Baruch College/Mount Sinai School of Medicine Program in Health Care Administration and Policy BUS9100 Lecture 16 Health Care Fraud and Abuse Raymond R. Arons, Dr. P.H, M.P.H
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1. Baruch College/Mount Sinai School of Medicine Program in
Health Care Administration and Policy BUS9100 Lecture 16 Health
Care Fraud and AbuseRaymond R. Arons, Dr. P.H, M.P.H
2. Lecture 16 2 Baruch College/Mount Sinai School of Medicine
Program In Health Care Administration and Policy BUS 9100: The
Social and Governmental Environment of the Business of Health Care
Lecture 16 Health Care Fraud and Abuse Raymond R. Arons, Dr. P.H,
M.P.H Health Care Fraud and Abuse The detection and elimination of
health care fraud and abuse is a top priority of federal law
enforcement. Our efforts to combat fraud were consolidated and
strengthened considerably by the Health Insurance Portability and
Accountability Act of 1996 (HIPAA). HIPAA established a national
Health Care Fraud and Abuse Control Program (the Program), under
the joint direction of the Attorney General and the Secretary of
the Department of Health and Human Services (HHS), acting through
the Departments Inspector General (HHS/OIG), designed to coordinate
federal, state and local law enforcement activities with respect to
health care fraud and abuse. 2 continued...Copyright 2011 Raymond
R. Arons, Teaneck, NJ, USA
3. Lecture 16 3 Health Care Fraud and Abuse During FY 2010, the
Federal government won or negotiated approximately $2.5 billion in
judgments and settlements, and it attained additional
administrative impositions in health care fraud cases and
proceedings. The Medicare Trust Fund received transfers of
approximately $2.86 billion during this period as a result of these
efforts, as well as those of preceding years; and another $683
million in Federal Medicaid money was transferred to the Treasury
separately The HCFAC account has returned over $18.0 billion to the
Medicare Trust Fund since the inception of the program in 1997. 3
Health Care Fraud and Abuse In FY 2010, the Department of Justice
(DOJ) opened 1,116 new criminal health care fraud investigations
involving 2,095 potential defendants. Federal prosecutors had 1,787
health care fraud criminal investigations pending, involving 2,977
potential defendants, and filed criminal charges in 488 cases
involving 931 defendants. A total of 726 defendants were convicted
for health care fraud-related crimes during the year. Also in FY
2010, DOJ opened 942 new civil health care fraud investigations and
had 1,290 civil health care fraud matters pending at the end of the
fiscal year. 4The Department of Health and Human Services and the
Department of Justice Health Care Fraud andAbuse Control Program
Annual Report For FY
2000http://www.usdoj.gov/dag/pubdoc/hipaa00ar21.htmCopyright 2011
Raymond R. Arons, Teaneck, NJ, USA
4. Lecture 16 4 Case 2009-1Copyright 2011 Raymond R. Arons,
Teaneck, NJ, USA
5. Lecture 16 5 Case 1 Durable Medical Equipment Fraud After a
five-week trial, a Federal jury in Miami convicted three owners of
two DME companies, a home health agency and an assisted living
facility which conspired to defraud Medicare of more than $14
million for unnecessary medicine, DME, and home health care
services. Two defendants were sentenced to 51-month terms of
imprisonment, and the third was sentenced to a 31-month prison
term. Patients testified at trial that they took kickbacks, were
falsely diagnosed with chronic obstructive pulmonary disease and
prescribed unnecessary aerosol medications, including commercially
unavailable compounds. A fourth co-defendant who was a
dermatologist, was also convicted in a separate jury trial and was
sentenced to prison for 41 months 5Medicare Fraud Convictions
Result in Prison Terms for Mother and Two DaughtersWASHINGTON The
owners of four Miami-based healthcare corporations were sentenced
andremanded to prison yesterday for their roles in schemes to
defraud the Medicare program, ActingAssistant Attorney General
Matthew Friedrich of the Criminal Division and U.S. Attorney
R.Alexander Acosta of the Southern District of Florida announced
today. Collectively, the threedefendants through their companies
collected more than $14 million from the Medicare programfor
unnecessary medicine, durable medical equipment (DME) and home
health care services.U.S. District Judge Cecilia M. Altonaga
sentenced Maria T. Hernandez (Mayte), 50, to 51months in prison;
Marta F. Jimenez, 67, to 31 months in prison; and Maivi Rodriguez,
34, to 51months in prison. All three were remanded into federal
custody at the conclusion of thesentencing. Hernandez and Rodriguez
are the daughters of Jimenez. On March 7, 2008, after afive week
trial, a jury convicted Hernandez, Jimenez and Rodriguez on all
charged counts,including conspiracy to defraud the U.S. government,
to cause the submission of false claims toMedicare, and to solicit
and receive kickbacks; and conspiracy to commit health care
fraud.Additionally, the defendants were found guilty of multiple
counts of receiving kickbacks inexchange for referring Medicare
patients.At trial, the jury heard testimony that Hernandez, Jimenez
and Rodriguez controlled more than60 Medicare beneficiaries for the
sole purpose of defrauding Medicare through the businessesthey
owned. Hernandez owned Action Best Medical Supplies Inc., a DME
company. Jimenezand Rodriguez owned Esmar Medical Equipment Inc., a
DME company; A & A MedicalServices Inc., a home health care
company; and M & M Comprehensive Inc., an assisted
livingfacility.Copyright 2011 Raymond R. Arons, Teaneck, NJ,
USA
6. Lecture 16 6Patients testified at trial that they were paid
cash kickbacks in exchange for use of their Medicarecards. Several
of the patients lived in the assisted living facility owned by
Jimenez andRodriguez. Patients testified that they knowingly took
cash kickbacks, were falsely diagnosedwith chronic obstructive
pulmonary disease and prescribed unnecessary aerosol
medications,including commercially unavailable compounds.
Compounding refers to the process of apharmacist mixing the
medication in the pharmacy, instead of purchasing it from
apharmaceutical manufacturer. Trial testimony revealed that one of
the men making the medicinewas trained as an auto mechanic without
any education, training or experience manufacturingmedicine. In
total, the co-conspirator pharmacies associated with Hernandez,
Jimenez andRodriguez were paid more than $14 million between 2000
and 2003 based on the submission ofclaims for medically unnecessary
aerosols.The case was prosecuted by Deputy Chief Kirk Ogrosky and
Senior Trial Attorney John S.Darden of the Criminal Divisions Fraud
Section in Washington, D.C., with the investigativeassistance of
the Department of Health and Human Services, Office of Inspector
General and theFBI. The case was brought as part of the Medicare
Fraud Strike Force, supervised by the FraudSection of the Criminal
Division and U.S. Attorney Acosta of the Southern District of
Florida.From investigations opened during the period of strike
force operations between March andOctober of 2007, federal
prosecutors have indicted 82 cases with 142 defendants in
SouthFlorida. Collectively, these defendants billed the Medicare
program for more than $492 million.Copyright 2011 Raymond R. Arons,
Teaneck, NJ, USA
7. Lecture 16 7 Case 2009-2Copyright 2011 Raymond R. Arons,
Teaneck, NJ, USA
8. Lecture 16 8 Case 2 - Physician Fraud and Abuse A physician
and the administrator of an HIV infusion clinic pleaded guilty for
their roles in a $37 million infusion fraud scheme. The physician,
who was sentenced to 84 months in prison, admitted to approving
approximately $26 million worth of fraudulent medical bills,
signing documents containing false information about treatments
purportedly provided to HIV patients, and approving medically
unnecessary treatments. The clinic administrator, who was sentenced
to serve 70 months in prison, admitted to causing the submission of
approximately $11 million in false claims to the Medicare program,
paying health care kickbacks, and committing health care fraud.
