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Consumer Health Digest #24-07
February 18, 2024
Consumer Health Digest is a free weekly e-mail newsletter edited by William M. London, Ed.D., M.P.H.
http://www.calstatela.edu/faculty/william-m-london, with help from Stephen Barrett, M.D
http://www.quackwatch.org/10Bio/bio.html., It summarizes scientific reports; legislative developments; enforcement actions; other news items; Web site evaluations; recommended and nonrecommended books; research tips; and other information relevant to consumer protection and consumer decision-making. The Digest’s primary focus is on health, but occasionally it includes non-health scams and practical tips. Items posted to this archive may be updated when relevant information becomes available. To subscribe, click here
http://lists.quackwatch.org/mailman/listinfo/chd_lists.quackwatch.org.
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Sham insurance sellers face $195 million judgment and permanent marketing banThe Federal Trade Commission (FTC) has obtained a $195 million judgment against Florida-based Simple Health Plans LLC and its CEO, Steven J. Dorfman. In a complaint filed in 2018
https://www.ftc.gov/news-events/news/press-releases/2018/11/ftc-halts-purveyors-sham-health-insurance-plans, the FTC said Simple Health misled people into thinking they were buying comprehensive health insurance that would cover preexisting medical conditions, prescription drugs, primary and specialty care treatment, inpatient and emergency hospital care, surgical procedures, and medical and laboratory testing. In reality, most consumers who enrolled reported paying as much as $500 per month for what was actually a medical discount program or extremely limited benefit program that did not deliver the promised benefits. It often left consumers with thousands of dollars in uncovered medical bills or, worse yet, unable to get necessary healthcare.
[FTC obtains $195 million judgment, permanent ban on telemarketing and selling healthcare products against Simple Health over charges it sold sham health insurance
https://www.ftc.gov/news-events/news/press-releases/2024/02/ftc-obtains-195-million-judgment-permanent-ban-telemarketing-selling-healthcare-products-against. FTC press release, Feb 9, 2024]
The court found the defendants violated the FTC Act and the agency’s Telemarketing Sales Rule. In granting the FTC’s motion for summary judgment
https://www.ftc.gov/system/files/ftc_gov/pdf/SimpleHealthSJOpinion_0.pdf, the Federal District Court in the Southern District of Florida called the activities “a well-documented account of a classic bait and switch scheme—aided by rigged internet searches, deceptive sales scripts, and predatory practices.” The Court banned Simple Health, Dorfman, and related entities Health Benefits One LLC, Health Center Management LLC, Innovative Customer Care LLC, Simple Insurance Leads LLC, and Senior Benefits One LLC from:
*** telemarketing and from marketing, promoting, selling or offering any healthcare products
*** any misrepresentations in the sale of any good or service
*** collecting any money for any healthcare product they previously sold
The court also ordered all of the defendants’ assets, which have been frozen since November 2018, to be liquidated and all proceeds turned over to the FTC, which is expected to use the money to provide refunds to consumers. The defendants are also required to destroy any personal information they collected about their customers.
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Physician assistant convicted of amniotic-fluid fraudA jury has convicted Ray Anthony Shoulders, 36, a physician assistant at a Fort Worth pain-management clinic, of conspiracy to commit healthcare fraud and 12 counts of healthcare fraud for his scam involving injecting amniotic fluid into patients’ joints in a dubious attempt at pain management. Shoulders now faces up to 240 years in federal prison—20 years per count.
According to evidence presented at trial, Shoulders and his co-conspirators submitted $788,000 in fraudulent claims and received more than $614,000 from Medicare for injecting amniotic fluid—the liquid that surrounds a growing fetus during pregnancy—into patients’ connective tissue in an off-label attempt to relieve joint pain.
