Monday, February 28, 2011

Johnson & Johnson--motion to dismiss denied (Risperdal)

Bloomberg is reporting that "Johnson & Johnson must defend a lawsuit by the U.S. Justice Department claiming the company paid kickbacks to influence sales of its antipsychotic drug Risperdal to nursing home patients, a judge ruled today.  J&J asked the judge to dismiss the complaint, arguing that payments it made to Omnicare, Inc., the largest U.S. pharmacy for nursing home patients, were allowable rebates and not illegal kickbacks. U.S. District Judge Richard Stearns ruled in federal court in Boston that the case may proceed against J&J, the world’s largest maker of health-care products. "  Click here for the full story.

This is a big deal because it appears that J&J is asserting a more aggressive approach to defending qui tam lawsuits like this one.  The industry is watching J&J to determine how it should defend against qui tam lawsuits.

The case is U.S. ex re. Lisitza and Kammerer v. Johnson & Johnson, 07-10288, 05-11518, U.S. District Court, District of Massachusetts (Boston).

Sunday, February 27, 2011

Update on Major Davis (Army cardidologist being prosecuted for taking money from Boston Scientific)

I recently blogged about U.S. Army Major Jason L. Davis, whom the DoJ is prosecuting for accepting money from Boston Scientific (see the charging instrument below).   It is a criminal offense for a military officer to receive compensation from a non-federal source (e.g., such as Boston Scientific) for performance of his governmental duties.  The criminal offense in question is 18 U.S.C. §209, and punishment is under 18 U.S.C. §216.  In addition to these laws, a number of regulations (e.g., the Joint Ethics Regulation and ethics rules from the U.S. Office of Government Ethics) also prohibit the type of relationship that Major Davis and Boston Scientific engaged in. 

Major Davis agreed to plead guilty and has entered into a plea agreement with DoJ.  His sentencing hearing was reset; here is the announcement from PACER.

02/17/2011NOTICE OF RESCHEDULED HEARING as to Jason Layne Davis (cc: USPO, PTS, USMO) Sentencing reset from 4/5/2011 to 5/18/2011 at 10:00 AM in D Courtroom before Judge J Richard Creatura at defendant's request. (KAM) (Entered: 02/17/2011)

Major Davis (Charging Document)                                                            

HHS & DoJ bringing the HEAT to Dallas and Chicago

HHS and DoJ just announced that they are standing up Medicare Fraud Strike Force HEAT teams in Chicago and Dallas.  The Houston office has done great work, let's seat if the Dallas team can match the Houston team's success.  But you have to wonder why HHS and DoJ are just now getting around to mobilizing a HEAT team in Chicago.  My Chicago qui tam lawyer friends tell me that Chicago is notorious for health care fraud.  But is that really a surprise anyone? 

Saturday, February 26, 2011

AstraZeneca paid $520 million for illegal off-label marketing of Seroquel

Continuing my series on recent off-label qui tam cases against pharma companies, last year AstraZeneca paid $520 million to resolve allegations that it illegally marketed the anti-psychotic drug Seroquel for uses not approved as safe and effective by the FDA. AstraZeneca promoted Seroquel to psychiatrists and other physicians for certain uses that were not approved by the FDA as safe and effective (including aggression, Alzheimer’s disease, anger management, anxiety, attention deficit hyperactivity disorder, bipolar maintenance, dementia, depression, mood disorder, post-traumatic stress disorder, and sleeplessness).

Click here for the DoJ press release.
Click here for the settlement agreement.
Click here for the Corporate Integrity Agreement between AstraZeneca and HHS-OIG.

Prozac for Dogs, Viagra for Females, What's Next?

That's right, Prozac is great for your dog, who would've thunk it.  Also, female sexual dysfunction, well there is a pill for that.  And guess what, the American taxpayer is going to pay for it.  This is an interesting video showing how creative some pharma companies have become at pushing drugs.

Update on the prosecution of former GSK in-house counsel

I’ve recently blogged about the criminal prosecution of former GSK in-house counsel Lauren Stevens.  Stevens was indicted for obstruction, concealment of documents, and making false statements.  The allegations stem from her involvement in responding to an FDA inquiry to GSK regarding off-label marketing of GSK’s antidepressant product Wellbutrin SR.  Stevens was employed at the time as a Vice President and an Associate General Counsel at GSK. 

Currently before the court is a motion by the Government to prevent Stevens from presenting the defense of “advice of counsel” at trial.  (No ruling yet—I’ll post it as soon as it hits PACER.)

