Dumpster dives found hundreds of containers of hazardous chemicals; unredacted patient data; and used blood and urine specimen containers.
Quest Diagnostics will pay 10 California counties $5 million to settle allegations that it illegally dumped hazardous and medical waste and protected patient data generated at several of its testing labs and patient service centers, California Attorney General Rob Bonta says.
The settlement comes after 30 inspections conducted by the district attorneys' offices at four Quest Diagnostics laboratories in the California and several of the more than 600 patient service centers statewide.
Regulators reviewed the contents of Quest's compactors and dumpsters and found hundreds of containers of chemicals, bleach, reagents, batteries, and electronic waste; unredacted medical information; medical waste such as used specimen containers for blood and urine; and hazardous waste such as used batteries, solvents, and flammable liquids, the AG says.
The disposals violate California's Hazardous Waste Control Law, Medical Waste Management Act, Unfair Competition Law, and civil laws prohibiting the unauthorized disclosure of personal health information.
After Quest was notified of the infractions, the AG's office notes that the company sought to bring its labs into compliance with California law. It hired an independent environmental auditor to review the disposal of waste at its labs and modified operations and training to improve handling, storage, and disposal of hazardous waste, medical waste, and patient data at all four laboratories and more than 600 service centers in California.
Under the settlement, Quest will pay $3.9 million in civil penalties, $700,000 in costs, and $300,000 for a Supplemental Environmental Project to support environmental training and enforcement in California.
The affected counties include Alameda, Los Angeles, Monterey, Orange, Sacramento, San Bernardino, San Joaquin, San Mateo, Ventura, and Yolo.
"We will not allow the public's health to be jeopardized by laboratories who prioritized cutting corners over protecting the health of the very people they were supposed to be caring for," says Orange County District Attorney Todd Spitzer. "This was not an isolated incident by a single Quest Diagnostics testing facility; this was Quest Diagnostics laboratories and testing facilities across the state skirting California's hazardous waste laws while ignoring the very real environmental and health impacts of these illegal actions."
The settlement also orders Quest to maintain an environmental compliance program, including hiring a third-party waste auditor, and report annually on its status.
Quest Responds
Quest offered this statement: "Quest takes patient privacy and the protection of the environment very seriously and has made significant investments to implement industry best practices to ensure hazardous waste, medical waste, and confidential patient information are disposed of properly. These include investing in technologies for treatment of biological waste, secured destruction of patient information, programs to maximize recycling efforts and minimize waste-to-landfill disposal, waste-to-energy recovery of non-recyclable wastes, and enhanced waste audit and inspection measures to ensure continued compliance with applicable laws."
Healthcare created one-in-five new jobs in the U.S. economy in the first month of 2024.
Healthcare sector job growth entered 2024 with a full head of steam, creating 70,000 jobs in January, representing 20% of the 353,000 jobs created in the larger U.S. economy, new federal data show.
Healthcare job growth in January was nearly double the 38,000 jobs created in December and well above the sector's 54,000 monthly average in 2023, the Bureau of Labor Statistics reported on Friday.
Ambulatory care continued to lead in job creation within the healthcare sector, accounting for 33,000 new jobs in January, followed by hospitals (20,000 jobs) and nursing and residential care (17,000).
The unemployment rate in the larger U.S. economy held fast at 3.7%, BLS says, with 6.1 million people reporting as unemployed, unchanged from December.
Big job gains were also seen in professional and business services (74,000), retail (45,000), and government (36,000).
The average hourly earnings for all employees on private nonfarm payrolls in January rose by 19 cents, or 0.6%, to $34.55. Over the past 12 months, average hourly earnings have increased by 4.5%. The average hourly earnings of private-sector production and nonsupervisory employees rose by 13 cents, or 0.3%, to $29.66.
January and December job numbers are considered preliminary by BLS, and subject to revisions.
With newfound authority granted by the IRA, HHS bids on 10 drugs selected for the first round of negotiations.
The federal government on Thursday offered its opening bid for mandated discounts on 10 pricey but widely used drugs in the Medicare program, beginning what are expected to be contentious and months-long negotiations with the nation's largest drug makers.
