Federal agents allege ‘healthcare fraud abuses erode the integrity and trust patients have with those in the healthcare industry’
Here’s yet another example of how federal and state law enforcement agencies intend to further crack down on fraud involving COVID-19 testing, financial relief programs, vaccination cards, and other pandemic-related programs.
The United States Department of Justice (DOJ) announced it has charged the owners of a Calif. clinical laboratory—as well as 19 other defendants—for their roles in fraudulent billing, kickbacks, and money laundering schemes to defraud Medicare of more than $214 million.
Imran Shams and Lourdes Navarro—owners of Matias Clinical Laboratory, Inc., in Baldwin Park, Glendale, Calif.—which was doing business as Health Care Providers Laboratory, Inc. (Matias)—were charged along with the other defendants with participating in fraud that took place in nine federal court districts.
The indictment alleges the pair paid kickbacks to marketers to obtain specimens and test orders. The lab company owners then laundered their profits through shell corporations in the US, transferred the money to foreign countries, and used it to purchase “real estate, luxury items, and goods and services for their personal use,” according to court documents.
“While millions of Americans were suffering and desperately seeking testing and treatment for COVID-19, some saw an opportunity for profit,” said Assistant Attorney General for the Criminal Division Kenneth A. Polite Jr., JD, during a news conference at the Justice Department, The New York Times reported.
“The actions of these criminals are unacceptable, and the FBI, working in coordination with our law enforcement partners, will continue to investigate and pursue those who exploit the integrity of the healthcare industry for profit,” said Luis Quesada of the Federal Bureau of Investigation’s (FBI) Criminal Investigative Division in a press release.
“Throughout the pandemic, we have seen trusted medical professionals orchestrate and carry out egregious crimes against their patients all for financial gain,” said Assistant Director Luis Quesada (above) of the FBI’s Criminal Investigative Division in a DOJ press release. “These healthcare fraud abuses erode the integrity and trust patients have with those in the healthcare industry, particularly during a vulnerable and worrisome time for many individuals.” Clinical laboratories throughout the US should be aware of increased scrutiny to Medicare billing by the DOJ. (Photo copyright: El Paso Times.)
According to the DOJ’s Summary of Criminal Charges, “Matias” Clinical Laboratory also “performed and billed Medicare for urinalysis, routine blood work, and other tests, despite the fact that Shams had been excluded from all participation in Medicare for several decades.” The indictment alleges that Shams and Navarro fraudulently concealed Sham’s role in the clinical laboratory and his prior healthcare-related criminal convictions.
“She always tried to follow the law and provide appropriate and quality testing services to the laboratory’s patients. She looks forward to clearing her name in court,” Werksman said.
However, both Navarro and Shams have a checkered past with law enforcement agencies. According to a State of California Department of Justice news release, in 2000, the two were convicted in California on felony counts of Medi-Cal fraud, grand theft, money laundering, and identity theft for using the names of legitimate physicians without permission and filing thousands of false claims with the state for medical tests never performed.
The Calif. Attorney General’s Division of Medi-Cal Fraud and Elder Abuse (DMFEA) seized approximately $1.1 million in uncashed warrants, which were returned to the Medi-Cal program. Since the 2000 case, Shams has been barred from filing for Medicare reimbursement, the New York Times reported.
Other Felony Indictments and Criminal Complaints for Healthcare Fraud
In a separate case, the DOJ announced Ron K. Elfenbein, MD, 47, of Arnold, Md., was charged by indictment with three counts of healthcare fraud in connection with an alleged scheme to defraud the US of more than $1.5 million in claims that were billed in connection with COVID-19 testing. Elfenbein is owner and medical director of Drs Ergent Care, LLC, which operates as FirstCall Medical Center. Elfenbein allegedly told his employees to submit claims to Medicare and other insurers for “moderate-complexity office visits” even though the COVID-19 test patients’ visits lasted five minutes or less.
And in April, the DOJ filed a criminal complaint against Colorado resident, Robert Van Camp, 53, for allegedly forging and selling hundreds of fake COVID-19 vaccination cards, which he sold to buyers and distributors in at least a dozen states.