In a twist, it appears that Stevens’ defense team is starting to get aggressive.  Even though Stevens is not charged with conspiracy, her defense team requests the Government identify all those who allegedly conspired with her to obstruct the FDA’s inquiry.  (The defense's most recent filing is below.)  I’ll post the Government’s response and the Court’s order when they hit PACER.

Either Stevens is taking the position that: 1) if she goes down the whole ship goes down or 2) she was in fact simply relying upon her subordinates and outside counsel to ensure compliance with the FDA inquiry (which would be a hard sell given the sophistication required to occupy such a high position with a multi-billion dollar company).  Below is an excerpt from the defense motion.

In response to the FDA inquiry, Ms. Stevens on behalf of GSK sent a series of letters and attached documents to FDA.  See Indict. ¶¶ 12-41.  In preparing the Company’s responses, Ms. Stevens was part of a larger legal team that included both in-house and outside counsel.[]   Ms. Stevens expects that the evidence at trial will show that the members of the legal team working with her had intimate knowledge of and involvement with the preparation of GSK’s responses, and that in her interactions with the FDA she acted consistently with the advice she received.  Ms. Stevens expects that many of the Attorney Witnesses will testify at trial, and that their testimony will support her contention that she did not engage in criminal conduct.
 US v. Stevens (Def. Memo Re Name Co-consp.)                                                              

Friday, February 25, 2011

Pharmalot--a great blog

A nice way to stay tuned to the pharma industry is Pharmalot.  It's a great blog.  In addition to analyzing industry trends, great training is also provided.  For example, Pharmalot is presenting a webcast on Mar. 8 to discuss payments to physicians, which the Health Care Act addressed.

Allergan paid $600 million for illegally marketing Botox

Continuing my series highlighting the spate of huge off-label marketing cases, last year Allergan agreed to plead guilty to a misdemeanor and pay a $375 million fine and $225 million in civil penalties, all for pushing Botox for off-label uses such as headache, pain and cerebral palsy treatment.

Click here for the DoJ press release.
Click here for the Wall Street Journal story.
Below is the qui tam complaint.  
Allergan FCA Complaint                                                            

Thursday, February 24, 2011

First ever HIPAA civil penalty ($4.3 million) is reporting that the "Department of Health and Human Services' Office for Civil Rights hit Cignet Health with a $4.3 million civil penalty for violating the HIPAA Privacy Rule and failing to cooperate during the subsequent probe even after a federal subpoena was issued, according to an HHS announcement."  Click here for the story.

Some doctors starting to advocate less use of prescription meds

Here is an interesting article by an expert that talks about the over-use of prescription meds.  Dr. Kruszewski argues that in some situations excessive use of prescription meds may do more harm than good.

Eli Lilly & Co. paid $1.42 billion for its off-label marketing

Eli Lilly & Co. paid $1.42 billion for its off-label marketing Zyprexa.  Lilly trained its sales force to disregard the law by promoting Zyprexa for off-label uses.  For over two years, Lilly earned “hundreds of millions of dollars” through consistent criminal violations of the Food, Drug, and Cosmetic Act.  Click here for  DoJ press release.

Forest Labs broke the law - paid $313 million

Continuing my series of illegal promotion by Pharma companies, let’s focus on Forest Labs, which recently pled guilty to obstruction of justice, distributing an unapproved drug and illegally promoting two other meds.  The drugs in question were Levothroid, an oral med for thyroid conditions, and two antidepressants - Celexa and Lexapro.  Forest Labs also agreed to pay $313 million, which includes $164 million in criminal penalties  Keep in mind that almost all of this Pharma co. money is taxpayer money.

Many of you have emailed wanting to see the documents in cases like these  Below are the following: 1) Corporate Integrity Agreement; 2) Plea Agreement, and 3) Settlement Agreement.

Forest Labs (Settlement Agreement)                                                            
Forest Lab (CIA)                                                            
Forest Pharm (Plea Agreement)                                                            

Wednesday, February 23, 2011

Do white-collar criminals have different brains?

I've always wondered what possesses a doctor who is making $500K/yr to risk prison by bilking Medicare.  It seems the brains of white-collar criminals may be different.   The Independent reports:

People who commit "white collar" crime such as credit-card fraud and computer hacking have been found to have brains that are structurally different from the brains of non-criminals with similar backgrounds, scientists have found.  Psychological tests on white-collar criminals also showed that they were better at making decisions in the kind of "higher executive" brain functions associated with being good at business, researchers said.  The study found that, in effect, white-collar criminals had more grey matter than a comparable group of non-criminals, suggesting that there may be a biological basis for this kind of criminal behaviour, according to Adrian Raine, a criminologist at the University of Pennsylvania. 