"Today is another milestone on the march to ensure people with Medicare get fair prices for prescription drugs. I am confident that this process will lead to lower prices, putting an end to exorbitant price gouging by pharmaceutical companies," Health and Human Services Secretary Xavier Becerra said in a media release.
With newfound authority granted by the Inflation Reduction Act, HHS named the 10 drugs selected for the first round of negotiations in August and announced in October that the makers of the 10 selected drugs agreed to negotiate a "maximum fair price."
The negotiations are expected to be drawn out over several months and finalized by August 1, with the new prices taking effect in 2026.
Pharmaceutical Research and Manufacturers of America (PhRMA) spokesman Alex Schriver called the negotiations "an exercise to win political points on the campaign trail rather than do what's in the best interest of patients."
"Government bureaucrats are operating behind closed doors to set medicine prices without disclosing for months how they arrived at the price or how much patient and provider input was used," Schriver said. "This lack of transparency and unchecked authority will have lasting consequences for patients long after this administration is gone."
Reports: U.S. Consumers Pay A Lot More
HHS fired back with fresh reports detailing the high prices that U.S. consumers pay for common drugs, such as insulin, when compared with other industrialized countries.
A new RAND report released this week to coincide with the launch of the negotiations found that prescription drug prices in the U.S. are about 2.78 times those seen in 33 other nations. That gap is even larger for brand-named drugs, RAND reports, with U.S. prices averaging 4.22 times those in comparison nations. Prices for generics -- which account for 90% of prescription volume in the U.S. -- are about 67% of the average cost in the comparison nations, the report notes, while prices for insulin are five to 10 times higher than those in other countries.
"These findings provide further evidence that manufacturers' gross prices for prescription drugs are higher in the U.S. than in comparison countries," said Andrew Mulcahy, lead author of the study and a senior health economist at RAND. "We find that the gap is widening for name-brand drugs, while U.S. prices for generic drugs are now proportionally lower than our earlier analysis found."
In addition, a report from Accountable.US found drug makers with products targeted for negotiation—including Merck, Eli Lilly, and Johnson & Johnson's Janssen—reported combined earnings of $38.7 billion in 2022, with combined stock buybacks and dividends increasing by $1.9 billion and $1.5 billion, respectively.
The allegations stem from a whistleblower lawsuit filed against a former neurosurgeon at Deaconness Hospital in Spokane.
Tacoma-based MultiCare Health System faces state and federal allegations that it "knowingly endangered patient safety" when it billed Medicare, Medicaid and other government health plans for unneeded spinal surgeries performed by a surgeon with a checkered clinical history.
The allegations stem from a whistleblower lawsuit filed against neurosurgeon Jason Dreyer, MD, a former staff physician who worked at MultiCare Deaconess Hospital and MultiCare Rockwood Clinic in Spokane from 2019 to 2021.
MultiCare said Monday it is "aware of the Department of Justice's allegations, and we believe them to be unfounded and without merit. We plan to vigorously defend MultiCare in this matter."
The Backstory
Before MultiCare hired Dreyer, he practiced for six years at Providence St. Mary's Medical Center in Walla Walla, a hospital owned and operated by Providence Health & Services, but resigned "amidst allegations that he was performing medically-unnecessary surgeries, harming patients, and falsifying diagnoses," Vanessa R. Waldref, U.S. Attorney for the Eastern District of Washington, said in a media release.
Eventually, Providence paid $22.7 million in 2022 to resolve False Claims Act allegations related to Dreyer's conduct, while Dreyer paid $1.2 million in 2023 for his role at Providence and was barred from billing government-sponsored health plans for nine years.
Disregarding well-documented "red flags," MultiCare's Deaconess hired Dreyer in July 2019. Three months later, Dreyer's high volumes were generating "significant revenue for MultiCare" and the health system put him on an incentive plan that paid the surgeon more money for greater volumes and complex surgeries, the complaint alleges.
Despite warnings in February 2020 that federal prosecutors were "investigating concerns that Dreyer was harming patients, falsifying diagnoses, and performing medically-unnecessary surgeries," MultiCare allowed Dreyer to maintain his practice until March 2021, when the Washington Department of Health suspended him.
