News at a Glance – Jul 2015

Medicare Celebrates 50th Birthday. This month, Medicare and Medicaid reached a milestone birthday. On July 30, 1965, President Lyndon B. Johnson signed legislation establishing those federal health insurance programs. The Centers for Medicare and Medicaid Services (CMS) reports that there are currently 55 million Americans benefitting from Medicare and that “in any given month” over 70 million benefit from Medicaid. “As we take a moment to reflect on the past five decades, we must also look to the future and explore ways to strengthen and improve health care for future generations,” said Andy Slavitt, acting administrator of the CMS, in a statement. CMS also announced this month that a Medicare Trustees Report indicates the trust fund supporting Medicare hospital insurance coverage is still projected to remain solvent until 2030 and that cost growth continues to be low. Medicare spending growth per enrollee has been averaging 1.3 per cent during the last five years, according to a CMS press release announcing the report. “Growth in per-Medicare enrollee costs continues to be historically low even as the economy continues to rebound. While this is good news, we cannot be complacent as the number of Medicare beneficiaries continues to grow,” said Slavitt in the release. “That’s why we must continue to transform our health care system into one that delivers better care and spends our dollars in a smarter way for beneficiaries so Medicare can continue to meet the needs of our beneficiaries for the next 50 years and beyond.”

Lengthy Sentence for Physician in Lab Referral Case. Yet another physician has been sentenced in connection with the Biodiagnostic Laboratory Services (BLS) case, receiving one of the longer sentences in the matter. Frank Santangelo, of Boonton, New Jersey was sentenced to over five years in prison after pleading guilty to Travel Act violations, money laundering and failing to file tax returns. In addition to prison, he also received three years supervised release and a $6,250 fine and $1.8 million forfeiture pursuant to his plea agreement. The government alleged Santangelo received over $1.8 million in bribes in exchange for referrals and BLS gained over $6 million in Medicare and private insurance payments relating to the referrals. A second physician was also sentenced this month to 21 months in prison for his involvement in the BLS case. Anthony DelPiano, of Monmouth Junction, had pleaded guilty to one count of accepting bribes. He also received one year supervised release, a $10,000 fine and must forfeit $207,500. So far, 38 people including 26 physicians, have pleaded guilty in connection with the BLS investigation.

FDA Approves Theranos Assay. California-based Theranos announced it received FDA approval for its herpes simplex virus-1 (HSV-1) IgG assay. The FDA decision, issued July 2 through the 510(k) process, clears for sale the Theranos HSV-1 IgG assay, which Theranos offers for $9.07. The laboratory-developed test (LDT), an enzyme-linked immunosorbent assay, is cleared for use on the company’s automated, proprietary platform with venous blood and fingerstick blood. “FDA review is a uniquely rigorous process we undertook voluntarily because we remain deeply committed to ensuring that our systems and all of our laboratory developed tests are of the highest quality, and that patients and their physicians have access to the most accurate information about their health,” said Holmes in a statement issued by the company. Meanwhile, as we reported in the April issue of G2 Compliance Advisor, the bill that Theranos lobbied into Arizona law took effect this month allowing Arizona residents to order any laboratory test they want without a doctor’s authorization.