6Miami Physician and HIV Clinic Administrator Plead Guilty for
Their Roles in a $37Million Medicare Fraud SchemeMiami physician
Ronald Harris, M.D., and Miami resident Mariela Rodriguez each
pleadedguilty today to defrauding the Medicare program in
connection with a $37 million HIV infusionfraud scheme, Acting
Assistant Attorney General Matthew Friedrich of the Criminal
Divisionand U.S. Attorney R. Alexander Acosta of the Southern
District of Florida announced.Harris pleaded guilty to conspiracy
to commit healthcare fraud and three counts of submittingfalse
claims to the Medicare program before U.S. District Judge Cecilia
M. Altonaga. In his plea,Harris admitted that he wrote false
prescriptions for HIV infusion treatments while serving as
themedical director for two medical clinics, Physicians Med-Care
and Physicians Health. Bothclinics purported to provide HIV
infusion services to Medicare beneficiaries. Harris admittedthat
beginning in August 2002 and continuing through March 2004, he
conspired with others todefraud the United States, to cause the
submission of false claims to the Medicare program, topay health
care kickbacks and to commit health care fraud. Harris also
admitted to submittingfalse claims.According to information
contained in plea documents, Harris admitted that between
August2002 and March 2004 he served as the medical director of
Physicians Med-Care and PhysiciansHealth, two Miami HIV infusion
clinics that were owned and controlled by Carlos and LuisBenitez,
and that were operated for the purpose of committing Medicare
fraud. Prior to August2002, Harris had no prior experience with
infusion therapy for HIV patients. During hisemployment with
Physicians Med-Care and Physicians Health, Harris admitted he
approvedapproximately $26.2 million worth of fraudulent medical
bills, signed documents containingCopyright 2011 Raymond R. Arons,
Teaneck, NJ, USA
9. Lecture 16 9false information about treatments purportedly
provided to HIV patients and approved medicallyunnecessary
treatments. According to information in the plea documents, the
Medicare programpaid approximately $17.5 million in fraudulent
bills as a result of Harris conduct.Rodriguez pleaded guilty before
U.S. District Judge Federico Moreno to conspiracy to commithealth
care fraud and one count of making false declarations to a federal
grand jury. In her plea,Rodriguez admitted that she administered an
HIV infusion clinic named Saint Jude RehabCenter, a Miami HIV
infusion clinic that was owned and controlled by Carlos and Luis
Benitez,and that was operated for the purpose of committing
Medicare fraud. Similar to Physicians Med-Care and Physicians
Health, Saint Jude purported to provide HIV infusion services to
Medicarebeneficiaries.Rodriguez admitted that she served as an
administrator of Saint Jude between June 2003 andNovember 2003,
during which time she submitted false claims to the Medicare
program for HIVinfusion treatments. Rodriguez further admitted that
beginning in June 2003 and continuingthrough November 2003, she
conspired with others to defraud the United States, to cause
thesubmission of false claims to the Medicare program, to pay
health care kickbacks and to commithealth care fraud. Rodriguez
also admitted to making false statements in her testimony before
afederal grand jury. Between June 2003 and November 2003, Saint
Jude submitted approximately$11.3 million worth of fraudulent bills
to the Medicare program for HIV infusion services thatwere never
provided and services that were medically unnecessary. As a result
of this conduct,the Medicare program paid approximately $8.2
million in fraudulent bills. Sentencing for bothRodriguez and
Harris has been scheduled for Nov. 4, 2008.In a related case,
Carlos and Luis Benitez, as well as their brother Jose Benitez,
were indicted onJune 11, 2008, for their role in a $110 million HIV
infusion fraud and money laundering scheme.The indictment alleges
that Carlos, Luis and Jose Benitez were the masterminds of a
massiveHIV infusion fraud operation throughout south Florida
involving at least 11 clinics and that theylaundered the proceeds
of their crimes. Also according the indictment, Carlos and Luis
Benitezwere the true owners of Physicians Med-Care, Physicians
Health and Saint Jude. All threeBenitez brothers remain
fugitives.The cases were prosecuted by Hank Bond Walther, John K.
Neal and Nathan Dimock of theCriminal Divisions Fraud Section, and
investigated by the FBI and the Department of Healthand Human
Services, Office of Inspector General. The cases were brought as
part of theMedicare Fraud Strike Force, supervised by Deputy Chief
Kirk Ogrosky of the CriminalDivisions Fraud Section and U.S.
Attorney Acosta of the Southern District of Florida. StrikeForce
prosecutors have indicted 82 cases involving 142 defendants since
Strike Force operationsbegan in March 2007. Collectively, these
defendants committed more than $492 million inMedicare
fraud.Copyright 2011 Raymond R. Arons, Teaneck, NJ, USA
10. Lecture 16 10 Case 2009-3Copyright 2011 Raymond R. Arons,
Teaneck, NJ, USA
11. Lecture 16 11 Case 3 - Physician Fraud and Abuse A Michigan
dermatologist was sentenced to 10 years and 6 months in prison and
ordered to pay $1.3 million in restitution and a $175,000 fine
following a jury trial conviction for health care fraud. The
dermatologist falsely informed patients that they had cancer and
performed unnecessary procedures when, in fact, laboratory results
indicated that their tissue specimens were benign. In addition, the
defendant billed for unnecessary follow-up office visits, claiming
that beneficiaries had developed postoperative infections, such as
impetigo, a disease rarely seen in adults. Finally, the
dermatologist reused single-use needles and sutures without proper
sterilization and failed to properly sterilize surgical equipment
used in procedures. HHS/OIG assisted the local health department in
informing patients of their possible risk of contracting a
blood-borne pathogen, such as hepatitis B or C or HIV, because of
his 7 unsanitary medical practices.GRAND RAPIDS -- When they found
out a Grand Rapids doctor might have exposed them to hepatitis and
HIV,many of his patients were scared. When they learned Dr. Robert
Stokes habit of reusing sutures, hypodermic needlesand other
instruments without proper sterilization did not violate any
criminal law, their fear turned to anger. PressPhoto / Adam
BirdSupporting the drive: Hastings Mayor Bob May endorses criminal
sanctions."Somethings got to be done," said Bob May, the mayor of
Hastings who was treated by Stokes for skin cancer. "It should be
legally improper todo what he did, as well as morally. We cannot
allow these doctors to do this to the public." Stokes, a
dermatologist, was sentenced last Decemberto 10 1/2 years in
federal prison for insurance fraud, not for potentially exposing
thousands of patients to life-threatening infections.
Investigatorscould find no federal law against his practice of
reusing surgical materials and instruments intended for one-time
use. State law provides onlycivil, not criminal, penalties. The
state board that licenses osteopathic physicians revoked Stokes
license in March, the strongest penalty availableunder current law,
said Ray Garza, director of the health regulatory division of the
state Department of Community Health. Stokes can apply
forreinstatement in five years, Garza said, although, barring a
successful appeal, he likely will still be in prison.Continue
reading "Patients of jailed doctor Robert Stokes join push for
dirty-needle penalties" Dr. Robert Stokes, a licensed and
board-certified dermatologist, was sentenced to 10 years and 6
months in prison and ordered to pay $1,315,682in restitution and a
$175,000 fine following his jury trial conviction for health care
fraud. The evidence at trial showed that Dr. Stokes falselyinformed
patients that they had cancer and performed unnecessary procedures
when, in fact, laboratory results indicated that their
tissuespecimens were benign. In addition, he used fraudulent
billing schemes, including upcoding surgical procedures to receive
higher reimbursementrates and billing for follow-up office visits
for which he was not entitled to reimbursement. Dr. Stokes
justified the unnecessary office visits byclaiming that
beneficiaries had developed postoperative infections, such as
impetigo, a disease rarely seen in adults. During trial
preparation, itwas discovered that Dr. Stokes reused single use
needles and sutures without proper sterilization and failed to
properly sterilize surgicalequipment used in procedures. OIG
assisted the local health department in informing patients of their
possible risk of contracting a blood-bornepathogen, such as
hepatitis B or C or HIV, because of his unsanitary medical
practices.Copyright 2011 Raymond R. Arons, Teaneck, NJ, USA
12. Lecture 16 12 8EAST GRAND RAPIDS -- The expansive estate of
Dr. Robert Stokes finally has sold, but the new owners wont be
moving in. The five-acreReeds Lake property, 2905 Bonnell Ave. SE,
is in foreclosure. It was purchased at a Kent County sheriffs sale
by mortgage-holder Fifth ThirdBank for $1.39 million, according to
county records. That rock-bottom price is only slightly more than
its state equalized value, which is abouthalf of market value. The
price also is more than 80 percent lower than its original
record-breaking asking price of $7.7 million.The foreclosure is yet
another chapter in the saga of the mansion and the man who owned
it. The former dermatologist now sits in federalprison, convicted
in 2007 of health care fraud. It was the most expensive listing in
Kent County ever when it hit the market in November 2007.After it
failed to sell at two auctions, earlier this year the price was
dropped to $2 million. There is more than $40,000 in unpaid
property taxesand the federal government has a lien on the property
connected to Stokes legal issues. Joe Schmitt, auctioneer for
Masterbid Inc., said he neverworked harder to sell a property only
to lose money on the deal. He launched an international marketing
effort and held live and silent auctions-- all fruitless. "We
really overextended ourselves, and we were unable to sell it," he
said. "A lot of it had to do with the Dr. Stokes relationshipwith
the community. It was horrible." The 14,000-square-foot home now
sits vacant. A Consumers Energy shut-off notice is tucked in the
frontdoor. Spring landscaping is yet to be done. Alicia Beyer, the
real-estate agent who first listed the property in 2007, is working
with the bank to sellit. "We have it listed on 149 different Web
sites -- national as well as international," she said. While
traffic remains strong, the voyeuristic interestis still so
prevalent prospective buyers must be approved for a minimum $2
million purchase price, said Beyer, who owns Beyer Realty. "Theycan
offer less, but they must be approved for $2 million," she said.
