2009-The Wall Street Journal reported that Richard Scott, "the former chief executive of HCA Inc," had formed the non-profit organization Conservatives for Patients' Rights as part of a "lobbying campaign to derail or modify" President Obama's health care proposals, but failed to note that Scott resigned from HCA in 1997 amid a federal investigation into the company's Medicare billing, physician recruiting, and home-care practices. HCA eventually pleaded guilty to fraud charges and paid approximately $1.7 billion in fines and penalties.
THURSDAY, JUNE 26, 2003; WWW.USDOJ.GOV;
WASHINGTON, D.C.
HCA Inc. (formerly known as Columbia/HCA and HCA - The Healthcare Company)
LARGEST HEALTH CARE FRAUD CASE IN U.S. HISTORY SETTLED; HCA INVESTIGATION NETS RECORD TOTAL OF $1.7 BILLION
Note: Hospital Corporation of America (HCA) was acquired by Columbia in 1994.
Why does this matter? The wrath of Richard Scott and friends is to this day still affecting main street America.
Who is Richard Scott? More importantly, who are Richard Rainwater & his wife, Darla Moore?
Before GW Bush was affiliated with Richard Rainwater may I remind you-Richard Scott was the ex-partner of Richard Rainwater with Columbia Homecare Group.
In 1997, Fortune magazine ran a cover story on successful business executive Darla Moore, titled "The Toughest Babe in Business."….She created the corporate bankruptcy finance tool, DIP, debtor in possession while at a Wall Street bank.
Columbia/HCA is a partnership of financier Richard Rainwater of Ft. Worth and lawyer Richard Scott. Scott was recently terminated by Darla Moore, the wife of Richard Rainwater and according to Fortune Magazine, the “Toughest Babe in the Business”.
As part of Richard Scott's severance package from Columbia he was paid $5.13 million and given a five year consulting contract at $950,000 per year. His former president, Mr. Vandewater was paid $3.24 million and given a five year consulting contract at $600,000 per year.
Both former executives are allowed to exercise vested stock options within 90 days. Scott owned or had options on 9.4 million shares of Columbia stock as of May, 1997. Vanderwater controlled 617,375 shares. Columbia has agreed to pay attorney's fees and any fines or judgments against the two. In addition, the two former executives get their office expenses paid for two years including secretaries. If they move within the next two years their moving expenses are paid by Columbia/HCA. Not a bad deal for someone who just got fired! Wow! What a surprise!
Rainwater also owned a large stake in Magellan Health Care which controls Charter Medical. Magellan, run by Darla Moore, is the largest network of psychiatric hospitals in the country. They are becoming more and more involved in obtaining government money for services formerly not covered as health care, according to Fortune Magazine.
Columbia just decided to sell its home health-care business and its head announced she is forming a company of her own. The home care unit is valued at $ 450 million. At least two other top executives of Columbia have resigned.
On Sept 8, 1998 Standard and Poors downgraded the bonds of Charter/HCA to negative bases on poor earnings. Looks like Rainwater and his Crescent Cos' have finally stumbled. One source within the company said it would be a long while before any new high-ticket acquisitions would take place. A previous deal with Prudential is in danger of being jettisoned.
Why does this matter- September 8, 1998?
We must review the case that just ended in December 2008 in Columbus Ohio with National Century Financial Enterprises which was headquartered in Dublin, Ohio. It began in 2002 when FBI raided the offices of National Century Financial Enterprises Dublin, Ohio
National Century Financial Enterprises:
“This case is one of the largest corporate fraud investigations involving a privately held company headquartered in small town America,” said Assistant Director Kenneth W. Kaiser of the FBI Criminal Investigative Division.
Just a reminder relating to the need for ‘healthcare financial service’ i.e. (NCFE) National Century Financial Enterprises; home health - which was struggling under the Balanced Budget Act of 1997; about 1,400 agencies closed nationwide in 1998.
3/9/2006
10-K SEC Filing, filed by J P MORGAN CHASE & CO on 3/9/2006: Enron litigation. JPMorgan Chase and certain of its officers and directors are involved in a number of lawsuits arising out of its banking relationships with Enron Corp.; the three current or former Firm employees are sued in their roles as former members of NCFE's board of directors
Just a reminder relating to the need for ‘healthcare financial service’ i.e. (NCFE) National Century Financial Enterprises; home health - which is struggling under the Balanced Budget Act of 1997; about 1,400 agencies closed nationwide in 1998.
March 26, 2008; By Jodi Andes; THE COLUMBUS DISPATCH
Nine other executives have been convicted or pleaded guilty in National Century's collapse. Only Poulsen and executive James Happ still await trial.
Only Poulsen and executive James Happ still await trial?
December 18, 2008 - The ONE AND ONLY acquittal; James K Happ!
By Jodi Andes THE COLUMBUS DISPATCH
Prosecutors' case fell short, juror says National Century fraud case produces 1st acquittal ; The "not guilty" verdicts that came in federal court yesterday were not so much a vindication of the last National Century Financial Enterprises executive to stand trial, a juror said.
Instead, they were more a belief that federal prosecutors had not done their job, the juror said after he and his fellow jurors acquitted James K. Happ of five counts after 12 hours of deliberation. "He very well may have been guilty. A lot of us thought he was," said the juror who wouldn't give his name. "But if he was, you gotta have the evidence."
To unravel this massive fraud that links FRAUD intertwined with Healthcare, Corporate Bankruptcy and Financial Institutes we can go back to 1979-but I will start with 1997:
July 26, 1997, Los Angeles Times article:
A controversial deal maker whose hard-nosed business tactics have reshaped the medical industry resigned Friday as scandal engulfed the vast hospital empire he had assembled over the last decade.
Richard Scott -- sometimes called "the Bill Gates of health care" -- quit as chairman of Columbia/HCA Healthcare Corp. amid a massive federal investigation into the Medicare billing, physician recruiting and home-care practices of the nation's largest for-profit health care company.
Though the federal probe focuses on other states, Columbia's aggressive expansion has included California, where the company operates 15 hospitals, 13 surgery centers and 10 home-health-care agencies, employing more than 11,000.
July 26, 1997- Where was James K Happ?
SEC Form September 9, 2003 Annual Meeting of Stockholders, Med Diversified Inc.:
Previously, Mr. Happ served for three years as executive vice president of NCFE, during which time he restructured the servicer department to improve operational performance and accelerated the utilization of technology to increase operational efficiency.
Mr. Happ also served as chief financial officer of the Dallas-based Columbia Homecare Group, Inc.,
… In this role, he directed the company through the challenging reimbursement climate, known as the interim payment system, and participated in the divestiture of all of Columbia/HCA's home care operations
Who purchased the majority of this divestiture in late ’98 & early ’99?
Medshares, Inc. of Memphis, Tennessee
Who financed this divestiture?
National Century Financial Enterprises, Inc.
Sherry Gibson pleaded guilty in 2003 to a lesser charge of securities fraud in exchange for helping prosecutors. Gibson told jurors she told investors "absolutely nothing" about National Century's practices of advancing cash to Memphis, Tenn.-based Medshares, a home-health care provider… July 30, 1999 MEDSHARES INC: Health Care Services Provider Files Chapter 11
Showing posts with label Financial Services in America. Show all posts
Showing posts with label Financial Services in America. Show all posts
Thursday, May 28, 2009
Largest corporate fraud investigations
December 2008, are you aware of the largest private financial fraud case in our country's history?
National Century Financial Enterprises:
“This case is one of the largest corporate fraud investigations involving a privately held company headquartered in small town America,” said Assistant Director Kenneth W. Kaiser of the FBI Criminal Investigative Division.
3/9/2006- 10-K SEC Filing, filed by J P MORGAN CHASE & CO on 3/9/2006: Enron litigation. JPMorgan Chase and certain of its officers and directors are involved in a number of lawsuits arising out of its banking relationships with Enron Corp.; the three current or former Firm employees are sued in their roles as former members of NCFE's board of directors...
Just a reminder relating to the need for ‘healthcare financial service’ i.e. (NCFE) National Century Financial Enterprises; home health - which was struggling under the Balanced Budget Act of 1997; about 1,400 agencies closed nationwide in 1998.
Guess one of the publicly traded healthcare companies that were involved in this ‘private’ financial institution that was used for the divestiture of the losing assets of the home healthcare units?
On Sept 8, 1998 Standard and Poors downgraded the bonds of Charter/HCA to negative bases on poor earnings. Looks like Rainwater and his Crescent Cos' have finally stumbled.
Columbia just decided to sell its home health-care business and its head announced she is forming a company of her own. The home care unit is valued at $ 450 million. At least two other top executives of Columbia have resigned.
March 26, 2008
By Jodi Andes
THE COLUMBUS DISPATCH
Nine other executives have been convicted or pleaded guilty in National Century's collapse. Only Poulsen and executive James Happ still await trial.
Only Poulsen and executive James Happ still await trial?
December 18, 2008 - The ONE AND ONLY acquittal; James K Happ!
By Jodi Andes
THE COLUMBUS DISPATCH
Prosecutors' case fell short, juror says ….Instead, they were more a belief that federal prosecutors had not done their job, the juror said after he and his fellow jurors acquitted James K. Happ of five counts after 12 hours of deliberation. "He very well may have been guilty. A lot of us thought he was," said the juror who wouldn't give his name. "But if he was, you gotta have the evidence."
Who was James K Happ?
SEC Form September 9, 2003 Annual Meeting of Stockholders, Med Diversified Inc.:
Previously, Mr. Happ served for three years as executive vice president of NCFE, during which time he restructured the servicer department to improve operational performance and accelerated the utilization of technology to increase operational efficiency.
Mr. Happ also served as chief financial officer of the Dallas-based Columbia Homecare Group, Inc.,
… In this role, he directed the company through the challenging reimbursement climate, known as the interim payment system, and participated in the divestiture of all of Columbia/HCA's home care operations
Who purchased the majority of this divestiture in late ’98 & early ’99?
Medshares, Inc. of Memphis, Tennessee
Who financed this divestiture?
National Century Financial Enterprises, Inc.
Sherry Gibson pleaded guilty in 2003 to a lesser charge of securities fraud in exchange for helping prosecutors. Gibson told jurors she told investors "absolutely nothing" about National Century's practices of advancing cash to Memphis, Tenn.-based Medshares, a home-health care provider… July 30, 1999
1999- Who filed the largest corporate bankruptcy in the Western Tennessee Federal Bankrutpcy Court?
Medshares, Inc. of Memphis, Tennessee
National Century Financial Enterprises:
“This case is one of the largest corporate fraud investigations involving a privately held company headquartered in small town America,” said Assistant Director Kenneth W. Kaiser of the FBI Criminal Investigative Division.
3/9/2006- 10-K SEC Filing, filed by J P MORGAN CHASE & CO on 3/9/2006: Enron litigation. JPMorgan Chase and certain of its officers and directors are involved in a number of lawsuits arising out of its banking relationships with Enron Corp.; the three current or former Firm employees are sued in their roles as former members of NCFE's board of directors...
