Federal prosecutors build the new healthcare-related fraud cases on previous nationwide enforcement actions from 2022
Federal charges have once again been brought against a number of physicians and clinical laboratory owners in what the US Department of Justice described as the “largest ever” coordinated nationwide law enforcement effort against COVID-19 pandemic-related healthcare fraud.
In total, the DOJ filed criminal charges against 18 defendants in five states plus the territory of Puerto Rico, according to an April 20 press release.
The highest dollar amount of these frauds involved ENT physician Anthony Hao Dinh, DO, who allegedly defrauded the Health Resources and Services Administration (HRSA) COVID-19 Uninsured Program for millions of dollars, and Lourdes Navarro, owner of Matias Clinical Laboratory, for allegedly “submitting over $358 million in false and fraudulent claims to Medicare, HRSA, and a private insurance company for laboratory testing” while performing “COVID-19 screening testing for nursing homes and other facilities with vulnerable elderly populations, as well as primary and secondary schools,” the press release states. Both court cases are being conducted in Southern California courtrooms.
The DOJ’s filing of charges came rather speedily, compared to other cases involving fraudulent clinical laboratory testing schemes pre-pandemic. The amount of money each defendant managed to generate in reimbursement from the fraud represents tens of thousands of patients. If feds were paying $100 per COVID-19 test, then the $153 million represents 153,000 patients, in just 18 to 24 months.
“Today’s announcement marks the largest-ever coordinated law enforcement action in the United States targeting healthcare fraud schemes that exploit the COVID-19 pandemic,” said Assistant Attorney General Kenneth A. Polite, Jr. (above), in an April 20 DOJ press release. “The Criminal Division’s Health Care Fraud Unit and our partners are committed to rooting out pandemic-related fraud and holding accountable anyone seeking to profit from a public health emergency.” Clinical laboratory managers may want to pay close attention to the DOJ’s prosecution of these newest cases of alleged COVID-19 fraud. (Photo copyright: Department of Justice.)
Prosecutors allege that Navarro and her husband, Imran Shams, who operated Matias—also known as Health Care Providers Laboratory—perpetrated a scheme to perform medically unnecessary respiratory pathogen panel (RPP) tests on specimens collected for COVID-19 testing, even though physicians had not ordered the RPP tests and the specimens were collected from asymptomatic individuals.
In some cases, the indictment alleges, Navarro and Shams paid kickbacks and bribes to obtain the samples.
The indictment notes that reimbursement for RPP and other respiratory pathogen tests is generally “several times higher” than reimbursement for COVID-19 testing. Claims for the tests were submitted to Medicare and an unidentified private insurer, as well as the HRSA COVID-19 Uninsured Program, which provided support for COVID-19 testing and treatment for uninsured patients.
Claims to the HRSA falsely represented that “the tested individuals had been diagnosed with COVID-19, when in truth and in fact, the individuals had not been diagnosed with COVID-19 and the tests were for screening purposes only,” the First Superseding Indictment states.
The indictment further states that both Navarro and Shams had previously been barred from participating in Medicare and other federal healthcare programs due to past fraud convictions. Navarro, the indictment alleges, was reinstated in December 2018 after submitting a “false and fraudulent” application to the HHS Office of Inspector General.
It also alleges that Navarro and Shams concealed their ownership role in Matias so the lab could maintain billing privileges.
More Alleged Abuse of HRSA Uninsured Program
In a separate case, Federal prosecutors alleged that Anthony Hao Dinh, DO, an ear, nose, and throat physician in Orange County, California, engaged in a scheme to defraud the HRSA COVID-19 Uninsured Program as well.
Dinh, prosecutors allege, “submitted fraudulent claims for treatment of patients who were insured, billed for services that were not rendered, and billed for services that were not medically necessary.”
The criminal complaint, filed on April 10, alleges that Dinh submitted claims for approximately $230 million, enough to make him the program’s second-highest biller. He was paid more than $153 million, prosecutors allege, and “used fraud proceeds for high-risk options trading, losing over $100 million from November 2020 through February 2022,” states the US Attorney’s Office, Central District of California press release.