Businessman J.C. Huizenga was one of the bidders at the live
auction lastFebruary, but he said he is not interested anymore. "I
wasnt looking for a place to live in," Huizenga said. "I was
looking for an opportunity. "Anytime there is an auction, sometimes
there is an opportunity." He would not reveal how much he bid, but
did say it was "much less than $3 million."Neighbors expressed
surprise the home was in foreclosure, but they hope someone moves
in. It has been "kind of a circus," said Mike Redman,who lives
across the street. "It will be nice to get it behind us and get
some good neighbors and just get it going. Well be happy when its
done."Beyer said marketing the property has been her "most
complicated deal," but she remains optimistic. "Flowers are
starting to blossom. The budsare coming out on the trees," she
said. "Well get the property spiffed back up, and well keep our
fingers crossed."Copyright 2011 Raymond R. Arons, Teaneck, NJ,
USA
13. Lecture 16 13 Case 2009-4Copyright 2011 Raymond R. Arons,
Teaneck, NJ, USA
14. Lecture 16 14 Case 4-Phamacutical Fraud Cephalon, Inc.,
entered a global criminal, civil, and administrative settlement
under which the company agreed to pay a total of $425 million plus
interest; plead guilty to a misdemeanor violation of the Federal
Food, Drug and Cosmetic Act; and enter into a comprehensive 5-year
CIA with HHS/OIG. The civil settlement resolves allegations filed
in four separate qui tam cases, which alleged that Cephalon
promoted the drugs Actiq, Gabitril, and Provigil for off-label uses
(that is, uses other than those approved by FDA). Cephalons
off-label promotional practices involved a variety of techniques,
including training its sales force to disregard restrictions of the
FDA-approved label and promote the drugs for off-label uses. In
addition to the $375 million civil settlement, Cephalon entered
into a criminal plea agreement with the United States under which
it will pay $50 million. 9 Board of Directors of Cephalon, Inc.
10Board of directors Dennis L. Winger, Frank Baldino, Vaugn M.
Kailian, William P. Egan, Charles, A. Sanders.Kevin E. Moley, Gail
R. Wilensky, PhD, Marilyn GreeacreCopyright 2011 Raymond R. Arons,
Teaneck, NJ, USA
15. Lecture 16 15Attorney Generals News Release September 30,
2008 Nixon will recover $3.8 million inMedicaid fraud case against
Pennsylvania pharmaceutical company.Jefferson City, Mo. - Attorney
General Jay Nixon today said his Medicaid Fraud Control Unitwill
recover more than $3.8 million for taxpayers under an agreement
with a Pennsylvaniapharmaceutical company that marketed three of
its drugs for uses not approved by the Food andDrug Administration
and rewarded some doctors who frequently prescribed the drugs. As a
resultof the scheme, Nixon said, the three drugs made by Cephalon
Inc. were prescribed more oftenthan they normally would have been,
and Medicaid programs in Missouri and the other statespaid too much
in reimbursement for the drugs. Under an agreement in principle
that resolvesallegations of off-label marketing, Cephalon will pay
a total of $375 million in damages andpenalties to Missouri, the
federal government and the 49 other states. The company also
agreedto plead guilty to a criminal charge in federal court in
Pennsylvania and pay a $50 millioncriminal fine. Nixon said the
Missouri share of the settlement is $3,813,757. With this
recovery,Nixons Medicaid Fraud Control Unit will have recovered
more than $120 million for taxpayersin Medicaid fraud cases.
"Working in concert with the Attorneys General of other states and
withthe federal government has enabled us to ensure that Missouri
taxpayers are not shortchanged byfraudulent practices," Nixon said.
"This case was another example of stopping fraud and abuseagainst
Medicaid and taxpayers." Cephalon, based in West Chester, Penn.,
engaged in the off-label marketing of these drugs: Actiq, approved
by the FDA to treat severe pain from cancer.Cephalon marketed the
highly addictive narcotic beyond oncologists to general
practitioners andinternists. Gabitril, approved as an
anti-epileptic drug to treat seizures. Cephalon marketed it
forconditions including depression, anxiety, Tourettes syndrome and
chronic pain. Patients whowere not suffering from seizures
subsequently experienced seizures as a result of taking the drugto
treat other conditions. Provigil, approved to treat narcolepsy and
sleep disorders. Cephalonmarketed it for a wide variety of other
conditions including fatigue, depression, multiplesclerosis,
schizophrenia, Parkinsons disease, chronic fatigue syndrome,
anxiety, neuropathicpain, and attention deficit/hyperactivity
disorder in children. Provigil became one of Cephalonsbest-selling
drugs.Cephalons off-label marketing campaign included subsidizing
the production and disseminationof reports favorable to off-label
uses, having a sale program with incentives to sales staff
topromote off-label uses, and rewarding high-prescribing doctors
with grants, speakerships andperceptorships. Cephalon also
sponsored Continuing Medical Education (CME) programs tofund
expensive vacations for physicians, and disseminated off-label
promotional literature tophysicians at these CMEs. In addition,
Cephalon has entered into a Corporate IntegrityAgreement with the
U.S. Department of Health and Human Services, Office of
InspectorGeneral, to ensure its compliance in the future. The
Missouri case was brought by the AttorneyGenerals Medicaid Fraud
Control Unit, which Nixon established in 1994. The unit has
authorityunder state law to investigate and prosecute, both civilly
and criminally, allegations of fraudagainst Missouris Medicaid
program.Copyright 2011 Raymond R. Arons, Teaneck, NJ, USA
16. Lecture 16 16 Gail Wilensky, Director, Cephalon, Inc 11GAIL
WILENSKY is an economist and a senior fellow at project HOPE, an
international healthfoundation. Dr. Wilensky serves as a trustee of
the Combined Benefits Fund of the United Mine Workersof America and
the National Opinion Research Center, is on the Board of Regents of
the UniformedServices University of the Health sciences (USUHS) and
the Visiting Committee of the Harvard Medicaland Dental Schools.
