stacks



corporate fraud

medicare and corporate fraud

How to Think Clearly About Medicare Administrative Costs:
Data Sources and Measurement

Philip Esformes sentenced to 20 years for $1.3 billion Medicaid fraud

"Many national healthcare plans provide universal insurance at a lower per-capita cost than the American system with better results." - JD Hunley

"A jury might think $45 million is fair and just compensation to the family of the woman who died while hospital personnel ignored her cries of pain.

The judge will automatically reduce any possible verdict to $250,000 - the most in non-economic damages anyone can recover for any injury or death caused by a healthcare provider.

The cap was passed at the behest of the insurance industry and medical establishment more than three decades ago.

It has never been changed or adjusted - even for inflation.

We may be reaching a point at which letting patients die is more cost-effective than treating them." - Linda Fermoyle Rice

1980s Under the Reagan administration International Medical Centers run by George Recarey expand rapidly due to a special exemption granted through the office of Jeb Bush.

1987 A federal court jury finds Jorge Recarey, Mariano Villa Del Rey and Antonio Fernandez Sr. guilty of labor racketeering charges.

3 CONVICTED OF RACKETEERING

July 1994 National Medical Enterprises agreed to pay $379 million in criminal fines, civil damages, and penalties for kickbacks and fraud at National Medical Enterprises psychiatric and substance abuse hospitals in more than 30 states.

After this settlement, National Medical Enterprises renames itself "Tenet".

October 1996 First American Health Care of Georgia, Inc, later Integrated Health Services, Inc, agrees to reimburse the federal government $255 million for overbilling and making fraudulent Medicare claims.

First American billed Medicare for costs unrelated to the care of patients in their homes, including the personal expenses of senior management, as well as marketing and lobbying expenses.

Epilogue: IHS files for bankruptcy and never pays the settlement.

November 1996 Laboratory Corporation of America Holdings (LabCorp), agrees to pay $182 million to resolve charges that it submitted false claims for medically unnecessary laboratory tests to federal and state health care programs.

The fraud involved bundled lab tests that were billed to Medicare as free-standing tests, resulting in an eight-fold increase in charges to Medicare.

March 1997 SmithKline Beecham Clinical Laboratories Inc. (SBCL), now GlaxoSmith Kline, is ordered to pay $325 million for filing false claims involving adding on laboratory tests not requested by doctors and not medically necessary, billing for lab tests that were not actually performed, giving kickbacks to doctors in order to get business, and billing Medicare for dialysis testing already paid for by kidney dialysis centers.

July 1998 Blue Cross Blue Shield of Illinois (also known as Health Care Service Corporation) pleeds guilty to eight felony counts and agrees to pay $144 million.

The nature of the fraud is that Blue Cross Blue Shield Illinois manipulated work samples and falsified reports to the Health Care Finance Administration in order to conceal evidence of its poor performance as a federally contracted processor of Medicare claims.

January 2000 Fresenius Medical Care of North America, the world's largest provider of kidney dialysis products and services, agreed to pay a fine of $486 million for a scam involving National Medical Care, Inc. (NMC), a kidney dialysis subsidiary owned by Fresenius which included fraudulent and fictitious blood testing claims by LifeChem, Inc. and fraudulent claims submitted to Medicare for intradialytic parenteral nutrition (IDPN), a nutritional therapy provided to patients during dialysis treatments.

February 2000 Beverly Enterprises Inc., the nation's largest assisted living facility chain, agreed to pay $175 million to resolve civil and criminal charges that it defrauded Medicare by fabricating Medicare patient records.

December 2000 HCA The Healthcare Company (formerly known as Columbia HCA), the largest for-profit hospital chain in the US, pleeds guilty to criminal conduct and agrees to pay more than $840 million in criminal fines, civil penalties and damages for unlawful billing practices.

Fraud included: billing for lab tests not medically necessary and not ordered by physicians, "upcoding" medical problems in order to get higher reimbursements for more serious medical issues, billing the government for advertising under the guise of "community education," and billing the government for non-reimbursable costs incurred in the purchase of health agencies around the country.

This agreement does not resolve allegations that HCA unlawfully charged for the costs of running its hospitals, and that it paid kickbacks to physicians to get Medicare and Medicaid patients referred to its facilities.

March 2001 Vencor Inc., one of the nation's largest assisted living facility chains, and Ventas Inc., a related real estate investment trust, agreed to pay the US $104.5 million to resolve claims for failure to provide the promised quality of care to assisted living facility patients due to inadequate staffing, improper care of bedsores, and failure to meet resident's basic dietary needs.

October 2001 Taketa-Abbott Pharmaceutical Products Inc. agreed to pay $875 million to resolve criminal charges and civil liabilities in connection with fraudulent drug pricing and marketing of Lupron®, a drug sold for $500 per dose for the treatment of prostate cancer under Medicare Part-A.

2002 Pfizer paid $49 million to settle state and federal Medicaid fraud charges involving Lipitor®.

April 2003 Bayer paid $257,200,000 to settle Medicaid fraud charges involving a "lick and stick" scheme in which Bayer sold re-labeled products to an HMO at deeply discounted prices, and then concealed this price discount in order to avoid paying additional rebates to the government.

June 2003 AstraZeneca agreed to pay $355,000,000 for providing free drug samples to doctors and telling them to bill Medicare and Medicaid hundreds of dollars per sample.

HCA agreed to pay $631 million in civil penalties and damages arising from false claims, including cost report fraud and the payment of kickbacks to physicians, submitted to Medicare and other federal health programs.

July 2003 CG Nutritionals, Inc. pled guilty to obstructing a criminal investigation and defrauding the Medicare and Medicaid programs and agreed to pay $400 million to resolve civil claims. In addition, the subsidiary of Abbott Labs, CG Nutritionals, Inc., agreed to a criminal fine of $200 million in relation to the sale of products which pump special foods into the stomachs and digestive systems of patients who are not able to ingest meals in a normal manner.

2003 GlaxoSmithKline signed a corporate integrity agreement and paid $88 million in a civil fine for overcharging Medicaid for the antidepressant, Paxil® and nasal allergy spray, Flonase®.




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