In addition to endangering patients, the complaint alleges that MultiCare fraudulently claimed and was paid millions of dollars from state and federal healthcare programs, including Medicare, Washington State Medicaid, TRICARE, the Federal Employees Health Benefits Program, and the Department of Veterans Affairs Community Care program.
"MultiCare was aware of serious concerns that Dr. Dreyer was putting patients in danger," Waldref said. "The complaint alleges that MultiCare nonetheless made the decision to allow him to treat and operate on patients, even after it became aware of the federal investigation. This is an egregious breach of the public trust."
MultiCare Responds
MultiCare issued this response to a request for comment from HealthLeaders.
"MultiCare has not yet been served with the complaint filed by the DOJ. We can assure you that MultiCare's commitment to our mission – partnering for healing and a healthy future – and our dedication to the health of the communities we serve is as strong as ever. The safety of our patients is and will always be our highest priority. We are aware of the Department of Justice's allegations, and we believe them to be unfounded and without merit. We plan to vigorously defend MultiCare in this matter."
The total could grow as four states and Washington, D.C. continue enrollment through Jan. 31.
The Affordable Care Act is more popular than ever, with a record 21.3 million people signing up on the landmark law's Health Insurance Marketplace during the federal open enrollment period, the Centers for Medicare & Medicaid Services says.
The latest enrollment figures represent a 31% increase over the 16.3 million people enrolled in 2023. That record participation could grow within the next week because enrollment in four states and the District of Columbia continues through Jan. 31, CMS says.
Total plan selections so far include more than five million new enrollees, representing about 25% of total plan selections this year, and 16 million people who renewed coverage, CMS says.
HHS Secretary Xavier Becerra says the record enrollment shows that "the ACA continues to be a successful, popular, and important federal program to millions of people and their families."
"For decades, when it came to federal programs we could depend on to keep Americans covered, three were always top of mind — Medicare, Medicaid, and Social Security, but now it's crystal clear that we need to add a fourth — the Affordable Care Act," Becerra said.
The Biden Administration is crediting subsidies and policies provided in the Inflation Reduction Act and the American Rescue Plan that keep premiums affordable. Because of that, HHS says, "four in five HealthCare.gov customers were able to find health care coverage for $10 or less per month for plan year 2024 after subsidies."
Compared to the 2023 open enrollment, nearly 4.2 million more people with household incomes less than 250% of the federal poverty level (about $75,000 per year for a family of four) enrolled in 2024 coverage. As of December 31, 2023, CMS data show that 2.4 million plan selections in states that use HealthCare.gov, or approximately 15%, were made by people previously enrolled in Medicaid or Children's Health Insurance Plan.
The federal open enrollment period ran from Nov. 1, 2023, to Jan. 16, 2024, for states using the HealthCare.gov platform. Although the open enrollment has ended, people who qualify for Medicaid or CHIP can enroll year-round. For those no longer eligible for Medicaid or CHIP, a special enrollment period is available to enroll in Marketplace coverage.
Additionally, people with household incomes less than 150% of the federal poverty level ($22,000/year for a person and $45,000/year for families of four) can enroll in Marketplace coverage anytime through a special enrollment period. Consumers who experience a change of life circumstance — such as marriage, birth, adoption, or loss of qualifying health coverage — may also be eligible for a special enrollment period.
President Barak Obama created the ACA and signed it into law in 2010.
Red States Embrace 'Obamacare'
The biggest enrollment growth so far has been in Republican-leaning states, some of which have rejected Medicaid expansion and / or cut their Medicaid rolls, CMS data show.
West Virginia saw the largest year-over-year enrollment increase of 80.2%, followed by Louisiana (75.9%), Ohio (62.2%), Indiana (59.6%) and Tennessee (59.5%). In addition, Mississippi, Arkansas, Alabama, South Carolina, Georgia, Arizona and Texas saw enrollment growth of at least 50%. In Florida, 4.2 million people signed up for health insurance, up from one million in 2023 and the most of any state. Only Maine ( -2.6%) and Washington, D.C. ( -1.4%) saw enrollment drop this year.
Despite the popularity of the ACA, it continues to be a hot button political issue. Former President Donald Trump, the likely GOP presidential nominee, failed to kill the ACA during his term in office, but he has pledged repeatedly to replace the ACA, which he has called "a disaster."