“Van Camp allegedly told an undercover agent that he had sold cards to ‘people that are going to the Olympics in Tokyo, three Olympians and their coach in Tokyo, Amsterdam, Hawaii, Costa Rica, Honduras,’” the DOJ said in a news release, CNBC reported.
Van Camp also allegedly told that agent, “I’ve got a company, a veterinary company, has 30 people going to Canada every f— day, Canada back. Mexico is big. And like I said, I’m in 12 or 13 states, so until I get caught and go to jail, f— it, I’m taking the money, (laughs)! I don’t care,” the DOJ stated.
Clinical laboratory directors and pathologists know these fraud charges provide another example of how the misdeeds of a few reflect on the entire healthcare industry, potentially causing people to lose trust in organizations tasked with providing their healthcare.
Tiny sensors with Bluetooth technology that measure useful biomarkers may eliminate need for invasive blood draws used for clinical laboratory tests
What if a baby’s pacifier could be used to measure electrolyte levels in newborns? An international research team has developed just such a device, and it has the potential to reduce invasive blood collections required to provide specimens for clinical laboratory testing of critical biomarkers. At the same time, this device may allow continuous monitoring of electrolyte levels with wireless alerts to caregivers.
Typical blood draws for NICU babies can cause information gaps as they are usually only performed twice a day. This can be problematic in cases where more frequent monitoring of these biomarkers is required to monitor the infant’s condition.
“We know that premature babies have a better chance of survival if they get a high quality of care in the first month of birth,” said Jong-Hoon Kim, PhD, Associate Professor at the WSU School of Electrical Engineering and Computer Science, in a WSU news release. “Normally, in a hospital environment, they draw blood from the baby twice a day, so they just get two data points. This device is a non-invasive way to provide real-time monitoring of the electrolyte concentration of babies.”
The smart pacifier (above) developed by researchers at the Washington State University School of Electrical Engineering and Computer Science—in collaboration with scientists in two South Korean institutions—provides continuous monitoring of sodium and potassium ion levels. This can help detect and prevent potentially dangerous dehydration issues in NICU babies without invasive blood draws for traditional clinical laboratory testing. (Photo copyright: University of Washington.)
How the Smart Pacifier Works
The miniature system developed by the WSU researchers utilizes a typical, commercially available pacifier outfitted with ion-selective sensors, flexible circuits, and microfluidic channels that monitor salivary electrolytes. These flexible, microfluidic channels attract the saliva when the pacifier is in the infant’s mouth which enables continuous and efficient saliva collection without the need for any type of pumping system. The gathered data is relayed wirelessly to caregivers using Bluetooth technology.
When the researchers tested their smart pacifier on infants, they discovered that the results captured from the device were comparable to information obtained from normal blood draws and standard clinical laboratory tests. Kim noted in the press release that technology currently in use to test infant saliva for electrolytes tend to be bulky, rigid devices that require a separate sample collection.
“You often see NICU pictures where babies are hooked up to a bunch of wires to check their health conditions such as their heart rate, the respiratory rate, body temperature, and blood pressure,” said Kim in the press release. “We want to get rid of those wires.”
The researchers intend to make the components for the device more affordable and recyclable. They also plan to perform testing for their smart pacifier on larger test groups to prove efficacy and hope the gadget will help make NICU treatment less disruptive for infant patients.
Going as far back as 2013, Dark Daily has covered research into the use of sensors placed in wearables and disposables to detect and monitor health issues.
“It should be noted that the ability to put reliable diagnostic sensors in disposables like diapers has been around for almost a decade and does not seem to have caught on with either caregivers or the public,” said Robert Michel, Editor-in-Chief of Dark Daily and its sister publication, The Dark Report. “Because the researchers who developed the pacifier are attempting to solve a problem for NICU babies, this solution might find acceptance.”
This is another example of how researchers are thinking outside the box as to how to measure critical biomarkers without the need to send a specimen to the core clinical laboratory and wait hours—sometimes overnight—for results.
InspectIR COVID-19 Breathalyzer identifies a chemical signature associated with SARS-CoV-2 in about three minutes with 91.2% sensitivity and 99.3% specificity
One company is hoping that it can make breathalyzers a viable, easier way to screen for SARS-CoV-2. It will soon have the opportunity to learn if consumers will accept this form of screening for COVID-19, as its device recently obtained an Emergency Use Authorization from the FDA.
