Crime

More Reasons Big Pharma and Medical Fraud Was High on Trump’s Agenda

It’s no wonder President Donald J.Trump went vigorously after Big Pharma and medical fraud. During his last year in office, the Justice Department (DOJ) recovered more than $1.8 billion from healthcare false claims cases.

In many of the cases, the healthcare companies agreed to or were ordered to pay additional amounts to state Medicaid programs. 

The largest recoveries from last fiscal year 2020 came from the drug industry. For example, Novartis paid more than $591 million to resolve claims it paid kickbacks to physicians to induce them to prescribe its drugs. 

The DOJ pursued opioid-related fraud schemes in fiscal 2020. One of the largest recoveries was from Practice Fusion, a health information technology developer that accepted kickbacks from opioid manufacturer Purdue Pharma in exchange for implementing alerts in its EHR software that were designed to increase prescriptions for OxyContin. 

Several cases were resolved by DOJ in which healthcare providers billed federal healthcare programs for medically unnecessary services or services that weren’t provided.

King of Prussia, Pa.-based Universal Health Services paid $117 million to resolve allegations that its psychiatric hospitals and behavioral treatment facilities submitted false claims for services that were not medically necessary. 

The co-owner of several compounding pharmacies and pharmaceutical distributors was sentenced on Jan. 15 to 18 years in prison for his role in a multimillion-dollar scheme to defraud Tricare and private healthcare benefit programs.

Wade Ashley Walters of Hattiesburg, Miss., was sentenced after pleading guilty to conspiracy to commit healthcare fraud and conspiracy to commit money laundering. 

Between 2012 and 2016, Walters defrauded health benefit programs by distributing compounded medications that were not medically necessary.

He and his co-conspirators adjusted prescription formulas to ensure the highest reimbursement, solicited recruiters to procure prescriptions for high-margin compounded medications and paid kickbacks to clinicians to authorize prescriptions for compounded medications. 

In addition to the prison term, Mr. Walters was ordered to pay $287.7 million in restitution and to forfeit $56.6 million that he derived from the fraud scheme. 

Two former employees of Southfield, Mich.-based Beaumont Health and a medical supply distributor were charged on Jan. 13 with wire fraud for their alleged involvement in a scheme to steal medical devices and supplies from Beaumont and sell them, according to DOJ.

According to the indictment, Paul Purdy, a former Beaumont employee, stole medical devices and supplies from the hospital and resold them on the internet from 2003 to 2017. When he resigned from Beaumont in 2017, he allegedly enlisted Valdet Serferovic, a hospital employee, to continue the scheme. Mr. Purdy and Mr. Serferovic allegedly stole three types of medical devices: cystoscopes, ophthalmoscopes and otoscopes. 

“Some of the medical devices stolen and resold over the Internet were possibly contaminated devices that were previously used in various surgical and other medical procedures on patients,” states the indictment, according to The Detroit News

In September 2017, Mr. Serferovic allegedly agreed to steal and sell medical devices and supplies to Zafar Khan, the owner of Surgical Suppliers of America. Mr. Khan allegedly sold the devices and supplies on the internet. 

“These defendants used their employment status to circumvent the safety protocols established by Beaumont Hospital to profit from the theft of medical devices and put the health and safety of the general public at risk in doing so,” U.S. Attorney Matthew Schneider said. “This indictment should send a clear message that our office is committed to prosecuting anyone who would endanger the health and safety of the general public for personal gain.”

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4 replies »

  1. Off topic. If 15.00 per hour do you still tip? Prices go up. Staff used to make wage on tips. Will we change our tipping pattern to match the rest of world. 1-5%?

    Liked by 2 people

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