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The Weekly Scan

Last Updated: 1:00 PM EST


  • Stephen Chalker, a South Florida pharmacist, was sentenced to 78 months in prison on Thursday for his role in a $5 million compounding pharmacy scheme. Additionally, Chalker was ordered to pay $4,980,679.50 in restitution jointly and severally and a forfeiture money judgment of $244,134. From approximately September 2014 to August 2016, Chalker engaged in a scheme to defraud Medicare, TRICARE and Medicaid by submitting false and fraudulent claims for compounded drugs and other prescription medications that were not medically necessary and/or never provided. The evidence established that in his role as the licensed pharmacist-in-charge of Pop’s Pharmacy, a now-defunct pharmacy in Deerfield Beach, Florida, Chalker submitted or caused the submission of high-dollar claims for expensive pain and scar creams that patients did not want, did not need and in some cases did not receive. Chalker, as pharmacist-in-charge, created the formulas for the fraudulent compounded pain and scar creams to be filled by Pop’s Pharmacy in order to maximize profits for Pop’s Pharmacy from insurance reimbursement, and not for patient care. Chalker and his co-conspirators ran a nationwide telemarketing and telemedicine scheme in which there was no real patient-prescriber relationship or actual patient care. (Justice.gov)

  • Gray Wesley Barrow, M.D., a Baton Rouge, Louisiana-based doctor, pleaded guilty on Tuesday for his role in a scheme to receive approximately $336,000 in illegal health care kickback payments. Barrow was a co-owner of Louisiana Spine & Sports LLC, a pain management clinic located in Baton Rouge. According to admissions made as part of his guilty plea, Barrow agreed to send urine specimens collected from his patients to a drug testing laboratory in return for a percentage of the reimbursements paid to the laboratory by health care benefit programs, including Medicare. As part of his plea, Barrow admitted that from approximately April 2014 through July 2016, he sent specimens collected from his patients to the drug testing laboratory and received approximately $336,000 in disbursements from the laboratory associated with testing for Medicare beneficiaries. (Justice.gov)

  • A federal grand jury indicted two clinic workers on Tuesday for their roles in a scheme involving approximately $5.9 million in allegedly fraudulent Department of Labor claims for unprovided drug screening and improperly coded physical therapy and report writing services. Melissa Sumerour of Waco, Texas and Latosha Morgan of Dallas, Texas were each indicted on one count of conspiracy to commit health care fraud. According to the indictment, from January 2011 to March 2017, Sumerour, Morgan and their co-conspirators allegedly engaged in an “upcoding” scheme to bill DOL for more expensive services than those that were actually performed, if any. The defendants allegedly defrauded DOL of approximately $5.9 million through fraudulent worker’s compensation claims. The indictment alleges that Sumerour and Morgan worked at clinics in Temple and Fort Worth, Texas, respectively, which treated almost exclusively DOL patients and that they routinely billed for higher reimbursable services in order to earn bonuses based on the percentage that their clinics billed. (Justice.gov)

Medicare and Medicaid

  • Last week, the Centers for Medicare & Medicaid Services (CMS) announced upcoming efforts to support better care and outcomes for nursing home residents under the Civil Money Penalty Reinvestment Program (CMPRP). This three-year initiative aims to improve residents’ quality of life by equipping nursing home staff, administrators and stakeholders with technical tools and assistance to enhance resident care. “CMS is committed to ensuring nursing home residents are safe and receive quality care,” said CMS Administrator Seema Verma. “We are pleased to offer nursing home staff practical tools and assistance to improve resident care and positively impact the lives of individuals in our nation’s nursing homes.” As part of the CMPRP, CMS will develop a variety of work products for nursing home professionals, such as staff competency assessment tools, instructional guides, training webinars and technical assistance seminars. These supports aim to help staff reduce adverse events, improve dementia care and strengthen staffing quality, including by reducing staff turnover and enhancing performance. (CMS.gov)

  • On Monday, the Centers for Medicare & Medicaid Services (CMS) proposed policies for 2020 to strengthen and modernize the Medicare Part C and D programs. The proposal would ensure that Medicare Advantage and Part D plans have more tools to negotiate lower drug prices, and the agency is also considering a policy that would require pharmacy rebates to be passed on to seniors to lower their drug costs at the pharmacy counter. The proposed changes include: Providing Part D plans with greater flexibility to negotiate discounts for drugs in “protected” therapeutic classes, so beneficiaries who need these drugs will see lower costs; requiring Part D plans to increase transparency and provide enrollees and their doctors with a patient’s out-of-pocket cost obligations for prescription drugs when a prescription is written; codifying a policy similar to the one implemented for 2019 to allow “step therapy” in Medicare Advantage for Part B drugs, encouraging access to high-value products including biosimilars; and implementing a statutory requirement, recently signed by President Trump, that prohibits pharmacy gag clauses in Part D. (Press Release: CMS.gov; Proposed Rule: FederalRegister.gov)