On April 14, 2022, InspectIR Systems, LLC, of Frisco, Texas, was granted the US Food and Drug Administration’s first-ever emergency use authorization (EUA202006) for a portable breath test device designed to screen for SARS-CoV-2 infection. Clinical laboratories that perform COVID-19 testing will want to compare the high-level sensitivity of this breath test compared to rapid antigen tests currently used for COVID-19 screening.
The device is about the size of a carry-on suitcase. It provides test results in less than three minutes and is currently authorized for use with subjects who are 18 or older.
The FDA’s EUA limits use of the device to “a qualified, trained operator under the supervision of a healthcare provider licensed or authorized by state law to prescribe tests,” the federal agency said. The test “can be performed in environments where the patient specimen is both collected and analyzed, such as doctor’s offices, hospitals, and mobile testing sites.”
The InspectIR COVID-19 Breathalyzer device “is yet another example of the rapid innovation occurring with diagnostic tests for COVID-19,” said Jeffrey Shuren, MD, JD (above), director of the FDA’s Center for Devices and Radiological Health (CDRH), in the news release. A portable device that can identify SARS-CoV-2 infections in a few minutes with 91% specificity may be of great interest to clinical laboratory companies operating COVID-19 popup testing sites around the nation. (Photo copyright: US Food and Drug Administration.)
In granting the authorization, the FDA cited results of a study with 2,409 participants in which the test had sensitivity (correct positive results) of 91.2% and specificity (correct negative results) of 99.3%. “The test performed with similar sensitivity in a follow-up clinical study focused on the Omicron variant,” the agency stated.
“The FDA continues to support the development of novel COVID-19 tests with the goal of advancing technologies that can help address the current pandemic and better position the US for the next public health emergency,” said Jeffrey Shuren, MD, JD, director of the FDA’s Center for Devices and Radiological Health (CDRH), in the news release.
In its coverage of the EUA, CNET noted that the InspectIR breath test is more sensitive than rapid antigen tests but not as sensitive as PCR tests. The FDA advised that people who receive a positive test result with the InspectIR COVID-19 Breathalyzer should follow up with a PCR molecular test.
How the InspectIR COVID-19 Breathalyzer Works
InspectIR LLC was founded in 2017 by Tim Wing and John Redmond, Forbes reported. Their original goal was to develop a breathalyzer for detection of cannabis or opioid use. However, with the onset of the COVID-19 pandemic, the entrepreneurs decided to adapt the technology into a SARS-CoV-2 diagnostic test.
As described in the FDA’s EUA documents, a subject breathes into the device using a sterilized one-time-use straw. A pre-concentrator collects and concentrates the five targeted VOCs, all from the ketone and aldehyde families of organic compounds. These go to a Residual Gas Analyzer, and an algorithm determines whether the sample contains the chemical signature associated with a SARS-CoV-2 infection.
Redmond told Forbes that the specific mix of VOCs is proprietary. The article notes that Wing, Redmond, and Verbeck have patented the pre-concentrator technology.
The devices are manufactured at a Pfeiffer Vacuum Inc. facility in Indiana. The InspectIR founders told Forbes they expect to produce 100 units per week in a start-up phase with plans to ramp up as sales increase. They also plan to look at applications for other respiratory diseases.
InspectIR has not announced exact pricing, but Time reports that the company will lease the equipment to clients, and that pricing per test will be comparable to rapid antigen tests.
InspectIR’s first breathalyzer device is receiving much positive coverage from the media. Should it prove to effective at spotting COVID-19 at popup testing sites, it may supplant traditional clinical laboratory rapid antigen tests as the screening test of choice.
No explanation for the delay was provided by court after nine weeks of testimony in the prosecution of the former clinical laboratory executive
Former Theranos president/chief operating officer Ramesh “Sunny” Balwani’s often-delayed fraud trial was scheduled to resume on May 27 with a full day of defense witness testimony. It will now be delayed until June 7.