"I don't want to terminate Obamacare, I want to REPLACE IT with MUCH BETTER HEALTHCARE. Obamacare Sucks!!!" Trump wrote in a November 2023 post on Truth Social.
However, Trump has never provided details on what his plan would look like.
Senate HELP Committee mulls subpoenas if J&J, Merck CEOs refuse 'invitation' to testify.
(Updated to include responses from Merck and J&J)
Firebrand Senator Bernie Sanders is calling three pharma CEOs to Capitol Hill, pressing them to explain before lawmakers – and possibly under oath -- why their drugs sold in the United States cost hundreds and thousands of dollars more than in other countries.
The big question: Will the CEOs show up?
Sanders (I-VT), chairman of the Senate Health, Education, Labor and Pensions Committee, is incensed that Johnson & Johnson CEO Joaquin Duato and Merck CEO Robert Davis ignored the Nov. 21 request by committee Democrats to appear voluntarily. Sander says that he will ask his colleagues to subpoena the pair when the committee next meets on Jan. 31.
"It is absolutely unacceptable that the CEOs of Johnson & Johnson and Merck have refused an invitation by a majority of members on the HELP Committee to appear before Congress about the outrageously high price of prescription drugs," Sanders says.
Chris Boerner, CEO of Bristol Myers Squibb, has agreed to testify.
In letters responding to the "invitation" to testify, however, attorneys for Merck and J&J raised concerns that the hearing would "not serve a valid legislative purpose," but would instead devolve into a "broad-ranging public spectacle" that would subject the CEOs to "retaliation" for their lawsuit challenging drug price controls put forward in the Inflation Reduction Act.
"It is neither lawful nor appropriate for you to try to use the Committee's investigative powers to chill pending litigation or to punish the Companies for exercising their First Amendment right to raise constitutional challenges to congressional enactments," Jennifer Zachary, general counsel for Merck & Co. Inc., wrote in a Jan. 12 letter to Sanders.
If subpoenaed, Duato and Davis may be required to provide sworn testimony or risk fines or even jail time for contempt of Congress if they fail to show.
"These CEOs may make tens of millions of dollars in compensation. The pharmaceutical companies they run may make billions in profits," Sanders says. "That does not give them a right to evade congressional oversight. It is time to hold these pharmaceutical companies accountable for charging the American people the highest prices in the world for the medicine they need."
If the committee votes to subpoena, it would be the first time it has done so since 1981. It could create a juicy photo op with CEOs raising their hands to deliver sworn testimony, reminiscent of photos taken when the CEOs of Big Tobacco were called to Congress in 1994.
‘Outrageously High'
Sanders offered a handful of examples that he says demonstrate the gaping chasm between drug prices in the United States and those charged in other countries.
Merck sells diabetes drug Januvia for $6,000 in the U.S., $900 in Canada and $200 in France. Merck also sells cancer drug Keytruda for $191,000 in the U.S., and $89,000 in Germany.
J&J's blood cancer drug Imbruvica sells for $204,000 in the U.S., $46,000 in the U.K., and $43,000 in Germany. J&J's HIV drug Symtuza sells for $56,000 in the U.S., and $14,000 in Canada.
Bristol Myers Squibb sells its blood thinner Eliquis for $6,700 in the U.S., $900 in Canada, and $650 in France.
Sanders also noted that J&J made $17.9 billion in profit in 2022 and Duato made $27.6 million in compensation. That same year, Merck made $14.5 billion and Davis made $52.5 million, Bristol Myers Squibb made $6.3 billion and former CEO, Giovanni Caforio made $41.4 million in compensation.
The two holdouts notwithstanding, big pharma has otherwise complied with lawmakers' requests to appear. CEOs from Eli Lilly, Moderna, Sanofi, and Novo Nordisk have voluntarily testified before the HELP committee, albeit with a little prodding.
Last February, for example, just hours after being invited before the HELP Committee to explain a proposed $130 list price for COVID vaccines, Moderna CEO Stéphane Bancel announced that the drug maker would offer the vaccine for free, which Sanders sarcastically called "an amazing coincidence."