She recently served as president of the Defense Health Board, a
Federal advisory tothe Secretary of Defense, was a commissioner on
the World Health Organizations Commission on theSocial Determinants
of Health and co-chaired the Dept. of Defense Task Force on the
Future of MilitaryHealth Care. She is an elected member of the
Institute of Medicine and has served two terms on itsgoverning
council. She is a former chair of the board of directors of Academy
Health, a former trustee ofthe American Heart Association and a
current or former director of numerous other
non-profitorganizations. She is also a director on several
corporate boards.Copyright 2011 Raymond R. Arons, Teaneck, NJ,
USA
17. Lecture 16 17 Case 2009-5Copyright 2011 Raymond R. Arons,
Teaneck, NJ, USA
18. Lecture 16 18 Case 5-Phamacutical Fraud Merck and Company
(Merck), Inc., agreed to pay $399 million plus interest to resolve
allegations that Merck failed to properly include discounts on
Vioxx (no longer marketed), Zocor, and Mevacorin in the best prices
reported to CMS under the Medicaid drug rebate program and, as a
result, underpaid rebates owed to the States and overcharged
entities that purchased Merck products under the 340B Drug Pricing
Program. The United States alleged that Merck sales representatives
induced physicians to use its drug products by making, among other
forms of illegal remuneration, payments that were disguised as fees
for training, consultation, or market research. Merck agreed to
this settlement at the same time it settled a matter in Louisiana,
involving similar discounted pricing programs offered to hospitals
for another Merck drug, Pepcid. Through both settlements, Merck
agreed to pay a total of $649 million plus interest. Merck further
agreed to enter into a 5-year CIA with HHS/OIG that includes
corrective measures to address its conduct in both cases. 12
Richard T. Clark, CEO & President, Merck & Co 13Merck CEO
Richard Clark says company plans to keep N.J. research facilitiesBy
Susan Todd/The Star-LedgerNovember 04, 2009, 5:18PMCopyright 2011
Raymond R. Arons, Teaneck, NJ, USA
19. Lecture 16 19 AP FILE PHOTOIn a 2005 file photo Richard T.
Clark, CEO & President, Merck & Co., speaksduring an
interview at the corporate headquarters in Whitehouse Station.There
was somethinglike awe in Merck Chief Executive Officer Richard
Clarks tone as he talked about thecompletion of his companys mega
merger with Schering-Plough. The merger, which combinedtwo of the
states most venerable drugmakers, officially propelled Clark to the
helm of thesecond-largest pharmaceutical company in the world this
morning. "It was just incrediblebringing these two companies
together, Clark said during a telephone interview. "I think
thismerger will be unlike any others in the industry based on that
synergy and communality of ourcultures.In March, Merck stunned the
pharmaceutical industry when it announced plans to buy
Schering-Plough for $41.1 billion. The deal came on the heels of
another mega-merger: Pfizers plan tobuy Madison-based Wyeth for $68
billion. Pfizer completed its acquisition of Wyeth last month.With
Schering-Plough incorporated into its folds, Merck has 106,000
employees roughly14,000 of them are in New Jersey in more than 140
countries. The company has 15 drugs inlate-stage development it was
Schering-Ploughs rich pipeline that drove Mercks ambitionsfrom the
start.Clark said the company intends to keep the research
facilities in Rahway and Kenilworth. "Theyare very important
research sites, Clark said of the two locations. "There is very
specificresearch work that we need to keep in place." The
Whitehouse Station corporate campus willcontinue serving as the
companys global headquarters. Clark said early on he set a strategy
tomeld the best of the two companies together. "I hand-picked the
integration leaders to make surethey believed in my objectives, he
said. "I rolled up my sleeves every day and worked with
myleadership team to ensure that we actually kept to the
standards.Merck & Company has agreed to pay more than $650
million to resolve allegations that thepharmaceutical manufacturer
failed to pay proper rebates to Medicaid and othergovernment health
care programs and paid illegal remuneration to health care
providers toinduce them to prescribe the companys products, the
Justice Department has announced.The allegations were brought in
two separate lawsuits filed by whistleblowers under the qui tam,or
whistleblower, provisions of the False Claims Act. Not only is the
combined recovery in thesetwo cases one of the largest healthcare
fraud settlements ever achieved by the JusticeDepartment," said
Attorney General Michael B. Mukasey, "it reflects our continuing
effort tohold drug companies accountable for devising pricing
schemes that deliberately seek to denyfederal health care programs
the same lower prices for drugs that are available to
othercommercial customers." H. Dean Steinke, a former Merck
employee, alleged in his suit filed inPhiladelphia that Merck
violated the Medicaid Rebate Statute in connection with its
marketing ofits drugs Zocor and Vioxx. (Zocor is a cholesterol
lowering drug and Vioxx, pulled from themarket by Merck in
September of 2004, was used for the treatment of acute pain and in
thetreatment of arthritis.) Merck allegedly offered deep discounts
for the two drugs if hospitals usedlarge quantities of those drugs
in place of competitors brands.The Medicaid Rebate Statute requires
that drug manufacturers report their "best prices" and othercost
information to the government in order to ensure that Medicaid
obtains the benefit of thesame discounts and price concessions that
other purchasers enjoy. An exception to this ruleallows
manufacturers to exclude from the prices they report any discounted
prices that areCopyright 2011 Raymond R. Arons, Teaneck, NJ,
USA
20. Lecture 16 20"nominal" in amount. Merck improperly termed
as "nominal" the prices it offered to hospitals toboost their sales
and excluded those discounts from the prices it reported to the
government.Steinkes suit further alleged that from 1997-2001, Merck
had approximately fifteen differentprograms used by its sales
representatives to induce physicians to use its many products.
Theseprograms primarily consisted of excess payments to physicians
that were disguised as fees paidto them for "training,"
"consultation" or "market research." In fact, the government
alleged thatthese fees were illegal kickbacks intended to induce
the purchase of Merck products. Merckagreed today to pay $399
million plus interest to settle the Medicaid Rebate as well as
thekickback allegations.In a separate suit filed by physician
William St. John LaCorte in New Orleans, its alleged thatMerck had
established a marketing scheme in which it provided substantially
reduced prices forits Pepcid products once the hospitals agreed to
primarily use the drug instead of a competitors.(Pepcid is used to
reduce stomach acid and to treat heartburn and acid reflux.) Merck
allegedlyoffered these incentives to hospitals in order to obtain
the benefit of spillover business whenpatients would continue to
purchase Pepcid once he or she was discharged. Merck
improperlytermed as "nominal" the prices it offered to hospitals to
boost the sales of Pepcid, excluded thosediscounts from the prices
it reported to the government, and thus effectively denied
thegovernment the benefit of these lower prices. Merck agreed today
to pay $250 million plusinterest to settle these allegations. Under
the two settlement agreements, the federal governmentwill receive
more than $360 million, and forty-nine states and the District of
Columbia over$290 million. In addition, Mr. Steinke will receive
$44,690,000 from the federal share of thesettlement amount and an
additional $23.5 million from the states. Similarly, Dr. LaCorte
willreceive a share of the proceeds from the federal and state
settlement amounts under theirrespective qui tam statutes."Our
health insurance programs rely upon the integrity of health
providers, includingpharmaceutical manufacturers, when they report
to the government programs which reimbursetheir products and
services with scarce funds," said Patrick L. Meehan, U.S. Attorney
for theEastern District of Pennsylvania, whose office led the
investigation of the Steinke matter."Particularly in the wake of
Hurricane Katrina, it is critical that precious government
resourcesnot be lost to fraud and abuse," said Jim Letten, the U.S.
Attorney for the Eastern District ofLouisiana, whose office led the
investigation of the LaCorte matter. "This office is dedicated
toprosecuting pricing fraud so that healthcare dollars go to help
the most vulnerable of our citizens-- the disabled and the poor."
"The Office of Inspector General has a strong record of
pursuingviolations in the Medicaid drug rebate program and is
working closely with Federal and Statelaw enforcement to hold
accountable pharmaceutical companies engaged in illegal
practicesresulting in Medicaid fraud," said Daniel R. Levinson,
Inspector General of the Department ofHealth and Human Services.
Todays settlement was the result of close cooperation between
theJustice Department, state attorneys general and other law
enforcement entities includingMedicaid Fraud Control Units, and the
Office of Inspector General of the Department of Healthand Human
Services. As part of the resolution of these two cases, the
Department of Health andHuman Services Office of Inspector General
(HHS-OIG) and Merck have entered into a five-year Corporate
Integrity Agreement to ensure that such improper conduct does not
occur in thefuture.Merck Board of DirectorsCopyright 2011 Raymond
R. Arons, Teaneck, NJ, USA
21. Lecture 16 21 Richard T. Clark Chairman of the Board,
president and chief executive officer, Merck & Co., Inc. New
Merck director since November 3, 2009 Leslie A. Brun Chairman and
chief executive officer, Sarr Group, LLC (investment holding
company). Non-executive chairman, Automatic Data Processing, Inc.
Director, Philadelphia Media Holdings, LLC, and Broadridge
Financial Solutions, Inc. New Merck director since November 3, 2009
Thomas R. Cech, Ph.D. Director, Colorado Institute for Molecular
Biotechnology, University of Colorado. New Merck director since
November 3, 2009 Thomas H. Glocer Chief executive officer, Thomson
Reuters Corporation (information and services company for
businesses and professionals). Director, Thomson Reuters
Corporation, Partnership for New York City. New Merck director
since November 3, 2009 Steven F. Goldstone Retired chairman and
chief executive officer, RJR Nabisco, Inc. Managing partner, Silver
Spring Group (private investment firm). Non-executive chairman,
ConAgra Foods, Inc. Director, Greenhill & Co., Inc. New Merck
director since November 3, 2009Copyright 2011 Raymond R. Arons,
Teaneck, NJ, USA
22. Lecture 16 22 William B. Harrison, Jr. Retired chairman of
the board, JPMorgan Chase & Co. (financial services). Director,
Cousins Properties Incorporated and Lincoln Center for the
Performing Arts. New Merck director since November 3, 2009 Harry R.
Jacobson, M.D. Vice chancellor, Health Affairs, Emeritus (since
June 2009), Vanderbilt University. Non-executive chairman, CeloNova
BioSciences, Inc. Director, HealthGate Data Corporation, Ingram
Industries, Inc. and Kinetic Concepts, Inc. New Merck director
since November 3, 2009 William N. Kelley, M.D. Professor of
Medicine, Biochemistry and Biophysics, University of Pennsylvania
School of Medicine. Director, Beckman Coulter, Inc., GenVec, Inc.,
and Polymedix, Inc. New Merck director since November 3, 2009 C.
Robert Kidder Chief executive officer, 3Stone Advisors LLC (private
investment firm). Director, Chrysler Group LLC and Morgan Stanley.
New Merck director since 2005Copyright 2011 Raymond R. Arons,
Teaneck, NJ, USA
23. Lecture 16 23 Rochelle B. Lazarus Chairman, Ogilvy &
Mather Worldwide (advertising and marketing communication company).
