CleanSlate Addiction Treatment Centers Settle Qui Tam Allegations of Prescribing of Suboxone by Nurse Practitioners and Physician Assistants Without Proper Physician Supervision and Improper Billing

The addiction industry is facing a great deal of scrutiny at every level. The laws and regulations are changing and compliance is lagging behind. Noble efforts to get patients treated quickly for substance abuse due to the growing opioid abuse epidemic will cause problems if the federal and state laws are not followed carefully especially where Suboxone and other scheduled drugs are involved (due to potential for misuse and diversion). Further, where there is Medicare/Medicaid or insurance billing involved issues of medical necessity, proper billing and proper medical supervision is key.

Treatment centers need to be mindful that federal rules and regulations regarding prescribing and billing must be followed carefully. A recent qui tam case addresses the prescribing of Buprenorphine (Suboxone), a Schedule III controlled substance that also can be used to treat pain, by mid-level practitioners and what happens when federal law changes but state regulations are not adopted. Providers must follow state and federal laws and regulations.  

How did this qui tam case come about? Until recently, only a physician could prescribe buprenorphine for addiction treatment. Congress modified the law in July 2016, allowing nurse practitioners and physician assistants to prescribe buprenorphine for addiction treatment, provided they meet certain training and state-law licensing requirements.  In Massachusetts, those requirements have not yet been established.

A recent case shows the legal issues. On November 22, 2016, the U.S. Attorney’s Office in Boston reached a $750,000 civil settlement yesterday with CleanSlate Centers, Inc. and Total Wellness Centers, LLC d/b/a CleanSlate. This civil settlement resolved allegations that the two companies, which together operate opioid addiction treatment centers in Massachusetts and other states, improperly prescribed buprenorphine (Suboxone®) for opioid addiction treatment and improperly billed Medicare.

California Doctor Sentenced to Probation for Removing Artifacts and Archeological Resources From Federal Parks After Significant Cooperation and Payment of Restitution

U.S. Park Service Photo of someone who tried to take petroglyph 

Federal regulations govern wildlife, national parks, endangered species, and we have seen individuals get felony charges for violating these laws and regulations while they pursue their hobbies. 

One of our cases years ago involved a physician who obtained fish from PennySaver and local shops and took care of them in his own home tanks -- but it turned out the fish was on an endangered species list and he was not aware of it. We were able to stop any consequence to the physician's license but the licensing boards are stricter now. A recent case involving a physician shows how a hobby or interest can lead to federal charges and a conviction.

On November 11, 2016, Dr. Jonathan Cornelius Bourne of Mammoth Lakes was sentenced to two years of probation, a $40,000 fine, and $249,372 in restitution for felony violations of the Archeological Resources Protection Act. Additionally, Dr. Bourne is banned from entering federal public lands for recreational purposes while on probation. This sentence follows his guilty plea on August 15, 2016, to unauthorized transportation of archeological resources and unauthorized excavation, removal, damage, or defacement of archeological resources. 

Physicians Can Apply for Award Up To $105,000 for Serving In a Medically Underserved Area of California - Apply Dec. 1, 2016 to Feb. 28, 2017

Are you licensed in California and looking for a way to work in an underserved area and get student loan forgiveness? Physicians (allopathic or ostepopathic physician or surgeon) can apply for an award from the Steven M. Thompson Physician Corps Loan Repayment Program up to $105,000 in exchange for a service obligation in a medically underserved area of California. 

The link for the physican scholarship is: http://www.oshpd.ca.gov/HPEF/Programs/STLRP.html 

For more information go the website for this program (and for other health care provider scholarships) at State of California Office of Statewide Health Planning and Development, Health Professions Education Foundation.  There are also scholarships for Registered Nurses, LVNs, Dentists, Physician Assistants, Occupational Therapists, Pharmicists, SpeechTherapists, Certified Midwifes, Nurse Practitioners, and other health care providers and those deadlines vary. Review the website for deadline and application information.