According to NBC Bay Area, a court assistant announced the delay but did not provide a reason for the postponement. A copy of the clerk’s notice posted on Twitter by Law360 also provided no further details. Pathologists and clinical laboratory managers must now wait several more months to learn what may be next revealed in testimony during this trial.
It is also yet one more delay in Balwani’s trial. His original trial date was January 2022 before being rescheduled for February. The needs for COVID-19 pandemic protocols further delayed the start multiple times until opening arguments began March 22 in a federal court room in San Jose, Calif.
One part of the trial has concluded. On May 20, the government rested its case against Balwani, who faces 12 counts of wire fraud and conspiracy to commit wire fraud while serving as second in command at Theranos, the now defunct Silicon Valley medical laboratory startup.
Former Theranos president and COO Ramesh “Sunny” Balwani (above) faces 12 charges of wire fraud and conspiracy to commit wire fraud while serving as chief operating officer of Theranos, the company that boldly declared it would disrupt the clinical laboratory testing industry. His trial, which began in March in US District Court in San Jose, Calif., is now delayed until June 7, when his defense attorneys will begin their first full day of witness testimony. (Photo copyright: Stephen Lam/Reuters/The New York Times.)
According to The Wall Street Journal (WSJ), nine weeks of testimony in US District Court in San Jose, Calif., included testimony from 24 witnesses. Prosecutors aimed to convince jurors Balwani controlled much of the day-to-day decision-making at Theranos and was a full participant in the fraud scheme.
NBC Bay Area stated prosecutors worked to link Balwani to two key decisions:
The rollout of the failed Edison blood testing device in Walgreens, and
The company’s improper use of the Pfizer logo on a report to Walgreens executives that appeared to validate Theranos’ technology.
Before this latest postponement, Balwani’s attorneys had begun their client’s defense by putting a naturopathic physician from Arizona on the stand. The witness testified to sending more than 150 patients to Theranos and to using the company’s blood tests for herself, the WSJ reported.
Bloomberg reported that prosecutors followed the previous outline used to gain the conviction of Elizabeth Holmes, founder and former CEO of Theranos, with many of the same witnesses from her trial reappearing on the stand to testify in the Balwani trial.
Prosecutors primarily focused their case on the injury to investors, which has angered some former Theranos customers.
“I feel like I belong to a group of people who were on the receiving end of a crime,” said Erin Tompkins—a Theranos customer who testified against both Holmes and Balwani—outside the courthouse shortly after finishing her testimony in the Balwani case, Bloomberg reported.
According to CNBC, Tompkins testified she was misdiagnosed as having HIV after having her blood drawn from a Theranos device at a Walgreens in Arizona.
“Despite the dedication and support of prosecutors, patient witnesses have been treated as peripheral” compared to the investors, Tompkins told Bloomberg. “We were defrauded because we trusted them with our blood and however many dollars for the test. But we weren’t robbed of millions of dollars.”
Susanna Stefanek, editorial manager at Apple Inc. who served on the Holmes jury, told Bloomberg, “[The prosecution] didn’t really prove that these patients were persuaded to get these blood tests by something she said or did, or even the advertising. The connection between Elizabeth Holmes and the patients was not that strong to us.”
Proving Patient Fraud
Michael Weinstein, JD, a former federal prosecutor turned Chair of White-Collar Litigation and Government at Cole Schotz in New Jersey, told Bloomberg that to convict Balwani of patient fraud, prosecutors must prove Balwani knew what was going on inside Theranos and that his misrepresentations caused patients to suffer.
“The government wants to show there was an inconsistency between what he was learning internally versus what he was saying externally,” Weinstein said.
With the Balwani trial likely to conclude this month, clinical laboratory directors and pathologists who have closely followed Theranos’ rise and fall should prepare for the final chapter in the saga.
Screening and analysis of ocean samples also identified a possible missing link in how the RNA viruses evolved
An international team of scientists has used genetic screening and machine learning techniques to identify more than 5,500 previously unknown species of marine RNA viruses and is proposing five new phyla (biological groups) of viruses. The latter would double the number of RNA virus phyla to 10, one of which may be a missing link in the early evolution of the microbes.