Director, General Electric, New York Presbyterian Hospital,
American Museum of Natural History and World Wildlife Fund. New
Merck director since November 3, 2009 Carlos E. Represas Chairman,
Nestle Group Mexico. Director, Bombardier Inc. and Vitro S.A. de
C.V. New Merck director since November 3, 2009 Patricia F. Russo
Former chief executive officer and director, Alcatel-Lucent.
Director, Alcoa, Inc., and General Motors. New Merck director since
1995 Thomas E. Shenk, Ph.D. Elkins Professor, Department of
Molecular Biology, Princeton University. Director, Cell Genesys,
Inc., and CV Therapeutics, Inc. New Merck director since November
3, 2009 Anne M. Tatlock Retired chairman of the board and chief
executive officer, Fiduciary Trust Company International (global
asset management services). Director, Fortune Brands, Inc., and
Franklin Resources, Inc. New Merck director since November 3,
2009Copyright 2011 Raymond R. Arons, Teaneck, NJ, USA
24. Lecture 16 24 Samuel O. Thier, M.D. Lead director of the
board. Professor of Medicine and Health Care Policy, Emeritus,
Harvard Medical School. Director, Charles River Laboratories, Inc.
New Merck director since November 3, 2009 Craig B. Thompson, M.D.
Director, Abramson Cancer Center and Professor of Medicine,
University of Pennsylvania School of Medicine. Chairman of the
Medical Advisory Board, Howard Hughes Medical Institute. Member of
the Advisory Board, M.D. Anderson Cancer Center. New Merck director
since 2008 Wendell P. Weeks Chairman and chief executive officer,
Corning Incorporated (technology company in telecommunications,
information display and advanced materials industries). Director,
Corning Incorporated. New Merck director since November 3, 2009
Peter C. Wendell Managing director, Sierra Ventures
(technology-oriented venture capital firm). Chairman, Princeton
University Investment Company. New Merck director since November 3,
2009Copyright 2011 Raymond R. Arons, Teaneck, NJ, USA
25. Lecture 16 25 Case 2009-6.Copyright 2011 Raymond R. Arons,
Teaneck, NJ, USA
26. Lecture 16 26 Case 6-Phamacy Fraud CVS Caremark Corporation
(CVS) agreed to pay $36.7 million and enter into a 5-year CIA with
HHS/OIG to resolve its liability based on allegations that it
fraudulently overcharged Medicaid programs in 23 States by
improperly switching drugs it dispensed. Specifically, the
Government and relator alleged that CVS dispensed ranitidine
(generic Zantac) capsules rather than tablets in order to increase
its reimbursement from Medicaid. As a result of dispensing and
billing Medicaid for capsules, CVS was reimbursed, on average, four
times what it would have been reimbursed had it dispensed tablets.
14 CVS Caremark President and CEO Thomas M. Ryan. 15Board of
DirectorsEdwin M. BanksFounder and Managing Partner of Washington
Corner Capital Management, L.L.C. C.David Brown IIChairman of the
Firm of Broad and Cassel, a Florida law firm David W.
DormanNon-Executive Chairman of the Board of Motorola, Inc. Kristen
E. Gibney WilliamsFormer executive of thePrescription Benefits
Management Division of Caremark International, Inc. Marian L.
HeardPresidentand Chief Executive Officer of Oxen Hill Partners
William H. JoyceFormer Chairman of the Board andCopyright 2011
Raymond R. Arons, Teaneck, NJ, USA
27. Lecture 16 27Chief Executive Officer of Nalco Company
Jean-Pierre MillonFormer President and Chief ExecutiveOfficer of
PCS Health Services, Inc. Terrence MurrayFormer Chairman of the
Board and ChiefExecutive Officer of FleetBoston Financial
Corporation C.A. Lance PiccoloChief Executive Officer ofHealthPic
Consultants, Inc. Sheli Z. RosenbergFormer President, Chief
Executive Officer and ViceChairwoman of Equity Group Investments,
L.L.C. Thomas M. RyanChairman of the Board, Presidentand Chief
Executive Officer of CVS Caremark Corporation and CVS Pharmacy,
Inc. Richard J. SwiftFormer Chairman of the Board, President and
Chief Executive Officer of Foster Wheeler Ltd.In March 2008, CVS
Caremark Corporation agreed to pay $36.7 million ($21.1 million to
the federalgovernment and $15.6 million to 23 states) to settle
claims that from 2000-2006, the company illegallyswitched patients
from the tablet form of the drug Ranitidine (generic Zantac) to a
capsule form in orderto increase Medicaid reimbursement. A
whistleblower initiated the lawsuit in 2003 and received morethan
$4.3 million as his share of the settlement.[14] In its press
release, the Government announced,"[s]witching medication from
tablets to capsules might seem harmless, but when that is done
solely toincrease profit and in violation of federal and state
regulations that are designed to protect patients,pharmacies must
know that they are subjecting themselves to the possibility of
triple damages, civilpenalties and attorney fees. . . . These
penalties, coupled with the willingness of insiders to report
fraud,should deter such misconduct, but when it doesnt, the result
in this case and others serve notice that wewill aggressively
pursue all available legal remedies."[15]United States et al., ex
rel. Bernard Lisitza v. CVS Caremark Corp. (N.D. Ill.)March18,
2008Retail pharmacy corporation CVS Caremark agreed to pay $36.7
million to the U.S., the Medicaidparticipating states, and the
District of Columbia to settle allegations that it overbilled
Medicaid for awidely used antacid drug, by switching patients from
the standard generic drug for a more expensiveversion. According to
allegations made in a qui tam suit filed in 2003 by relator Bernard
Lisitza,CVS had purposefully and unlawfully switched patients from
the tablet form of Ranitidine, which isgeneric Zantac, to a much
more expensive capsule version in order to increase its
reimbursementfrom Medicaid. Because the capsule version costs two
to four times more than the tablet form of thedrug, CVS was able to
bill Medicaid for millions more than it was eligible to receive.
RelatorBernard Lisitza learned of this fraudulent scheme while
working as a temporary receiving pharmacistin Illinois. Of the
$36.7 million recovered in the settlement, $21,060,535 will go to
the federalgovernment and $15,639,464 will go to the Medicaid
participating states, including Illinois,California, Delaware,
Florida, Hawaii, Louisiana, Massachusetts, Nevada, Tennessee,
Texas,Virginia, and the District of Columbia. As his share of the
recovery, Lisitza will receive $3,580,291.TAF members Michael Behn
and Linda Wyetzner of Behn & Wyetzner represented Lisitza.
AssistantU.S. Attorney Linda A. Wawzenski represented theCopyright
2011 Raymond R. Arons, Teaneck, NJ, USA
28. Lecture 16 28 Case 2009-7Copyright 2011 Raymond R. Arons,
Teaneck, NJ, USA
29. Lecture 16 29 Case 7- Hospital Fraud Staten Island
University Hospital (SIUH) paid nearly $89 million in a global
settlement resolving allegations that it defrauded Medicare,
Medicaid, and TRICARE. The global settlement resolves two separate
qui tam lawsuits and two Government investigations. As part of the
global settlement, SIUH also entered into a 5-year CIA with HHS/OIG
In the first lawsuit, the Governments investigation alleged that
SIUH submitted claims for payment for treatment provided to
patients in beds for which SIUH had received no certificate of
operation from the New York State Office of Alcoholism and
Substance Abuse Services and concealed the existence of those beds
from that office. SIUH paid nearly $12 million to the United States
and nearly $15 million to the State of New York. 16 Staten Island
University Hospital (SIUH) In the second lawsuit, the investigation
alleged that SIUH knowingly used incorrect billing codes for
certain cancer treatments performed at the hospital, and thus
obtained reimbursement for treatment that was not covered by
Medicare or TRICARE. SIUH will pay $25 million to settle this
lawsuit. Additional conduct self-disclosed by SIUH was resolved
prior to the filing of the lawsuits. Pursuant to HHS/OIGs
Self-Disclosure Protocol, SIUH agreed to nearly $36 million for
reporting 17Copyright 2011 Raymond R. Arons, Teaneck, NJ, USA
30. Lecture 16 30Staten Island hosp to repay 89M in fraud
caseinvovling doctor who coerced George HarrisonBY GLENN BLAINDAILY
NEWS ALBANY BUREAUMonday, September 15th 2008, 11:31 PMALBANY - A
cancer doctor accused of forcing ex-Beatle George Harrison to sign
a guitar on hisdeathbed left Staten Island University Hospital a
costly legacy.In a mammoth settlement of Medicaid andMedicare fraud
charges, the hospital Monday agreedto repay state and federal
governments $88.9 million. Part of the settlement covers work
doneby Dr. Gilbert Ledermans radiation oncology department. "This
was a hospital that sought toexploit the Medicare program and
obtain millions of dollars in payments that it was not entitledto,"
said Richard Reich, lawyer for federal whistleblower Elizabeth
Ryan, who brought the firstcase against Lederman and the hospital.
