Over 600 Arrested in Healthcare Fraud Sweep

By Pat Anson, Editor

Over 600 doctors, nurses, pharmacists and other medical providers have been arrested in what the U.S. Justice Department is calling its largest healthcare fraud investigation.

Most of the charges involve false claims for opioid prescriptions or addiction treatment that resulted in $2 billion in fraudulent billings to Medicare, Medicaid and other health insurers. Many of the arrests occurred weeks or months ago, and were apparently lumped together by federal agencies to make the crackdown on healthcare fraud appear to be the "largest ever." 

“This is the most fraud, the most defendants, and the most doctors ever charged in a single operation -- and we have evidence that our ongoing work has stopped or prevented billions of dollars’ worth of fraud,” said Attorney General Jeff Sessions.

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Federal officials also announced that they have excluded 2,700 individuals from participating in Medicare, Medicaid and other federal health programs, including 587 providers excluded for conduct related to opioid diversion and abuse. 

“Health care fraud is a betrayal of vulnerable patients, and often it is theft from the taxpayer,” said Sessions.  “In many cases, doctors, nurses, and pharmacists take advantage of people suffering from drug addiction in order to line their pockets. These are despicable crimes.”

A $106 million scheme uncovered in Florida alleged there was widespread fraudulent urine drug testing at a substance abuse treatment center. The owner, medical director and two employees at the sober living facility allegedly recruited patients and paid kickbacks to them for participating in bogus drug tests.

In California, an attorney at a compounding pharmacy allegedly paid kickbacks and offered incentives such as prostitutes and expensive meals to two podiatrists in exchange for bogus prescriptions written on pre-printed prescription pads. Once the fraudulent prescriptions were filled, about $250 million in false claims were submitted to federal, state and private insurers.

In Texas, a pharmacy chain owner, managing partner and lead pharmacist were accused of using fraudulent prescriptions to fill bulk orders for over one million hydrocodone and oxycodone pills, which the pharmacy then sold to drug couriers for millions of dollars. 

“Healthcare fraud touches every corner of the United States and not only costs taxpayers money, but also can have deadly consequences,” said FBI Deputy Director David Bowdich.  “Through investigations across the country, we have seen medical professionals putting greed above their patients’ well-being and trusted doctors fanning the flames of the opioid crisis.”

Since becoming Attorney General, Sessions has shown a particular interest in opioid prescriptions -- once urging pain patients to “tough it out” and take aspirin instead.

Last August, Sessions ordered the formation of a new data analysis team, the Opioid Fraud and Abuse Detection Unit, to focus solely on opioid-related health care fraud.  Five months later, Sessions launched a Justice Department task force targeting manufacturers and distributors of opioid medication, as well as physicians and pharmacies engaged in the “unlawful” prescribing of opioids.

As PNN has reported, the data mining of opioid prescriptions -- without examining the full context of who the medications were written for or why – can be problematic. Last year the DEA raided the offices of Dr. Forest Tennant, a prominent California pain physician, because he had “very suspicious prescribing patterns.” Tennant only treated intractable pain patients, many from out-of-state, and often prescribed high doses of opioids to patients because of their chronically poor health -- important facts that were omitted or ignored by DEA investigators. Tennant has not been charged with a crime, but announced plans to retire after the DEA raid.

Sessions has also proposed a new rule that would allow the DEA to punish drug makers if their painkillers are diverted or abused. If approved, the agency could reduce the amount of opioids a company would be allowed to produce, even if the drug maker had no direct role in the diversion.

Most overdoses are not linked to opioid pain medication, but are more likely associated with illicit fentanyl, heroin, anti-anxiety drugs or antidepressants.

Controversial Genetic Testing Company in Receivership

By Pat Anson, Editor

A controversial genetic testing firm under federal investigation for healthcare fraud has been placed into court-ordered receivership – a form of bankruptcy – that could lead to the restructuring and sale of the company. The CEO and founder of Proove Biosciences has also left the company.

In an interview with STAT, former CEO Brian Meshkin blamed the company's financial problems on “erroneous and damaging” reports that were based on “false allegations” by disgruntled former employees.

Proove Biosciences specializes in DNA testing that the company claims can improve the effectiveness of pain management treatment and determine whether a patient is at risk of opioid addiction.

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In June, FBI agents raided the company’s headquarters in Irvine, California. Former and current employees who were interviewed by STAT said the agents were focused on possible kickbacks to doctors who encouraged patients to take Proove’s DNA tests. Physicians reportedly could make $144,000 a year in kickbacks that were called “research fees.”

