In brief: Scam prevention, PBM protection, Accendra offer

WASHINGTON – Rep. Aaron Bean, R-Fla., has introduced H.R. 8871, the DME Scammer Prevention Act, to require the electronic submission of DME products most susceptible to fraud within 90 days of the initial claim date. The current submission deadline is 365 days, which Bean says allows fraudulent vendors to take advantage of the payment system. “Rising fraud and criminal activity threaten to undermine the Medicare system for Northeast Floridians and seniors across the country,” he said. “We have an obligation to ensure that taxpayer dollars are used to care for our most vulnerable – not lining the pockets of fraudsters who exploit gaps in the system. This legislation strengthens accountability, improves oversight and helps modernize the way claims are processed so legitimate patients get the care they need without delay or abuse of the system.” The bill would also direct the Government Accountability Office (GAO) to conduct a comprehensive review of the technology used by the Medicare Administrative Contractors (MACs) to screen and process claims. This report, Bean says, will help to identify gaps in current fraud detection tools and recommend improvements to better protect the Medicare system. The full text of Bean’s bill can be found here.

NCPA celebrates PBM bill passing in Tennessee

ALEXANDRIA, Va. – The National Community Pharmacists Association (NCPA) applauds Tennessee Gov. Bill Lee for signing the Freedom, Access and Integrity in Registered Pharmacy (FAIR Rx) Act (Senate Bill 2040/House Bill 1959) into law, making the state the second to pass legislation prohibiting pharmacy benefit managers (PBMs) from owning or operating pharmacies. The NCPA supported the Tennessee Pharmacists Association’s leadership on the FAIR Rx Act as it moved through the legislative process. “An enormous conflict of interest exists when a giant corporate PBM or insurance plan owns and operates its own pharmacy,” said NCPA CEO B. Douglas Hoey, pharmacist, MBA. “This legislation simply gives these health care giants a choice — you can be a PBM or you can be a pharmacy but you can’t be both. The FAIR Rx Act provides structural change that strikes at the crux of that conflict. We applaud the governor and legislators for their courage, withstanding tremendous pressure from the PBM-insurer lobby to pass this bill and defend Tennessee’s patients, taxpayers, and pharmacies.” This follows a similar piece of legislation signed into law in Arkansas last year. A federal bill to require companies that own health insurers or PBMs to divest their pharmacy businesses was reintroduced in Congress on May 13.

Vitacore receives approval in Canada for its custom-fit CPAP mask

VANCOUVER, British Columbia – Vitacore has received a Medical Device License (MDL) from Health Canada for FormFit, a fully custom-fit medical-grade silicone CPAP mask, the first of its kind, the company says. With regulatory approval secured, Vitacore is officially launching FormFit across Canada, direct-to-consumer at vitacore.com/formfit and through participating sleep clinics and health care providers nationwide. “One of the fundamental problems in CPAP therapy is that we’ve been trying to fit an extremely diverse range of facial shapes into a small number of generic mask designs,” said Mikhail Moore, president of Vitacore. “The medical device industry has long assumed that mass production and true personalization are incompatible. FormFit proves they are not. We've built a platform that translates each patient's unique anatomy into a manufactured, medical-grade product with no compromises, no generic shells, no 'best available size.' FormFit is the first product on this platform, and I believe it represents the future of how personalized medical devices will be designed and built.” Vitacore says its proprietary technology converts a short smartphone facial scan into a high-resolution 3D facial model, which is then used to produce a precisely fitted mask that is manufactured in Canada. FormFit is compatible with CPAP, APAP and BiPAP therapy devices. With the Canadian launch underway, Vitacore is also preparing a submission to the U.S. Food and Drug Administration (FDA).

Three men sentenced for submitting $6.9M fraudulent claims for braces

WASHINGTON – Three Florida men have been sentenced to prison for their participation in a scheme to defraud Medicare and launder more than $2.2 million in illicit health care fraud proceeds, according to the Department of Justice (DOJ).

• Marco Scamarone, 34, of Tamarac, Florida, was sentenced to 70 months in prison.
• Jose Mendez, 34, of Coral Springs, Florida, was sentenced to 78 months in prison.
• Renee Vazquez, 33, of Tamarac, Florida, was sentenced to 60 months in prison.

According to court documents and statements made in court, the defendants owned and operated two fraudulent durable medical equipment (DME) companies: Braces and Orthotics LLC, located in the Eastern District of Virginia, and Stone Oak Durable Medical Equipment LLC, located in the Southern District of Florida. Between January 2022 and February 2023, the fraudulent DME companies submitted approximately $6.9 million in fraudulent claims to Medicare for orthotic braces that were medically unnecessary and ineligible for Medicare reimbursement. The conspiracy involved illegal kickbacks and bribes paid to an offshore marketing company exchange for the referral of beneficiaries and fraudulent doctors’ orders. The three men conspired to launder the proceeds of their fraud through a series of shell companies under their control or the control of their associates — ultimately laundering more than $2.2 million in illicit funds for their own benefit and the benefit of their co-conspirators.

Accendra Health announces exchange offer, consent solicitations

RICHMOND, Va. – Accendra Health has commenced an offer to exchange any and all of the company’s outstanding 4.5% senior notes due 2029 and 6.625% senior notes due 2030. Eligible holders of 2029 notes that participate in the new money notes issuance will be able to exchange such 2029 notes for newly issued 9% senior secured first lien notes due 2032 and newly issued 9.75% senior secured second lien notes due 2033. Eligible holders of 2029 notes that do not participate in the new money notes issuance and eligible holders of 2030 notes will be able to exchange such notes for second lien notes. In addition, the company is soliciting consents from eligible holders of the existing notes to adopt certain proposed amendments to the indentures governing the existing notes to eliminate substantially all of the affirmative and negative covenants, eliminate certain events of default, modify covenants regarding mergers and consolidations and modify or eliminate certain other provisions contained in the existing notes indentures, including provisions related to defeasance. In connection with the exchange offer for the 2029 notes, the company is also offering $326.25 million in aggregate principal amount of newly issued first lien notes for cash. The new notes will be issued by the company and guaranteed on a senior secured basis by its existing and future wholly-owned domestic subsidiaries, including each subsidiary guarantor of the existing Notes. Each eligible holder of 2029 notes will only be entitled to receive the new money participant early exchange consideration if they tender their 2029 notes at or prior to the early exchange time and deliver in cash their pro rata cash portion of $65.25 million in aggregate principal amount of first lien notes to the exchange agent by the funding date. FMI, go here.

• Related: Accendra Health lags in Q1 but lays groundwork for standalone status.