Pfzier's off-label marketing ($2.3 Billion)

A few months ago, Pfizer agreed to pay $2.3 billion to settle civil and criminal allegations that it had illegally marketed its painkiller Bextra, which has been withdrawn from the market.  It was the largest health care fraud settlement and the largest criminal fine of any kind ever.

Click here for a link to the New York Times article.
Click here for a link to the Wall Street Journal article. 
Click here for the DoJ press release.

Here is a brief TV news story:

A series in off-label marketing

The New York Times recently reported "Four pharmaceutical companies paid more than half of the $19.8 billion in civil and criminal settlements the last 20 years for improper billings to federal and state governments . . ."  Over the next few days, I will be blogging about off-label marketing by drug companies, the staggering amount of money involved (usually paid for by taxpayers), how it's done, and the harm often caused to patients.

Tuesday, February 22, 2011

Don't Mess With Texas

In a landmark case, the Texas Attorney General's Office showed that Pharma shouldn't Mess With Texas.  With Medicaid costs skyrocketing, often due to fraud committed by pharma companies feeding at the government's trough, the Texas Attorney General's Office obtained at $170 million jury verdict in an average wholesale price case.  Here is a link to the Tex. AG's  press release.  The jury verdict is below.  Kudos to Asst. Tex. AG Ray Winter and his team.  Pretty good for an Aggie.  Also congrats to Jarrett Anderson (also an Ag), Glenn MacTaggart, Jim Bream, and the Ven-A-Care team for protecting the Medicaid program and Texas taxpayers. 

Texas Ex Rel Ven-A-Care v Alpharma Verdict                                                            

Texas considering consolidating its 9 medical boards

In attempt to save $7 million, Texas Gov. Perry proposes the state consolidate its 9 medical boards into 1.   $7 million in savings is a drop in the bucket when the state spends billions on health care.  But will patient safety be impacted?  The Fort Worth Star Telegram reports that "Gov. Rick Perry's proposal to combine nine health professions boards into a single agency has some critics asking whether that would jeopardize patient safety."  Click here for the story.

Because of massive tort reform in 2004, it's almost impossible to sue a health care provider in Texas.  The proponents of tort reform pushed through their bills arguing that frivolous lawsuits were driving up the cost of health care.  Well, after 7 years of tort reform, health care costs continue to explode.  Fraud, in my experience, is the main reason health care costs continue to rise.    

My med mal defense friends tell me that because it's so difficult to sue doctors in Texas, the medical boards have been inundated with complaints by harmed patients who have had the courthouse doors closed to them.   Seems like it doesn't make sense to now start chopping one of the remaining check and balance on bad docs. 

Monday, February 21, 2011

UTHealth study suggests private insurers control health care spending better than Medicare

What's the difference between McAllen, Texas and El Paso, Texas (my hometown by the way)? UT Health Science researchers found that Medicare spends almost twice as much more per patient overall in McAllen than in El Paso.  But the study also found that BlueCrossBlueShield-TX spends about the same in both places.  In fact, BCBS-TX’s per-patient spending was actually slightly lower in El Paso.  What does that say about the government's ability to control health care costs compared with the private insurance? 

Click here for a link to the UT Health System announcement of the study.

Click here for a Heritage Foundation analysis of the study.

Click here for a report to health care executives about the study.

Easy to read White Paper about Healthcare Fraud, Waste, & Abuse

Below is an easy to read White Paper by Thomson Reuters Healthcare Analytics about the magnitude of fraud, waste, and abuse in our health care systems.  I do take issue, however, with the author classifying fraud as "waste."   

Here are some of the highlights that taxpayers should be made aware of:

  • The Federal Bureau of Investigation (FBI) estimates that fraudulent billings to public and private healthcare programs are 3-10 percent of total health spending, or $75–$250 billion in fiscal year 2009.
  • Most fraudulent and abusive practices simply add cost with no value, but others actually expose patients to the risk associated with unnecessary procedures.

White House budget delays for 2 years cuts to physician payments

The White House FY 2012 Budget protects doctors from steep cuts in their Medicare payments.  The WH budget delays a scheduled 25 percent cut in the Sustainable Growth Rate, Medicare's physician payment formula that was slated to go into effect in 2012.  To cover the cost of shielding physician reimbursements from cuts for two years, the White House says it plans to squeeze $62 billion in savings out of Medicare and Medicaid payments to hospitals and doctors by the expanded use of generic drugs in federal health programs.  How many times have you heard government officials say they can save money by "squeezing" savings out of a program.  Just doesn't happen.  So much for bending the Medicare cost curve down.  