Just a reminder relating to the need for ‘healthcare financial service’ i.e. (NCFE) National Century Financial Enterprises; home health - which was struggling under the Balanced Budget Act of 1997; about 1,400 agencies closed nationwide in 1998.
Guess one of the publicly traded healthcare companies that were involved in this ‘private’ financial institution that was used for the divestiture of the losing assets of the home healthcare units?
On Sept 8, 1998 Standard and Poors downgraded the bonds of Charter/HCA to negative bases on poor earnings. Looks like Rainwater and his Crescent Cos' have finally stumbled.
Columbia just decided to sell its home health-care business and its head announced she is forming a company of her own. The home care unit is valued at $ 450 million. At least two other top executives of Columbia have resigned.
March 26, 2008
By Jodi Andes
THE COLUMBUS DISPATCH
Nine other executives have been convicted or pleaded guilty in National Century's collapse. Only Poulsen and executive James Happ still await trial.
Only Poulsen and executive James Happ still await trial?
December 18, 2008 - The ONE AND ONLY acquittal; James K Happ!
By Jodi Andes
THE COLUMBUS DISPATCH
Prosecutors' case fell short, juror says ….Instead, they were more a belief that federal prosecutors had not done their job, the juror said after he and his fellow jurors acquitted James K. Happ of five counts after 12 hours of deliberation. "He very well may have been guilty. A lot of us thought he was," said the juror who wouldn't give his name. "But if he was, you gotta have the evidence."
Who was James K Happ?
SEC Form September 9, 2003 Annual Meeting of Stockholders, Med Diversified Inc.:
Previously, Mr. Happ served for three years as executive vice president of NCFE, during which time he restructured the servicer department to improve operational performance and accelerated the utilization of technology to increase operational efficiency.
Mr. Happ also served as chief financial officer of the Dallas-based Columbia Homecare Group, Inc.,
… In this role, he directed the company through the challenging reimbursement climate, known as the interim payment system, and participated in the divestiture of all of Columbia/HCA's home care operations
Who purchased the majority of this divestiture in late ’98 & early ’99?
Medshares, Inc. of Memphis, Tennessee
Who financed this divestiture?
National Century Financial Enterprises, Inc.
Sherry Gibson pleaded guilty in 2003 to a lesser charge of securities fraud in exchange for helping prosecutors. Gibson told jurors she told investors "absolutely nothing" about National Century's practices of advancing cash to Memphis, Tenn.-based Medshares, a home-health care provider… July 30, 1999
1999- Who filed the largest corporate bankruptcy in the Western Tennessee Federal Bankrutpcy Court?
Medshares, Inc. of Memphis, Tennessee
Friday, May 8, 2009
Doctor pleads guilty to health care fraud- Illinois, Elmwood Park
Elmwood Park, Illinois
Doctor pleads guilty to health care fraud
May 7, 2009 11:03 PM
A 47-year-old Elmwood Park doctor pleaded guilty this afternoon to federal health care fraud charges, admitting he submitted hundreds of thousands of dollars in false health insurance claims, the Chicago Sun-Times reports.
Dr. Otto Garcia Montenegro admitted he submitted about $500,000 worth of phony insurance claims between 2003 and 2007.
May 7, 2009
BY NATASHA KORECKI Federal Courts Reporter
An Elmwood Park doctor pleaded guilty this afternoon to federal health care fraud charges, admitting he submitted hundreds of thousands of dollars in false health insurance claims.
Dr. Otto Garcia Montenegro, 47, admitted he submitted about $500,000 worth of phony insurance claims between 2003 and 2007.
He did it while he worked as a general practice physician out of his own clinic, Montenegro Clinic Inc. Federal prosecutors say he treated dozens of patients each week.
Prosecutors said he created hundreds of phony bills and charged insurers for visits and treatments that never happened.
“He is extremely remorseful for his conduct, the extent of which will be revealed at sentencing,” said his attorney, Lawrence Beaumont.
Montenegro is scheduled to be sentenced Aug. 20.
The case was investigated by the FBI and the Labor Department’s Office of Inspector General.
Doctor pleads guilty to health care fraud
May 7, 2009 11:03 PM
A 47-year-old Elmwood Park doctor pleaded guilty this afternoon to federal health care fraud charges, admitting he submitted hundreds of thousands of dollars in false health insurance claims, the Chicago Sun-Times reports.
Dr. Otto Garcia Montenegro admitted he submitted about $500,000 worth of phony insurance claims between 2003 and 2007.
May 7, 2009
BY NATASHA KORECKI Federal Courts Reporter
An Elmwood Park doctor pleaded guilty this afternoon to federal health care fraud charges, admitting he submitted hundreds of thousands of dollars in false health insurance claims.
Dr. Otto Garcia Montenegro, 47, admitted he submitted about $500,000 worth of phony insurance claims between 2003 and 2007.
He did it while he worked as a general practice physician out of his own clinic, Montenegro Clinic Inc. Federal prosecutors say he treated dozens of patients each week.
Prosecutors said he created hundreds of phony bills and charged insurers for visits and treatments that never happened.
“He is extremely remorseful for his conduct, the extent of which will be revealed at sentencing,” said his attorney, Lawrence Beaumont.
Montenegro is scheduled to be sentenced Aug. 20.
The case was investigated by the FBI and the Labor Department’s Office of Inspector General.
Tuesday, April 28, 2009
Bigger then Enron- Richard Scott
New Commercial for Richard Scott
Conservatives for Patients' Rights
Remember who Richard is:
The Epitome of Fraud- Waste-Abuse:
2009 - WSJ reported that Richard Scott, "the former CEO of HCA Inc," had formed the non-profit organization-
Conservatives for Patients' Rights
as part of a "lobbying campaign to derail or modify" health care reform.
non-profit? What a joke.
Not this thief: THURSDAY, JUNE 26, 2003; WWW.USDOJ.GOV;
HCA Inc. (formerly known as Columbia/HCA and HCA - The Healthcare Company)
LARGEST HEALTH CARE FRAUD CASE IN U.S. HISTORY SETTLED; HCA INVESTIGATION NETS RECORD TOTAL OF $1.7 BILLION
Note: Hospital Corporation of America (HCA) was acquired by Columbia in 1994.
He features a doctor from England. I wonder why?
HCA International
242 Marylebone Road London, NW1 6JL
News & Events Careers Sitemap Legal
2008-
Welcome to London's leading private hospitals
Text size: A A
With six world-class hospitals and four outpatient medical centres in London, we are the private hospitals of choice for the successful treatment of serious and complex medical conditions. We also achieve some of the highest patient outcome and survival rates in the UK and our hospitals are virtually MRSA-free*
Conservatives for Patients' Rights
Remember who Richard is:
The Epitome of Fraud- Waste-Abuse:
2009 - WSJ reported that Richard Scott, "the former CEO of HCA Inc," had formed the non-profit organization-
Conservatives for Patients' Rights
as part of a "lobbying campaign to derail or modify" health care reform.
non-profit? What a joke.
Not this thief: THURSDAY, JUNE 26, 2003; WWW.USDOJ.GOV;
HCA Inc. (formerly known as Columbia/HCA and HCA - The Healthcare Company)
LARGEST HEALTH CARE FRAUD CASE IN U.S. HISTORY SETTLED; HCA INVESTIGATION NETS RECORD TOTAL OF $1.7 BILLION
Note: Hospital Corporation of America (HCA) was acquired by Columbia in 1994.
He features a doctor from England. I wonder why?
HCA International
242 Marylebone Road London, NW1 6JL
News & Events Careers Sitemap Legal
2008-
Welcome to London's leading private hospitals
Text size: A A
With six world-class hospitals and four outpatient medical centres in London, we are the private hospitals of choice for the successful treatment of serious and complex medical conditions. We also achieve some of the highest patient outcome and survival rates in the UK and our hospitals are virtually MRSA-free*
Tuesday, March 3, 2009
HEALTHSOUTH....LARGEST in the NATION!!!! OMG!
BIRMINGHAM, Ala., March 2 /PRNewswire-FirstCall/ -- HealthSouth Corporation (NYSE: HLS) today announced it will participate in the Barclays Capital Global Healthcare Conference on March 10-11, 2009, at the Loews Miami Beach Hotel in South Beach, Fla.
HealthSouth President and Chief Executive Officer Jay Grinney and Executive Vice President and Chief Financial Officer John Workman will be speaking on Tuesday, March 10, at 9:30 a.m. EDT. The presentation will be webcast live and will be available at http://investor.healthsouth.com by clicking on an available link.
OMG!! ANOTHER LARGEST in the NATION!!!!
Pay attention AMERICANS!
About HealthSouth
HealthSouth is the nation's largest provider of inpatient rehabilitative healthcare services. Operating in 26 states across the country and in Puerto Rico, HealthSouth serves patients through its network of inpatient rehabilitation hospitals, long-term acute care hospitals, outpatient rehabilitation satellites, and home health agencies. HealthSouth strives to be the nation's preeminent provider of inpatient rehabilitative healthcare services and can be found on the Web at www.healthsouth.com.
Media Contact
Andy Brimmer, 205-410-2777
Investor Relations Contact
Mary Ann Arico, 205-969-6175
maryann.arico@healthsouth.com
HealthSouth President and Chief Executive Officer Jay Grinney and Executive Vice President and Chief Financial Officer John Workman will be speaking on Tuesday, March 10, at 9:30 a.m. EDT. The presentation will be webcast live and will be available at http://investor.healthsouth.com by clicking on an available link.
OMG!! ANOTHER LARGEST in the NATION!!!!
Pay attention AMERICANS!
About HealthSouth
HealthSouth is the nation's largest provider of inpatient rehabilitative healthcare services. Operating in 26 states across the country and in Puerto Rico, HealthSouth serves patients through its network of inpatient rehabilitation hospitals, long-term acute care hospitals, outpatient rehabilitation satellites, and home health agencies. HealthSouth strives to be the nation's preeminent provider of inpatient rehabilitative healthcare services and can be found on the Web at www.healthsouth.com.
Media Contact
Andy Brimmer, 205-410-2777
Investor Relations Contact
Mary Ann Arico, 205-969-6175
maryann.arico@healthsouth.com
Thursday, December 18, 2008
Federal agents raid convalescent home headquarters
Federal agents raid convalescent home headquarters
By TONY SAAVEDRA and RONALD CAMPBELL
The Orange County Register
Wednesday, December 17, 2008
Federal agents on Wednesday raided the Mission Viejo headquarters of a national chain of convalescent homes in what company officials said appears to be an investigation into suspected Medicare fraud.
Officials from Ensign Group Inc. said the Department of Justice has been investigating the company since 2006. Greg Stapley, corporate vice president and legal counsel, said the firm may have inherited the problem from its strategy of acquiring troubled group homes.
"We take in a lot of facilities that are in trouble and turn them around," Stapley said.
The U.S. Attorney's Office in Los Angeles could not be reached for comment.
Founded in 1999, The Ensign Group owns and leases 61 convalescent centers in six states, including three in Orange County: Palm Terrace Health Care Center in Laguna Woods; Sea Cliff Health Care Center in Huntington Beach; and Victoria Health Care Center in Costa Mesa. Ensign has a total of 7,400 beds and raised $411 million in revenue in 2007.