  • On Tuesday, the Centers for Medicare & Medicaid Services (CMS) launched a new online tool that allows consumers to compare Medicare payments and co-payments for certain procedures that are performed in both hospital outpatient departments and ambulatory surgical centers. The Procedure Price Lookup tool displays national averages for the amount Medicare pays the hospital or ambulatory surgical center and the national average co-payment amount a beneficiary with no Medicare supplemental insurance would pay the provider. The Procedure Price Lookup tool is launching as required by Congress in the 21st Century Cures Act. Medicare’s statutes require that CMS maintain separate payment systems for different types of healthcare providers, meaning both CMS and patients may pay different amounts for the same service, depending on the site of care. “The different payment rates are a prime example of Medicare’s misaligned financial incentives, under which providers can make more money if they see patients at one location as opposed to another,” Administrator Verma said. (Press Release: CMS.gov; Tool: Medicare.gov)

  • On Thursday, the Centers for Medicare & Medicaid Services (CMS) released four waiver concepts for states’ use to promote more affordable, flexible health insurance coverage options through State Relief and Empowerment Waivers. CMS is providing states with these waiver concepts in an effort to spur innovation, reduce burden for states with potentially limited policy resources or legislative schedules, and illustrate how states might take advantage of new flexibilities provided in recently released guidance related to State Relief and Empowerment Waivers (also referred to as “section 1332 waivers” or “state innovation waivers”). Waiver concepts are offered to spur innovative ideas that can be utilized by individual states to improve their health care markets. The concepts are account-based subsidies, state-specific premium assistance, adjusted plan options, and risk stabilization strategies. (CMS.gov)

  • Today, the Government Accountability Office released a new report: "Medicare Laboratory Tests: Implementation of New Rates May Lead to Billions in Excess Payments." Medicare paid $7.1 billion for 433 million laboratory tests in 2017. These tests help health care providers prevent, diagnose, and treat diseases. The Protecting Access to Medicare Act of 2014 included a provision for GAO to review CMS’s implementation of new payment rates for these tests. This report addresses, among other objectives, (1) how CMS developed the new payment rates; (2) challenges CMS faced in setting accurate payment rates and what factors may have mitigated these challenges; and (3) the potential effect of the new payment rates on Medicare expenditures. GAO analyzed 2016 Medicare claims data (the most recent data available when GAO started its work and the year on which new payment rates were based) and private-payer data CMS collected. GAO also interviewed CMS and industry officials. (GAO.gov)


  • On Wednesday, the U.S. Department of Health and Human Services (HHS) issued a draft strategy designed to help reduce administrative and regulatory burden on clinicians caused by the use of health information technology (health IT) such as electronic health records (EHRs). The draft Strategy on Reducing Regulatory and Administrative Burden Relating to the Use of Health IT and EHRs was led by the HHS Office of the National Coordinator for Health Information Technology (ONC), in partnership with the Centers for Medicare & Medicaid Services (CMS), and was required in the 21st Century Cures Act. The draft strategy reflects the input and feedback received by ONC and CMS from stakeholders, including clinicians, expressing concerns that EHR burden negatively affects the end user and ultimately the care delivery experience. This draft strategy includes recommendations that will allow physicians and other clinicians to provide effective care to their patients with a renewed sense of satisfaction for them and their patients. (HHS.gov)

Private Sector

  • CVS Health announced on Wednesday that it has completed its acquisition of Aetna. “By fully integrating Aetna's medical information and analytics with CVS Health’s pharmacy data, we can develop new ways to engage consumers in their total health and wellness through personal contacts and deeper collaboration with their primary care physicians,” CVS Health President and CEO Larry J. Merlo said. “As a result, we expect patients will benefit from earlier interventions and better-connected care, leading to improved health outcomes and lower medical costs.” The transaction values Aetna at $212 per share or approximately $70 billion. Including the assumption of Aetna’s debt, the total value of the transaction is $78 billion. The combined company's shares are listed on the New York Stock Exchange under the ticker symbol “CVS.” The Aetna brand name will continue to be used in reference to the health insurance products. Going forward, Aetna will operate as a standalone business within the CVS Health enterprise and will be led by members of its current management team. (CVSHealth.com)

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