In a statement, the hospital said the settlement "closesthe
chapter" on several ongoing investigations and that funds are
budgeted to pay for it. "Wewant to assure our patients and the
communities we serve that SIUH will continue to deliver thesame
high-quality care that has enabled us to win coveted national
awards," the statement said.Of the $88.9 million, $25 million is to
settle claims that the hospital fraudulently billed Medicarefor
stereotactic body radiosurgery cancer treatments, which are not
covered by Medicare. Ryan,the widow of a Staten Island University
cancer patient, brought the case under the federal FalseClaims Act.
She got $3.75 million. Federal prosecutors are still pursuing a
case againstLederman. Telephone calls to Ledermans lawyer were not
returned. Lederman, who no longerworks at Staten Island University,
treated Harrison there before he died of brain cancer inNovember
2001. Olivia Harrison, the ex-Beatles widow, accused him of
coercing Harrison intoautographing his sons guitar and signing
autographs for his two daughters. Olivia Harrisondropped a suit
against Lederman after he agreed to destroy the guitar and the
autographs.Read more:
http://www.nydailynews.com/news/2008/09/15/2008-09-15_staten_island_hosp_to_repay_89m_in_fraud.html#ixzz0heF48682The
Doctor Cant Help HimselfWhen the notorious cancer doctor Gil
Lederman cadged an autograph from a dyingGeorge Harrison, the world
was appalled.But as Lederman scrambles to salvage hisreputation,
the very nature of his experimental practice has come under attack.
By Andrew Goldman Published May 21, 2005Copyright 2011 Raymond R.
Arons, Teaneck, NJ, USA
31. Lecture 16 31(Photo credit: Eugene Richards)On an evening
in mid-November 2001, Gil Lederman made a judgment call that would
bringhim the kind of fame that even he had never dreamed possible.
A bespectacled cancer doctorwith an Alfred Kinsey fade haircut,
Lederman was already something of a local celebrity; hisdistinctive
nasal monotone had been heard for years on New York talk-radio
stations, promotinghis revolutionary cancer treatment, fractionated
stereotactic radiosurgery, at Staten IslandUniversity Hospital. But
Ledermans fameas a kind of Dr. Zizmor of radiation oncologypaled in
comparison with that of his patient, George Harrison, who was lying
in a rented housenear the hospital, dying of lung cancer that had
invaded his brain.Though hed been treating Harrison for only about
a month, Lederman thought they had bondedenough to warrant an
unconventional house call. I feel like a brother to him, the
doctorconfided to another physician at his hospital. So, as any man
with an ailing sibling would do,Lederman showed up that night on
Harrisons doorstep with his three children in tow, so thatthey
might say hello and good-bye to Uncle George, who was leaving the
next morning forCalifornia, where he would die two weeks later.That
night has become something of an outer-borough Rashomon. Depending
on whose versionyou believe, Lederman either had a touching visit
with Harrison or bullied a dying man in adeclining mental state
into creating a valuable piece of rock-and-roll memorabilia. The
Harrisoncamp claimed as follows: Lederman showed up uninvited and
instructed his 13-year-old son,Ariel, to strum a song on his Yamaha
electric guitar. When the performance was over, Ledermanput the
guitar in Harrisons lap and asked him to sign it. I do not even
know if I know how tospell my name anymore, responded an exhausted
Harrison. Cmon, you can do this, saidLederman, guiding his hand and
spelling his name aloud: G-E-O-R-G-E H-A-R-R-I-S-O-N.Lederman
insisted to friends that Harrison invited the children over and
happily signed theguitar. The shaky scrawl of the signature itself
is inconclusiveit could have been written underduress or simply
signed by a willing star on a great deal of medication.
Nevertheless, once theHarrison estate sued the doctor for $10
million and the press got their mitts on the legalCopyright 2011
Raymond R. Arons, Teaneck, NJ, USA
32. Lecture 16 32complaint, Lederman became a popular tabloid
target. At the peak of the frenzy, he was labeled aghoul and a
scumbag. Page Six even ran a cartoon depicting him chasing Keith
Richardswith a pen and guitar. Im not on my deathbed! Richards
yells.It seemed like the ultimate disgrace for a Harvard-trained,
triple board-certified physician whoshould have been amassing yacht
money or doing Lasker Awardquality research at that point inhis
life. Then again, Ledermans behavior at Harrisons deathbed wasnt a
complete surprise tothose whod been watching his curious approach
to his career. My sense of the guy is that hesjust somebody who
doesnt get it, says a prominent radiation oncologist whos met him
onseveral occasions. His social skills arent there. But it turns
out that questionable manners maybe the least pernicious of
Ledermans sins. The doctor is now facing half a dozen
multi-million-dollar civil suits, some of which accuse him of
bilking terminal cancer patients by luring themwith promises of a
miracle cure.As Dr. Lederman waxed on about his mother, George
Harrison, according to a source, spokethree measured words:
Please...stop...talking.Ledermans defenders claim that the Harrison
matter has turned a caring, innovative physicianinto the kind of
wounded game that trial lawyers love to hunt. Lederman prides
himself ontaking the most challenging cases that nobody else wants,
cases where patients have not beengiven any hope whatsoever. Hes
not offering them a cure but an option, says Andrew Garson,an
attorney who defended Lederman in two previous malpractice cases
and believes the recentspate of lawsuits stems from his clients bad
press. Even a judge weighing a recent change-of-venue request
acknowledged that Lederman had been through the ringer. His
decision played offHarrisons Something: Something in the folks he
treats / Attracts bad press like no otherdoctor.But others contend
that the Harrison case was just a symptom of Ledermans larger
pathology ofbeing singularly unable to grasp right and wrong when
dealing with the fragile emotions ofdesperately ill people. The
real issue with Gil is the following, says Jay Loeffler, chief
ofradiation oncology at Massachusetts General Hospital. Is he a
genius, far ahead of his time? Oris he a scoundrel?Lederman grew up
a bookish Jew surrounded by the flinty Protestants of Waterloo,
Iowa. HisUkrainian-immigrant grandfather had started a small
clothing concern called LedermansWestern Outfitters, where young
Gil earned a nickel an hour. (This explains the geeky
scientistsincongruous fondness for Western shirts and ornate cowboy
boots.) He decided he wanted to bea doctor when he was 12 years
old. It was 1966, the year the Beatles released Revolver, and
hisolder brother was nearly killed by a drunk driver. At that
moment I decided that I wanted tohelp people, he says.He trained in
three specialtiesinternal medicine at the University of
ChicagoMichael ReeseHospital, then medical oncology and radiation
oncology at Harvardand at the age of 34became the director of
Staten Island University Hospitals radiation oncology
department.Though its rare for a doctor whos never practiced
full-time to be the director of a program, itwasnt exactly a
prestige post. Before Ledermans arrival in 1987, the radiation
oncologyCopyright 2011 Raymond R. Arons, Teaneck, NJ, USA
33. Lecture 16 33department was just what youd find in most
community hospitals; that is, if you lived on StatenIsland and your
kid needed radiation, youd wait about five seconds before driving
to Sloan-Kettering or New York-Presbyterian. The department had a
single aging cobalt machine and sawonly eleven patients a day.The
ambitious new director set out to change that. Lederman forged a
close relationship withthenhospital CEO Rick Varone, and, over the
next decade, persuaded the administration to buyfive linear
accelerators, at $1.8 million a pop. In 1991, Lederman became the
first doctor in NewYork to offer brain radiosurgery. Unlike
standard radiation treatment, which irradiates a largefield around
a cancer, exposing healthy tissue to low doses of toxic radiation,
radiosurgery isdesigned to zero in on the tumor. Finely shaped
radiation beams are sent into the head frommany different
directions, with the full dose concentrated where they intersect.
The upshot is thatlarger doses can be trained on the cancer, while
healthy tissue is minimally affected. Ledermandescribes it with an
elegantly simple metaphor: Imagine a plum in a bread box . . .