According to documents filed by the company with the Security Exchange Commission, the Department of Justice has been looking into the billing and reimbursement practice of some of the firm's subsidiaries.
In 2007, federal attorneys in Los Angeles subpoenaed the firm's bank documents, but later rescinded the demand. The subpoena asked for financial transactions involving Ensign, 10 subsidiaries, an outside investor group and some company officers, said the SEC report.
Later that year, the U.S. Attorney's office sought a meeting with an Ensign employee regarding an investigation into Medicare claims with the federal Department of Health and Human Services Office. The request for a meeting was rescinded, according to the SEC report.
In December 2007, the firm's accounting contractor was subpoenaed and, later, another employee was contacted.
"We believe that the U.S. Attorney may be conducting parallel criminal, civil and administrative investigations involving the Ensign Group and one or more of our skilled nursing facilities," the company said in SEC documents.
The raid on Wednesday was the first formal confirmation of the federal probe.
In November 2006, the company conducted its own internal investigation into Medicare reimbursements and found that documentation was missing for $224,000 in Medicare claims, documents said. These claims have been reported to the federal government, according to SEC statements.
Contact the writer: tsaavedra@ocregister.com or 714-796-6930
By TONY SAAVEDRA and RONALD CAMPBELL
The Orange County Register
Wednesday, December 17, 2008
Federal agents on Wednesday raided the Mission Viejo headquarters of a national chain of convalescent homes in what company officials said appears to be an investigation into suspected Medicare fraud.
Officials from Ensign Group Inc. said the Department of Justice has been investigating the company since 2006. Greg Stapley, corporate vice president and legal counsel, said the firm may have inherited the problem from its strategy of acquiring troubled group homes.
"We take in a lot of facilities that are in trouble and turn them around," Stapley said.
The U.S. Attorney's Office in Los Angeles could not be reached for comment.
Founded in 1999, The Ensign Group owns and leases 61 convalescent centers in six states, including three in Orange County: Palm Terrace Health Care Center in Laguna Woods; Sea Cliff Health Care Center in Huntington Beach; and Victoria Health Care Center in Costa Mesa. Ensign has a total of 7,400 beds and raised $411 million in revenue in 2007.
According to documents filed by the company with the Security Exchange Commission, the Department of Justice has been looking into the billing and reimbursement practice of some of the firm's subsidiaries.
In 2007, federal attorneys in Los Angeles subpoenaed the firm's bank documents, but later rescinded the demand. The subpoena asked for financial transactions involving Ensign, 10 subsidiaries, an outside investor group and some company officers, said the SEC report.
Later that year, the U.S. Attorney's office sought a meeting with an Ensign employee regarding an investigation into Medicare claims with the federal Department of Health and Human Services Office. The request for a meeting was rescinded, according to the SEC report.
In December 2007, the firm's accounting contractor was subpoenaed and, later, another employee was contacted.
"We believe that the U.S. Attorney may be conducting parallel criminal, civil and administrative investigations involving the Ensign Group and one or more of our skilled nursing facilities," the company said in SEC documents.
The raid on Wednesday was the first formal confirmation of the federal probe.
In November 2006, the company conducted its own internal investigation into Medicare reimbursements and found that documentation was missing for $224,000 in Medicare claims, documents said. These claims have been reported to the federal government, according to SEC statements.
Contact the writer: tsaavedra@ocregister.com or 714-796-6930
Miami physician and nurse were sentenced today to 30 years and seven years in prison,
Prison Sentence One of the Longest Ever Received by a Physician in a Medicare Fraud Case
WASHINGTON, Dec. 17 /PRNewswire-USNewswire/ -- A Miami physician and nurse were sentenced today to 30 years and seven years in prison, respectively, in connection with their roles in an $11 million HIV infusion fraud scheme, Acting Assistant Attorney General Matthew Friedrich of the Criminal Division and U.S. Attorney R. Alexander Acosta of the Southern District of Florida announced. The 30-year prison sentence is one of the longest terms ever given to a physician in a federal Medicare fraud case.
Ana Alvarez-Jacinto, 54, and Sandra Mateos, 44, were sentenced today in U.S. District Court for the Southern District of Florida by Chief District Judge Federico Moreno. In addition to their prison sentences, Judge Moreno ordered both Alvarez-Jacinto and Mateos to serve three years of supervised release following their prison term and to pay $8,289,286 in restitution to the Medicare program.
Alvarez-Jacinto and Mateos were found guilty by a Miami jury on Oct. 17, 2008, after a two-week trial on one count of conspiracy to defraud the United States, to submit false claims, and to pay healthcare kickbacks, and one count of conspiracy to commit health care fraud. Alvarez-Jacinto was also convicted of three counts of submitting false claims to the Medicare program.
Evidence at trial established that the defendants worked at Saint Jude Rehab Center, Inc. (St. Jude), a clinic that purported to specialize in treating AIDS patients. Evidence at trial established that St. Jude was operated and owned by Carlos and Luis Benitez, and managed by convicted co-conspirators Aisa Perera and Mariela Rodriguez.
According to evidence presented at trial, in a five-month period between June and November 2003, Alvarez-Jacinto, with the assistance of Mateos, ordered hundreds of medically unnecessary HIV infusion treatments at the clinic. Evidence established that HIV positive Medicare patients were brought to the clinic by Carlos and Luis Benitez for the purpose of receiving cash payments in exchange for allowing the clinic to bill for unnecessary treatments. Testimony revealed that Mateos and other co-conspirators paid the patients cash kickbacks of approximately $150 per visit. After patients had been paid, they agreed to allow Alvarez-Jacinto and her co-conspirators to prescribe unnecessary infusion treatments. St. Jude then billed Medicare for approximately $11 million for the unnecessary services during that five-month period. For those claims, Medicare paid more than $8 million to St. Jude.
"This is a case in which a physician provided unneeded medical services in the form of infusions to actual 'patients' simply to bilk Medicare and make a fast buck," said Acting Assistant Attorney General Matthew Friedrich. "This sentence should send a clear message that health care providers who engage in fraud will not escape accountability because of their professional status."
"False billings to Medicare for services not delivered is a serious crime that depletes our limited Medicare dollars. Far worse, however, is when medical professionals like the doctor and nurse sentenced today, actually order and perform medically unnecessary treatments to pad bills and make more money. Such conduct is inexcusable and will be prosecuted," said U.S. Attorney R. Alexander Acosta.
"Medical professionals are considered respected members of the community, but when that trust is broken, they are not insulated from having to take responsibility for their criminal behavior," said Special Agent in Charge Jonathan I. Solomon of the FBI's Miami Office. "This case demonstrates that those who choose to commit health care fraud, regardless of their stature or position, will be held accountable for their actions "The Office of Inspector General is very pleased with today's sentencing and will continue to aggressively investigate those who defraud the Medicare system. This type of greed, at the expense of our most vulnerable citizens will not be tolerated," said Christopher B. Dennis, Special Agent in Charge of the U.S. Department of Health and Human Services, Office of Inspector General - Miami region.
After trial, advertising placed in El Nuevo Herald proclaimed Alvarez-Jacinto's innocence and a letter signed by the defendant contained in the advertisement urged members of the medical community to write to the court to support her release from prison. At sentencing, Chief District Judge Moreno found her trial testimony to be perjurious and enhanced her sentence for obstruction of justice.
Carlos Benitez, Luis Benitez and Jose Benitez, were indicted on June 11, 2008, for their role in an HIV infusion and money laundering scheme that totaled more than $100 million for claims submitted by St. Jude and other clinics. The indictment alleges that Carlos, Luis and Jose Benitez were the masterminds of a large-scale HIV infusion fraud operation throughout South Florida involving at least 11 clinics, including St. Jude, and that they laundered the proceeds of their crimes. All three Benitez brothers remain at large.
An indictment is merely a charge, and defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt.
This case was prosecuted by Senior Trial Attorney Charles E. Duross, and Trial Attorneys John K. Neal and Laura Perkins of the Criminal Division's Fraud Section. The case was investigated by the FBI and the Department of Health and Human Services, Office of the Inspector General.
The case was brought by the Medicare Fraud Strike Force (MFSF). The MFSF is a multi-agency team of federal, state and local prosecutors and agents designed to combat Medicare fraud. Strike force operations began in the Miami-area on March 1, 2007. The MFSF is led by Deputy Chief Kirk Ogrosky of the Criminal Division's Fraud Section in Washington, D.C., and the office of U.S. Attorney R. Alexander Acosta of the Southern District of Florida. Since the inception of MFSF operations in 2007, federal prosecutors have indicted 106 cases with 188 defendants in both Los Angeles and Miami. Collectively, these defendants fraudulently billed the Medicare program for more than half a billion dollars.
SOURCE U.S. Department of Justice
Copyright©2008 PR Newswire.
All rights reserved
WASHINGTON, Dec. 17 /PRNewswire-USNewswire/ -- A Miami physician and nurse were sentenced today to 30 years and seven years in prison, respectively, in connection with their roles in an $11 million HIV infusion fraud scheme, Acting Assistant Attorney General Matthew Friedrich of the Criminal Division and U.S. Attorney R. Alexander Acosta of the Southern District of Florida announced. The 30-year prison sentence is one of the longest terms ever given to a physician in a federal Medicare fraud case.
Ana Alvarez-Jacinto, 54, and Sandra Mateos, 44, were sentenced today in U.S. District Court for the Southern District of Florida by Chief District Judge Federico Moreno. In addition to their prison sentences, Judge Moreno ordered both Alvarez-Jacinto and Mateos to serve three years of supervised release following their prison term and to pay $8,289,286 in restitution to the Medicare program.
Alvarez-Jacinto and Mateos were found guilty by a Miami jury on Oct. 17, 2008, after a two-week trial on one count of conspiracy to defraud the United States, to submit false claims, and to pay healthcare kickbacks, and one count of conspiracy to commit health care fraud. Alvarez-Jacinto was also convicted of three counts of submitting false claims to the Medicare program.
Evidence at trial established that the defendants worked at Saint Jude Rehab Center, Inc. (St. Jude), a clinic that purported to specialize in treating AIDS patients. Evidence at trial established that St. Jude was operated and owned by Carlos and Luis Benitez, and managed by convicted co-conspirators Aisa Perera and Mariela Rodriguez.
According to evidence presented at trial, in a five-month period between June and November 2003, Alvarez-Jacinto, with the assistance of Mateos, ordered hundreds of medically unnecessary HIV infusion treatments at the clinic. Evidence established that HIV positive Medicare patients were brought to the clinic by Carlos and Luis Benitez for the purpose of receiving cash payments in exchange for allowing the clinic to bill for unnecessary treatments. Testimony revealed that Mateos and other co-conspirators paid the patients cash kickbacks of approximately $150 per visit. After patients had been paid, they agreed to allow Alvarez-Jacinto and her co-conspirators to prescribe unnecessary infusion treatments. St. Jude then billed Medicare for approximately $11 million for the unnecessary services during that five-month period. For those claims, Medicare paid more than $8 million to St. Jude.
