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Paul Zimmerman
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Showing 13 posts by Kelly M. Hagemann.

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Department of Justice Targets Fraud and Corruption within Substance Abuse Disorder Treatment Industry

Late last week, the U.S. Department of Justice announced criminal charges against 10 defendants for alleged kickback schemes at substance abuse disorder treatment facilities in Orange County. These charges are part of “The Sober Home Initiative”—a coordinated effort among federal and state law enforcement to investigate and prosecute fraud and corruption within licensed rehab and sober living facilities. In connection with the DOJ’s announcement, a lead prosecutor ominously told the Orange County Register, “This is the beginning, not the end.” (Read More)

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Federal Authorities Have Their Eyes on Treatment Facilities, Sober Living Home Operators and Marketers, Especially in Orange County

Federal prosecutors are aggressively targeting the substance use disorder treatment space—an industry that some believe has been permeated with fraud and abuse. This is particularly the case in Orange County, California, referred to by some as part of the “Rehab Riviera” on account of the dense concentration of treatment facilities and sober living homes in Costa Mesa, Laguna Beach and San Juan Capistrano.

Just last week, on November 15, a marketer pleaded guilty in Orange County federal court to accepting nearly $2 million in kickback payments in return for referring patients to treatment facilities. And, by all indications, further indictments and charges are coming. (Read More 

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EKRA Put to the Test Yet Again

Michelman & Robinson recently posted a blog about two Californians (a medical doctor among them) and three others (one from New Jersey and two Marylanders), all of whom admitted to their part in a conspiracy—in violation of the Eliminating Kickbacks in Recovery Act of 2018 (EKRA)—that involved multiple layers of kickbacks. EKRA enforcement continues with the indictment last month of the Chief Executive Officer of a Costa Mesa-based substance abuse treatment and counseling center. (Read More)

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Chain of Kickbacks Leads to Long-Awaited EKRA Enforcement Against Marketers, Recruiters, and Treatment Facilities

Congress enacted the Eliminating Kickbacks in Recovery Act (EKRA) back in October 2018—legislation that prohibits the payment of kickbacks in exchange for patient referrals to substance use treatment providers. Nearly two years later, a handful of men who ran a triple kickback scheme are amongst the first to plead guilty for violating the law. (Read More)

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Under the Microscope: Substance Abuse Patient ReferralsĀ 

Governor Brown just signed Senate Bill 1228 into law, implementing Health & Safety Code §§11831.6 and 11831.7. The move directly impacts marketing practices within the world of substance abuse treatment. (Read More)

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Rossella Apostoli  © 123RF.com

Federal Legislation Expected on Sober Living Homes

Sober living homes offer drug- and alcohol-free, cooperative living arrangements for people in the process of recovery from addiction. Rapid growth within the sector as well as increased media attention due to some recurring concerns expressed by frustrated communities, have led many states and municipalities to rethink their approach to substance abuse treatment and explore new modes of regulation. Now, federal legislators have said that they will intervene. (Read More)

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DOJ Seeks to Block Two Major Health Insurance Mergers

The United States Department of Justice (DOJ) is suing to block two proposed mergers between major health insurance companies, claiming that the deals violate antitrust laws and would lead to increased health care costs for patients. As noted in an earlier blog post, the merger of Aetna and Humana, as well as Anthem Inc.’s acquisition of Cigna Corp., has faced many regulatory and antitrust hurdles since being announced last year. Several key stakeholders, including California insurance Commissioner Dave Jones, have expressed concern that the aforementioned mega-deals will result in an anti-competitive insurance market. Now, the DOJ has announced that it is challenging both mergers on the grounds that they "would lead to higher health-insurance prices, reduced benefits, less innovation, and worse service for over a million Americans." (Read More)

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Viktor Bondar © 123RF.com

CA Insurance Commissioner Urges U.S. Justice Department to Block Merger of Aetna and Humana

The proposed $37 billion merger of health insurance giants Aetna and Humana has faced several regulatory and antitrust hurdles since it was announced in July 2015. Aetna’s proposed acquisition of Humana also coincides with another health insurer deal in which Anthem Inc. agreed to buy Cigna Corp. If both mergers are approved, it would reduce the number of major national health insurance companies to three: Aetna, Anthem and UnitedHealth Group Inc. Stakeholders have kept a watchful eye on California, curious as to how key insurance regulators would respond to the proposed merger. Now, California Insurance Commissioner Dave Jones has issued a finding that the Aetna and Humana merger is anti-competitive. Jones formally recommended the Department of Justice block the proposed merger of Aetna and Humana. (Read More)

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Health Net Payments Trickle in to Addiction Treatment Centers as CA Regulators Investigate Insurer

As we have previously detailed, Health Net began directing a great deal of attention toward addiction treatment providers in early 2016. The payor (which has subsequently been acquired by Centene Corp.) started aggressively monitoring and investigating claims from substance abuse treatment facilities, and then dramatically expanded its attestation requests to smaller providers. Among other things, Health Net scrutinized referral practices, the medical necessity of services, and whether providers were waiving out-of-pocket payments from patients. Providers throughout California, as well as states like Arizona, Nevada and Texas, received attestation requests regardless of whether Health Net had any specific evidence of fraud and abuse. At the same time, providers found that Health Net payments stopped completely, including payments for previously-submitted claims that pre-dated the attestation letters.  Now, while some providers are beginning to receive reimbursements from Health Net, the California Department of Insurance (CDI) has reportedly opened an inquiry into the improper withholding of payments. (Read More)

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NY Hospital to Pay $2.2 Million for Allowing TV Crew to Videotape Dying Patient

On the ABC television series “NY Med,” doctors from New York-Presbyterian Hospital (NYP) are profiled as they perform medical procedures. However, in an effort to keep it “real,” the show’s crew has landed the hospital in hot water. The Department of Health and Human Services, Office for Civil Rights (OCR) announced that it has reached a $2.2 million settlement with NYP for the “egregious disclosure” of two patients’ protected health information (PHI) to film crews and staff during the filming of “NY Med,” without first obtaining authorization from the patients. In particular, OCR found that the hospital allowed the television crew to film a dying patient and another person in significant distress, even after a medical professional urged the crew to stop. (Read More)