This underserved area covers most of the state and is close to major urban areas. Visit the website link above for the map of the area covered.

California Registered Nurse Who Ordered Botox From Canadian Company Via Internet for Medical Spa Pleads Guilty to Federal Charge of Receipt and Delivery of a Misbranded Drug

One important issue for all medical providers is to understand where FDA medications and injectables come from. Ordering on the Internet or from unauthorized distributers can create serious legal issues, including criminal charges, license discipline and in cases where insurance or Medicare/Medi-Cal (Medicaid) has been billed there will be demands for overpayment and allegations of fraudulent billing.

A registered nurse who owned and operated a day spa in Laguna Niguel, California has learned this lesson the hard way. This month she agreed to plead guilty to a federal charge related to the illegal distribution of Botox that was not approved for use in the United States.  

Bridget “Gigi” Goddard, who allegedly owned Pure Indulgence Skin Rejuvenation in Laguna Niguel, has agreed to plead guilty to one count of receipt and delivery of a misbranded drug, a crime that carries a statutory maximum penalty of three years in federal prison. It would be highly unlikely she would receive the maximum but it is a felony and will likely have license repurcussions.

Lesson of the Case. The issue is often whether there is criminal intent and there have been thousands of physicians purchasing. How is that shown? One way is whether the individual received a letter from FDA about it and continued to order from other countries.  FDA has been transparent about notifying medical providers about illegal use of Botox and other medications from outside the U.S. On the FDA website there's a list of medical providers who were notified from 2013 to the present and there's a list of "repeat offenders." Ms. Goddard unfortunately was one of those listed as having been notified in 2013 and apparently still used product from outside the U.S. The undercover agent was key in her case. 

Government Has List of Providers Who Bought From SB Medical, Inc., TC Medical and Gallant Pharmaceutical. This case comes out of a larger federal case against SB Medical that was filed in Alexandria, Virginia against SB Medical, Inc. and its principals. In that case, the company plead guilty and was ordered to pay a $45 million fine and to forfeit $30 million for smuggle misbranded pharmaceuticals into the United States. The government sent letters to medical clinics and medical spas who had bought Botox and other injectables from SB Medical, Inc. and other companies under investigation and then followed up with them. Other entities that were also prosecuted include Gallant Pharmaceutical. 

Allegations Against Ms. Goddard. The government alleged that the Botox that Ms. Goddard purchased had been manufactured for distribution in foreign nations such as Turkey and was not approved by the FDA for distribution in the United States. All Botox products approved for distribution in the United States by the United States Food and Drug Administration are manufactured by Allergan and must be administered under the supervision of a licensed physician. 

Ms. Goddard admitted in her plea agreement that, over the course of several years, she ordered Botox over the internet from Canadian companies that sold unapproved drugs to customers in the United States. In April 2016, the government send an undercover FDA agent to Pure Indulgence which compounded Ms. Goddard's legal issues.  The government alleges that at this undercover visit, Ms. Goddard told the undercover agent that the undercover agent did not need to be examined by a physician before the Botox injections were administered, and she knowingly misled the agent as to whether the Botox was approved for use in the United States.

Ms. Goddard is scheduled to make her first appearance in this case in United States District Court in Santa Ana on December 12. The investigation into Goddard was conducted by FDA’s Office of Criminal Investigation. The case is being prosecuted by Assistant United States Attorney Scott D. Tenley of the Santa Ana branch office.

Attorney Commentary. The high price of Botox and other injectibles have caused entrepreneurs to buy overseas and sell in the U.S. in person or through the Internet. The salespersons represent that the product is the "same" but often that is not the case. In addition, even if the product were Allergan from overseas - if the drugs are not distributed by Allergan and sold in the U.S., it is illegal to import the products from outside the U.S. One of the reasons is that there are counterfeiters who repackage, are not using real product, and the chain of custody is not guaranteed. In addition, there is product liability insurance in the U.S. that is not available for products purchased from outside the U.S. 