"This is a case in which a physician provided unneeded medical services in the form of infusions to actual 'patients' simply to bilk Medicare and make a fast buck," said Acting Assistant Attorney General Matthew Friedrich. "This sentence should send a clear message that health care providers who engage in fraud will not escape accountability because of their professional status."
"False billings to Medicare for services not delivered is a serious crime that depletes our limited Medicare dollars. Far worse, however, is when medical professionals like the doctor and nurse sentenced today, actually order and perform medically unnecessary treatments to pad bills and make more money. Such conduct is inexcusable and will be prosecuted," said U.S. Attorney R. Alexander Acosta.
"Medical professionals are considered respected members of the community, but when that trust is broken, they are not insulated from having to take responsibility for their criminal behavior," said Special Agent in Charge Jonathan I. Solomon of the FBI's Miami Office. "This case demonstrates that those who choose to commit health care fraud, regardless of their stature or position, will be held accountable for their actions "The Office of Inspector General is very pleased with today's sentencing and will continue to aggressively investigate those who defraud the Medicare system. This type of greed, at the expense of our most vulnerable citizens will not be tolerated," said Christopher B. Dennis, Special Agent in Charge of the U.S. Department of Health and Human Services, Office of Inspector General - Miami region.
After trial, advertising placed in El Nuevo Herald proclaimed Alvarez-Jacinto's innocence and a letter signed by the defendant contained in the advertisement urged members of the medical community to write to the court to support her release from prison. At sentencing, Chief District Judge Moreno found her trial testimony to be perjurious and enhanced her sentence for obstruction of justice.
Carlos Benitez, Luis Benitez and Jose Benitez, were indicted on June 11, 2008, for their role in an HIV infusion and money laundering scheme that totaled more than $100 million for claims submitted by St. Jude and other clinics. The indictment alleges that Carlos, Luis and Jose Benitez were the masterminds of a large-scale HIV infusion fraud operation throughout South Florida involving at least 11 clinics, including St. Jude, and that they laundered the proceeds of their crimes. All three Benitez brothers remain at large.
An indictment is merely a charge, and defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt.
This case was prosecuted by Senior Trial Attorney Charles E. Duross, and Trial Attorneys John K. Neal and Laura Perkins of the Criminal Division's Fraud Section. The case was investigated by the FBI and the Department of Health and Human Services, Office of the Inspector General.
The case was brought by the Medicare Fraud Strike Force (MFSF). The MFSF is a multi-agency team of federal, state and local prosecutors and agents designed to combat Medicare fraud. Strike force operations began in the Miami-area on March 1, 2007. The MFSF is led by Deputy Chief Kirk Ogrosky of the Criminal Division's Fraud Section in Washington, D.C., and the office of U.S. Attorney R. Alexander Acosta of the Southern District of Florida. Since the inception of MFSF operations in 2007, federal prosecutors have indicted 106 cases with 188 defendants in both Los Angeles and Miami. Collectively, these defendants fraudulently billed the Medicare program for more than half a billion dollars.
SOURCE U.S. Department of Justice
Copyright©2008 PR Newswire.
All rights reserved
Friday, December 5, 2008
HHS and DOJ Health Care Fraud and Abuse Control Program
HHS and DOJ Health Care Fraud and Abuse Control Program
Annual Report For FY 2007
The Department of Health and Human Services And The Department of Justice Health Care Fraud and Abuse Control Program
Annual Report For FY 2007,
November 2008
"The Health Insurance Portability and Accountability Act of 1996 (HIPAA) established a national Health Care Fraud and Abuse Control Program (HCFAC or the Program), under the joint direction of the Attorney General and the Secretary of the Department of Health and Human Services (HHS)1, acting through the Department’s Inspector General (HHS/OIG), designed to coordinate Federal, state and local law enforcement activities with respect to health care fraud and abuse. In its eleventh year of operation, the Program’s continued success again confirms the soundness of a collaborative approach to identify and prosecute the most egregious instances of health care fraud, to prevent future fraud or abuse, and to protect program beneficiaries."
Permanent Link Topic(s): E-Government, Government Documents
Annual Report For FY 2007
The Department of Health and Human Services And The Department of Justice Health Care Fraud and Abuse Control Program
Annual Report For FY 2007,
November 2008
"The Health Insurance Portability and Accountability Act of 1996 (HIPAA) established a national Health Care Fraud and Abuse Control Program (HCFAC or the Program), under the joint direction of the Attorney General and the Secretary of the Department of Health and Human Services (HHS)1, acting through the Department’s Inspector General (HHS/OIG), designed to coordinate Federal, state and local law enforcement activities with respect to health care fraud and abuse. In its eleventh year of operation, the Program’s continued success again confirms the soundness of a collaborative approach to identify and prosecute the most egregious instances of health care fraud, to prevent future fraud or abuse, and to protect program beneficiaries."
Permanent Link Topic(s): E-Government, Government Documents
If only there were also programs like this in developed countries.
Monday, December 01, 2008
Two Important Resources Last month, I was fortunate to be able to attend the 13th International Anti-Corruption Conference in Athens, Greece, where I learned about two important additions to our resources relevant to the issues discussed on Health Care Renewal, specifically to improving integrity and transparency to the manufacture, promotion, and use of pharmaceuticals.
The Medicines Transparency AllianceFormed this year, this group seeks to bring "together at both the international and national levels, a diverse group of people with an interest in the pharmaceutical sector (stakeholders) to find ways to improve information flows, and increase transparency and accountability about the selection, regulation, procurement, sale, distribution and use of medicines in developing countries. By doing so, MeTA will improve how decisions are made about medicines, improve the way they are purchased and supplied, encourage innovative and responsible business practices, and increase the voice of patients and consumers." The Alliance will be focused mainly on developing countries, so that "when a country implements MeTA, it makes a commitment to progressively disclose a standard set of core data covering the quality, availability, price and promotion of medicines. This commitment also includes fully involving civil society, business and other stakeholders to work together to generate, disclose, debate and use these data to help address problems in the pharmaceutical market."
The Alliance has launched programs in Peru and Ghana, and plans to launch programs in Kyrgyzstan and Jordan.
The World Health Organization (WHO) Good Governance for Medicines Programme
This program has been in operation for several years, but seems to have a new and improved web-site. The site notes "Theft, extortion and abuse …the US$ 3 trillion-plus spent on health services worldwide each year are an obvious target for corruption. In fact, Transparency International estimates that 10 to 25 % of global public health procurement spending is siphoned off and stolen. Life-saving resources are being snatched away from the millions of people that need them most. The pharmaceutical sector, with its US$ 600 billion-plus global market value, is vulnerable to fraud." The goal of the programme "is to improve this situation. Guided by WHO’s Medicines Strategy 2004-2007 and launched in late 2004, the programme is raising awareness of abuse in the public pharmaceutical sector and promoting good governance. Its ultimate aim is to ensure that essential medicines reach people - not the black market."
If only there were also programs like this in developed countries.
Labels: Medicines Transparency Alliance, pharmaceuticals, WHO Good Governance for Medicines Programme
posted by Roy M. Poses MD at 11:42 AM
Links to this post
Two Important Resources Last month, I was fortunate to be able to attend the 13th International Anti-Corruption Conference in Athens, Greece, where I learned about two important additions to our resources relevant to the issues discussed on Health Care Renewal, specifically to improving integrity and transparency to the manufacture, promotion, and use of pharmaceuticals.
The Medicines Transparency AllianceFormed this year, this group seeks to bring "together at both the international and national levels, a diverse group of people with an interest in the pharmaceutical sector (stakeholders) to find ways to improve information flows, and increase transparency and accountability about the selection, regulation, procurement, sale, distribution and use of medicines in developing countries. By doing so, MeTA will improve how decisions are made about medicines, improve the way they are purchased and supplied, encourage innovative and responsible business practices, and increase the voice of patients and consumers." The Alliance will be focused mainly on developing countries, so that "when a country implements MeTA, it makes a commitment to progressively disclose a standard set of core data covering the quality, availability, price and promotion of medicines. This commitment also includes fully involving civil society, business and other stakeholders to work together to generate, disclose, debate and use these data to help address problems in the pharmaceutical market."
The Alliance has launched programs in Peru and Ghana, and plans to launch programs in Kyrgyzstan and Jordan.
The World Health Organization (WHO) Good Governance for Medicines Programme
This program has been in operation for several years, but seems to have a new and improved web-site. The site notes "Theft, extortion and abuse …the US$ 3 trillion-plus spent on health services worldwide each year are an obvious target for corruption. In fact, Transparency International estimates that 10 to 25 % of global public health procurement spending is siphoned off and stolen. Life-saving resources are being snatched away from the millions of people that need them most. The pharmaceutical sector, with its US$ 600 billion-plus global market value, is vulnerable to fraud." The goal of the programme "is to improve this situation. Guided by WHO’s Medicines Strategy 2004-2007 and launched in late 2004, the programme is raising awareness of abuse in the public pharmaceutical sector and promoting good governance. Its ultimate aim is to ensure that essential medicines reach people - not the black market."
If only there were also programs like this in developed countries.
Labels: Medicines Transparency Alliance, pharmaceuticals, WHO Good Governance for Medicines Programme
posted by Roy M. Poses MD at 11:42 AM
Links to this post
Court approves Medicare freeze on payments to Miami home healthcare companies
Medicare will continue to suspend payments to Miami home healthcare agencies suspected of fraud, according to a November 24 Miami Herald article.
A federal judge ruled Medicare’s refusal to pay reimbursement to companies suspected of overcharging for diabetic and other services, which began in October, is reasonable and appropriate.
A home healthcare company sued Medicare following the initial announcement claiming that the program was beyond Medicare’s scope of authority.
According to the article, Medicare estimates it spends $1.3 billion of its $16.5 billion national home healthcare budget on companies based in Miami-Dade County.
Miami Herald article.
By: Compliance Monitor
December 1st, 2008
A federal judge ruled Medicare’s refusal to pay reimbursement to companies suspected of overcharging for diabetic and other services, which began in October, is reasonable and appropriate.
A home healthcare company sued Medicare following the initial announcement claiming that the program was beyond Medicare’s scope of authority.
According to the article, Medicare estimates it spends $1.3 billion of its $16.5 billion national home healthcare budget on companies based in Miami-Dade County.
Miami Herald article.