Dinh was also charged for allegedly attempting to defraud the federal Paycheck Protection Program (PPP) and Economic Injury Disaster Loan (EIDL) program. He faces a maximum sentence of 50 years in federal prison, the press release states.
Dinh’s sister, Hang Trinh Dinh, 64, of Lake Forest, California, and Matthew Hoang Ho, 65, of Melbourne, Florida, are also charged in the complaint, the Los Angeles Times reported.
Both of these cases are notable because of the size of the fraud each defendant pulled off involving COVID-19 lab testing. Clinical laboratory managers may want to review the original court indictments. The documents show the brazenness of these fraudsters and detail how they may have induced other doctors to refer them testing specimens.
Level 3 bio labs handle Ebola, smallpox and other deadly diseases, and may play a role in research into the human genome
Because of the COVID-19 pandemic, there is a concerted effort to improve public health laboratories and increase the growth of bioresearch. Clinical laboratories across the country are required by law to send specimens of certain infectious diseases to public health labs for testing and analysis. The results of those tests are then reported to the federal Centers for Disease Control and Prevention (CDC), which is working to foster robust connections and relationships between clinical labs and public health labs.
A land transaction for a 1.6-acre purchase between Dallas County and TXRE Properties closed in April. The development of the lab is expected to cost $52 million and should be completed by late 2025 with occupancy as early as January 2026.
The graphic above is an artist rendering of what the new Dallas County Health and Human Services Public Health Laboratory may look like. For some time now, Dallas County has been working to create a hub centered around infrastructure and buildings to be used for bio development and research, public health labs, and even clinical laboratories. (Graphic copyright: 5G Studio Collaborative.)
Continuing Support for HHS
“The large-scale response required for COVID-19 demonstrated the need for the acquisition that will permit the continued support of the HHS efforts in response to the ongoing safety, containment, incident response to emerging and high consequence diseases that could operate at the peak of a crisis without hindering or being hindered by other county operations,” states a Dallas County Commissioners Court Order, D Magazine reported.
“The county currently utilizes owned facilities to provide laboratory services, testing services, and other initiatives,” according to the court order. “These facilities have performance and design shortcomings and have required significant capital expenditure for their ongoing use.
“To avoid leasing space and avoid additional capital investment into deferred and ongoing maintenance, the county has been searching for a suitable location/acquisition to collocate uses/departments into a centralized, efficient, and suitable laboratory,” the court order continued.
Lab Will Conduct Research into Potentially Fatal Diseases
The facility will pursue becoming a Biological Safety Level-3 laboratory. BSL-3 labs typically conduct research or work on microbes that can cause serious and potentially fatal disease through inhalation. These labs are required to be easily decontaminated. They must also have additional safety measures, including interlocked doors, sealed windows, floors, and walls, and filtered ventilation systems.
“The core diagnostic functions are—along with safety—related to identification, containment, security, and incident response to emerging and high consequence diseases,” the court order notes.
A Georgetown University article published last year concluded there are 148 institutions with BSL-3 laboratories in the US. This number was established by identifying and totaling the number of BSL-3 facilities that published research between 2006 and 2021 using PubMed Central, a full-text archive of biomedical and life sciences journal literature at the US National Institutes of Health’s National Library of Medicine (NIH/NLM).
The creation of this new biosafety lab in Dallas is consistent with the trend of investment dollars being poured into research into the human genome. This type of research, along with the creation of new facilities, can directly lead to new biomarkers that can be utilized in clinical laboratory testing and disease prevention.
Challenges abound as the NHS tries to recover before UK citizens move to private insurance; some patients have wait times of up to six months for a histopathology diagnosis of cancer
As we noted, thousands of clinical laboratory tests and surgical pathology readings had to be delayed or cancelled due to the strikes.
An NHS worker in a Liverpool hospital told CNN that conditions felt like a “war zone” with patients being treated in the backs of ambulances, corridors, waiting rooms, cupboards, or not at all since hospitals are well over capacity.
“Those who can afford to get private insurance are,” Chris Thomas (above), told The Guardian. Thomas is Head of the Commission on Health and Prosperity for UK progressive policy think tank the Institute for Public Policy Research (IPPR). “People are not opting out of the NHS because they have stopped believing in it as the best and fairest model of healthcare,” he said. “Rather, those who can afford it are being forced to go private … and those without the funds are left to ‘put up or shut up.’” (Photo copyright: Institute for Public Policy Research.)
