The chain of diabetes clinics providing a proprietary and controversial insulin infusion protocol called was labeled a "pyramid scheme" in a unsealed this week in Alabama.
Released on July 24, the indictment supersedes one handed up in April, which charged Trina founder G. Ford Gilbert, JD, a prominent Alabama legislator, and a longtime Alabama Republican leader and lobbyist in an alleged bribery scheme aimed at securing insurance coverage for the Trina treatments.
Charges against that legislator, Rep. Jack Williams (R), have now been dropped, but another state legislator is now charged: Rep. Randall M. Davis (R), chairman of the House Committee on Constitution, Campaigns and Elections. He had announced in 2017 that he would not seek re-election this year.
The CEO of Trina Health LLC, Sacramento lawyer G. Ford Gilbert, 70, has sold to investors across the country, including several physicians and other health providers, the rights to use his protocols and equipment, branded as "Artificial Pancreas Treatment," which he claimed he developed.
He said the three-hour IV insulin infusions successfully treated a range of conditions from neuropathy and wounds to chronic fatigue and erectile dysfunction, the indictment said. Over the years, more than two dozen Trina clinics have operated from New York and Florida to California.
The latest indictment, which supersedes the , accuses Davis of conspiracy and public corruption. In exchange for recruiting investors to help finance Trina clinics, he was to receive fees amounting to a 5% ownership in the clinics.
"Trina Health operated as a 'pyramid scheme,'" the indictment reads. "That is, Trina Heath generated revenue by recruiting individuals into its business based on the promise that those individuals would make money by recruiting others into the business." After selling to second-level investors, "the first level individual who recruited the second-level individual would get a cut of that license fee as a finder's fee."
Coverage Denied
After Blue Cross Blue Shield of Alabama (BCBS-AL) investigated billing practices at one of the Alabama Trina clinics, it discovered that the Centers for Medicare & Medicaid Services ruled in a against paying for outpatient IV insulin infusions. BCBS-AL followed suit, a significant decision because BCBS-AL insures 3 million people in the state, or 90% of Alabama's private insurance market, including many Alabama state employees, the indictment said.
Moreover, BCBS-AL demanded refunds on money it had already paid, about $600 for each weekly infusion session.
The indictment said Davis not only helped recruit investors, but after BCBS-AL denied payment, attempted to pressure BCBS-AL to reverse its decision. Failing that, Davis helped advance a bill that Gilbert wrote that was designed to force BCBS-AL to pay for Trina clinic infusions. It said that outpatient IV insulin treatments were to be covered just like inpatient IV insulin treatments, which are routinely covered by health plans "as a medically necessary treatment in the hospital setting."
Davis and House of Representatives Majority Leader Micky Ray Hammon (who prosecutors said was not indicted because he was already convicted of unrelated corruption charges) were offered a 5% ownership interest in any clinic he could find investors for -- a kind of finder's fee -- from one of the Trina clinic principals, a friend of Gilbert's, codenamed "C.B." the document said. In an email to that principal investor, Davis "wrote that he hoped that they would 'make millions on this deal,'" the indictment said.
Innocent
Gilbert’s attorney, Richard Jaffe, issued a statement saying that his client “maintains his innocence to these unfounded charges,†and vows to vigorously fight them in court. He added “it has never been a crime, and it never will be, to honestly utilize the legislative process to benefit the citizens of the state of Alabama.†Jaffe said Gilbert has deep Alabama roots and connections, and “was not about profit but about health, and that will be evident at trial.†He said the life of Gilbert’s daughter, named Trina, “was salvaged by this treatment that is not yet covered in Alabama.â€
BlueGate
The indictment also describes in detail how Gilbert fashioned a public relations and lobbying campaign against BCBS-AL and called it "BlueGate, the Committee Against BCBS Abuses."
Gilbert allegedly believed that, through BlueGate, he could get a legislative hearing on his bill, in turn leading BCBS-AL to restore Trina coverage. The indictment said BlueGate would initiate lawsuits in state and federal court and enlist labor unions (including the powerful Alabama Education Association, which represents public school teachers) to lobby on Trina's behalf.
Gilbert also hired lobbyist Connors to advocate for Gilbert's bill to be heard, the indictment said. Connors is a former head of the Alabama Republican Party.
Despite the issues with denial of reimbursement at two Alabama clinics in May of 2015, Gilbert kept up confidence in his eventual victory, and attended the opening of a third Trina clinic, which then-Gov. Robert Bentley also attended. (Bentley resigned in April 2017 in yet another corruption scandal.)
Earlier this year, MedPage Today published a detailed series on Trina, speaking at length with Gilbert prior to his indictment, as well as with clinic operators and both critics and supporters of the infusion protocol in the medical community.