By: Compliance Monitor
December 1st, 2008
Condell, the largest health care provider in Lake County, Ill., $36 Million Settlement After Self-Reporting Possible Health-Care Fraud
Condell Health Network and Medical Center to Pay $36 Million Settlement After Self-Reporting Possible Health-Care Fraud
December 1, 2008
Condell Health Network and Medical Center to Pay $36 Million Settlement After Self-Reporting Possible Health-Care FraudCondell Health Network, parent corporation of Condell Medical Center, a 283-bed hospital in Libertyville - after voluntarily disclosing that it received improper Medicare and Medicaid payments - has agreed without litigation to pay the United States and the State of Illinois$36 million as a result of filing false claims for reimbursement, announced Patrick J. Fitzgerald, U.S. Attorney for the Northern District of Illinois. Condell, the largest health care provider in Lake County, Ill., made the voluntary disclosure earlier this year while in the process of being acquired by Advocate Health Care, of Oak Brook, Ill., which was scheduled to be completed today. Full release
Posted by Admin at 02:56 PM
http://www.newsunfiltered.com/archives/2008/12/condell_health.html
December 1, 2008
Condell Health Network and Medical Center to Pay $36 Million Settlement After Self-Reporting Possible Health-Care FraudCondell Health Network, parent corporation of Condell Medical Center, a 283-bed hospital in Libertyville - after voluntarily disclosing that it received improper Medicare and Medicaid payments - has agreed without litigation to pay the United States and the State of Illinois$36 million as a result of filing false claims for reimbursement, announced Patrick J. Fitzgerald, U.S. Attorney for the Northern District of Illinois. Condell, the largest health care provider in Lake County, Ill., made the voluntary disclosure earlier this year while in the process of being acquired by Advocate Health Care, of Oak Brook, Ill., which was scheduled to be completed today. Full release
Posted by Admin at 02:56 PM
http://www.newsunfiltered.com/archives/2008/12/condell_health.html
Wednesday, November 12, 2008
Healthcare fraud probes given more resources
Posted: November 11, 2008 - 3:00 pm EDT
The Justice Department’s inspector general found that U.S. attorneys directed more attorney hours toward healthcare fraud, firearms and organized crime than their offices were allocated, while extra positions Congress funded for counterterrorism went unfilled.Offices in large cities were most likely to dedicate more attorney hours to healthcare fraud, according to an audit report examining the resource management of the Justice Department’s 94 U.S. attorneys’ offices. The offices in Baltimore; Dallas; Detroit; the Eastern District of New York, which includes Brooklyn and Queens; Houston; Los Angeles; Miami; and Washington each dedicated two to five times their allocated number of full-time employees for healthcare.
Beginning in fiscal 2006, Congress allocated an additional 43 full-time-equivalent positions to counterterrorism but the inspector general found roughly the same number of attorneys with that focus through 2007 as in 2003. The Executive Office for U.S. Attorneys told auditors that the numbers were partially a result of the timing of the appropriations, inaccurate time reporting by attorneys and fewer terrorism matters referred to the offices than in previous years. Director Kenneth Melson, in a response to the inspector general, notes that U.S. attorneys are appointed by the president and are “afforded significant discretion to manage his or her office according to locally perceived priorities and needs.”
The report, however, finds fault with the data relied on to make decisions and with individual attorney evaluations that are performed infrequently because of budget constraints. -- by Gregg Blesch
Posted: November 11, 2008 - 3:00 pm EDT
The Justice Department’s inspector general found that U.S. attorneys directed more attorney hours toward healthcare fraud, firearms and organized crime than their offices were allocated, while extra positions Congress funded for counterterrorism went unfilled.Offices in large cities were most likely to dedicate more attorney hours to healthcare fraud, according to an audit report examining the resource management of the Justice Department’s 94 U.S. attorneys’ offices. The offices in Baltimore; Dallas; Detroit; the Eastern District of New York, which includes Brooklyn and Queens; Houston; Los Angeles; Miami; and Washington each dedicated two to five times their allocated number of full-time employees for healthcare.
Beginning in fiscal 2006, Congress allocated an additional 43 full-time-equivalent positions to counterterrorism but the inspector general found roughly the same number of attorneys with that focus through 2007 as in 2003. The Executive Office for U.S. Attorneys told auditors that the numbers were partially a result of the timing of the appropriations, inaccurate time reporting by attorneys and fewer terrorism matters referred to the offices than in previous years. Director Kenneth Melson, in a response to the inspector general, notes that U.S. attorneys are appointed by the president and are “afforded significant discretion to manage his or her office according to locally perceived priorities and needs.”
The report, however, finds fault with the data relied on to make decisions and with individual attorney evaluations that are performed infrequently because of budget constraints. -- by Gregg Blesch
Thursday, October 23, 2008
former Minnesota Department of Health and Human Services (DHS) employee ...FRAUD
Aug. 5, 2003, through Sept. 10, 2008, ...$903,896.54 from the State of Minnesota through Medicaid health care fraud.
Hudsonite indicted for health care fraud in Minnesota
Hudson Star-Observer
Published Wednesday, October 22, 2008
A former Minnesota Department of Health and Human Services (DHS) employee was recently indicted by a federal grand jury for health care fraud and for the alleged theft of more than $900,000 in Medicaid funds.
Kim Joann Austen, 47, Hudson was charged Oct. 7 in Minneapolis with one count of health care fraud and 22 counts of theft of health care funds. Her indictment was unsealed Wednesday following her initial appearance in Minneapolis.
Austen turned herself in to authorities Tuesday. Austen remains in custody, and a detention hearing is scheduled for 4:30 p.m. Thursday at the United States Courthouse in Minneapolis.
Austen's indictment alleges that from Aug. 5, 2003, through Sept. 10, 2008, she knowingly and willfully executed a scheme to defraud Medicaid, a federal health care benefit program. It also alleges that Austen used her position to receive $903,896.54 from the State of Minnesota through Medicaid.
Austen had been a state employee since 1981, and had worked in several positions within the DHS since that time. Since approximately August 1997, Austen had been the supervisor of the Medicaid Management Information System (MMIS). The MMIS is a computerized system that processes submitted Medicaid claims for payment.
For more information see the Oct. 30 edition of the Star-Observer.
Hudsonite indicted for health care fraud in Minnesota
Hudson Star-Observer
Published Wednesday, October 22, 2008
A former Minnesota Department of Health and Human Services (DHS) employee was recently indicted by a federal grand jury for health care fraud and for the alleged theft of more than $900,000 in Medicaid funds.
Kim Joann Austen, 47, Hudson was charged Oct. 7 in Minneapolis with one count of health care fraud and 22 counts of theft of health care funds. Her indictment was unsealed Wednesday following her initial appearance in Minneapolis.
Austen turned herself in to authorities Tuesday. Austen remains in custody, and a detention hearing is scheduled for 4:30 p.m. Thursday at the United States Courthouse in Minneapolis.
Austen's indictment alleges that from Aug. 5, 2003, through Sept. 10, 2008, she knowingly and willfully executed a scheme to defraud Medicaid, a federal health care benefit program. It also alleges that Austen used her position to receive $903,896.54 from the State of Minnesota through Medicaid.
Austen had been a state employee since 1981, and had worked in several positions within the DHS since that time. Since approximately August 1997, Austen had been the supervisor of the Medicaid Management Information System (MMIS). The MMIS is a computerized system that processes submitted Medicaid claims for payment.
For more information see the Oct. 30 edition of the Star-Observer.
Saturday, October 4, 2008
The Bankruptcy Code Today...
The Bankruptcy Code Today
The present Bankruptcy Code, which became law in 1978, combines three previous reorganization chapters into one, Chapter 11. Chapter 11 is designed to be a flexible tool for the reorganization of the business and debts of corporations, partnerships and individuals. The goals of the reorganization process are many: to maintain the going concern value of the enterprise; to protect workers, their jobs and their retirement benefits; to realize greater value for creditors than a straight liquidation of assets would make possible; to avoid the ripple effects of a failed enterprise. In exchange for opening its books and records, a debtor obtains an automatic stay of any action to commence or continue civil litigation, or to collect an indebtedness, by any creditor in any court anywhere in the United States. Upon the filing of a petition, the previous entity or person becomes a new legal entity, called the debtor in possession, which is charged with fiduciary responsibility for the proper administration of the case for the benefit of creditors and equity holders. A trustee is appointed in a Chapter 11 case only if the debtor in possession is found to have engaged in fraudulent activities or gross mismanagement. The goal and purpose of the reorganization process is the filing of a plan of reorganization that will provide for the repayment of claims on a fair and equitable basis while at the same time permitting the debtor entity to continue its operations.
A reorganization plan must be accompanied by a disclosure statement that has been approved by the bankruptcy court as containing adequate information to enable a creditor to make an informed decision to vote to accept or reject the plan. As in the old composition agreements, confirmation of the plan requires that the majority in number but only two-thirds in amount of creditor claims in each impaired class must vote to accept it. If a debtor is unable to achieve the requisite number of votes to obtain acceptance of its plan by the acceptance method, it may ask the court to confirm the plan over the objections of creditors. The court must evaluate whether the plan is fair and equitable and does not discriminate unfairly with respect to each class of claims impaired under the plan. Upon confirmation of a reorganization plan, property of the estate vests in the reorganized debtor, and the plan becomes a new contract between the debtor and its creditors.
Chapter 11 reorganization has come to be seen as the vehicle of choice for addressing mass tort claims. Cases have been filed, for example, by manufacturers of asbestos-containing building materials, Agent Orange, and the Dalkon Shield birth control device. The focus of these cases was the development of a process that would permit all interested parties, including victims, lenders, debtors and shareholders, to come together to develop an equitable method of compensating victims while permitting the debtor to continue in operation. The formation of various official committees, each with its own advisers, facilitates the process.
Chapter 11 and the U.S. Catholic Church
These are the principles that have led to the filing of the diocesan reorganization cases. In each case, the bishops have cited the need for a process that permits equitable and compassionate treatment of victims while permitting the diocese to return to its role as a church. From its first pages, the disclosure statement in the Tucson case emphasizes that the purpose of the filing was to “fairly, justly, and equitably compensate the victims of sexual abuse by clergy or others associated with the Diocese and bring healing to victims, parishioners and others affected by the past acts of sexual abuse committed by clergy and others while allowing the Diocese to continue its ministry and mission.” The proposed plan provides for the creation of two trusts to be funded by settlements from insurers and the liquidation of certain diocesan assets, exclusive of parish and school property. Trustees for each of these trusts are to be given responsibility for resolving all pre-petition tort claims, investing and managing settlement funds, and making payments to holders of allowed claims.
One issue that has received much attention in these cases is whether the assets of the parishes are assets of the bankruptcy estates. While it does not define property rights, the Bankruptcy Code does prescribe which assets become property of the bankruptcy estate upon the filing of a petition for relief. Property of the estate is very broadly defined to include “all legal and equitable interests of the debtor in property as of the commencement of the case.” There are certain exceptions to this broad definition. Property of the estate does not include property in which the debtor holds, as of the commencement of the case, only legal title and not an equitable interest. Pursuant to canon law, all clerics and lay persons who take part in the administration of ecclesiastical goods are bound to fulfill their functions in the name of the church according to the norms of law. But the Code of Canon Law does not specify how title to the temporal goods of the church is to be held, and the practice varies from state to state.
It has been argued that pursuant to canon law, the bishop’s interest in parish assets is a bare legal title and that parish assets are therefore not property of a diocese’s bankruptcy estate. This is far from clear, however, and trial and appeal of this issue could take years. But through the plan negotiation process, it may be possible for interested parties to agree upon an adequate amount to fund a plan in lieu of liquidating parish assets. Victims and parishes, through their representatives, may fully participate in the plan negotiation process.