Two-Tier System Could Become UK’s Norm, Dividing Classes
The drive towards private insurance is leaving Britain on the brink of having a “two-tier” system where the NHS is overpowered by private healthcare. And it’s not an unwarranted fear. One in six people in Britain are prepared to use private healthcare instead of waiting for the NHS, The Guardian reported.
A report from the Institute for Public Policy Research (IPPR) claims a UK two-tiered system would not mimic what we have here in the US. Rather, if the trend continues in the private direction, it would more likely be comparable to dentistry in England, “… where poor NHS access exists for some and superior but expensive access exists for many. We stand at the precipice of a growing ‘opt-out’ by those who can,” according to the IPPR report, The Guardian noted.
More importantly, this could further divide classes. “Such a trend could threaten the deep and widespread public support for the NHS among voters and leave millions of patients vulnerable because of their ethnicity, postcode, income or job,” The Guardian noted the IPPR report as saying.
“It’s different when you see your everyday reality though naïve eyes. He saw the elderly patients on the jigsaw of trolleys crammed into the department, pushed against the wall, squeezed in the gap between the bed and nursing stations.
“He saw the fluids hanging from rails where we had no stands, lines running into the patient’s forearms. He saw the oxygen fed into their noses from cylinders propped along the bed, the cacophony of beeping machines and alarms.
“It doesn’t look like it does on the TV. It doesn’t even look like it does on reality TV,” she wrote.
The healthcare statistics are alarming. According to CNN:
There was a 20% increase in excess deaths the final week of December 2022, compared to the previous five years.
Half of patients waiting for emergency care that month waited for more than four hours, which was a record.
Also in December, 54,000 people waited more than 12 hours for emergency admission. The wait was “virtually zero” prior to the COVID-19 pandemic.
And “category 2” conditions, such as a stroke or heart attack, had a more than 90-minute wait time for ambulance attendance. The target response time is 18 minutes.
Dim Hopes for Improvement
Though the NHS has struggled in recent years, the challenges are seemingly worse now. “This time feels different. It’s never been as bad as this,” gastroenterologist Peter Neville, MD, a consultant physician who worked with the NHS since 1989, told CNN.
CNN noted that a perfect storm of challenges might have brought the NHS to where it is today. COVID-19, flu seasons paired with COVID, lack of financial support, lack of social support, staffing and morale issues are just some of the problems that the NHS must address.
Experts point out that as the NHS’ struggles increase so begins a loop where one problem feeds another. Patients who wait to be seen have treatments that take longer, then they get sicker, and the cycle continues.
Despite having one of the highest proportions of government healthcare spending on Earth, up to 40% of Britons report having accessed or plan to access private care, Breitbart reported.
Sadly, it’s unlikely enough cash will come in from the UK government to make significant improvements for the NHS. The budget announcement in November showed the NHS was to get an average 2% spending increase over the next two years, CNN reported.
Are there lessons here for US hospitals, clinical laboratories, and pathology groups? Perhaps. It’s always instructive to see how our fellow healthcare providers across the pond respond to public pressure for more access to quality care.
Multiple studies have shown that people with darker skin pigmentation run a higher risk of being misdiagnosed and undertreated than patients with lighter skin due to inaccurate oxygen level readings
Now, scientists at multiple institutions are working to improve the basic pulse oximeter’s design by making it capable of measuring multiple biomarkers, as well as addressing long-standing inaccuracies in the device when used on people with darker skin pigmentation.
This ongoing research demonstrates how new technologies are enabling innovators to add useful functions to standard, well-accepted devices.
Valencia Koomson, PhD (above), Associate Professor, Electrical and Computer Engineering, and head of the Advanced Integrated Circuits and Systems Lab at Tufts University, has developed a pulse oximeter that measures oxygenation in tissue, rather than in blood. Her approach could ensure patients with darker skin pigmentation will be accurately diagnosed at the point-of-care. Though generally not used in clinical laboratory settings, medical technologists will be interested to learn of these new innovations in pulse oximeters. (Photo copyright: Tufts University.)
