Consumer Health Digest #18-27
Your Weekly Update of News and Reviews
July 8, 2018
Consumer Health Digest is a free weekly e-mail newsletter edited by William M. London, Ed.D., M.P.H., with help from Stephen Barrett, M.D. It summarizes scientific reports; legislative developments; enforcement actions; news reports; Web site evaluations; recommended and nonrecommended books; and other information relevant to consumer protection and consumer decision-making. Its primary focus is on health, but occasionally it includes non-health scams and practical tips.
Telemarketing executive sentenced. Timothy Thomas, 55, of Brentwood, Tennessee has been sentenced to 66 months in prison for marketing and misrepresenting health insurance plans. The judge also ordered him to forfeit $1.5 million dollars and pay more than $2.5 million in restitution to victims. Thomas had pleaded guilty to: (a) mail fraud for representing that limited benefit health plans were major medical health insurance plans, and (b) criminal contempt for violating a court order that froze his assets and placed his company, United Benefits of America LLC (a/k/a United States Benefits and Health Care America) into receivership.
From at least 2007 to 2010, Thomas hired salespeople to sell over the phone so-called "association memberships" created by third-party companies such as International Association of Benefits and Consumer Driven Benefits of America. These memberships included bundled benefits, such as limited benefit health plans, prescription drug discount cards, accidental death and dismemberment benefits, and lifestyle benefits, such as rental car discounts. Thomas targeted his sales to customers who had been denied traditional health insurance because of preexisting conditions. The sales script attempted to portray the memberships as equal in quality to traditional health insurance, omitting the fact that limited benefit health plans left customers with the vast majority of the financial risk. [Former CEO of Tennessee-based telemarketing company sentenced to federal prison. U.S. Department of Justice, press release Number 18-882, July 2, 2018]
During his 2016 presidential campaign, Donald Trump said he would maintain Obamacare protection against denial of coverage for people with preexisting conditions. However, the Trump administration is seeking a court ruling that Obamacare's protections for preexisting conditions are unconstitutional. Such a ruling would make consumers more susceptible to schemes like Thomas's.
FTC halts "free trial" marketing scheme. A federal district court has temporarily halted the operation of San Diego-based Internet marketers who were deceptively advertising free-trial offers and not only charging full-price, but also enrolling buyers in expensive continuity plans without their consent. The court also froze the operation's assets and appointed a stemporary receiver over the business. The defendants are Triangle Media Corporation, Jasper Rain Marketing LLC, Hardwire Interactive Inc., and Brian Phillips, who the FTC alleges owns and operates Triangle Media Corporation. The defendants are charged with violating the FTC Act, the Restore Online Shoppers' Confidence Act, and an implementing regulation of the Electronic Fund Transfer Act. According to the FTC's complaint:
- The products included skin creams, electronic cigarettes, and dietary supplements.
- In their advertising through third-party websites, blog posts, and surveys, the defendants offered consumers "RISK FREE" trials of products such as "Wrinkle Rewind," "Erase Repair H/A," "Pro Vapor," "Cerebral X," "Test X Core," and "Garcinia Clean XT."
- Consumers who clicked on these advertisements were taken to the defendants' websites, which claimed to offer trials for just the cost of shipping (typically $4.95 or less), but charged as much as $98.71 for the trial shipment. Many were also enrolled without their consent in a plan under which they received an additional monthly shipment at full price.
- The defendants used deceptive order confirmation pages to trick consumers into ordering additional products, for which the defendants charged consumers full price and enrolled them in negative-option plans.
- The defendants made it difficult to stop or avoid the recurring charges or obtain a refund.
The FTC is seeking a permanent injunction to bar the defendants from such practices. [FTC halts online marketers responsible for deceptive "free trial" offers. FTC press release, July 3, 2018]
U.S. hospital utilization data summarized. David Belk, M.D. who blogs about health-care prices, has provided a concise summary of data from the American Hospital Association, the Centers for Medicare and Medicaid Services and California's Office of Statewide Health Planning and Development that show:
- Inpatient censuses for U.S. hospitals have been steadily declining for nearly four decades.
- Fewer Medicare and Medicaid patients are being admitted to U.S. hospitals each year even though there are many more recipients.
- Hospitals are providing far more outpatient services than in the past, largely to replace their decline in inpatients.
- There are far fewer hospitals and hospital beds in the U.S. than there were in the 1980s.
- The total number of surgeries performed in the U.S., both inpatient and outpatient, hasn't changed significantly since 2001 even though the U.S. population has both aged and increased.
- Skilled nursing facilities have also seen a decline in their censuses in recent years.
Belk attributes these changes to increased scrutiny over admissions by insurers, improvements in outpatient medical and surgical care, greater availability of effective prescription drugs including inexpensive generics, increasing use of hospice care outside of hospitals, and greater availability of in-home skilled nursing services.
Couple charged with practicing medicine without a license. Todd Bragg and his wife, Kathleen have each been charged with one felony count of practicing medicine without a license and one misdemeanor count of advertising to practice medicine without a license. Todd was also charged with a felony count of aiding and abetting the practice of medicine without a license. The couple's business, "A Youthful Reflection" in San Jose, California offered laser hair removal and skin rejuvenation. They hired registered nurses to perform the laser treatments, which, they allegedly were told could be performed under Todd's chiropractic license. However, in California laser hair removal can be legally performed only by a physician or a physician's assistant or registered nurse working under medical supervision. [San Francisco Bay area couple charged with practicing medicine without a license. Division of Investigation blog, California Department of Consumer Affairs. June 27, 2018]
This page was posted on July 8, 2018