Other questions have arisen about the role of the bankruptcy judge in supervising diocesan activities and the administration of diocesan assets, and whether this would impermissibly interfere with the free exercise of religion. In point of fact, the bankruptcy judge has no responsibility for case administration under the present Bankruptcy Code. That role is placed upon the trustee. While it is possible under the Bankruptcy Code for a judge to appoint an operating trustee for a nonprofit debtor in the event of gross mismanagement or fraud, it is more likely that a judge would first address specific creditor concerns through the appointment of an examiner. An examiner may be a lawyer or an accountant, but need not be, and is charged with investigating allegations concerning fraud, dishonesty, incompetence, misconduct, mismanagement or irregularities in the management of the affairs of the debtor, and with making a report of his findings to the court and other interested parties. If the report of the examiner reveals the need for the appointment of a trustee, a person is elected to serve as trustee by non-insider creditors holding allowable, undisputed, fixed and liquidated unsecured claims.
In a Chapter 11 case, however, there ordinarily is no trustee. Rather, the debtor in possession is clothed with the rights, duties and powers of a case trustee. So long as a diocese remains in possession of its property, the bishop of that diocese, together with his consultors, will continue to make decisions concerning the operation of the diocese. While a debtor may not use, sell or lease property outside the ordinary course of its business without the approval of the bankruptcy court, this approval is routinely given where there are no objections to the proposed action by affected parties. Whether in connection with obtaining confirmation of a plan or during the administrative phase of a case, the role of the bankruptcy judge is limited to deciding whether a proposed action does or does not meet the requirements of the Bankruptcy Code. In deciding that question, the judge generally has no power to compel an alternative action.
Bankruptcy law is certainly not the solution for all problems, and I am not urging a rush to the bankruptcy courts. But more Catholics need to become familiar with the reorganization process and value it for the creative solution it can provide for some very difficult problems now being faced by the church in the United States.
Jennie D. Latta is a United States bankruptcy judge for the Western District of Tennessee.
The present Bankruptcy Code, which became law in 1978, combines three previous reorganization chapters into one, Chapter 11. Chapter 11 is designed to be a flexible tool for the reorganization of the business and debts of corporations, partnerships and individuals. The goals of the reorganization process are many: to maintain the going concern value of the enterprise; to protect workers, their jobs and their retirement benefits; to realize greater value for creditors than a straight liquidation of assets would make possible; to avoid the ripple effects of a failed enterprise. In exchange for opening its books and records, a debtor obtains an automatic stay of any action to commence or continue civil litigation, or to collect an indebtedness, by any creditor in any court anywhere in the United States. Upon the filing of a petition, the previous entity or person becomes a new legal entity, called the debtor in possession, which is charged with fiduciary responsibility for the proper administration of the case for the benefit of creditors and equity holders. A trustee is appointed in a Chapter 11 case only if the debtor in possession is found to have engaged in fraudulent activities or gross mismanagement. The goal and purpose of the reorganization process is the filing of a plan of reorganization that will provide for the repayment of claims on a fair and equitable basis while at the same time permitting the debtor entity to continue its operations.
A reorganization plan must be accompanied by a disclosure statement that has been approved by the bankruptcy court as containing adequate information to enable a creditor to make an informed decision to vote to accept or reject the plan. As in the old composition agreements, confirmation of the plan requires that the majority in number but only two-thirds in amount of creditor claims in each impaired class must vote to accept it. If a debtor is unable to achieve the requisite number of votes to obtain acceptance of its plan by the acceptance method, it may ask the court to confirm the plan over the objections of creditors. The court must evaluate whether the plan is fair and equitable and does not discriminate unfairly with respect to each class of claims impaired under the plan. Upon confirmation of a reorganization plan, property of the estate vests in the reorganized debtor, and the plan becomes a new contract between the debtor and its creditors.
Chapter 11 reorganization has come to be seen as the vehicle of choice for addressing mass tort claims. Cases have been filed, for example, by manufacturers of asbestos-containing building materials, Agent Orange, and the Dalkon Shield birth control device. The focus of these cases was the development of a process that would permit all interested parties, including victims, lenders, debtors and shareholders, to come together to develop an equitable method of compensating victims while permitting the debtor to continue in operation. The formation of various official committees, each with its own advisers, facilitates the process.
Chapter 11 and the U.S. Catholic Church
These are the principles that have led to the filing of the diocesan reorganization cases. In each case, the bishops have cited the need for a process that permits equitable and compassionate treatment of victims while permitting the diocese to return to its role as a church. From its first pages, the disclosure statement in the Tucson case emphasizes that the purpose of the filing was to “fairly, justly, and equitably compensate the victims of sexual abuse by clergy or others associated with the Diocese and bring healing to victims, parishioners and others affected by the past acts of sexual abuse committed by clergy and others while allowing the Diocese to continue its ministry and mission.” The proposed plan provides for the creation of two trusts to be funded by settlements from insurers and the liquidation of certain diocesan assets, exclusive of parish and school property. Trustees for each of these trusts are to be given responsibility for resolving all pre-petition tort claims, investing and managing settlement funds, and making payments to holders of allowed claims.
One issue that has received much attention in these cases is whether the assets of the parishes are assets of the bankruptcy estates. While it does not define property rights, the Bankruptcy Code does prescribe which assets become property of the bankruptcy estate upon the filing of a petition for relief. Property of the estate is very broadly defined to include “all legal and equitable interests of the debtor in property as of the commencement of the case.” There are certain exceptions to this broad definition. Property of the estate does not include property in which the debtor holds, as of the commencement of the case, only legal title and not an equitable interest. Pursuant to canon law, all clerics and lay persons who take part in the administration of ecclesiastical goods are bound to fulfill their functions in the name of the church according to the norms of law. But the Code of Canon Law does not specify how title to the temporal goods of the church is to be held, and the practice varies from state to state.
It has been argued that pursuant to canon law, the bishop’s interest in parish assets is a bare legal title and that parish assets are therefore not property of a diocese’s bankruptcy estate. This is far from clear, however, and trial and appeal of this issue could take years. But through the plan negotiation process, it may be possible for interested parties to agree upon an adequate amount to fund a plan in lieu of liquidating parish assets. Victims and parishes, through their representatives, may fully participate in the plan negotiation process.
Other questions have arisen about the role of the bankruptcy judge in supervising diocesan activities and the administration of diocesan assets, and whether this would impermissibly interfere with the free exercise of religion. In point of fact, the bankruptcy judge has no responsibility for case administration under the present Bankruptcy Code. That role is placed upon the trustee. While it is possible under the Bankruptcy Code for a judge to appoint an operating trustee for a nonprofit debtor in the event of gross mismanagement or fraud, it is more likely that a judge would first address specific creditor concerns through the appointment of an examiner. An examiner may be a lawyer or an accountant, but need not be, and is charged with investigating allegations concerning fraud, dishonesty, incompetence, misconduct, mismanagement or irregularities in the management of the affairs of the debtor, and with making a report of his findings to the court and other interested parties. If the report of the examiner reveals the need for the appointment of a trustee, a person is elected to serve as trustee by non-insider creditors holding allowable, undisputed, fixed and liquidated unsecured claims.
In a Chapter 11 case, however, there ordinarily is no trustee. Rather, the debtor in possession is clothed with the rights, duties and powers of a case trustee. So long as a diocese remains in possession of its property, the bishop of that diocese, together with his consultors, will continue to make decisions concerning the operation of the diocese. While a debtor may not use, sell or lease property outside the ordinary course of its business without the approval of the bankruptcy court, this approval is routinely given where there are no objections to the proposed action by affected parties. Whether in connection with obtaining confirmation of a plan or during the administrative phase of a case, the role of the bankruptcy judge is limited to deciding whether a proposed action does or does not meet the requirements of the Bankruptcy Code. In deciding that question, the judge generally has no power to compel an alternative action.
Bankruptcy law is certainly not the solution for all problems, and I am not urging a rush to the bankruptcy courts. But more Catholics need to become familiar with the reorganization process and value it for the creative solution it can provide for some very difficult problems now being faced by the church in the United States.
Jennie D. Latta is a United States bankruptcy judge for the Western District of Tennessee.
Tuesday, September 30, 2008
Many economists now doubt that government measures can prevent a major recession
Unfortunately, objective media coverage and comparisons of single-payer public health care with our current profit-driven corporate system are almost non-existent at this time.
George Seldes once said, “Journalism’s job is not impartial ‘balanced’ reporting. Journalism’s job is to tell the people what is really going on.”
Truth Emergency US
By Peter Phillips and David Kubiak
Many economists now doubt that government measures can prevent a major recession given the severe slump in the housing market, the subprime mortgage crisis, growing unemployment, declining consumer spending, and record high oil prices. Even harder times for working people are undoubtedly at hand, yet mainstream corporate media continues to lavish more attention on the Super Bowl and celebrity misadventures than measures to protect Americans from grave personal economic harm. We are spun, mislead, propagandized and amused to death by our media conglomerates and as a result the US has become the best entertained and least informed society in the world.
There is a literal truth emergency in the United States, not only regarding distant wars, torture camps, and doctored intelligence, but also around issues that most intimately impact our lives at home. For example, few Americans know that there has been a thirty-five year decline in real wages for most workers in the country, while the top 10% now enjoy unparalleled wealth with strikingly low tax burdens.
George Seldes once said, “Journalism’s job is not impartial ‘balanced’ reporting. Journalism’s job is to tell the people what is really going on.” Michael Moore’s top-grossing movie Sicko is one example of telling the people what is really going on. Health care activists know that US health insurance is an extremely large and obscenely lucrative industry with the top nine companies “earning” $93 billion in profits in 2006 alone. The health-care industry represents the country’s third-largest economic sector, trailing only energy and retail among the 1,000 largest US firms.
Nevertheless, 16%of Americans still have no health insurance whatsoever and that number will not soon decline, as insurance costs continue to rise two to three times faster than inflation. The consequences are immediate and tragic. Unpaid medical bills are now the number one cause of personal bankruptcy in the country, and the Institute of Medicine estimates that nearly eighteen thousand Americans die prematurely each year because they lack coverage and access to adequate care.
US private health care services differ markedly from other industrialized countries where single payer systems provide everyone with medical care as a basic human right. Unfortunately, objective media coverage and comparisons of single-payer public health care with our current profit-driven corporate system are almost non-existent at this time. To protect their bloated bottom lines, private insurance companies and HMOs invest heavily in lobbyists and corporate-friendly political candidates that promote their “indispensable” role in any future health care reforms. Besides their insider political influence, these firms deploy massive advertising budgets to discourage media investigations of the economic interests shaping our health policies today
Tens of thousands of American engaged in various social justice issues constantly witness how corporate media marginalize, denigrate or simply ignore their concerns. Activist groups working on issues like 9/11 truth, election fraud, impeachment, war propaganda, civil liberties/torture, and many corporate-caused environmental crises have been systematically excluded from mainstream news and the national conversation leading to a genuine truth emergency in the country as a whole.
George Seldes once said, “Journalism’s job is not impartial ‘balanced’ reporting. Journalism’s job is to tell the people what is really going on.”