Certain amniotic products have been approved by the U.S. Food and Drug Administration (FDA) for wound care, but not for pain management. In fact, the FDA has issued repeated consumer alerts
https://www.fda.gov/vaccines-blood-biologics/consumers-biologics/important-patient-and-consumer-information-about-regenerative-medicine-therapieswarning that biologics such as amniotic fluid “have not been approved for the treatment of any orthopedic condition, such as osteoarthritis, tendonitis, disc disease, tennis elbow, back pain, hip pain, knee pain, neck pain, shoulder pain, chronic pain, or fatigue.” Thus, Medicare considers amniotic injections administered to treat pain medically unnecessary and does not cover them. They do pay for some—but not all—amniotic injections administered to reduce inflammation of damaged tissue, as in a wound. Shoulders’ scam involved administering an amniotic fluid product not covered by insurance but billing for a more expensive product with a billing code for which Medicare paid.
[Assistant convicted at trial of amniotic fluid scam
https://www.justice.gov/usao-ndtx/pr/assistant-convicted-trial-amniotic-fluid-scam. U.S. Attorney’s Office, Northern District of Texas press release, Jan 25, 2024
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COVID Resist marketers ordered to stop deceptive advertisingThe FTC has announced a proposed stipulated order
https://www.ftc.gov/system/files/ftc_gov/pdf/FTCv.PPO-Dkt101-2024-02-14-ProposedStipulatedOrder.pdf that would ban Precision Patient Outcomes, Inc. and the company’s CEO, Margrett Priest Lewis, from:
*** claiming any product prevents or reduces the likelihood of infection with, or community transmission of, the COVID-19 virus, unless the FDA has approved the representation
*** claiming any unapproved product reduces the severity or duration of COVID-19
*** misrepresenting the health benefits or efficacy of any drug, food, or dietary supplement or the results of any tests or studies
The order requires defendants to:
(a) possess and preserve all scientific evidence used to support the health claims made for products they sell, and
(b) notify customers and resellers about the FTC’s lawsuit.
The order settles the FTC’s complaint
https://www.ftc.gov/system/files/ftc_gov/pdf/ppo_filed_complaint.pdfthat alleged the defendants began advertising COVID Resist on the company’s website and social media pages during the pandemic with deceptive claims the product could treat, prevent, or mitigate COVID-19. After learning about the Commission’s enforcement action under the COVID-19 Consumer Protection Act against a company making similar claims, the defendants merely changed the name of the product from COVID Resist to VIRUS Resist and continued to deceptively advertise it as an effective treatment for COVID-19. According to the FTC, the product contained nothing more than vitamins, zinc, and a flavonoid.
Based on the defendants’ conduct, the FTC alleged they violated the FTC Actby:
(a) making unsubstantiated efficacy claims, and
(b) falsely claiming to have scientific evidence to support their claims.
[FTC order will ban California-based company from COVID-19 advertising claims
https://www.ftc.gov/news-events/news/press-releases/2024/02/ftc-order-will-ban-california-based-company-covid-19-advertising-claims. FTC press release, Feb 15, 2024]
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TINA.org questions Talkiatry’s advertised patient cost. Talkiatry, an online mental health service, claims the majority of patient visits cost “$30 or less,” but TruthInAdvertising.org (TINA.org) and the Better Business Bureau have received complaints from patients who were billed much more than that per visit. At the bottom of its website, Talkiatry reveals that “a patient’s final cost depends on their insurance.” Noting that some patients have been charged hundreds of dollars per visit, TINA.org asked Talkiatry:
If the cost depends on consumers’ insurance coverage, why is Talkiatry providing a specific dollar amount in its advertising?
Does it have data to support its claim that the majority of visits cost patients $30 or less?
Tina.org received no answers to these questions.
[Talkiatry: Consumer complaints regarding alleged surprise charges are piling up
https://truthinadvertising.org/articles/talkiatry/. TINA.org, Feb 1, 2024]
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Stephen Barrett, M.D.
Consumer Advocate
7 Birchtree Circle
Chapel Hill, NC 27517
Telephone: (919) 533-6009
http://www.quackwatch.org (health fraud and quackery)
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