Radiosurgerycan hit the plum without attacking the bread box.Still,
the machines were worth nothing unless they had bodies to aim at,
so Lederman startedspreading the gospel of radiosurgery, for which
he charged about $18,000 per round oftreatment. My feeling was, if
you have a new treatment, then people should learn about it,
hesays. We were educating people. There were radio ads,
cable-television spots, Internetadvertising, and presentations at
the hospital. Lederman also went on tour, traveling to
Italy,England, Israel, and many other countries to speak to
prospective patients and examine their CTscans on the spot. CEO
Staten Island Hospital-Anthony Ferreri 18Heart Societys annual Wine
Festival & Casino NightCopyright 2011 Raymond R. Arons,
Teaneck, NJ, USA
34. Lecture 16 34Added by Melinda Gottlieb on September 17,
2009 at 9:48 AMDr. Dennis Bloomfield, left, Angelina Malerba, owner
of Angelinas Ristorante, and Staten IslandUniversity Hospital CEO
Anthony Ferreri share a moment at the Staten Island Heart Societys
annualWine Festival and Casino Night at Angelinas in Tottenville.
The event was presented by Aidas World ofLiquors. STATEN ISLAND
ADVANCE/HILTON FLORES ----- Dr. Dennis Bloomfield, AngelinaMalerba
(Angelinas Ristorante), SIUH CEO Anthony Ferreri. The Staten Island
Heart Societys annualWine Festival & Casino Night at Angelinas
Ristorante...presented by Aidas World of Liquors.Read more: Gil
Ledermans DubiousCareer
http://nymag.com/nymetro/health/features/10817/#ixzz0heGUavhfCopyright
2011 Raymond R. Arons, Teaneck, NJ, USA
35. Lecture 16 35 Case 2009-8Copyright 2011 Raymond R. Arons,
Teaneck, NJ, USA
36. Lecture 16 36 Case 8- Hospital Fraud In Connecticut,
Yale-New Haven Hospital entered into a civil settlement agreement
with the Government in which it will pay approximately $3.8 million
to resolve allegations that it violated the FCA. These allegations
involved charges to Medicare for infusion therapy, chemotherapy
administration and blood transfusion services. During the
time-period at issue, Medicare only allowed payment for one unit of
infusion therapy and chemotherapy administration per patient visit,
and one unit of blood transfusion services per day. 19To set forth
the commitment of the University of Miami to compliance with (1)
the federalFalse Claims Act, 31 U.S.C. 3729, et seq.; (2) the
Florida False Claims Act, Fla. Stat. 68.081 68.092; and (3) state
Medicaid plan amendments promulgated to comply with Section
6032(Employee Education About False Claims Case 8- Hospital Fraud
Yale University has entered into a civil settlement agreement with
the federal government in which it will pay $7.6 million to resolve
allegations that it violated the False Claims Act and the common
law in the management of federally-funded research grants awarded
to the university between January 2000 and December 2006. The grant
awards were made by approximately 30 federal agencies and entities,
including NIH, NSF, DOE, DOD, and NASA. 20 continued...Copyright
2011 Raymond R. Arons, Teaneck, NJ, USA
37. Lecture 16 37 Case 8- Hospital Fraud The investigation
focused on allegations involving two types of mischarges to federal
grants. Both types of mischarges arose as violations of the basic
principle that recipients of federal grants are allowed to charge
to each grant account only allocable costs, which are costs that
relate to the specific objectives of that grant project. The first
allegation involved cost transfers and the requirement that costs
transferred to a federal grant account must be allocable to that
particular grant account. The settlement resolves allegations that
some Yale researchers at times improperly transferred charges to a
federal grant account to which those charges were not allocable.
Researchers allegedly were motivated to carry out these wrongful
transfers when the federal grant was near its expiration date and
they needed to spend down the remaining grant funds. Federal
regulations require that unspent grant funds be returned to the
government. 21 Case 8- Hospital Fraud The second allegation
involved salary charges and the requirement that charges to federal
grant accounts for researcher time and effort must reflect actual
time and effort spent on a particular grant. It was alleged that
some Yale researchers submitted time and effort reports, for summer
salary paid from federal grants, that wrongfully charged 100
percent of their summer effort to federal grants when, in fact, the
researchers expended significant effort on unrelated work.
Researchers allegedly were motivated to carry out these wrongful
salary charges by the fact that they are not paid their academic-
year salary by Yale during the summer. The only salary received by
these researchers during the summer was the result of the effort
they charged to federal grants. Absent the alleged grant
mischarges, the researchers would not have been paid. The $7.6
million payment comprises two components: $3.8 million in actual
damages for the false claims, and $3.8 million assessed as
penalties for the false claims 22Copyright 2011 Raymond R. Arons,
Teaneck, NJ, USA
38. Lecture 16 38 Yale-New Haven Hospital 20 21Copyright 2011
Raymond R. Arons, Teaneck, NJ, USA
39. Lecture 16 39 President and CEO of Yale New Haven Hospital
22Marna P. Borgstrom, of Guilford, has been named president and
chief executive officer of Yale-New Haven Hospital and Yale New
Haven Health Systemsucceeding Joseph A. Zaccagnino who will retire
on September 30 after a distinguished 35-year career.Borgstrom, a
26-year employee of Yale-New Haven Hospital, has served as
thehospitals executive vice president and chief operating officer
since 1993. Herappointment is effective October 1, 2005."Marna
Borgstrom has been a dedicated and talented leader at Yale-New
Haven Hospital for more than 25 years," said Marvin K. Lender,
chairman of theYale-New Haven Hospital board of trustees. "Her
leadership skills and commitment are evident to all who meet her.
She was the unanimous choice of boththe search committee and the
full board of trustees."Prior to being named executive vice
president and chief operating officer, Borgstrom served as the
senior vice president of administration from 1992-1993.From 1985 to
1992, she served as vice president of administration. Borgstrom
joined Yale-New Haven Hospital in 1979 as an administrative fellow.
Shealso served in a number of administrative roles during her
career at Yale-New Haven Hospital. She is the first woman to be
named as president and CEO ofthe hospital and the health system."We
have great confidence in Marnas leadership," said Julia M.
McNamara, chair of the Yale New Haven Health System board of
directors. "Her talentand personal qualities, as well as her
experience and knowledge of this health system will allow for a
seamless transition and her vision will set the stagefor a strong
future."As executive vice president and chief operating officer of
Yale-New Haven Hospital, Borgstrom has been responsible for the
systems $850 millionoperating budget and she has served as the
primary liaison with the Yale University School of Medicine. During
her career, Borgstrom directed thecompletion of the $51 million
South Pavilion renovation and the construction of the $156 million
Yale-New Haven Childrens Hospital, as well as theopening of the
Shoreline Medical Center in Guilford.In her role as executive vice
president of the Yale New Haven Health System, Borgstrom has
overseen a system with more than 1,500 licensed beds and acombined
operating budget of more than $1.3 billion at Yale-New Haven,
Bridgeport and Greenwich hospitals. The largest health system in
the state ofConnecticut, Yale New Haven Health System was created
in 1995 and in addition to its three primary members, maintains a
contractual relationship withWesterly Hospital in Rhode
Island.Copyright 2011 Raymond R. Arons, Teaneck, NJ, USA
40. Lecture 16 40"Yale University enjoys a strong and mutually
beneficial relationship with the entire Yale New Haven Health
System," said Richard Levin, president ofYale University. "We have
the utmost confidence in Marna Borgstroms ability to bring together
the resources in all of our institutions to advance ourmission as
one of the nations premiere academic medical centers and health
care systems."Borgstrom received a Master of Public Health degree
in hospital administration from the Yale University School of
Medicine and a bachelors degree inhuman biology from Stanford
University. She and her husband, Eric, have two sons.Yale New Haven
Health System (YNHHS) is the leading health care system in
Connecticut with approximately 12,000 employees. YNHHS - through
Yale-New Haven, Bridgeport and Greenwich hospitals and their
affiliated organizations - provides comprehensive, cost effective,
advanced patient carecharacterized by safety, quality and
service.Yale-New Haven Hospital is a 944-bed, not-for-profit
hospital serving as the primary teaching hospital for the Yale
School of Medicine. Yale-New Havenwas founded as the fourth
voluntary hospital in the U.S. in 1826 and today, the hospital
complex includes Yale-New Haven Childrens Hospital and Yale-New
Haven Psychiatric Hospital, with a combined medical staff of about
2,400 university and community physicians practicing in more than
100specialties.Reporters: For more information on this release,
contact Vin Petrini, (203) 688-2612.Return to: News Release
IndexCopyright 2011 Raymond R. Arons, Teaneck, NJ, USA
41. Lecture 16 41 Case 2009-9Copyright 2011 Raymond R. Arons,
Teaneck, NJ, USA
42. Lecture 16 42 Case 9- Hospital Fraud Lester E. Cox Medical
Centers, a health care system headquartered in Missouri, has paid
$60 million and entered into a 5-year CIA with HHS/OIG to settle
allegations that it paid doctors at a local physician group for
referrals, and billed Medicare for the services resulting from
those referrals, in violation of the Anti-Kickback and Physician
Self-Referral statutes 20 PUTATIVE CLASS ACTION AGAINST LESTER E.
