News roundup: DDoS attacks may be ‘smokescreen’, DEA slams Truepill with ‘show cause’, telehealth claims stabilize at 5.4%, Epic squashes patent troll, Cerner meeting exits KC, MedOrbis, Kahun partner on AI intake

Readers won’t get out of 2022 without one last cybercrime…article. DDoS attacks–distributed denial of service–escalated worldwide with Russia’s invasion of Ukraine in February. (Ukraine and military aid is a hot topic this week with President Zelenskyy’s visit to the US and Congress speech.) Xavier Bellekens, CEO of Lupovis, a cybersecurity company and a cyberpsychologist (!), postulates that DDoS attacks, as nasty as they are, may be a smokescreen for far more nefarious and damaging attacks. While IT goes into crisis mode over the DDoS, other attacks and information gathering on systems preparing for future attacks are taking place. Russian cyber groups focus on large organizations and move down the line into the most vulnerable, using both manual and automated approaches. Worth reading given the vulnerability and IT short staffing in healthcare organizations. Cybernews

The fallout from Cerebral and Schedule 2 telehealth misprescribing expands. The Drug Enforcement Agency (DEA) issued a ‘Show Cause’ to online pharmacy Truepill for inappropriate filling of ADHD Schedule 2 medications, including Adderall. A ‘Show Cause’ order is an administrative action to determine whether a DEA Certificate of Registration should be revoked, which could put Truepill out of business. The red flag for the DEA: 60% of  Truepill’s prescriptions–72,000–filled between September 2020 and September 2022 were for controlled substances, including generic Adderall. Truepill was Cerebral’s primary mail order provider, though they also used CVS and Walmart. The company stopped filling Cerebral’s ADHD prescriptions in May 2022.

In the order, the DEA cites that “Truepill dispensed controlled substances pursuant to prescriptions that were not issued for a legitimate medical purpose in the usual course of professional practice. An investigation into Truepill’s operations revealed that the pharmacy filled prescriptions that were: unlawful by exceeding the 90-day supply limits; and/or written by prescribers who did not possess the proper state licensing.”

The company stated in an emailed statement that they were fully cooperating with the investigation. If it does move to a hearing, Truepill’s chances of a successful defense are statistically low.

Truepill also fills prescriptions for Hims & Hers, GoodRx and Mark Cuban Cost Plus Drug Company. It was valued in its 2021 funding round at $1.6 billion. Companies in telemental health and prescribing of Schedule 2 ADHD medications, such as Cerebral and Done Health, are under enhanced scrutiny over their business practices [TTA 1 June]. Mobihealthnews, DEA press release, HISTalk, Digital Health Business & Technology

Telehealth medical claims stabilize. FAIR Health’s latest reports for August and September report that the percent of medical claims coded as telehealth are back up to 5.4%. June and July dropped slightly to 5.2% and 5.3% respectively. Also steady are that the vast majority of claims are for mental health services. In September, they were 66% of diagnoses far ahead of ‘acute respiratory diseases and infections’ at 3.1%. In procedure codes, psychotherapy accounts for over 43%.

A patent troll Epically bites the dust. Back in the early to mid-2010s [TTA’s index here], patent trolls (technically non-practicing entities which have no active business) presented a significant threat to early and growth-stage health tech companies. One, MMR Global (which apparently no longer exists), was notorious for buying up EHR and PHR-related patents and then filing patent infringement lawsuits against both small and large healthcare organizations with similar patents–and their users–that were generally monetarily settled. But NPEs are still active. One in south Florida, Decapolis Systems, used the same techniques as MMR Global had, suing in this case multiple Epic customers for patent infringement. Epic not only defended its customers but also sued Decapolis in the US District Court, Southern District of Florida. The court found that both Decapolis patents were invalid, ending what Epic termed ‘vexatious patent litigation’. Decapolis had successfully sued 24 other entities, including other EHRs, which settled. Owned by an inventor, this company will have to find another line of honest business. Epic release, Thomson Coburg