Measuring Tissues Instead of Blood
The pulse oximeter—a device that attaches to a person’s finger—uses red and infrared light to measure blood oxygen saturation (SpO2) and display pulse rate.
Studies in 2022 that looked into how hospitals administered oxygen to different patients found that inconsistent pulse oximeter readings could cause caregivers to administer less oxygen than is actually needed to people with darker skin pigmentation.
This is because melanin in the skin can interfere with “absorption of light used to measure oxygenated blood in a person’s finger,” according to a National Science Foundation (NSF) news story. Such inaccurate pulse oximeter readings can lead to “inaccurate readings and poorer treatment outcomes” for people with dark skin tones, the NSF wrote.
“Addressing this problem will require innovation in pulse oximeter design and revised regulatory standards,” said Valencia Koomson, PhD, Associate Professor, Electrical and Computer Engineering, Tufts University, Medford, Massachusetts, in the NSF news story.
Koomson, who leads the Advance Integrated Circuit and Systems Lab at Tufts, has developed a prototype pulse oximeter device, which NSF explained, measures oxygenation in biological tissues instead of blood.
“My lab’s work on pulse oximeter devices will provide an alternative technology to address many confounding factors that affect pulse oximeter accuracy, including skin pigmentation, motion artifact, and others,” Koomson said.
National Public Radio (NPR) said Koomson’s device has built-in “technology that can measure a person’s skin tone.”
“We can send more light if there’s a higher level of melanin present, so that melanin doesn’t become a confounding factor that obscures our results,” Koomson told NPR.
Another Pulse Oximeter Redesign
Another new approach to pulse oximetry was developed at Brown University in Providence, Rhode Island.
Rutendo Jakachira, Research Assistant, School of Engineering, and a PhD student in physics, turned to new optical techniques to address the challenge of oxygen saturation levels in dark skin tones, according to a Brown University news release.
Jakachira and Kimani Toussaint, PhD, Professor of Engineering and Senior Associate Dean in the School of Engineering, say they have created possibly the first LED-based light source to emit radially polarized light.
When the LED passes light through a person’s finger, the device calculates the amount of light the hemoglobin in the blood absorbed, NPR explained.
“We did a preliminary study on about five people, and although it was a small study, the results are promising,” said Jakachira, who plans a larger study and clinical trial.
Study Suggests Patients with Darker Skin May Have Received Delayed COVID-19 Care
The researchers analyzed electronic health record (EHR) data from 43,753 patients at Sutter Health in Sacramento, California, who had SpO2 measurements done between January 2020 and February 2022, and 8,735 patients seen for COVID-19 between July 2020 and February 2021 in the hospital’s emergency department.
In their AJE paper, they wrote, “We investigated whether or not pulse oximetry systematically underestimated oxygen saturation in patients who identified as NHB [non-Hispanic Black/African-American] as compared with NHW [non-Hispanic White] counterparts. We also assessed whether or not differences in oxygen saturation measurement affected hospital admission, care delivered, or return to the hospital post discharge among patients with COVID-19.
“We found evidence of differential pulse oximeter measurement error in NHB individuals, resulting in nonrandom overestimation of blood oxygenation as compared with NHW individuals. NHB individuals were also more likely to have hypoxemia [abnormally low oxygen levels in the blood] not detected by pulse oximetry.
“For NHB patients presenting in the ED with COVID-19, we found that overestimation of oxygen saturation was associated with underestimation of the need for admission and underestimation of the need for treatment with dexamethasone and supplemental oxygen. Additionally, we observed associated delays in dexamethasone initiation and initiation of oxygen supplementation.
“There are also broader implications beyond COVID-19, as differential pulse oximeter accuracy has the potential to exacerbate disparities for any condition that relies upon blood oxygenation measurement to inform clinical decision-making.”
Importance of Accurate Readings
Developing pulse oximeters that are accurate for all people, regardless of skin tone, is clearly an important breakthrough. Medical laboratory leaders and pathologists recognize that SpO2 data—along with clinical laboratory test results—are critical for successful diagnostics and treatment. Thus, new technologies that add useful functions to well-accepted devices are positive developments and worth watching.