Truth Emergency US
By Peter Phillips and David Kubiak
Many economists now doubt that government measures can prevent a major recession given the severe slump in the housing market, the subprime mortgage crisis, growing unemployment, declining consumer spending, and record high oil prices. Even harder times for working people are undoubtedly at hand, yet mainstream corporate media continues to lavish more attention on the Super Bowl and celebrity misadventures than measures to protect Americans from grave personal economic harm. We are spun, mislead, propagandized and amused to death by our media conglomerates and as a result the US has become the best entertained and least informed society in the world.
There is a literal truth emergency in the United States, not only regarding distant wars, torture camps, and doctored intelligence, but also around issues that most intimately impact our lives at home. For example, few Americans know that there has been a thirty-five year decline in real wages for most workers in the country, while the top 10% now enjoy unparalleled wealth with strikingly low tax burdens.
George Seldes once said, “Journalism’s job is not impartial ‘balanced’ reporting. Journalism’s job is to tell the people what is really going on.” Michael Moore’s top-grossing movie Sicko is one example of telling the people what is really going on. Health care activists know that US health insurance is an extremely large and obscenely lucrative industry with the top nine companies “earning” $93 billion in profits in 2006 alone. The health-care industry represents the country’s third-largest economic sector, trailing only energy and retail among the 1,000 largest US firms.
Nevertheless, 16%of Americans still have no health insurance whatsoever and that number will not soon decline, as insurance costs continue to rise two to three times faster than inflation. The consequences are immediate and tragic. Unpaid medical bills are now the number one cause of personal bankruptcy in the country, and the Institute of Medicine estimates that nearly eighteen thousand Americans die prematurely each year because they lack coverage and access to adequate care.
US private health care services differ markedly from other industrialized countries where single payer systems provide everyone with medical care as a basic human right. Unfortunately, objective media coverage and comparisons of single-payer public health care with our current profit-driven corporate system are almost non-existent at this time. To protect their bloated bottom lines, private insurance companies and HMOs invest heavily in lobbyists and corporate-friendly political candidates that promote their “indispensable” role in any future health care reforms. Besides their insider political influence, these firms deploy massive advertising budgets to discourage media investigations of the economic interests shaping our health policies today
Tens of thousands of American engaged in various social justice issues constantly witness how corporate media marginalize, denigrate or simply ignore their concerns. Activist groups working on issues like 9/11 truth, election fraud, impeachment, war propaganda, civil liberties/torture, and many corporate-caused environmental crises have been systematically excluded from mainstream news and the national conversation leading to a genuine truth emergency in the country as a whole.
Drug manufacturer reaches $425 million fraud settlement
Drug manufacturer reaches $425 million fraud settlement
BY DREW SMITH
HARTFORD, Conn. (Legal Newsline) -- Cephalon, a Frazer, Pa.-based drug manufacturer, has announced a $425 million Medicaid fraud settlement for off-label drug marketing.
After a four-year investigation by federal and state authorities, the company was found to have marketed three drugs -- Actiq, Gabitril and Provigil -- for un-approved uses.
"Cephalon put profits over patients -- illegally promoting drugs at any cost to patients, and endangering public safety," Connecticut Attorney General Richard Blumenthal said in a statement.
Blumenthal's office participated in the investigation and settled a separate suit with Cephalon for $6.15 million.
"We are pleased to have these long-standing matters behind us, while preserving our ability to participate in all federal and state health care programs, thereby maintaining the access of patients in those programs to our medications," said Jerry Pappert, executive VP and general counsel for Cephalon.
Actiq is a pain medication with potency 100 times stronger than morphine. It was designed to treat cancer patients, but Cephalon was accused of marketing the drug to "virtually any physician who could treat chronic pain."
Gabitril is a drug that was meant to treat seizures but was found to actually cause seizures when prescribed off-label to patients who were not epileptic. After Cephalon's aggressive promotion, sales of the drug grew from $4.3 million in 2000 to $66.5 million in 2005.
In addition to paying the $425 million fine to federal authorities and $6.15 million to Connecticut, the company must also pay $12 million in accrued interest. Cephalon must also plead guilty to a misdemeanor violation and enter into a five-year Corporate Integrity Agreement.
http://www.legalnewsline.com/news/216160-drug-manufacturer-reaches-425-million-fraud-settlement
BY DREW SMITH
HARTFORD, Conn. (Legal Newsline) -- Cephalon, a Frazer, Pa.-based drug manufacturer, has announced a $425 million Medicaid fraud settlement for off-label drug marketing.
After a four-year investigation by federal and state authorities, the company was found to have marketed three drugs -- Actiq, Gabitril and Provigil -- for un-approved uses.
"Cephalon put profits over patients -- illegally promoting drugs at any cost to patients, and endangering public safety," Connecticut Attorney General Richard Blumenthal said in a statement.
Blumenthal's office participated in the investigation and settled a separate suit with Cephalon for $6.15 million.
"We are pleased to have these long-standing matters behind us, while preserving our ability to participate in all federal and state health care programs, thereby maintaining the access of patients in those programs to our medications," said Jerry Pappert, executive VP and general counsel for Cephalon.
Actiq is a pain medication with potency 100 times stronger than morphine. It was designed to treat cancer patients, but Cephalon was accused of marketing the drug to "virtually any physician who could treat chronic pain."
Gabitril is a drug that was meant to treat seizures but was found to actually cause seizures when prescribed off-label to patients who were not epileptic. After Cephalon's aggressive promotion, sales of the drug grew from $4.3 million in 2000 to $66.5 million in 2005.
In addition to paying the $425 million fine to federal authorities and $6.15 million to Connecticut, the company must also pay $12 million in accrued interest. Cephalon must also plead guilty to a misdemeanor violation and enter into a five-year Corporate Integrity Agreement.
http://www.legalnewsline.com/news/216160-drug-manufacturer-reaches-425-million-fraud-settlement
Sunday, September 28, 2008
Prosecutors began their investigation after several U.S. employees of Swiss-based Serono claimed fraud.
"...president of a medical device company was sentenced Wednesday to three years probation and fined $10,000 for plotting ..."
Serono and its U.S. subsidiaries agreed in October 2005 to pay $704 million to resolve civil and criminal charges.
Executive sentenced in Serono fraud case
By Jay Lindsay, Associated PressWriter09.25.2008
Categories AP Business Business & Finance conspiracy Corporate management Court Proceedings crime Drug approvals General news Government and politics health Medical equipment and supplies manufacturing Technology Weight loss technologies
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The president of a medical device company was sentenced Wednesday to three years probation and fined $10,000 for plotting with Swiss-based Serono Laboratories to increase sales of an AIDS drug by manipulating a test for AIDS patients.
Rudolph Liedtke, president of Michigan-based RJL Sciences, pleaded guilty to conspiracy in 2005 for making and selling a software package in a device that Serono used to diagnose AIDS "wasting," an often fatal condition involving severe weight loss.
Prosecutors said the device diagnosed wasting even without weight loss so that Serono could increase sales of its drug Serostim. Demand for the drug had dropped in the late 1990s with the advent of "cocktails" of AIDS drugs that prevented wasting.
After Liedtke's cooperation with federal authorities, Serono and its U.S. subsidiaries agreed in October 2005 to pay $704 million to resolve civil and criminal charges.
On Wednesday, prosecutors asked U.S. District Judge Edward Harrington to sentence Liedtke to a prison sentence of just less than 3½ years. But Harrington refused, citing the case of Dr. Norma Muurahainen, who worked as a medical director for Serono and pleaded guilty to disseminating an adulterated device, but does not face prison time.
"(Liedtke) cooperated for three years. The other person, who in my judgment is equally culpable, did not," Harrington said. "It would have been a gross disparity to give him 41 months while the doctor walks."
Liedtke, 67, and his attorney, Robert Kalec, declined comment after the hearing. Assistant U.S. Attorney Mary Elizabeth Carmody and U.S. Attorney Michael Sullivan declined comment.
As part of the plea deal, prosecutors had originally agreed to a shorter sentence than they recommended Wednesday. But Carmody said that after Liedtke pleaded guilty in April 2005, he continued selling his company's device, which had not been approved by the Food and Drug Administration.
"Our position before the court would be different had he not continued the crime after he had pled guilty," Carmody said. "How does society tolerate, how does the court tolerate this kind of behavior? How does the court know that this defendant is not going to walk out the door and do it again? That is his history."
Kalec said he couldn't justify what his client did after his guilty plea. But he said that Liedtke's wrongdoing "paled in comparison" to others in the case, and added his company's profits were minuscule next to Serono's. He argued that without Liedtke's extensive cooperation with prosecutors, Serono would not have agreed to the huge penalty, the third-largest recovery in a health care fraud case in U.S. history.
Kalec asked Harrington to sentence Liedtke to probation, arguing that Carmody's concern that Liedtke would repeat his crime was unfounded.
"How do we know he won't go out and do it again? If he's on probation, the court continues to have a hammer over his head to ensure that he doesn't," Kalec said.
In brief comments before the court, Liedtke apologized for continuing to sell the device after his guilty plea.
"I'm just very, very sorry," he said.
Serono began marketing Serostim in 1996. But demand for the drug fell off sharply in the late 1990s after"cocktails" of AIDS drugs that made patients less susceptible to wasting hit the market. Serono then conspired with RJL Sciences to create a market for Serostim by selling a software package called SomaScan, which was used to diagnose AIDS wasting, but was not approved by the Food and Drug Administration for that use.
The cost of many of the prescriptions for Serostim, $21,000 for 12 weeks of treatment, was paid by Medicaid. Prosecutors began their investigation after several U.S. employees of Swiss-based Serono claimed fraud.
Serono paid a criminal fine of $136.9 million and civil penalties of $567 million, and pleaded guilty to federal conspiracy charges.
____
AP Legal Affairs Writer Denise Lavoie contributed to this report from Boston
Serono and its U.S. subsidiaries agreed in October 2005 to pay $704 million to resolve civil and criminal charges.
Executive sentenced in Serono fraud case
By Jay Lindsay, Associated PressWriter09.25.2008
Categories AP Business Business & Finance conspiracy Corporate management Court Proceedings crime Drug approvals General news Government and politics health Medical equipment and supplies manufacturing Technology Weight loss technologies
Comments 0
The president of a medical device company was sentenced Wednesday to three years probation and fined $10,000 for plotting with Swiss-based Serono Laboratories to increase sales of an AIDS drug by manipulating a test for AIDS patients.
Rudolph Liedtke, president of Michigan-based RJL Sciences, pleaded guilty to conspiracy in 2005 for making and selling a software package in a device that Serono used to diagnose AIDS "wasting," an often fatal condition involving severe weight loss.
Prosecutors said the device diagnosed wasting even without weight loss so that Serono could increase sales of its drug Serostim. Demand for the drug had dropped in the late 1990s with the advent of "cocktails" of AIDS drugs that prevented wasting.
After Liedtke's cooperation with federal authorities, Serono and its U.S. subsidiaries agreed in October 2005 to pay $704 million to resolve civil and criminal charges.
On Wednesday, prosecutors asked U.S. District Judge Edward Harrington to sentence Liedtke to a prison sentence of just less than 3½ years. But Harrington refused, citing the case of Dr. Norma Muurahainen, who worked as a medical director for Serono and pleaded guilty to disseminating an adulterated device, but does not face prison time.