Oracle’s message to Kansas City: no more Cerner meetings for you. And maybe more. Cerner’s site for its annual customer/partner conference since 2007 has been in Kansas City, attracting about 14,000 visitors. Not only will it be integrated into Oracle CloudWorld in Las Vegas, 18-21 September, it’s been retitled Oracle Health with no mention of Cerner. The loss to local KC business is substantial–estimated to be in the $18 million range. While it’s logical to integrate it into the massive CloudWorld conference, it’s also another message to KC after Oracle’s sudden real estate downsizing that Cerner’s presence there will shrink…and shrink..as it’s absorbed into Oracle Health, and further confirmation that the Cerner name is gradually being sunsetted. KansasCity.com, HISTalk

A new (to this Editor) specialty care telehealth company, MediOrbis, is partnering with Kahun for an AI-enabled digital intake tool. This is a chatbot capable of conducting an initial medical assessment. Based on the patient’s answers and Kahun’s database of about 30 million evidence-based medical knowledge insights, it provides a summary for the physician before the telehealth visit and highlights areas of concern. Mobihealthnews  MediOrbis also has partnered with remote care/engagement Independa to add its capabilities to Independa’s HealthHub on their LG TVs.

Weekend short takes: May telehealth claims up to 5.4%; three health plan breaches, one at its law firm–affecting over 400,000 patients; layoffs hit Calm, Truepill (updated)

FAIR Health’s telehealth claims took two bumps up in both April and May. In April, telehealth medical claims moved slightly upward to 4.9% from March’s 4.6%, but May increased 10% to 5.4%, a percentage not seen since May 2021. Mental health conditions still make up the vast bulk of claims at 62.8%, but 3.6% of telehealth claims involve COVID-19 diagnoses, with 3.2% of claims for respiratory diseases and infections. This is attributed to a regional increase in the Southern and Western states of the latest variants of COVID-19. FAIR Health monthly tracker main page

Priority Health, a Michigan-based nonprofit health plan company, was breached through its law firm Warner Norcross & Judd (WNJ). The October 2021 breach at WNJ wasn’t reported to Priority Health until 6 June. The unauthorized party potentially accessed first and last names, pharmacy and claim information, drug names, and prescription dates from certain prescriptions filled in 2012. 120,000 members were affected. What the information was doing at the plan’s law firm was not disclosed. Priority Health is Michigan’s second-largest plan with over one million members.

In other breaches, Texas-based Behavioral Health Group (BHG), had a data incident that affected 197,507 individuals. The unauthorized party had potentially removed certain files and folders from portions of its network on 5 December 2021.  The files include names, Social Security numbers, driver’s license numbers, financial account information, biometrics, medication information, medical record numbers, dates of service, passports, payment card information, and health insurance information. However, the information accessed doesn’t appear to have been misused.

First Choice Community Healthcare in Albuquerque, New Mexico, also had a data security incident that involved 101,541 patients. The PHI in the 27 March breach included names, Social Security numbers, patient ID numbers, medications, dates of service, diagnosis and treatment information, birth dates, health insurance information, medical record numbers, patient account numbers, and provider information. Again, there appears to be no misuse to date. HealthITSecurity

More health tech companies lay off staff.

  • Calm, one of those incessantly advertised (in US) meditation apps, is discharging 20% (90) staffers, at least 12 in marketing, according to a report in the Wall Street Journal (may be paywalled). From this Editor’s LinkedIn post in response to early reports:
    • Calm was strategically ‘off’ in spending. They overspent on direct to consumer–expensive TV spots on major networks and sponsorships, paid social and search. If you wanted Calm’s full features, you paid for them. Expensive meditation apps are merely a “nice to have” and there are a bunch of free ones available. 
    • There’s also too much app overlap and mistargeting out there. Calm was trying to sell the app to businesses as a benefit (ROTFL) but was hedging its bets with buying Ripple, which designs apps for care coordination and condition management (another crowded area).
    • Another sign–new sole CEO named this summer. Now sole CEO David Ko came from Ripple and the two Calm founders moved over to co-chair roles.
    • This is a company that raised well north of $200 million to become a $2 billion unicorn as early as 2019, another sign of too much cash, too soon, and VCs/equity investors following the fad. ‘Mindfulness’ became a fad as early as 2018.
  • Truepill is up to its third layoff–33% or 175 staff, including all UK staff plus much of the product and data teams.  Their cutbacks relate to multiple failures, the first in betting on ADHD controlled substances, the second in blowing through vast amounts of funding but unable to obtain more (a Series D of $142 million but unable to float a Series E). Truepill’s ADHD med bet fell apart with its relationship with Cerebral, now under Federal investigation [TTA 16 June]. As early as May, Truepill, Cerebral’s primary mail order provider, had stopped filling their prescriptions for Schedule 2 medications [TTA 1 June]. This follows on a June layoff of 15% or 150 people. Truepill had also expanded into telehealth and diagnostics, two areas which will only be lightly supported going forward. TechCrunch