Founder of now defunct clinical laboratory testing company was supposed to report to prison April 27, but a last-minute legal challenge has delayed that judge’s order
Anatomic pathologists and clinical laboratory leaders who are following the continuing saga of Theranos and Elizabeth Holmes may be interested to learn that the former CEO’s attorneys are making last-minute legal moves to delay her prison sentence while she appeals her guilty verdict. At the same time, Holmes appears to be on a mission to revamp her public image.
Apparently, the twists and turns in Holmes’ never-ending story are not yet over when it comes to Theranos, its maligned clinical laboratory technology, and the company’s convicted founder.
On May 7, The New York Times (NYT) profiled Holmes in a massive, 5,000-word story that attempted to portray her as a flawed businessperson who now prefers a simpler life with her partner and two young children.
“I made so many mistakes and there was so much I didn’t know and understand, and I feel like when you do it wrong, it’s like you really internalize it in a deep way,” disgraced Theranos founder Elizabeth Holmes recently told The New York Times. Anatomic pathologists and clinical laboratory directors impacted by the revelation that Theranos hide the fact that its blood testing technology was faulty may not sympathize with Holmes’ position. (Photo copyright: Stuart Isett/Fortune Global Forum.)
Legal Team Secures Last-Minute Delay in Holmes’ Surrender
Holmes admitted to the news outlet that the deep voice she used in public, along with her black turtleneck sweaters, were part of a character she created.
“I believed it would be how I would be good at business and taken seriously and not taken as a little girl or a girl who didn’t have good technical ideas,” Holmes told the NYT. “Maybe people picked up on that not being authentic, since it wasn’t.”
However, on April 26, the 9th Circuit Court of Appeals stayed her surrender date until that court rules on Holmes’ latest bid to stay free while she appeals her conviction, The Washington Post reported.
Just days earlier on April 10, a district court judge ruled that Holmes would not stay free while her appeal progresses. The 9th Circuit announcement curtailed the district court ruling. It is not known when the 9th Circuit will issue a decision in the matter.
New York Times Reports on Holmes’ Change in Personality
The somewhat odd New York Times profile of Holmes varied between reflections on her past crimes and on her current personal life, where she is known as “Liz.”
“In case you’re wondering, Holmes speaks in a soft, slightly low, but totally unremarkable voice—no hint of the throaty contralto she used while running her blood-testing startup Theranos, now defunct,” the NYT reported.
Holmes still lives in California with her partner, Billy Evans (whose parents own a luxury hotel chain), and their two children: a son who is almost two years old and a daughter born in February. She works at home for a rape-crisis hotline.
Balwani’s Role in Theranos Again Publicly Debated
In the NYT interview, Holmes talked about being raped while a student at Stanford University and about alleged abuse from her Theranos business partner and former lover, Ramesh “Sunny” Balwani.
Balwani, Theranos’ former President and Chief Operating Officer, began his 12-year, 11-month prison sentence on April 20 in a Southern California facility for his role in defrauding Theranos investors, KTVU TV reported. Balwani has also appealed his conviction on the 12 fraud charges.
Holmes reiterated to the NYT past statements she made in court that Balwani allegedly exerted social and sexual control over her when they both worked at Theranos and were in a romantic relationship.
“She lived by entrepreneurial tenets that she said Balwani told her she needed to follow in order to succeed,” the NYT reported. “These included not sleeping for more than five hours, going vegan, getting to the office daily by 5 a.m., no alcohol.”
“[I] deferred to [Balwani] in the areas he oversaw because I believed he knew better than I did,” including on clinical lab activities at Theranos, Holmes said.
Balwani’s attorneys dismissed Holmes’ allegations, as they have in the past.
Clinical laboratory professionals can reasonably make two broad observations from the continuing saga of Theranos and Elizabeth Holmes:
Justice for healthcare crimes is often deferred for those who have influence and money.
Holmes’ image overhaul may be a last-ditch effort to sway public opinion about her, in the event that she receives a new jury trial as a result of her appeal.
Dark Daily will continue to keep you updated on further developments in this case.
