WASHINGTON -- On Oct. 3, Sens. Chuck Grassley (R-Iowa) and Herb Kohl (D-Wis.) wrote to the administrator of the Centers for Medicare and Medicaid Services (CMS), seeking an explanation for the agency's missed deadline for drafting the implementing details of the Physician Payment Sunshine Act (Sunshine Act), a new law requiring public disclosure of the financial relationships between physicians and the pharmaceutical, medical device and biologics industries.  The administrator responded.  The senators made the following comments on the response.

Sen. Grassley comment: "The administrator's response doesn't tell us anything new.  There's no explanation for the delay and no indication of when to expect completion.   It's an inadequate response any way you look at it.  Meanwhile, the U.S. government just settled with a medical device maker for $2.4 million over allegations of kickbacks to doctors to use the company's products.  The payments to doctors are the kind that might be prevented through disclosure as soon as the Sunshine Act is in place.  The longer we wait, the more taxpayers miss out on the benefits.   I'll continue to press for answers from CMS."

Sen. Kohl comment: "Given how straightforward and detailed the Sunshine Act provisions were, it's troubling that the response to our letter would come a month late without any indication on progress, a timeline or what caused the delay.  With medical device and pharmaceutical companies facing the January 1, 2012 deadline to begin collecting information about all payments to physicians, the lack of guidance leaves a great deal of uncertainty and I'm sure that's why many of the affected companies have joined us in calling for swift implementation." 

Here's an article describing the settlement referred to in Sen. Grassley's comment.

Fraud and Abuse

California Medical Device Maker to Pay $2.4 Million to Settle Kickback Charges

By Tom Gilroy

LOS ANGELES–A San Jose, Calif., maker of devices to treat spinal fractures has agreed to pay the United States $2.4 million to settle Department of Justice allegations that the company paid kickbacks to induce physicians to use its products, DOJ said in an Oct. 26 announcement (United States ex rel. Eberhard v. DFine Inc., W.D. Tenn., No. 10-CV-2474, settlement announced 10/26/11).

The settlement, which came as a result of a qui tam whistleblower lawsuit brought under the False Claims Act, resolves the government's contention that DFine Inc. used customer surveys, known as User Preference Evaluations (UPEs), to pay participating doctors illegal kickbacks to induce them to use DFine's vertebral augmentation devices.

"Although DFine ostensibly collected product information from participating physicians, each UPE survey required use of a new DFine device in a patient, the majority of which were Medicare beneficiaries," DOJ noted.

$500 Payment to Fill Out Survey

In each case, DFine paid the physicians $500 per patient to participate in the survey, DOJ added. The government also alleged that DFine provided improper remuneration in the form of travel expenses, lavish dinners, entertainment, and promotional speaker fees to doctors located in Chicago and Little Rock, Ark. DFine also solicited doctors to convert their business from a competitor's product and/or persuaded the physicians to continue to use DFine products, DOJ alleged.DOJ charged that DFine's alleged conduct violated the anti-kickback statute, which prohibits offering or paying remuneration to induce referrals or services covered by Medicare, Medicaid, or other federally funded programs. The lawsuit was filed in U.S. District Court for the Western District of Tennessee. The investigation of the case was handled by the DOJ's Civil Division, the U.S. Attorney's Office for the Western District of Tennessee, and the Office of Inspector General at the U.S. Department of Health and Human Services.

Company Admits No Wrongdoing

In a statement, DFine said it fully cooperated with the investigation and "continues to deny all of DOJ's unproven allegations."The terms of the agreement specifically state that DFINE and its employees admit no wrongdoing, liability or illegal activity," the statement said. "The decision to settle prior to completing the full investigation was a very difficult one, but one we felt was best for the company based upon the significant disruption and associated costs to continue the investigation, as well as the uncertainty regarding its duration."According to the settlement, the company was represented by Leo Cunningham and Lee-Anne V. Mulholland of Wilson Sonsini Goodrich & Rosati. The settlement is at http://op.bna.com/hl.nsf/r?Open=bbrk-8n3rv2.

 

Sens. Franken, Grassley, Lead Bipartisan Group in Pressing for Investigation of Mobile Phone "Stalking Apps" that Allow Abusers to Secretly Track Victims

Senators Ask Department of Justice, Federal Trade Commission to Look Into Legality of Apps

WASHINGTON, D.C.?Today, U.S. Sens. Al Franken (D-Minn.) and Chuck Grassley (R-Iowa) led a bipartisan group of Senators in calling on key federal agencies for an investigation into mobile phone "stalking apps."  The apps are designed to allow domestic abusers and stalkers to secretly track a victim's movement and location, read a victim's email and text messages, or listen to a victim's phone calls?all without the victim's knowledge or consent.