In July, PNN reported that Proove was linked to a Medicare fraud case, in which three Indiana healthcare providers allegedly “caused Proove Bioscience… to falsely and fraudulently bill various health care programs for genetic tests... that were not medically necessary and never interpreted."

Proove was not named as a defendant in the Indiana case. In an email to PNN, Meshkin said Proove had cooperated with investigators.

“Proove has cooperated with both the FBI and US Attorney’s office on this case," said Meshkin. "With regards to tests being 'medically necessary', Proove received written and signed determinations of medical necessity supporting the tests ordered and billed to insurance carriers just like every other laboratory which requires such a determination on a test requisition form. Thus Proove operated appropriately and consistent with usual and customary practices."

Meshkin also defended Proove research, published in the Journal of Addiction Research & Therapy, which claimed to show the effectiveness of its genetic tests.The publisher of the journal, OMICS International, has been accused by the Federal Trade Commission (FTC) of deceiving researchers and readers about the true nature of its publications and peer review process.

"Proove can only speak to its experience with this particular journal,” Meshkin said in an email to PNN. "Specifically for papers submitted to this journal, our R&D team and academic collaborators engaged in documented, extensive peer-review, received suggested edits and provided responses to the suggested edits to the manuscripts submitted for review and publication. Thus, Proove would certainly consider the publications accepted from Proove-affiliated authors in that journal to be 'peer-reviewed'."

According to the FTC complaint filed last August, OMICS  has created hundreds of "open access" online medical journals that publish articles with little or no peer review. Researchers are also charged significant fees to get their articles published by OMICS, a "pay to play" policy that some consider unethical because it diminishes the quality of academic journals and the peer review process.

Proove has aggressively promoted its genetic tests with healthcare providers around the country. A pain clinic in Montana, for example, had a Proove “patient engagement representative” employed on site at the Benefis Pain Management Center in Great Falls.

“We had a meeting one day and here are these people from Proove Biosciences. They told us they were doing a research project,” said Rodney Lutes, a physician assistant who was later fired by Benefis. “They wanted to come to Benefis, into the pain department, and test our patients.  We were told this would be at no cost to the patient. My understanding was that they weren’t going to charge anybody, but I found out afterwards they were charging insurance companies.

“They said providers who participated in this would get some form of payment for participating in the program and for filling out all the paperwork.”

Lutes’ supervising physician at the clinic was Katrina Lewis, MD, a pain management specialist at Benefis who is listed as a member of Proove’s Medical Advisory Board.  Lewis apparently plays a significant role at the clinic, even though she only works there part time. Benefis has denied that Lewis or any of its employees received kickbacks from Proove for referring business to them.

STAT reported that Proove’s restructuring was apparently ordered by Mike Leavitt, a Proove board member, who also served as Utah governor and secretary of the Department of Health and Human Services. Leavitt’s investment firm, Leavitt Equity Partners, provided about $7 million in funding to Proove, according to Meshkin.

A former Proove manager told STAT that she initially felt good about going to work for the company, but soon had misgivings about Proove's research and billing practices.

“It sucked the life out of me, on an integrity level,” said Rhonda Frantz-Smith. “It got more and more corrupt.”

Proove Biosciences Linked to Fraud Investigation

By Pat Anson, Editor

A genetic testing company in southern California has been linked to a nationwide crackdown on healthcare fraud that resulted in criminal charges being filed against hundreds of doctors, nurses and medical professionals.

Among the defendants are three individuals affiliated with Physicians Primary Care of Jeffersonville, Indiana, who are accused of unlawfully dispensing oxycodone, hydrocodone and other opioid medications to patients without a legitimate medical need.

The charges also allege that Jeffrey Campbell, MD, and nurse practitioners Mark Dyer and Dawn Antle "caused Proove Bioscience, Inc., a genetic lab company, to falsely and fraudulently bill various health care programs for genetic tests administered to Physicians Primary Care patients that were not medically necessary and never interpreted."

Proove Biosciences is not formally charged in the grand jury indictment, which was unsealed yesterday in the U.S. District Court of Kentucky in Louisville. In an emailed statement to PNN, Proove's founder and CEO said the company cooperated with authorities and terminated its contract with Dr. Campbell when it first learned of the investigation in 2014.

"Since then, Proove has cooperated with both the FBI and US Attorney’s office on this case," said Brian Meshkin. "With regards to tests being 'medically necessary', Proove received written and signed determinations of medical necessity supporting the tests ordered and billed to insurance carriers just like every other laboratory which requires such a determination on a test requisition form. Thus Proove operated appropriately and consistent with usual and customary practices."