Though the newly-discovered viruses are not currently associated with human disease—and therefore do not drive any current medical laboratory testing—for virologists and other microbiologists, “a fuller catalog of these organisms is now available to advance scientific understanding of how viruses evolve,” said Dark Daily Editor-in-Chief Robert Michel.
“While scientists have cataloged hundreds of thousands of DNA viruses in their natural ecosystems, RNA viruses have been relatively unstudied,” wrote four microbiologists from Ohio State University (OSU) who participated in the study in an article they penned for The Conversation.
The OSU study authors included:
Ahmed Zayed, PhD, research scientist, Dept. of Microbiology, OSU.
Matthew Sullivan, PhD, Professor of Microbiology and Director of the Center of Microbiome Science at OSU.
“RNA viruses are clearly important in our world, but we usually only study a tiny slice of them—the few hundred that harm humans, plants and animals,” explained Matthew Sullivan, PhD (above), Director, Center of Microbiome Science, in an OSU news story. Sullivan led the OSU research team. “We wanted to systematically study them on a very big scale and explore an environment no one had looked at deeply, and we got lucky because virtually every species was new, and many were really new,” he added. (Photo copyright: University of Ohio.)
RNA versus DNA Viruses
In contrast to the better-understood DNA virus, an RNA virus contains RNA instead of DNA as its genetic material, according to Samanthi Udayangani, PhD, in an article she penned for Difference Between. Examples of RNA viruses include:
One major difference, she explains, is that RNA viruses mutate at a higher rate than do DNA viruses.
The OSU scientists identified the new species by analyzing a database of RNA sequences from plankton collected during a series of ocean expeditions aboard a French schooner owned by the Tara Ocean Foundation.
“Plankton are any aquatic organisms that are too small to swim against the current,” the authors explained in The Conversation. “They’re a vital part of ocean food webs and are common hosts for RNA viruses.”
The team’s screening process focused on the RNA-dependent RNA polymerase (RdRp) gene, “which has evolved for billions of years in RNA viruses, and is absent from other viruses or cells,” according to the OSU news story.
“RdRp is supposed to be one of the most ancient genes—it existed before there was a need for DNA,” Zayed said.
The RdRp gene “codes for a particular protein that allows a virus to replicate its genetic material. It is the only protein that all RNA viruses share because it plays an essential role in how they propagate themselves. Each RNA virus, however, has small differences in the gene that codes for the protein that can help distinguish one type of virus from another,” the study authors explained.
The screening “ultimately identified over 44,000 genes that code for the virus protein,” they wrote.
Identifying Five New Phyla
The researchers then turned to machine learning to organize the sequences and identify their evolutionary connections based on similarities in the RdRp genes.
“The more similar two genes were, the more likely viruses with those genes were closely related,” they wrote.
The technique classified many of the sequences within the five previously known phyla of RNA viruses:
But the researchers also identified five new phyla—including two dubbed “Taraviricota” and “Arctiviricota”—that “were particularly abundant across vast oceanic regions,” they wrote. Taraviricota is named after the Tara expeditions and Arctiviricota gets its name from the Arctic Ocean.
They speculated that Taraviricota “might be the missing link in the evolution of RNA viruses that researchers have long sought, connecting two different known branches of RNA viruses that diverged in how they replicate.”
In addition to the five new phyla, the researchers are proposing at least 11 new classes of RNA viruses, according to the OSU story. The scientists plan to issue a formal proposal to the International Committee on Taxonomy of Viruses (ICTV), the body responsible for classification and naming of viruses.
Studying RNA Viruses Outside of Disease Environments
“As the COVID-19 pandemic has shown, RNA viruses can cause deadly diseases. But RNA viruses also play a vital role in ecosystems because they can infect a wide array of organisms, including microbes that influence environments and food webs at the chemical level,” wrote the four study authors in The Conversation. “Mapping out where in the world these RNA viruses live can help clarify how they affect the organisms driving many of the ecological processes that run our planet. Our study also provides improved tools that can help researchers catalog new viruses as genetic databases grow.”
This remarkable study, which was partially funded by the US National Science Foundation, will be most intriguing to virologists and microbiologists. However, clinical laboratories also should be interested in the fact that the catalog of known viruses has just expanded by 5,500 types of RNA viruses.