Stay tuned to see how effective the interest groups are in protecting high rates for docs given the current Republican-dominated House.  It will be fun to watch the fight between the docs and Big PhRMA to see who gets to push the Medicare cost curve up.  But stepping in to play the good guy will be GPhA, the trade association for the generic drug industry.  I bet the house the docs win this battle. 

Click here for a link to the New York Times story.

Click here for a link to the Wall Street Journal story.

Click here for a link to the American Medical News story.

Sunday, February 20, 2011

Ex-Glaxo Lawyer Wants U.S. to Reveal Possible Conspirators

I've blogged about how the DoJ is prosecuting Lauren Stevens, a former GSK in-house counsel, for obstruction of justice.  A Bloomberg news story reveals that last week Stevens requested the Court order the prosecutors to say whether attorneys at the law firm King & Spalding LLP are unindicted co-conspirators.  The Court has yet to issue an order, which I'll post as soon as it hits Pacer. 

HHS creates “Most Wanted” List for Health Care Fraudsters

Because health care fraud is such big business, HHS has created an HHS “Most Wanted” list, see below.  Click here for the link.

Here’s one example of these notorious fraudsters:

Along with her co-conspirators, Susan Bendigo, who was born in the Philippines, is accused in a Federal indictment of billing Medi‑Cal, California's Medicaid program, for $17.1 million, collecting $10 million, about half of which came from the claims she submitted for services she provided with unlicensed staff.  A registered nurse, Bendigo was director of nursing for a company that provided nurses for home health agencies. Investigators say that from May 2004 through May 2007, she sent unlicensed nurses to treat patients under Medi‑Cal, even though she knew that Medi‑Cal required licensed nurses to perform the work. 


Saturday, February 19, 2011

Using dementia patients to rip off Medicare (to the tune of $83 million)

The recently unsealed indictment shows how easy it is to get rich.  As alleged in the Indictment below, a handful of individuals were able to bill Medicare for over $83 million using dementia patients as a platform to commit Medicare fraud. 

The alleged illegal conduct in the indictment is "unlike anything we've seen before in terms of the nature and size of the scheme," Assistant Attorney General, Lanny Breuer said in a statement yesterday.  Unlike so much Medicare fraud that involves medical equipment and services, this case involves Medicare's Partial Hospitalization program, which gives mental health patients much-needed services in outpatient settings.  The defendants preyed on some of the most vulnerable patients, paying kickbacks to owners and operators of assisted living facilities and halfway houses in exchange for patient referrals.  Bogus mental health therapy sessions were organized where elderly and infirm patients were left in rooms for hours, and received no legitimate or medically necessary therapy.  Some of the patients suffered from Alzheimer's disease or dementia, and did not even know where they were.  Others simply came to make money through kickbacks.

Patient recruiters would find people who needed a place to stay overnight and offer them free temporary housing, cash or other bribes in exchange for agreeing to pose as patients. Some of the defendants were also charged with having "charting parties," where senior managers met regularly to write up fake patient medical charts.

Here is the Indictment:


HEAT strikes in 9 cities

The Medicare Fraud Strike Force (HEAT) just charged 111 defendants in 9 cities, including doctors, nurses, health care company owners and executives, and others, for their alleged participation in Medicare fraud schemes involving more than $225 million in false billing.

This obviously took some serious investigation and coordination.  While some of these providers may end up in jail, it has yet to be seen if the Government can recover that $225 million (doubtful in my opinion--that taxpayer money is probably stashed away in some off-shore account).

Click here for the link to the FBI press release. 

Thursday, February 17, 2011

More and more providers wanting to self-report

It appears that word is out about the False Claims Act and that the Government is starting to really crack down on health care fraud.  We've notice an uptick in providers are wanting to self-report, but don't know how.  Self-reporting is a major decision, one that should be done with legal counsel.

The Texas Office of Inspector General has posted its self-reporting guidance online.  Click here.

Here are the regs published by HHS-OIG:


Wednesday, February 16, 2011

Texas analyzes whether to opt out of the Medicaid Program

Some in Texas think the state should opt out of the Medicaid Program.  The Texas Legislature requested its state agencies analyze that option.  See the report below.  It appears, though, it would cost Texas more money to opt out than to stay in.  The report is clear that the Medicaid Program, however, is on a financially unsustainable path.  