Sens. Franken and Grassley wrote a letter to the Federal Trade Commission and the Department of Justice and urged the agencies to determine whether such apps are legal under current law. The letter was also signed by Sens. Amy Klobuchar (D-Minn.), John Cornyn (R-Texas), Richard Blumenthal (D-Conn.), Lindsey Graham (R-S.C.), Sheldon Whitehouse (D-R.I.), Charles Schumer (D-N.Y.) and Dianne Feinstein (D-Calif.).

"Stalking apps are dangerous," the Senators wrote in the letter. "We ask that you quickly determine if they are also illegal. If so, we ask that the Department of Justice and the Federal Trade Commission use their full force to investigate and prosecute those behind the development and marketing of these products for illegal stalking."

Stalking apps are directly marketed to individuals seeking to secretly track their spouses and intimate partners. "Worried about your spouse cheating?" one apps' website asked, offering the ability to "Track EVERY text, EVERY call and EVERY Move They make Using our EASY Cell Phone Spy Software." Other apps make similar claims, telling users that they can "track her movements throughout the day" or even "tap her actual phone call." According to 2006 Bureau of Justice Statistics data, some 26,000 Americans are victims of GPS stalking annually, including by cell phone?although most advocates believe that number if considerably larger in 2011.

The letter cites an example of a victim from St. Louis County, Minnesota, who was tracked by her abuser through her smartphone during her trips to various county buildings to obtain an Order of Protection against him.  This example was drawn from testimony submitted by the Minnesota Coalition for Battered Women and the National Network to End Domestic Violence to the Senate Judiciary Subcommittee on Privacy, Technology and the Law, which Franken chairs.

You can read the full text of the letter below.

 

The Hon. Eric H. Holder, Jr.

Attorney General

Department of Justice

 

The Honorable Jon Liebowitz

Chairman

Federal Trade Commission

 

Dear Attorney General Holder and Chairman Liebowitz:

We are writing to express our urgent concern about the proliferation and use of so-called "stalking apps"?mobile apps for cell phones and smartphones that allow a domestic abuser or stalker to continuously and secretly monitor a victim's movements and whereabouts.  Based on 2006 data, the Bureau of Justice Statistics has estimated that more than 26,000 persons are victims of GPS stalking annually, including by cell phone.  Reports from advocates?and the boom in mobile technology?strongly suggest that this figure is much higher in 2011.  We ask that your agencies investigate whether the developers and distributors of stalking apps are in compliance with all applicable federal criminal and consumer protection laws.

In testimony submitted for a May 2011 hearing before the Senate Judiciary Subcommittee on Privacy, Technology and the Law, the Minnesota Coalition for Battered Women and the National Network to End Domestic Violence recounted the disturbing experience of a Minnesota woman who was stalked through her smartphone:

In a recent case in Northern St. Louis County, MN, an advocate reported that a woman who entered the domestic violence program located within a county building received a text message from her abuser within five minutes of entering the building. The abuser asked why she was in the county building. The woman was extremely frightened and the advocate helped her obtain an Order for Protection (OFP) at the local courthouse. After filing the OFP, the woman received another text message asking why she went to the courthouse and if she was filing an OFP against him. The only device the woman had on her was her smart phone and they later concluded that her abuser was tracking her via a location tracking application or service on her phone.

This excerpt reflects just one example of numerous cases of stalking through mobile devices.

Stalking applications are widely available and simple to install, usually by a spouse or intimate partner.  Anyone who leaves their mobile phone alone for five minutes could have stalking software installed without their knowledge. See Ben Goldacre, "How I Stalked My Girlfriend," The Guardian (Jan. 31, 2006).  Once installed, stalking apps can allow an abuser to listen to his victim's phone calls, read her emails and text messages, and track her real-time GPS location?entirely without the victim's knowledge or consent.

These apps are openly marketed to individuals who are trying to stalk or "spy" on an unwitting victim.  "Worried about your spouse cheating?" one app's website asks.  "Track EVERY text, EVERY call and EVERY Move They make Using our EASY Cell Phone Spy Software." Another app brags that its software will "turn a mobile into a secret gps [sic] tracking device." Still another site advertises that it will allow a user to "[t]rack her movements throughout the day," "[k]now what number she is calling or receiving," and even "tap her actual phone call."

Location-based services (LBS) offer consumers numerous benefits.  They help users navigate commutes and avoid traffic, help locate lost or stolen wireless devices, and also help parents keep track of their families.  Indeed, most major wireless carriers offer their customers legitimate services that allow them to track the locations of the users of their calling plans?especially minor children.  While these services can be abused by individual customers, all major carriers take precautions pursuant to voluntary industry guidelines to notify a wireless user that he or she is being tracked through one of these services.