Eli Lilly CEO David Ricks told the committee in May that his company would not raise prices on existing insulin products, following public outrage over the skyrocketing costs of the century-old biologic.
'Retaliatory Motives'
In a Jan. 12 letter to Sanders, J&J attorney Brian E. Smith said his client "has two prinicpal concerns with the hearing."
"First, you and your staff have stated that the hearing will examine pharmaceutical pricing in the United States as compared to the rest of the world... a Johnson & Johnson representative is not an appropriate witness for these topics," Smith notes, adding that J&J does not hold the New Drug Application or FDA registration for Imbruvica and does not control the price in the United States, and that J&J has "only has the right to commercialize Xarelto in the United States and does not control the price outside of the United States." In addition, he noted that Stelara will have biosimilar competition in early 2025 from company that will set its own price.
"Second, and more importantly, your staff and your public comments have indicated that the hearing is intended to focus on the Inflation Reduction Act and, specifically, the companies that pursued litigation challenging certain aspects of the statute," Smith wrote. "Indeed, the Committee has chosen to invite the CEOs of three select companies that are currently engaged in such litigation."
"This targeting seems unlikely to be coincidental," Smith wrote, "and it raises significant concerns that the hearing is intended as retribution for the companies' decisions to exercise their rights to challenge a statute that inappropriately infringes on constitutionally protected freedoms. Moreover, these litigations are ongoing, and the issues raised in the litigation should be properly resolved in a courtroom, not in a Committee hearing."
Smith noted that the committee's insistance on hearing from Duato, and its refusal to hear from a expert on drug pricing offered by J&J "unfortunately elevates our concerns that the hearing is being called to punish the companies who have chosen to engage in constitutionally protected litigation... Compulsory process intended as retribution for pursuing constitutionally protected litigation would also exceed Congress’s authority under applicable Supreme Court precedent."
Merck General Counsel Zachary echoed those concerns, and suggested that any attempt to subpoena Davis would be challenged in court.
"The only companies that were called to testify were the three that had filed lawsuits–lawsuits that you have roundly criticized," she wrote. "That fact says much about the likelihood of retaliatory motives."
Inhaler Costs Leave Bernie Gasping
In a related action earlier this month, Sanders and Democrats on the HELP Committee sent letters to the CEOs of AstraZeneca, Boehringer Ingelheim, GlaxoSmithKline, and Teva, -- the four largest makers of asthma inhalers -- telling them that the HELP Committee is "launching a major investigation into the extremely high prices these companies charge for inhalers that 25 million Americans with asthma and 16 million Americans with chronic obstructive pulmonary disease (COPD) rely on to breathe."
"There is no rational reason, other than greed, as to why GlaxoSmithKline charges $319 for Advair HFA in the United States, but just $26 for the same inhaler in the United Kingdom," the letters say. "It is unacceptable that Teva is charging Americans with asthma $286 for its QVAR RediHaler that costs just $9 in Germany. It is beyond absurd that Boehringer Ingelheim charges $489 for Combivent Respimat in the United States, but just $7 in France."
"Those prices are only possible in the U.S. because these companies have manipulated regulations to boost their bottom lines," the letters say.
The letters note that inhalers have been on the market since the 1950s and that most of the drugs within the inhalers have been around for more than 25 years. Yet, in the past five years alone, the four companies have reported making more than $25 billion from inhalers, and that between 2000 and 2021, manufacturers of all inhaler products in the U.S. raked in more than $178 billion in revenue.
Specifically, the letter asks the CEOs to explain:
How they decide to add new features to old inhalers or to move patients off of old products and onto new products, tactics that keep lower-cost generics off the market.
Whether the companies have evidence that their new products have any real clinical benefits compared to the old products.
The costs involved in manufacturing their inhalers and information about their patient assistance programs – which provide free or discounted inhalers to patients – including how much the companies deduct from their corporate taxes for operating those programs.
How much the drugmakers spend on research and development for asthma and COPD.
...year-over-year still short of pre-pandemic levels.
Hospital operating margins continue to grow and stabilize, although the gap between high- and low-performing hospitals remains wide, a new report shows.