DOJ investigates telemental Cerebral on over-prescribing of controlled medications

DOJ dropped an anvil on Cerebral’s head Friday night. Last week’s reports on the Drug Enforcement Agency (DEA) investigation of telemental health provider Cerebral were confirmed on Friday with the official notification that the US Attorney’s Office for the Eastern District of New York had subpoenaed the company as part of their investigation into possible violations of the Controlled Substances Act. According to the Wall Street Journal, the subpoena was issued to Cerebral Medical Group, the corporation it uses to contract with clinicians and provide healthcare services. The company is fully cooperating with the investigation by the Department of Justice, which includes turning over records pertaining to their prescribing of controlled substances such as Adderall and Xanax. This has been reported by FierceHealthcare which is citing (paywalled) Insider.

Last week, Cerebral announced that it would stop prescribing controlled substance prescriptions for new ADHD patients as of 9 May. However, they would continue prescribing controlled substances for other mental health conditions, according to a memo from their chief medical officer to their clinician network.

Cerebral’s Saturday statement in response to the subpoena maintains (from FierceHealthcare):

“To be clear, at this time, no regulatory or law enforcement authority has accused Cerebral of violating any law”

and

“Cerebral has dedicated significant time, energy, and resources to ensuring that its policies and procedures regarding the prescription of controlled substances and other medications both are medically appropriate and comply with all applicable state and federal law,” the statement also said. “As a responsible company, Cerebral is continuously improving its systems and practices. The foundation of this company is built on evidence-based, ethical, and compliant practices so that our patients can receive the highest quality of care and achieve the best clinical outcomes.”

The company has done well with the increased demand for mental health services provided via telehealth including remote evaluating and prescribing. In December, their $300 million Series C raise boosted their valuation past $4.8 billion.

Darkening this rosy picture is, as TTA noted last week, that a former VP of product and engineering, Matthew Truebe, has sued Cerebral for wrongful dismissal. According to him, the company put growth before patient safety, including overprescribing medications for ADHD. Other reports indicate that the DEA interviewed other former Cerebral nurse practitioners who felt pressured to prescribe ADHD medication after a short video call. The Verge

Cerebral has also gained notoriety for dodgy advertising claims pertaining to ADHD and other conditions. In January, advertising on TikTok and Instagram was pulled for claims that obesity is “five times more prevalent” among adults with ADHD, and stated that getting treatment for the mental health disorder could help patients “stop overeating.” These followed inquiries by Forbes and NBC News. Also pulled was their Facebook advertising around prescribing Type 2 diabetes medications, GLP-1 agonists, as a “wonder drug” for weight loss. 

Will this put a damper on the burgeoning area of telemental health and remote prescribing? Stay tuned. Also Becker’s. 