In contrast, stalking apps abuse and misuse LBS to affirmatively facilitate stalking.  Indeed, these apps are designed to run secretly on a victim's phone and are actually marketed to abusers as being "undetectable."  While many of these apps also advertise themselves as a mechanism for parents to keep tabs on their minor children, their design and marketing suggests that this is an attempt to legitimize an otherwise suspect activity.  We believe that in most cases, stalking apps' intrusion into victims' privacy and their potential for abuse will far outweigh any legitimate purpose that these apps may serve.

Stalking apps are dangerous.  We ask that you quickly determine if they are also illegal.  If so, we ask that the Department of Justice and the Federal Trade Commission use their full force to investigate and prosecute those behind the development and marketing of these products for illegal stalking.

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Friday, Oct. 21, 2011

WASHINGTON - In an effort to ensure greater accountability in the Justice Department's distribution of money to grant recipients, Sen. Chuck Grassley offered an amendment to the appropriations bill being debated in the United States Senate that would include an 11-point accountability plan for federal grants administered by the Department of Justice.  The amendment offered Thursday was defeated by a vote of 46 to 54 on mostly party lines.  Grassley said he will continue to pursue the measure, despite the special interests that worked hard to defeat his amendment and protect their continued stream of federal funds.

"We have non-partisan audits showing that taxpayer money is being abused and wasted  in federal grant programs." Grassley said.  "We need transparency, accountability, and performance from both the Justice Department and individual grantees who are trusted with federal dollars.  It's a shame we're wasting taxpayer dollars like this when we can immediately do something to begin to remedy the problem.

"And it's a shame that something this basic fell on partisan lines when this shouldn't be a partisan issue, but it just goes to show that reforms to Washington's spending addiction will be hard to come by, given the continued power special interests have.  It also reinforces the need for the Deficit Committee to come up with big and bold ideas.  The outcome also tells me I need to continue to educate my fellow members about the problems that come from granting money without enough accountability and to consider whether it's fair to grant taxpayer money to non-profit groups as long as they have their own money parked offshore to avoid federal taxes."

Grassley said the Boys and Girls Clubs of America, the national umbrella group for hundreds of clubs around the country, continued receiving tax dollars while using off-shore tax shelters, paying generous executive compensation and lobbyists' fees, and simultaneously closing clubs due to an alleged lack of funds.   "I support the mission of the Boys and Girls Clubs.  The local clubs help thousands of children every year," Grassley said. "However, given our current fiscal crisis, I can't support federal taxpayer dollars being awarded as grants to those who hold millions of dollars in rainy day funds off-shore.  My amendment doesn't prohibit charities from investing offshore.  It just says they can't get federal grants if they invest offshore to avoid taxes on their investment income.  When organizations have funding and resources available to them, it's not clear why they shouldn't be dipping into those rainy day funds before seeking federal money."

A nearly identical version of the accountability package was included as part of the Trafficking Victims Protection Act Reauthorization Act voted out of the Judiciary Committee on a bipartisan basis just last week.  Select pieces were previously approved as part of the Second Chance Act reauthorization this past July.

Grassley also submitted last week a similar plan, along with several other ideas, to the Deficit Reduction Committee.  Grassley's letter can be found here.

Grassley's 11-point accountability plan:

o   required the OIG to audit 10 percent of grantees,

o   required mandatory exclusion for those with negative audit findings unremedied after 6 months, with priority placed to those with no past negative audit findings,

o   required reimbursement for funds awarded erroneously to grant recipients that should have been excluded,

o   required a mandatory 25 percent match with no less than 60 percent of the 25 percent constituting cash,

o   prohibited non-profits that hold money off-shore for purposes of avoiding unrelated business income tax from receiving federal grants,

o   capped administrative expenses at 8 percent, limited conference expenditures, prohibited grantees' lobbying, and

o   required the Office of Justice Programs Assistant Attorney General to certify to Congress annual compliance with these provisions.

Grassley said an audit of the Government Accountability Office of nine Trafficking Victims Protection Act grants over the last five years found fraud in all nine grants, including more than $1.4 million in questioned costs on a $1.7 million grant.

Violence Against Women Act grants were also susceptible to fraud; 21 of 22 randomly selected grants over 10 years revealed significant fraud and abuse, including one audit where 93 percent of grant funds were questioned by the Inspector General.

So far in 2011, the Inspector General has audited 21 grant recipients with grant funding totaling $54 million and has questioned the use of more than 26 percent of these grant dollars.  If the random audits the Inspector General has conducted were extrapolated to all 3,467 grants DOJ has awarded in 2011, totaling more than $2 billion, that would mean more than $500 million of grants administered could have questionable costs.  "That's just an extrapolation but it reinforces the need for a higher percentage of grants to be audited, as my amendment would require," Grassley said.

