Little Health Law Blog

On January 15, 2013, Dr. Joel I. Bertstein, a La Jolla, California oncologist, pled guilty to a charge that he introduced an unapproved drug into interstate commerce and administering it to patients. The drug is a cancer fighting drug known as “Mabthera.” Mabthera has not been approved by the U.S. Food and Drug Administration (FDA) for use in the United States and is intended for marketing in Turkey. Rituxa is the approved U.S. drug that contains the same active ingredient and is used to fight lymphomas and leukemias.

According to the government’s allegations, Bernstein and his corporate medical practice, Dr. Joel I. Bernstein, M.D. Inc., imported Mabthera at a deep discount, dispensed the drug to unwitting patients, billed Medicare as if the drug was legitimate, and retained profits from the transactions. The government alleged that during the period from 2007 to 2011, Bernstein purchased $3.4 million of unapproved cancer drugs, for significantly less than market value in the U.S., and submitted claims to Medicare at the full reimbursement price using Medicare codes for approved cancer drugs. The government charged that Bernstein submitted reimbursement claims of $1.7 million to Medicare.

The financial recovery for the federal tax payer is not the sole objective for the government’s prosecution of this type of Medicare fraud. Additionally, the government seeks to combat a strong nationwide trend that exposes U.S. patients to risks associated with the use of drugs not vetted and approved by the FDA. Patient welfare is at stake. Indeed, the government considers the problem of counterfeit drugs to be of “epidemic” scale. Numerous federal agencies, including the Department of Justice, the Federal Bureau of Investigation, the FDA, and Homeland Security, are involved in the effort to combat a national crisis of importation counterfeit and unapproved drugs. The government has undertaken significant efforts to discovery fraudulent Medicare schemes that cost the federal taxpaper billions of dollars every year and compromise patient safety.

The FDA’s procedures for approving a drug apply not only to the drug itself but also to labeling and packaging, the facility where the drug was manufactured and shipping protocol. Some oncology medications must be transported at a particular temperature. When a patient consumes an unapproved drug, he is taking a serious chance that the proper conditions for the manufacture and shipment of the drug have not been met. In Dr. Berstein’s case, the government asserted that unapproved chemotherapy drugs “may be fake, ineffective, unsafe and dangerous.”
Continue reading ›

Federal law enforcement agents arrested one Chicago-area resident and six Detroit-area residents based on allegations of home health care fraud. In an 18-count indictment unsealed on January 17, 2013, the federal government contends that the seven parties effectuated a scheme to defraud Medicare based on claims for in-home health services at Royal Home Health Care Inc., Prestige Home Health Care Services Inc., Platinum Home Health Services Inc. and Empirical Home Health Care Services Inc. According to the indictment, Medicare was defrauded of over $22 million based on false claims for services since August 2008.

The Medicare Program is a federal health care program that provides benefits to the disabled and persons over age 65. It is administered by the Centers for Medicare and Medicaid Services (“CMS”), a division of the United States Department of Health and Human Services Office of Inspector General (“HHS-OIG”). In order for a health care provider to participate in Medicare, the provider must agree to abide by Medicare polices and procedures, rules, and regulations published by the federal government. When a provider is certified as a participant in the program, the provider receives a provider identification number for billing purposes, known as a “PIN.” A provider uses the PIN to submit claims for reimbursement to the government for services rendered to a patient, or “beneficiary.” A Medicare beneficiary has a Medicare beneficiary number that is used for billing purposes.

Combating Medicare fraud has been a major priority and focus of the federal government for many years. Since March 2007, the federal government’s Medicare Fraud Strike Force, which involves HHS-OIG, the FBI and other federal law enforcement, have charged more than 1,480 defendants who have falsely billed Medicare for over $4.8 billion. This indictment is part of the effort of the government’s Medicare Fraud Strike Force to effectively combat Medicare Fraud in an effort to curb the spiraling costs of the Medicare Program and otherwise for the benefit of the federal taxpayer.

According to the indictment, the home health care companies purported to provide in-home physical therapy, occupational therapy, speech pathology and/or skilled nursing services to patients. Royal, Prestige, Platinum and Empirical were Medicare providers that submitted claims directly to Medicare using PINs and beneficiary numbers. The individuals named in the indictment were either owners and/or officers of the home health care companies, or were employed as therapists or patient recruiters. The indictment charges that the defendants offered and paid kickbacks and bribes in the forms of cash payments and/or prescription narcotics to Medicare beneficiaries for the purpose of such beneficiaries arranging for the use of their Medicare beneficiary numbers by the conspirators as the bases of claims for physical therapy and other services. The indictment further alleges that Medicare claims were submitted to the government for physical therapy services and other services that were not provided and/or were not medically necessary. The indictment states that the defendants used false medical documents to support the fraudulent claims.
Continue reading ›