empire collapsed after his arrest two years ago. He pleaded guilty to 16 counts of fraud in September.

But fraud doesn't accurately describe Fata's crimes, victims and former associates say, and victims are being allowed to speak in open court. While that's common in other kinds of criminal trials, it's unusual in a sentencing proceeding for victims of Medicare fraud.

In this case, though, some of Fata's patients were given chemotherapy treatments, some for years, after false or inflated cancer diagnoses by Fata. Many others were treated, and billed for, drugs on schedules designed for profitability rather than therapeutic value. The government has estimated there are at leat 550 people who were victimized by the doctor.

"Whether they were cancer or non-cancer patients, solid tumor or liquid, Fata did not discriminate: his ultimate goal was to maximize his profit on the backs of his patients," federal prosecutors argued in a sentencing memorandum.

Fata has been compared by government lawyers to financial fraudster Bernard Madoff for the brazen scope of his crimes and his willingness to prey on those who trusted him. At least two expert medical witnesses for the government are scheduled to testify during the sentencing hearing. An expert for the defense who reviewed some of Fata's cases defended the treatment of 17 out of 20 cases — but could not defend the rest. A Detroit negligence lawyer is experienced in the effective resolution of negligence lawsuits as related to improper care or practice in a professional setting.

About 40 members of the victims' group are traveling to the courthouse in a chartered bus, wearing special T-shirts and buttons emblazoned with the slogan "Army of One," united in their quest for justice and their shared experience. Speakers are allotted 10 minutes each to make their statements.

But beyond the hearing, complex issues of compensation for the victims remain. About 40 lawsuits are pending in Oakland County Circuit Court. Borman will hold a restitution hearing at least 90 days after Fata's sentencing to adjudicate the distribution of assets. The government has claimed Medicare is owed $34 million.

In addition to Medicare and former patients, private insurance companies, including Blue Cross/Blue Shield of Michigan, and a former employee turned whistle-blower have a financial stake in the outcome.

Compensation even for the most devastated victims is not clear-cut. Some couldn't file lawsuits because the statute of limitations had expired by the time Fata was arrested, says Donna MacKenzie, of Olsman Mueller Wallace & MacKenzie, a Ferndale law firm handling 13 cases against Fata and his practice. Many others who were harmed were turned away, for various reasons, because of the cost of litigating their claims.

Brian McKeen, who represents other former patients, says Fata's practice was "drastically under-insured" for a total of $3.6 million. Victims say they've been told the government has recovered about $10 million in assets.

"I'm on a mission to make the public realize how heavily the justice system is skewed toward providers and against the plaintiffs, the victims," he said. "Nobody cares about victim's rights until they become a victim."

Fata's arrest was triggered two years ago, on August 2, 2013, when the clinic's practice business manager, George Karadsheh, notified the FBI of Fata's potential crimes. On Aug. 5, 2013, Karadsheh officially filed a so-called qui tam or whistle-blower lawsuit in federal court. The FBI then interviewed Dr. Soe Maunglay, an oncologist at the clinic who had reported his concerns to Karadsheh. Fata was arrested the following morning.

Karadsheh's identity became public June 10, when a Detroit News article named him as the Fata practice insider who first called the FBI. The government subsequently unsealed the lawsuit.

"I've handled a lot of Medicare fraud but this is unspeakable," says David Haron, Karadsheh's lawyer. "Mr. Karadsheh has incredible concern for the patients. He lost his job but they lost so much more."

Parkin, the wife of a victim, knows her family will never regain what they have lost. "For us, the hearing is important because we don't want this to go down in history as fraud," she says. "We want it to go down as murder."


Original Story: freep.com

A former head of the Detroit Medical Center who was later charged in one of the largest fraud and corruption investigations in Canadian history has died in custody in Panama.

Dr. Arthur Porter, 59, CEO of DMC from 1999 through 2003, died Wednesday of cancer while under armed guard in a Panama City hospital. The death was announced by Porter's biographer, Jeff Todd, who said the cause was lung cancer that had spread to the bone and liver.

Before his transfer to the hospital this spring, Porter had been in Panama's La Joya Prison following his 2013 arrest in that country on fraud, conspiracy and money laundering charges related to the construction of a $1.3 billion so-called super hospital in Montreal. A Birmingham criminal lawyer is following this story closely.

Porter, who left the DMC to head McGill University's hospital network, was accused of taking as much as $22.5 million in bribes in a kickback scheme for the super hospital's construction contract.

At least seven other individuals also faced criminal charges for the kickback allegations, according to the Montreal Gazette.

The newspaper reported that Porter's extradition to Quebec had been put on hold earlier this year as his lawyer challenged his detention in prison. It does not appear that Porter ever faced trial for the allegations.

A spokeswoman for the Canadian Department of Foreign Affairs would not comment Wednesday night on any specifics of Porter's case. A Harrisonburg white collar crime lawyer is experienced in the effective resolution of white collar crime lawsuits as related to business related crimes.

A native of Sierra Leone, Porter was a radiation oncology specialist who became CEO of DMC in May 1999, when the then-struggling hospital system was burning through nearly $100 million a year. Although he slashed thousands of jobs, consolidated hospitals and sold off clinics, DMC was still a money-loser by September 2003, when Porter resigned under pressure.

In a memoir released last year that he wrote while in prison, Porter claimed that in 2001, he received a phone call from President George W. Bush offering him the job of U.S. Surgeon General, according to the Montreal Gazette. Porter declined Bush's offer.

Porter left the U.S. in 2004 to become executive director of McGill University's hospital network. In 2008, he was named to a seat on Canada's spy agency watchdog committee, gaining access to Canadian state secrets.

At the time of Porter's arrest in 2013, DMC officials told the Free Press that he was never suspected or accused of any wrongdoing during his years in Detroit. He arrived in Detroit in 1991 as a member of the radiation oncology department at the DMC-affiliated Wayne State University School of Medicine.

"We certainly didn't see any behavior that would have caused us to believe he was involved in improper activities," a former DMC board member, Stephen D'Arcy, said at the time. "It's almost bizarre the kinds of things he was involved in apparently in Canada."

A DMC spokesperson could not be reached for comment late Wednesday.

According to Porter's biographer, Porter was forced to smuggle chemotherapy drugs into prison to keep himself alive and, despite repeated letters to the Canadian embassy in Panama for better medical care, wasn't granted access to cancer treatment until this year.

He spent his final days on high doses of morphine for the pain, his biographer wrote in a statement posted online.

The Montreal Gazette reported that Porter's wife pleaded guilty in December to money laundering and was sentenced to two years in prison. A San Francisco corporate lawyer represents clients in corporate criminal charges and corporate finance cases.

In attempts to recover $17.5 million of the $22.5 million that was allegedly defrauded, Quebec authorities have seized properties belonging to Porter and his family in Michigan, Florida and the Caribbean and bank accounts in the U.S. and other countries, the newspaper said.