 

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Today, as Congress begins the long anticipated overhaul of the nation's education policy known as No Child Left Behind, one vulnerable group of students - too often left out of the debate -- will roar into its center.

In an effort to focus attention on the unlocked potential of these students, the Congressional Coalition on Adoption Institute (CCAI) and Fostering Media Connections (FMC) held a "National Conversation" on foster care and education, linking policymakers in Washington, D.C., and Los Angeles with researchers in Chicago and teachers and former foster youth in Sacramento via webcast. The conversation during this unprecedented nationwide event mirrored the themes detailed in "Rescuing Forgotten Futures," an Action Guide released by CCAI and FMC today, which outlines how everyone from citizens to policymakers can help improve educational outcomes for foster youth.

"Every foster youth deserves a high quality education with an academic mentor and the opportunity to stay in his or her school of origin. With the Senate education committee rewriting the Elementary and Secondary Education Act this week, it is important that they include provisions that ensure school stability for foster youth," said Sen. Mary Landrieu (D-LA), who joined the "National Conversation."  "I have long fought for the right of children in foster care to get the quality education every child deserves, and I will continue to advocate for them to receive the support and guidance they need to have a chance to succeed in the future."

Sen. Chuck Grassley (R-IA), who co-chairs the Senate Caucus on Foster Youth alongside Sen. Landrieu, pointed to the importance of the "National Conversation" in finding answers to the challenges students face in foster care.

"A major issue for young people in foster care is how difficult the system makes it to stay in the same school.  A child might get a new foster placement that's only a few miles away from where he's been but have to switch schools because of school district rules.  Finding a way to avoid this upheaval needs to be a policy goal at every level of government.  Discussions like this one can help encourage the debate and bring about a meaningful response," Sen. Grassley said.  "School life offers valuable opportunities for kids to make healthy, lasting connections, and young people in foster care would benefit tremendously from the chance to do so, especially given the challenging and even painful uncertainty so many of them face elsewhere in their lives."

For 26-year-old Derrick Riggins, who grew up in foster care and now works on Capitol Hill after working as a CCAI Foster Youth intern, this was especially true.

"Education is one of the most important tools we can provide for children in foster care," Riggins said. "It is a tool that can be used to open many doors and provide a way out of the child welfare system cycle."

Acting Assistant Secretary for Children and Families, George Sheldon, pointed to the need for strong inter-agency collaboration between education and child welfare administrations to unlock the very doors Riggins referred to.

"We recognize how critically important educational stability is for kids in foster care, whose lives are already full of disruption, " Sheldon said.  "We also know that the child welfare system alone can't guarantee their educational success.  That's why we are working closely and intensely with our partners at the Department of Education to facilitate the right connections between key state and local agencies to make sure these kids get the consistent and high quality education they deserve."

Cheryl Smithgall, a Research Fellow with Chapin Hall at the University of Chicago, one of the nation's top institutions in research around children's issues, joined the "National Conversation," and made clear that improvement in education is directly linked to educational agencies' ability to focus attention on vulnerable students.

"To the extent that policymakers are interested in the underperformance of schools, they need to be interested in vulnerable children," Smithgall said. "Research shows that early developmental and educational experiences are critical to later educational success.  As we contemplate child welfare and education policies and attempt to foster greater collaboration between the two systems, we need to think about how best to expose vulnerable children and their parents to high-quality developmental and educational supports as early in their lives as possible, and how to keep those supports in place when transitions occur in their lives."

Indeed, an amendment addressing the educational needs of students in foster care is expected to be included in Senate Health, Education, Labor, and Pensions Committee's deliberations, indicating that this sensitivity to vulnerable children will help drive the priorities of the national education debate: the potential in these young people is an undeniable American resource.

The fact is that every day that we allow the educational needs of our foster youth to go unaddressed, is another day of lost potential for our country," said Kathleen Strottman, executive director of CCAI. "My experience with these youth makes me confident that they are our future doctors, lawyers, business entrepreneurs, and political leaders.  Their voice in today's conversation is but one example of how ready they are to lead us into the future."

The "National Conversation" also featured Rep. Karen Bass, a former Sacramento teacher who is dedicated to improving the lives of foster youth; Jetaine Hart, a former foster youth and educational mentor for students in foster care; and Derrick Riggins, Madison Sandoval-Lunn, and Christina Miranda who are CCAI Foster Youth Interns. The event was webcast from Consumnes River College in Sacramento, home to the Enriched Scholars Program which is helping dozens of foster youth succeed in community college. Advocates hosted viewing gatherings across the country including Washington, West Virginia and Massachusetts.

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