"(Liedtke) cooperated for three years. The other person, who in my judgment is equally culpable, did not," Harrington said. "It would have been a gross disparity to give him 41 months while the doctor walks."
Liedtke, 67, and his attorney, Robert Kalec, declined comment after the hearing. Assistant U.S. Attorney Mary Elizabeth Carmody and U.S. Attorney Michael Sullivan declined comment.
As part of the plea deal, prosecutors had originally agreed to a shorter sentence than they recommended Wednesday. But Carmody said that after Liedtke pleaded guilty in April 2005, he continued selling his company's device, which had not been approved by the Food and Drug Administration.
"Our position before the court would be different had he not continued the crime after he had pled guilty," Carmody said. "How does society tolerate, how does the court tolerate this kind of behavior? How does the court know that this defendant is not going to walk out the door and do it again? That is his history."
Kalec said he couldn't justify what his client did after his guilty plea. But he said that Liedtke's wrongdoing "paled in comparison" to others in the case, and added his company's profits were minuscule next to Serono's. He argued that without Liedtke's extensive cooperation with prosecutors, Serono would not have agreed to the huge penalty, the third-largest recovery in a health care fraud case in U.S. history.
Kalec asked Harrington to sentence Liedtke to probation, arguing that Carmody's concern that Liedtke would repeat his crime was unfounded.
"How do we know he won't go out and do it again? If he's on probation, the court continues to have a hammer over his head to ensure that he doesn't," Kalec said.
In brief comments before the court, Liedtke apologized for continuing to sell the device after his guilty plea.
"I'm just very, very sorry," he said.
Serono began marketing Serostim in 1996. But demand for the drug fell off sharply in the late 1990s after"cocktails" of AIDS drugs that made patients less susceptible to wasting hit the market. Serono then conspired with RJL Sciences to create a market for Serostim by selling a software package called SomaScan, which was used to diagnose AIDS wasting, but was not approved by the Food and Drug Administration for that use.
The cost of many of the prescriptions for Serostim, $21,000 for 12 weeks of treatment, was paid by Medicaid. Prosecutors began their investigation after several U.S. employees of Swiss-based Serono claimed fraud.
Serono paid a criminal fine of $136.9 million and civil penalties of $567 million, and pleaded guilty to federal conspiracy charges.
____
AP Legal Affairs Writer Denise Lavoie contributed to this report from Boston
healthcare workers voted by more than a 3-to-1 margin to be represented by SEIU United Healthcare
California Assembly Speaker pro Tempore Sally Lieber (D-San Jose) reacted to the vote of healthcare workers at Stanford hospitals in favor of union representation.
In an election conducted by the National Labor Relations Board, healthcare workers voted by more than a 3-to-1 margin to be represented by SEIU United Healthcare Workers - West (UHW) at Stanford Hospital & Clinics (SHC) and Lucile Packard Children’s Hospital (LPCH). Today’s vote garnered an even wider margin of support than when workers first voted for union representation in 1998.
“I am very pleased by the outcome of this vote,” said Lieber. “The overwhelming show of support for union representation should give the community confidence that the voice of front-line caregivers will be heard.”
Lieber continued, “Clearly this is an important decision for these workers and their families-but also for the community that relies on Stanford Hospital and Lucile Packard Children’s Hospital for care.”
SEIU-UHW will be representing approximately 1,450 healthcare workers at the Stanford hospitals.
A month ago, Stanford physically blocked Speaker pro Tem Lieber and union members from entering the hospital to deliver an open letter signed by workers asking Stanford management to remain neutral and open-minded toward employees seeking union representation.
California State Assembly
Other news:
In an election conducted by the National Labor Relations Board, healthcare workers voted by more than a 3-to-1 margin to be represented by SEIU United Healthcare Workers - West (UHW) at Stanford Hospital & Clinics (SHC) and Lucile Packard Children’s Hospital (LPCH). Today’s vote garnered an even wider margin of support than when workers first voted for union representation in 1998.
“I am very pleased by the outcome of this vote,” said Lieber. “The overwhelming show of support for union representation should give the community confidence that the voice of front-line caregivers will be heard.”
Lieber continued, “Clearly this is an important decision for these workers and their families-but also for the community that relies on Stanford Hospital and Lucile Packard Children’s Hospital for care.”
SEIU-UHW will be representing approximately 1,450 healthcare workers at the Stanford hospitals.
A month ago, Stanford physically blocked Speaker pro Tem Lieber and union members from entering the hospital to deliver an open letter signed by workers asking Stanford management to remain neutral and open-minded toward employees seeking union representation.
California State Assembly
Other news:
Saturday, September 27, 2008
Supreme Court upholds state Medicaid fraud decision
Connecticut Supreme Court upholds state Medicaid fraud decision
BY DREW SMITH
HARTFORD, Conn. (Legal Newsline)--The Connecticut Supreme Court has upheld a ruling made by the state's Department of Social Services against a Farmington-based company for defrauding the state's Medicaid program.
Attorney General Richard Blumenthal and DSS Commissioner Michael Starkowski praised the decision, which orders Goldstar Medical, Inc., to pay the state $198,193 in restitution and suspended the company's owner, Donald Bouchard.
"This victory ends attempts by Goldstar and Bouchard to evade accountability for health care fraud. Now they must refund taxpayers for their wrongdoing," Blumenthal said.
Goldstar, a company that supplies oxygen to nursing homes and other long-term care facilities, was subject of a 2005 investigation that ultimately found the company defrauded the Medicaid program by submitting payment claims for uncovered services and services not ordered by a physician, double-billing and illegal altering documents.
Bouchard has attempted to fight the state order since 2005.
"The Supreme Court -- upholding the state's order -- has roundly rejected efforts to avoid refunds and other remedies," Blumenthal said.
According to Blumthal's office, Goldstar altered documents in order to show patients needed the company's oxygen supplies instead of those included in the patient's nursing home rate. This caused Medicaid to pay Goldstar for unneeded oxygen.
"While the great majority of vendors in the Medicaid program are honest and forthright, Connecticut and other states must constantly employ fraud prevention and enforcement measures to root out incidents of abuse," Starkowski said.
Filed Under: State Supreme Courts
BY DREW SMITH
HARTFORD, Conn. (Legal Newsline)--The Connecticut Supreme Court has upheld a ruling made by the state's Department of Social Services against a Farmington-based company for defrauding the state's Medicaid program.
Attorney General Richard Blumenthal and DSS Commissioner Michael Starkowski praised the decision, which orders Goldstar Medical, Inc., to pay the state $198,193 in restitution and suspended the company's owner, Donald Bouchard.
"This victory ends attempts by Goldstar and Bouchard to evade accountability for health care fraud. Now they must refund taxpayers for their wrongdoing," Blumenthal said.
Goldstar, a company that supplies oxygen to nursing homes and other long-term care facilities, was subject of a 2005 investigation that ultimately found the company defrauded the Medicaid program by submitting payment claims for uncovered services and services not ordered by a physician, double-billing and illegal altering documents.
Bouchard has attempted to fight the state order since 2005.
"The Supreme Court -- upholding the state's order -- has roundly rejected efforts to avoid refunds and other remedies," Blumenthal said.
According to Blumthal's office, Goldstar altered documents in order to show patients needed the company's oxygen supplies instead of those included in the patient's nursing home rate. This caused Medicaid to pay Goldstar for unneeded oxygen.
"While the great majority of vendors in the Medicaid program are honest and forthright, Connecticut and other states must constantly employ fraud prevention and enforcement measures to root out incidents of abuse," Starkowski said.
Filed Under: State Supreme Courts
Thursday, September 18, 2008
Hancock kept prescribing drugs with high addiction risks
A former Hawkins County doctor was arrested in Texas Wednesday on indictments of health care fraud, unlawfully dispensing controlled substances, money laundering, income tax evasion and failure to file tax returns.
John Theodore Hancock, 47, was indicted by a federal grand jury in Greeneville, Tennessee, on September 9.
While Hancock was licensed to practice in Tennessee, the indictment alleges he operated "Hancock Family Medicine" and "Dr. John T. Hancock Family Medicine" in Mooresburg.
Hancock is accused of improperly prescribing such substances as methadone, morphine, oxycodone, hydrocodone, and benzodiazepines for patients he didn't examine.
He's also accused of charging patients $80 to $100 in cash for each visit.
Investigators believe Hancock kept prescribing drugs with high addiction risks, even after he learned some patients were doctor shopping or selling their drugs.
The indictment also accuses Hancock of writing prescriptions patients would bring back for his personal use.
Hancock agreed to surrender his registration with the DEA to prescribe controlled substances in December 2003, then got another doctor to issue prescriptions for his patients, according to the indictment.
Since most of the prescriptions were paid for through TennCare, the indictment charges Hancock with trying to defraud that program.
Investigators believe five patients, identified in the indictment, died due to Hancock's prescribing practices.
Hancock is also charged with making financial transactions using money from health care fraud and unlawfully dispensed substances. One instance involves $16,480 in cash in February 2005. Another involves $18,552 in cash in April 2005.
The indictment alleges Hancock evaded paying income tax for 1994 and 1995 and failed to file tax returns from 2002 through 2005. During that time, investigators think he had a gross income of over $1 million.
Hancock was released on bond when he appeared in U.S. District Court in Marshall, Texas Wednesday. He's due in federal court in Greeneville on September 24.
If convicted, Hancock faces possible life in prison and fines of more than $2.5 million.
John Theodore Hancock, 47, was indicted by a federal grand jury in Greeneville, Tennessee, on September 9.
While Hancock was licensed to practice in Tennessee, the indictment alleges he operated "Hancock Family Medicine" and "Dr. John T. Hancock Family Medicine" in Mooresburg.
Hancock is accused of improperly prescribing such substances as methadone, morphine, oxycodone, hydrocodone, and benzodiazepines for patients he didn't examine.
He's also accused of charging patients $80 to $100 in cash for each visit.
Investigators believe Hancock kept prescribing drugs with high addiction risks, even after he learned some patients were doctor shopping or selling their drugs.
The indictment also accuses Hancock of writing prescriptions patients would bring back for his personal use.
Hancock agreed to surrender his registration with the DEA to prescribe controlled substances in December 2003, then got another doctor to issue prescriptions for his patients, according to the indictment.
Since most of the prescriptions were paid for through TennCare, the indictment charges Hancock with trying to defraud that program.
Investigators believe five patients, identified in the indictment, died due to Hancock's prescribing practices.
Hancock is also charged with making financial transactions using money from health care fraud and unlawfully dispensed substances. One instance involves $16,480 in cash in February 2005. Another involves $18,552 in cash in April 2005.
The indictment alleges Hancock evaded paying income tax for 1994 and 1995 and failed to file tax returns from 2002 through 2005. During that time, investigators think he had a gross income of over $1 million.
Hancock was released on bond when he appeared in U.S. District Court in Marshall, Texas Wednesday. He's due in federal court in Greeneville on September 24.
If convicted, Hancock faces possible life in prison and fines of more than $2.5 million.
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