COX MEDICAL CENTER PURSUANT TO FAIR DEBT COLLECTION PRACTICES ACTIf
you received a letter or telephone call from Ozark Professional
Collections after August 10,2002 attempting to collect a debt you
may be part of a potential class action against Lester E.Cox
Medical Center (also known as Cox Hospital). During this time
period, Lester E. CoxMedical Center attempted to collect its debts
under the registered fictitious name OzarkProfessional Collections.
In doing so, Cox Hospital failed to disclose that no such
entityexisted, but instead Ozark Professional Collections was
merely a division of Lester E. CoxMedical Center. Cox misled its
patients so they would assume that their account was beingturned
over to an independent collection agency. This is a clear violation
of the Fair DebtCollection Practices Act, 15 U.S.C. 1692 K.CLICK
HERE TO READ THE LAW .Cox told patients with accounts due that
unless payment was received they would be turned overto a
collection agency. If no payment was made, Cox stopped writing or
calling people underits own name and instead did so as Ozark
Professional Collections. If a debtor asked who ownedor operated
Ozark Professional Collections, the debt collectors refused to
answer thesequestions. In fact, the employee manual for Ozark
Professional Collections specifically told itscustomer service
representatives not to answer questions regarding the nature,
ownership oroperation of Ozark Professional Collections. As a
result, the patients who owed debts to LesterE. Cox Medical Center
assumed that they had been turned over to an independent
collectionagency rather than merely another division of Cox
Hospital to collect its debt.In a similar case, United States
District Judge, Dean Whipple, has held that this constitutes aclear
violation of the Fair Debt Collection Practices Act. Judge Whipple
stated:Copyright 2011 Raymond R. Arons, Teaneck, NJ, USA
43. Lecture 16 43In the present case it is painfully obvious
from the record that Cox Medical Centers is a creditorwho, in the
process of collecting its own debts, uses a name other than its
usual business namenamely Ozark Professional Collectionsto indicate
that a third party is attempting to collectits debt. Indeed, OPC
deliberately tries to avoid telling consumers that it is a division
of CoxMedical Centers. Consequently, Cox Medical Centers is a debt
collector in the eyes of thestatute. Daley v. Povena Hospital, 88
F.Supp. 2d 881 (N.D.Ill 2000) (holding hospitals using itsown
employees for in-house collection under a misleading doing business
as designation liableunder the FDCPA).The Court now turns to
whether Cox violated the FDCPAs provisions. Naturally, in light of
theabove ruling and the facts, the Court finds that by sending two
collection letters to theHuntsmans on OPC letterhead, Cox committed
two violations of 1692e(14). Therefore, theCourt grants Defendants
summary judgment on Count IV. CLICK HERE TO READ THECOURT
JUDGMENTSo, if you have received a collection letter or telephone
call from Ozark Professional Collectionson or after August 11,
2002, you have a claim against Lester E. Cox Medical Center for
violatingthe Fair Debt Collection Practices Act.A potential class
action lawsuit has been filed on behalf of all individuals who
received acollection communication from Ozark Professional
Collections on or after August 11, 2002. CLICK HERE TO READ THE
CLASS ACTION COMPLAINT . While the court has notyet been asked to
certify the lawsuit as a class action, we are registering potential
class membersso that if and when the court does certify the class
to proceed we will have already begun theprocess of identifying
class members. If you would like to register as a potential class
memberplease use the CONTACT US form on this website. CLICK HERE TO
CONTACT US . Itasks for basic information such as your name,
address, telephone number, e-mail address, andaccount information
with Cox Medical Center. It also asks for the date of any
communicationswith Ozark Professional Collections (OPC) requests
that you send us a copy of anycommunications you have had with
Ozark Professional Collections and any related bills fromLester E.
Cox Medical Center, if you have them.There is no cost or obligation
to register as a class member or to participate in the class
action, ifand when it is certified. In turn, if the class is not
certified we may pursue certain individualclaims at our option, but
reserve the right not to proceed with other claims if we determine
it isnot feasible to do so. If you have any questions regarding
this matter, you may contact us at ourtoll free number
1/800-444-7552. For further information regarding the law firms and
thelawyers who are pursuing this potential class action, please
click below to be connected to theirrespective websites. Thank you
for your interest and we look forward toCopyright 2011 Raymond R.
Arons, Teaneck, NJ, USA
44. Lecture 16 44Hospitals/Facilities Clinics &
PhysiciansCox South Find a Physician/Clinic3801 S. National Ave.
Search by region, specialty or physician name toSpringfield, MO
65807 find the physician that best meets your health care
needs.563-bed hospital, full-service care facility at theheart of
the "Medical Mile" in south Springfield. CoxHealth owned and
operated clinics A directory of clinics organized by clinic
name.Cox North1423 N. Jefferson Ferrell-Duncan ClinicSpringfield,
MO 65802 A directory of physicians organized by specialty72-bed
facility, and the original site of the 1906 The Clinic at
Walmartopening of Burge Hospital, which has become Walk-in services
for basic care is available throughCoxHealth. CoxHealth at local
Walmart stores.Cox Monett Helpful Information801 Lincoln
Ave.Monett, MO 65708 Maps, Directions & Parking Easy-to-use
maps and directions to get you where25-bed critical access hospital
serving Monett, Mo., you need to be in the city, on our campuses
orand the surrounding counties. inside a specific building.Cox
Walnut Lawn Construction Updates1000 E. Walnut Lawn Please check
here for current and futureSpringfield, MO 65807 construction
projects at CoxHealth, as well as updates to parking, building
entry and navigationA 102-bed extension of the Cox South campus
that related to these projects.offers Rehabilitation Services,
Wound Healing andUrgent Care. Phone Numbers Frequently called phone
numbers for CoxHealth.Cox Surgery Center960 E. Walnut
LawnSpringfield, MO 65807New facility that provides a centralized
location formost outpatient surgeries.Urgent Care1000 E.
PrimroseSpringfield, MO 65807CoxHealth Adult and Pediatric Urgent
Carelocations are your one-stop facilities for non life-threatening
illnesses and injuries.Copyright 2011 Raymond R. Arons, Teaneck,
NJ, USA
45. Lecture 16 45 Case 2009-10Copyright 2011 Raymond R. Arons,
Teaneck, NJ, USA
46. Lecture 16 46 Case 10- Hospital Fraud The University of
Pennsylvania Health System (UPHS) paid $3.5 million to resolve
allegations that UPHS had erroneously submitted separate and
distinct Medicaid payment claims for blood transfusions on bills
that had more than one unit per day. Further, UPHS allegedly
submitted fraudulent claims associated with office visits for new
patients, as well as fraudulent claims for infusion therapy. UPHS
is the 20th hospital to settle under the 3-year-long Operation
Vampire project, aimed at uncovering hospitals erroneous Medicare
claims associated with blood transfusions. Including this case,
Operation Vampire recoveries total approximately $12.5 million. 30
University of Pennsylvania Health System 31Copyright 2011 Raymond
R. Arons, Teaneck, NJ, USA
47. Lecture 16 47 CEO Pennsylvania Health System 32Left to
Right: Ralph Muller, CEO of the University of Pennsylvania Health
System; Penn President AmyGutmann; and Raymond and Ruth Perelman
cut the ribbon to mark the official opening of the PerelmanCenter
for Advanced Medicine at Penn while Dr. Arthur Rubenstein,
Executive Vice President of theUniversity of Pennsylvania for the
Health System and Dean of the School of Medicine looks on.Copyright
2011 Raymond R. Arons, Teaneck, NJ, USA
48. Lecture 16 48Case 2009-11Copyright 2011 Raymond R. Arons,
Teaneck, NJ, USA
49. Lecture 16 49 Case 11- Hospital Fraud Lester E. Cox Medical
Centers, a health care system headquartered in Missouri, has paid
$60 million and entered into a 5-year CIA with HHS/OIG to settle
allegations that it paid doctors at a local physician group for
referrals, and billed Medicare for the services resulting from
those referrals, in violation of the Anti- Kickback and Physician
Self-Referral statutes 22 Lester E. Cox Medical Centers Our
MissionAbout CoxHealth CoxHealths Mission is to improve the health
of the communities we serve through quality health care, education
and research. and Cox Medical Centers Lester E. Cox Medical Centers
Mission is to provide compassionate, quality health care, health
education and research consistent with available financial
resources. Health care will be provided without prejudice and
regardless of the patients ability to pay. and Cox Monett Cox
Monetts mission is to improve the health status of our community by
providing high quality health care, education and wellness, through
value and convenience with a personal touch. 27Copyright 2011
Raymond R. Arons, Teaneck, NJ, USA