Here are some of the findings from the report:

Medicaid expenditures comprise about 15% of all personal health care spending in Texas, and certain essential health care services are particularly reliant on Medicaid funds:

  1. Medicaid assists two-thirds of Texans in nursing homes.
  2. Medicaid pays for more than half of all births in the state.
  3. Medicaid provides billions of dollars to hospitals to help cover the cost of care to indigent, uninsured Texans and unauthorized immigrants.
  4. Medicaid and its companion Children's Health Insurance Program (CHIP) provide insurance to 3.8 million low income Texans each month.
With a 9% annual rate of growth in Texas, the Medicaid program, according to the Congressional Budget Office, is unsustainable at the state and federal level:

  1. In FY 2011, Texas Medicaid expenditures (state and federal) will exceed $30 billion, up from $11 billion in FY 2000. This 170% increase in just 11 years far exceeds growth in state tax revenue.
  2. The program now consumes more than 25% of the state budget and increasingly strains funding available for other budget priorities.
  3. New Medicaid spending mandated by the ACA will exacerbate the program's financial imbalances, especially beyond 2019, when the federal government transfers more of the cost of complying with the ACA to the states.


Tuesday, February 15, 2011

Huge medical data theft in NYC (it's worth more than gold)

In one of the larger medical data thefts reported, personal health data for about 1.7 million New York City patients, hospital staffers, and others was stolen on Dec. 23 from an unlocked van in Manhattan.  The electronic record files, which were stored on 20 years worth of magnetic tapes, contained personal information, protected health information or personally identifiable employee medical information on patients and workers, including names, addresses and Social Security numbers, according to the New York City Health and Hospitals Corporation. The van belonged to GRM Information Management Services, the City's medical records vendor.

Here is the notification from New York City Health & Hospitals Corp. about the theft.  Who needs a gun to steal when you have Medicaid and Medicare identifiers.  Such information is worth more than gold.

Dental Medicaid fraud harms kids

In my ongoing series about dental Medicaid fraud, see this 20/20 story about how some unethical dentists use children to bilk Medicaid.

Texas State Rep. Tara Rios Ybarra charged in Medicaid fraud case

Earlier I blogged about how the Government charged Texas State Representative Tara Rios Ybarra with crimes associated with Medicaid fraud.  The link below is a news story about the case.  The indictment is further below.

Tara Rios Ybarra charged in Medicaid fraud case: "Texas State Rep. Tara Rios Ybarra was temporarily held in federal custody this morning after being charged in a Medicaid fraud case involving a McAllen oral surgeon."

Here is a copy of the Indictment.

Ybarra Indictment                                                            

The Hall of Shame (Dentists who have been convicted for crimes related to Medicaid Fraud)

Unlike the dentists below, these dentists have actually been convicted of crimes related to Medicaid fraud:

David Lloyd Gonzales Jr. (Pasadena, Texas)

Here is the press release from the US Attorney's Office (E.D. of Tex.) regarding Dr. Herod.

Texas dentists recently charged with Medicaid fraud

There has been a string of dentists that have been recently indicted by the Government for Medicaid fraud.  It appears that dental Medicaid fraud is a serious problem in Texas. 

The Government has accused or indicted the Texas dentists listed below with various crimes related to Medicaid fraud (click on the dentist's name to be directed to the Government's press release).  Keep in mind, however, that indictment does not mean that they are guilty.  

Sunday, February 13, 2011

Active duty Army doc pleads guilty

Active duty Army doctor Major Jason L. Davis and the Department of Justice have struck a deal.  The Department of Justice charged Major Davis with the criminal offense of accepting a supplement to his federal salary.  The plea agreement (see below) states Boston Scientific paid Major Davis to allow its employees to watch him implant cardiac devices.  Boston Scientific and Major Davis called these illegal kickbacks as "training payments."  Fortunately, DoJ was not fooled by this ruse. 

It appears that the medical device industry and big pharma are targeting military doctors.   Corruption within the military must never be tolerated.  An ethical and corruption-free military is what separates the United States from almost every other country in the world.  We should be ever diligent to prevent this form of corruption.  Major Davis' illegal acts reflect poorly upon all military doctors and officers.

It would  interesting to find out why the Army did not court-martial Major Davis.  Questions should be asked.  For example, did DoJ get involved only because the Army wanted to cover up corruption in its ranks?  Who reported the fraud?  Regardless, it's refreshing to see DoJ clean up this corruption. 
The plea agreement is below.  Click here for a link to the story in the Army Times.  I'll report back after Major Davis is sentenced.  If you have more information about this case, please contact me. 

U.S. v. Major Davis (Plea Agreement)