HIMSS names SMC a ‘world leader’ in digital pathology and awards the South Korean Healthcare provider Stage 7 DIAM status
Anatomic pathologists and clinical laboratory managers in hospitals know that during surgery, time is of the essence. While the patient is still on the surgical table, biopsies must be sent to the lab to be frozen and sectioned before going to the surgical pathologist for reading. Thus, shortening time to answer for frozen sections is a significant benefit.
This effort in surgical pathology is part of a larger story of the digital transformation underway across all service lines at this hospital. For years, SMC has been on track to become one of the world’s “intelligent hospitals,” and it is succeeding. In February, SMC became the first healthcare provider to achieve Stage 7 in the HIMSS Digital Imaging Adoption Model (DIAM), which “assesses an organization’s capabilities in the delivery of medical imaging,” Healthcare IT News reported.
As pathologists and clinical laboratory leaders know, implementation of digital pathology is no easy feat. So, it’s noteworthy that SMC has brought together disparate technologies to reduce turnaround times, and that the medical center has caught the eye of leading health information technology (HIT) organizations.
“The digital pathology system established by the pathology department and SMC’s information strategy team could be one of the good examples of the fourth industrial revolution model applied to a hospital system,” anatomic pathologist Kee Taek Jang, MD (above), Professor of Pathology, Sungkyunkwan University School of Medicine, Samsung Medical Center told Healthcare IT News. Clinical laboratory leaders and surgical pathologists understand the value digital pathology can bring to faster turnaround times. (Photo copyright: Samsung Medical Center.)
Anatomic Pathologists Can Read Frozen Sections on Their Smartphones
Prior to implementation of its 5G digital pathology system, surgeons and their patients waited as much as 20 minutes for anatomic pathologists to traverse SMC’s medical campus to reach the healthcare provider’s cancer center diagnostic reading room, Healthcare IT News reported.
Now, SMC’s integrated digital pathology system—which combines slide scanners, analysis software, and desktop computers with a 5G network—has enabled a “rapid imaging search across the hospital,” Healthcare IT News noted. Surgical pathologists can analyze tissue samples faster and from remote locations on digital devices that are convenient to them at the time, a significant benefit to patient care.
“The system has been effective in reducing the turnaround time as pathologists can now attend to frozen test consultations on their smartphone or tablet device via 5G network anywhere in the hospital,” Jean-Hyoung Lee, SMC’s Manager of IT Infrastructure, told Healthcare IT News which noted these system results:
TAT decreased from 20 minutes to 10 minutes.
Transferring scans of large frozen tissues up to three gigabyte in size is now possible through the 5G network.
Additionally, through the 5G network, pathologists can efficiently access CT scans and MRI data on proton therapy cancer treatments. Prior to the change, the doctors had to download the image files in SMC’s Proton Therapy Center, according to a news release from KT Corporation, a South Korean telecommunications company that began working with SMC on building the 5G-connected digital pathology system in 2019.
DIAM is an approach for gauging an organization’s medical imaging delivery capabilities. To achieve Stage 7—External Image Exchange and Patient Engagement—healthcare providers must also have achieved all capabilities outlined in Stages 5 and 6.
In addition, the following must also have been adopted:
The majority of image-producing service areas are exchanging and/or sharing images and reports and/or clinical notes based on recognized standards with care organizations of all types, including local, regional, or national health information exchanges.
The application(s) used in image-producing service areas support multidisciplinary interactive collaboration.
Patients can make appointments, and access reports, images, and educational content specific to their individual situation online.
Patients are able to electronically upload, download, and share their images.
“This is the most comprehensive use of integrated digital pathology we have seen,” Andrew Pearce, HIMSS VP Analytics and Global Advisory Lead, told Healthcare IT News.
SMC’s Manager of IT Planning Seungho Lim told Healthcare IT News the medical center’s goal is to become “a global advanced intelligent hospital through digital health innovation.” The plan is to offer, he added, “super-gap digital services that prioritize non-contact communication and cutting-edge technology.”
For pathologists and clinical laboratory leaders, SMC’s commitment to 5G to move digital pathology data is compelling. And its recognition by HIMSS could inspire more healthcare organization to make changes in medical laboratory workflows. SMC, and perhaps other South Korean healthcare providers, will likely continue to draw attention for their healthcare IT achievements.