The median calendar year-to-date operating margin index for hospitals in November was 2%, reflecting an ongoing improvement. However, the margins have yet to return to levels seen in pre-pandemic 2020 and 2021, according to Kauffman Hall’s latest National Hospital Flash Report.
Year-over-year inpatient and outpatient revenues for November 2023 increased by 5% and 9%, respectively, total expense adjusted discharges fell, and revenue per adjusted discharge grew—all indicators of financial recovery, according to the KH report, which relies on data from more than 1,300 hospitals.
These favorable trends reflect the efforts that hospitals have taken to deliver care in the most effective settings and reduce reliance on contract labor when possible.
Erik Swanson, senior vice president of Data and Analytics with Kaufman Hall says "hospitals should take advantage of the relative stability and re-embrace strategic growth if they hope to see continued success in 2024."
"Growth strategies may vary from hospital to hospital, but all leaders should ensure that they are supporting goals beyond just profitability and scale, including business model transformation and diversification," he says.
In addition, average length of stay fell indicating a shift towards more normal patient acuity. Swanson says that hospitals that have adopted value-based and bundled payment models will benefit further as they transition and provide care at the appropriate clinical setting.
The 38,000 job gains in December was below the monthly average 54,000 jobs healthcare created over the past 12 months.
Healthcare job growth continued to be an economic driver in 2023, creating 653,000 jobs over the 12-month span and accounting for 24% of all jobs created in the overall economy last year, preliminary federal data show.
The 38,000 new healthcare jobs created in December was down from the sector's 54,000 monthly average in 2023, but still accounted for nearly 40% of the 215,000 new jobs created in the United States in the last month of 2023.
The 653,000 new jobs in 2023 is a 17% increase year-over-year from the 557,000 healthcare jobs created in 2022, and the healthcare sector accounted for 17.2 million jobs in 2023, up from 16.6 million jobs at the end of 2022, the Bureau of Labor Statistics reported Friday.
Within healthcare, ambulatory care services continued to lead in job creation, accounting for 19,000 new jobs in December, and half (320,000) of all healthcare jobs in 2023. Hospitals accounted for 15,000 jobs in December and 183,000 jobs for the year, and nursing and residential care accounted for 3,200 jobs in December and 151,000 for the year.
The unemployment rate in the larger U.S. economy held fast at 3.7%, BLS says, with 6.3 million people reporting as unemployed, unchanged from November.
Big job gains also were seen in government (52,000) and leisure and hospitality (40,000).
The average hourly earnings for all employees on private nonfarm payrolls in November rose by 15 cents, or 0.4%, to $34.27. Over the past 12 months, average hourly earnings have increased by 4.1%. The average hourly earnings of private-sector production and nonsupervisory employees rose by 10 cents, or 0.3%, to $29.42.
December and November job numbers are considered preliminary by BLS, and subject to revisions.
This latest preliminary injunction is the commission's fourth successful healthcare sector merger challenge within a one-month span.
IQVIA Holdings' proposed acquisition of rival Propel Media has been temporarily enjoined by a federal judge while the Federal Trade Commission works to permanently block the consolidation of the two healthcare advertising platforms.
During a two-week hearing in November and early December before U.S. District Court Judge Edgardo Ramos, the FTC had sought a preliminary injunction for the deal, arguing that consolidating IQVIA's Lasso Marketing and PMI's DeepIntent -- two of the three largest providers of demand-side advertising platforms -- would give IQVIA an anticompetitive edge for a service that targets ads for pharmaceuticals and other healthcare products to physicians.
Regulators had argued that the merger would incentivize IQVIA – described by the FTC as "the world's largest healthcare data provider" -- to withhold information that would kneecap competition from rivals and discourage newcomers from entering the emerging industry.
Ramos agreed with regulators and in a December 29 ruling said "the FTC has shown that there is a reasonable probability that the proposed acquisition will substantially impair competition in the relevant market and that the equities weigh in favor of injunctive relief."
The FTC will argue for a permanent injunction at an administrative hearing that begins January 18.
FTC Bureau of Competition Director Henry Liu boasted that the injunction is the fourth successful attempt by the commission within the past month to stifle healthcare sector consolidation, which he said has been shown to increase prices and reduce quality for consumers.
