Thursday, September 24, 2020

OCR Settles Five More Investigations in HIPAA Right of Access Initiative

OCR Settles Five More Investigations in HIPAA Right of Access Initiative: The Office for Civil Rights (OCR) at the U.S. Department of Health and Human Services (HHS) announces that it has settled five more investigations in its HIPAA Right of Access Initiative this year. OCR announced this initiative as an enforcement priority in 2019 to support individuals’ right to timely access to their health records at a reasonable cost under the HIPAA Privacy Rule. The five settlements announced below bring OCR’s total to seven completed enforcement actions under the Right of Access Initiative.

Orthopedic Clinic Pays $1.5 Million to Settle Systemic

Orthopedic Clinic Pays $1.5 Million to Settle Systemic: Orthopedic Clinic Pays $1.5 Million to Settle Systemic Noncompliance with HIPAA Rules

HIPAA Business Associate Pays $2.3 Million to Settle Breach

HIPAA Business Associate Pays $2.3 Million to Settle Breach: HIPAA Business Associate Pays $2.3 Million to Settle Breach Affecting Protected Health Information of Over 6 million Individuals


FDA Takes Actions to Help Lower U.S. Prescription Drug Prices

Final Rule, Guidance Fulfill Plan for Safe Importation of Certain Drugs Originally Intended for Foreign Markets

Today, the U.S. Department of Health and Human Services and the U.S. Food and Drug Administration took actions to help provide safe, effective, and more affordable drugs to American patients as part of the Safe Importation Action Plan, fulfilling the aspect of the July Executive Order on drug pricing to complete the rulemaking to allow states to import certain prescription drugs from Canada.

The final rule implements a provision of federal law that allows FDA-authorized programs to import certain prescription drugs from Canada under specific conditions that ensure the importation poses no additional risk to the public’s health and safety while achieving a significant reduction in the cost of covered products to the American consumer. The final guidance for industry describes procedures drug manufacturers can follow to facilitate importation of prescription drugs, including biological products, that are FDA-approved, manufactured abroad, authorized for sale in any foreign country, and originally intended for sale in that foreign country.

“Today’s action is an important part of FDA’s priorities to promote choice and competition. The Safe Importation Action Plan aims to clearly describe procedures to import drugs that would lower prices and improve access while also maintaining the high quality and safety Americans expect and deserve,” said FDA Commissioner Stephen M. Hahn, M.D. “The FDA will continue to assess and act on opportunities to increase competition in the prescription drug market and help reduce the cost of medicines.”

The rule allows states (including the District of Columbia and territories), Indian tribes and—in certain future circumstances—pharmacists and wholesalers, to submit importation program proposals to the FDA for review and authorization. An importation program can be co-sponsored by a state, Indian tribe, pharmacist or wholesaler. Referred to as Section 804 Importation Programs, these programs will be...

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A Group of U.S. Senators Introduce the SAFE DATA Act 

Wednesday, September 23, 2020

Statute of Limitation in Federal Criminal Cases: An Overview Charles Doyle Senior Specialist in American Public Law 


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 Department of Justice

U.S. Attorney’s Office
Southern District of California

Friday, September 18, 2020

Tennessee Doctors Sentenced in $65 Million TRICARE Fraud

Assistant U. S. Attorney Mark W. Pletcher (619) 546-9714

NEWS RELEASE SUMMARY – September 18, 2020

SAN DIEGO – Two doctors, Susan Vergot and Carl Lindblad, were sentenced in federal court today for participating in a health care fraud scheme that bilked TRICARE – the health care program that covers United States service members – out of tens of millions of dollars by prescribing thousands of exorbitantly expensive compounded drugs to patients they never saw or examined.

Dr. Vergot and Dr. Lindblad were sentenced to 24 and 28 months in custody, respectively, by U.S. District Judge Janis L. Sammartino. The custodial portion of each defendant’s sentence will be split between prison and home confinement. Each was also sentenced to pay a $15,000 fine.

"This conspiracy inflicted nearly $65 million in actual losses to TRICARE, the health care benefits program relied upon by millions of our military members and their families," said U.S. Attorney Robert Brewer. "It is hard to imagine a more outrageous example of selfish doctors stealing from the U.S. health care system believing they were exempt from providing necessary care."

"Today’s sentencings demonstrate our resolve to hold those accountable who seek to enrich themselves at the expense of taxpayers," said Michael Mentavlos, Special Agent in Charge of the Defense Criminal Investigative Service, Southwest Field Office. "TRICARE is a critical DoD program providing care for our service members, retirees, and their families. Together with our partners, we will continue to use all means available to root out fraud in this invaluable program."

Compounded medications are specialty medications mixed by a pharmacist to meet the specific medical needs of an individual patient. Although compounded drugs are not approved by the Food and Drug Administration (FDA), they are properly prescribed when a physician determines that an FDA-approved medication does not meet the health needs of a particular patient, such as if a patient requires a particular dosage or application or is allergic to a dye or other ingredient.

According to the sentencing memorandum, as part of this conspiracy a team of individuals worked to recruit and pay Marines, primarily from the San Diego area, and their dependents – all TRICARE beneficiaries – to obtain compounded medications that would be paid for by TRICARE. This information was sent to Choice MD, the Tennessee medical clinic that employed Dr. Vergot and Dr. Lindblad. Dr. Vergot and Dr. Lindblad then wrote prescriptions for the TRICARE beneficiaries, despite never examining the patients. Once signed by the doctors, these prescriptions were not given to the straw beneficiaries, but sent directly to particular pharmacies controlled by co-conspirators, most often a small pharmacy, The Medicine Shoppe in Bountiful, Utah, which filled the prescriptions and mailed the drugs to the patients in California.

Between November 2014 and June 2015, Drs. Vergot and Lindblad authorized 6,694 prescriptions, for which their co-conspirators billed TRICARE a staggering $89,725,000. Of this amount, over $65 million was for prescriptions written for straw TRICARE beneficiaries in the Southern District of California.

Defendants Vergot and Lindblad are the second and third defendants sentenced in this matter. CFK, Inc., the corporate owner of The Medicine Shoppe, was sentenced previously. A nurse practitioner, Candace Craven, previously pleaded guilty, as have the patient recruiters, including Joshua Morgan, Kyle Adams, Daniel Castro, Jeremy Syto, and Bradely White. All await sentencing. Jimmy and Ashley Collins, the owners of Choice MD, were charged by Superseding Indictment in June 2020. Their case remains pending. .

DEFENDANTS Case Numbers: 18-CR-1850-JLS, 18-CR-1855-JLS

Carl Lindblad Age: 77 Chattanooga, TN

Susan Vergot Age: 65 Chattanooga, TN


Conspiracy to Commit Health Care Fraud – Title 18, U.S.C § 1349

Maximum penalty: Ten years in prison and $250,000 fine or double loss amount, whichever is greater


Defense Criminal Investigative Service

Naval Criminal Investigative Service

IRS Criminal Investigation Division, Gulfport, MS

Federal Bureau of Investigation - Jackson, MS Field Office

Health Care Fraud
Press Release Number: 
Updated September 18, 2020


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