While the pricing structure of pharmaceuticals and medical devices may not seem fair, it is the law and medical providers must be careful and instruct office managers and nurses to order from the manufacturer or authorized distributors. If there is an investigation or visit by an FDA agent, it is important to not handle this alone and seek experience counsel since mistakes during an interview can have serious repurcussions.

How do you prevent an FDA investigation from turning into a criminal case? The government looks for criminal intent. The FDA had been heavy handed in some cases and was even named the Botox Police. Allergan had its own financial interest in pursuing charges. 

Tips. First, if there is an interview request -- and trust me, the agents do not call for an appointment and simply show up in pairs -- be polite and ask for time to have an attorney present and so you can gather all your records and prepare for an interview (or decide not to be interviewed depending on the facts). 

Second, do not lie. Do not fabricate records. Do not ask anyone else to lie or fabricate an invoice. This is what the government loves - when someone panics and acts like a foolish teenager and lies without thinking - since it shows "criminal intent." 

Third, do not minimize the importance of these investigations and attempt to handle it on your own. When you are stressed, part of your brain shuts down and at the time of the interview, the FDA or other goverment agency knows a lot more facts than you.

Finally, each case is different and there could be an additional 10 tips but it will be case specific. Even chain pharmacies have counterfeit and fake drugs and over the counter medications. Counterfeiting is a huge business. Be smart and breathe, take your time to get experienced representation and prepare for an interview like you would anything else.

Posted by Tracy Green, Esq.

Green and Associates, Attorneys at Law
Email:  tgreen@greenassoc.com
Office: 213-233-2261

California Owner and CFO of Chain of Outpatient Drug Rehab and Sober Living Facilities Charged With Insurance Fraud and Identity Theft In State Case in LA County Superior Court

There have been investigations into the drug rehabilitation business the past two years with insurance investigators leading the way. The investigations have covered the marketing to patients, payment of patients' insurance policies, use of drug toxicology laboratories, excessive billing allegations and other insurance issues.

In the largest Los Angeles case to date, on November 10, 2016, Community Recovery of Los Angeles (CRLA)'s CEO Chris Bathum and CFO Kirsten Wallace were charged in a state case in Los Angeles County Superior Court with multiple felony counts of grand theft and identity theft for allegedly conspiring to defraud patients and insurers out of more than $176 million through an elaborate conspiracy. Simultaneously, search warrants were also executed at 15 locations throughout Los Angeles and Orange County. Mr. Bathum and Ms. Wallace are presumed innocent and a criminal complaint is not evidence. 

The felony complaint alleges that Mr. Bathum and Mr. Wallace conspired to steal patient identities and buy health insurance policies for patients without their knowledge. After completing treatment, it is alleged that Mr. Bathum continued to have CRLA bill insurance companies for treatment services. It is alleged that CRLA billed health insurance companies more than $176 million in fraudulent claims. The insurers, including Anthem Blue Cross, Blue Shield, Cigna, Health Net and Humana paid approximately $44 million in total before stopping claim payments to CRLA.

Former Napa Winemaker Charged in California Federal Court With Mail and Wire Fraud in Mislabeling Wine

Mislabeling of food items has not been a high priority in past years. However, the issues that have happened in China with olive oil and in the U.S. with “organic” food and the money that the mislabelers make while they deceive consumers is no longer going unnoticed. If your company makes a product or food item that is not properly labeled, understanding the risks is important. 

Federal regulations govern, and some companies do not realize that there is civil and criminal exposure if they are violated. A recently filed case may help companies realize the high risks and why compliance is important. It also shows how hiding facts, creating false records or deceptive acts may turn a civil lawsuit into a criminal case.

On November 2, 2016, former winemaker Jeffry Hill was indicted in San Francisco for mail fraud and wire fraud in connection with his operation of a Napa Valley-based wine company Hill Wine Company (“HWC”). These are allegations and not evidence but for companies and individuals just being charged is something to be avoided.