"To close out 2023, the FTC secured another significant victory that temporarily blocks an anticompetitive merger that would raise health care prices for consumers," Lui says. "The federal court's order in IQVIA is also a win for the FTC as it continues to challenge anticompetitive deals involving health care and emerging technology platforms."
Durham, NC-based IQVIA issued a statement saying it was "disappointed by the court's decision."
"We are reviewing the decision and evaluating our options. IQVIA's acquisition of Propel Media would make it easier for patients and doctors to obtain the healthcare information they need to make better decisions that lead to better health outcomes. We maintain that the FTC's arguments in this case are inconsistent with the reality of the marketplace and unsupported by the law," the statement read.
In December, the FTC also successfully challenged Illumina's acquisition of Grail, John Muir's takeover of San Ramon Regional Medical Center from Tenet Healthcare, and Sanofi's acquisition of Maze Therapeutics' Pompe disease drug.
The agreement fines Cerebral $200,000 for its illicit practices and returns $540,000 to more than 16,500 affected consumers.
Cerebral will pay $740,000 in fines and restitution and provide a "click-to-cancel" button on its website after New York regulators cited the online mental healthcare provider for an overly burdensome cancellation process.
In a media release Thursday, New York Attorney General Letitia James says an investigation by her office found Cerebral required subscribers to cancel by email, but then forced them to take additional, needless steps such as completing a multi-question survey, before processing the cancellation.
In a media statement, Cerebral noted that it was "pleased" with the settlement and "has not admitted any wrongdoing."
"(This) allows us to move forward with a continued focus on our mission of building a new era of high-quality mental healthcare," the statement read.
Cerebral could cancel subscriptions with the click of a button, the AG reported, but gave itself up to 72 hours to finalize cancellations – and at times took a week or more. Cerebral used the delay to badger subscribers with renewal offers, and when delays crossed a consumer's billing date, Cerebral charged them for another month of service.
The AG's investigation also found that Cerebral charged consumers for its mental health treatment services, even when it had no providers available to provide the treatment.
In addition, the AG's investigation found that Cerebral illegally ordered its employees to anonymously post and "upvote" bogus positive reviews while "downvoting" negative ones. Employees were also ordered to contact customers directly and ask them to remove negative reviews, and to tell them, "We wouldn't want anything online to deter someone from seeking mental health care and that's really why we ask people if they are willing to" edit or remove the review, the AG's report says.
The agreement fines Cerebral $200,000 for its illicit practices and returns $540,000 to more than 16,500 affected consumers and stop its deceptive and burdensome tactics. Cerebral will pay restitution directly to eligible consumers within 90 days, crediting the payment account originally billed for the subscription.
The AG's office opened an investigation of Cerebral's cancellation practices following a rash of consumer complaints. Shortly after the AG launched the investigation, Cerebral streamlined its cancellation process to include a "click-to-cancel" process and implemented other recommendations made by regulators on disclosure and refunds. Cerebral also agreed to make no more than one follow-up attempt to retain former subscribers.
Cerebral Responds
Cerebral sent this statement to HealthLeaders.
"We are pleased to report that Cerebral has reached a settlement with the NYAG to close its investigation into Cerebral's business practices. The Company's continued commitment to evolving and improving its compliance practices, and our clinician-led leadership team's unwavering commitment to patient safety and privacy have been integral to our reaching this resolution with the NYAG. Cerebral has been transparent and cooperative throughout this process and remains committed to providing excellent care for our valued patients while upholding the highest standards in full compliance with all applicable laws."
"As acknowledged by the NYAG, shortly after the NYAG launched its investigation, Cerebral began improving its cancellation process and implementing other recommendations made by the NYAG. Cerebral recognizes that clients who have benefitted from its mental health care services may be ready to cancel their subscription and is committed to honoring those cancellation requests.
We continue our deep commitment to our patients' overall well-being, and we will continue to improve our clinical and business practices to stay compliant with the quickly evolving telehealth regulatory landscape."
"The NYAG settlement, in which Cerebral has not admitted any wrongdoing, allows us to move forward with a continued focus on our mission of building a new era of high-quality mental healthcare. We look forward to continuing to be a trusted mental health partner to all who need care.
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