As PNN has reportedProove’s headquarters in Irvine, California was raided by FBI agents last month, along with doctors affiliated with Proove in California, Florida and Kentucky. At the time, the FBI would only say the raids were part of a healthcare fraud investigation.

STAT News reported in February that the FBI and the Inspector General for the Department of Health and Human Services (HHS) were investigating possible criminal activity at Proove. Former and current employees interviewed by the FBI said agents were focused on illegal kickbacks to doctors who encouraged patients to take Proove’s DNA tests. Physicians reportedly could make $144,000 a year in kickbacks that were called “research fees.”

"Proove has been subject to a handful of inaccurate stories,” Proove said in a statement last month.  “We can no longer ignore these false stories based on unreliable sources, and filled with erroneous accusations... spread by a few disgruntled former employees and consultants.”

In all, 412 defendants have been charged nationwide in what the Justice Department calls its “largest ever health care fraud enforcement action.” Most of the charges, according to prosecutors, involve the illegal distribution of painkillers and $1.3 billion in various billing schemes that targeted Medicare, Medicaid and TRICARE, a health insurance program for veterans and their families.    

Attorney General Jeff Sessions said nearly 300 health care providers were being suspended or banned from participating in federal health programs.

“Too many trusted medical professionals like doctors, nurses, and pharmacists have chosen to violate their oaths and put greed ahead of their patients,” said Sessions. “Amazingly, some have made their practices into multi-million dollar criminal enterprises. They seem oblivious to the disastrous consequences of their greed. Their actions not only enrich themselves often at the expense of taxpayers but also feed addictions and cause addictions to start.”

Proove’s ‘Peer Reviewed’ Studies

Proove Biosciences promotes itself as a “leader in personalized pain medicine” and claims its genetic tests have been proven effective in clinical studies at identifying medications that can best treat pain and other health conditions. Critics say most Proove studies are not peer-reviewed and one genetic expert told STAT News the studies were “hogwash.”

Last month Proove claimed in a press release that 91% of patients in a peer-reviewed study reported pain relief after treatment changes prompted by its genetic tests. The press release said the study -- conducted by Katrina Lewis, MD, a member of Proove's medical advisory board who works at Benefis Pain Management Center in Great Falls, Montana – was “accepted for publication by the Journal of Addiction Research & Therapy.”

Not only has the study still not been published, but the journal’s publisher has been accused by the Federal Trade Commission (FTC) of deceiving researchers and readers about the true nature of its publications and peer review process.

According to the FTC complaint filed last August, OMICS International has created hundreds of "open access" online medical journals that publish articles with little or no peer review.

Researchers are also charged significant fees to get their articles published by OMICS, a "pay to play" policy that some consider unethical because it diminishes the quality of academic journals and the peer review process.

According to its website, OMICS publishes a dizzying array of over 700 online medical and scientific journals, ranging from the Journal of Hepatitis to the Journal of Yoga and Physical Therapy, "the official journal of Yoga Federation of Russia and the Hong Kong Yoga Association." 

“In reality, many of Defendants’ online publications do not adopt the rigorous peer review practices that are standard in the scholarly journal publishing industry,” the FTC complaint says. “In numerous instances, individuals who have agreed to serve as peer reviewers for Defendants either never receive any manuscripts to review or discover that, when they access the online manuscript review system to review their assigned articles, the articles have already been approved for publication. In addition, in numerous instances, consumers receive no edits or, at most, only stylistic edits before Defendants publish the work.” 

"As for the Journal of Addiction Research & Therapy, Proove can only speak to its experience with this particular journal and cannot comment on the allegations by the FTC," said CEO Meshkin. "Specifically for papers submitted to this journal, our R&D team and academic collaborators engaged in documented, extensive peer-review, received suggested edits and provided responses to the suggested edits to the manuscripts submitted for review and publication. Thus, Proove would certainly consider the publications accepted from Proove-affiliated authors in that journal to be 'peer-reviewed'." 

In March, OMICS published in the Journal of Addiction Research & Therapy a study by Proove which found that one of the company’s genetic tests could identify patients at high-risk of developing opioid use disorder. Proove said in a news release the study had been peer reviewed. 

In April, a second Proove study was published in Pharmacogenomics and Personalized Medicine, an online journal published by Dove Medical Press, another so-called predatory publisher that charges high fees to researchers to get their studies into medical journals.

"This is the first of many peer-reviewed publications over the next several months demonstrating the validity of Proove Opioid Risk (test), building on the existing published evidence," Dr. Svetlana Kantorovich, Proove's Research and Development director said in a news release.