Weekend news and deals roundup: Allscripts closes sale of hospital EHRs, closing out CEO; DEA scrutiny of Cerebral’s ADHD telehealth prescribing; more telehealth fraud; Noom lays off; fundings; and why healthcare AI is only ML

That was fast. Allscripts closed its $700 million March sale of its hospital and large physician practice EHRs to Constellation Software Inc. through N. Harris Group. The Allscripts EHRs in the transaction are Sunrise, Paragon, Allscripts TouchWorks, Allscripts Opal, and dbMotion. They reported their Q1 results today. According to HISTalk earlier this week, CEO Paul Black will be stepping down, with President Rick Poulton stepping in immediately. Update–this was confirmed on their investor call Thursday and the transition is effective immediately. No reasons given, but there were no effusive farewells.  Healthcare Dive

A damper on telemental health? Online mental health provider Cerebral, which provides talk therapy, audio/video telehealth, and prescriptions for anxiety, depression, insomnia, ADHD, and other conditions, is finding itself under scrutiny. This week, its main mail fulfillment pharmacy partner, Truepill, stopped filling prescriptions for Adderall, Ritalin, Vyvanse, and other controlled Schedule 2 pharmaceuticals. Cerebral is redirecting current patients with these prescriptions to local pharmacies and as of 9 May, will not prescribe them to new ADHD patients.

Based on reports, the Drug Enforcement Agency (DEA) is looking at Cerebral in particular as part of a wider scrutiny of telehealth providers and pharmacies filling telehealth-generated prescriptions due to allegations of overprescribing. It also didn’t help that a former VP of product and engineering plus whistleblower claims in a wrongful dismissal lawsuit that Cerebral execs wanted to prescribe ADHD drugs to 100% of diagnosed patients as a retention strategy. Bloomberg Law. Unfortunately, Insider is paywalled but you may be able to see a report in the Wall Street Journal. Becker’s Hospital Review, FierceHealthcare

Also troubling telehealth is recurrent fraud, waste, and abuse cases involving Medicare and Medicaid. Back in 2020 the National Healthcare Fraud Takedown took down over 80 defendants in telemedicine fraud [TTA 2 Oct 20, 30 Jan 21]. The Eastern District of NY based in Brooklyn has indicted another physician, an orthopedic surgeon, in a $10 million fraud involving durable medical equipment (DME). In exchange for kickbacks from several telemedicine companies, he allegedly prescribed without examination and with only a cursory telephone conversation DME such as orthotic braces. DOJ release

Some fundings and a sale of note–and a big layoff at a well-known digital health leader:

  • Blue Spark Technologies, an RPM company with a patented Class II real-time, disposable, continuous monitoring body temperature patch good for 72 hours, TempTraq, raised a $40 million intellectual property-based debt solution (??) to fund growth led by GT Investment Partners (“Ghost Tree Partners”) with support from Aon plc (NYSE: AONRelease
  • Specialty EHR Netsmart acquired TheraOffice, a practice management platform for physical therapy and rehabilitation practices which will be added to its existing CareFabric platform. Neither terms nor management transitions were disclosed in the release.
  • ‘White label’ telehealth/virtual health provider Bluestream Health is implementing its systems in Mankato Clinic, with 13 facilities across southern Minnesota. It’s a rarity–physician-owned and led–and in business since 1916. This also fits into a new telehealth trend–providers working with ‘white label’ telehealth companies and not with the Big 5. Release
  • Ubiquitously advertised (in US) weight-loss app Noom is laying off a substantial number of employees–180 coaches plus 315 more employees. Reportedly they are pivoting away from on-demand text chat to scheduled sessions that don’t require so many people. While profitable in 2020 ($400 million) and with Series F funding of over $500 million in 2021, it’s come under criticism that while its pitch heavily features easy behavioral change achieved through cognitive behavioral therapy (CBT), their real core of weight loss is severe calorie restriction. Engadget
  • Element5, an administrative software provider for post-acute facilities, raised a $30 million Series B from Insight Partners. They claim that their software is AI and RPA (robotic process automation) based. ReleaseMobihealthnews

And speaking of the AI pitch in healthcare, a VC named Aike Ho explains why she doesn’t invest in healthcare AI companies because there’s no such thing in healthcare–it’s just machine learning. On that, Ms. Ho and your Editor agree. She also makes the point that the market they address is ancillary and not core services, plus they have difficulty clinching the sale because they don’t relate well to achieving or can’t prove at this stage improved clinical outcomes. Ms. Ho’s looooong series of Tweets is succinctly summarized over at HISTalk (scroll down halfway).