Articles Posted in Medicare and Medicaid Fraud

We read today in the news that a Dr. Michael D. Kim in Houston, Texas had been indicted by a Federal Grand Jury in yet another “motorized wheelchair fraud scheme.” According to the government’s indictment, Dr. Kim fraudulently approved thousands of Medicare beneficiaries for motorized wheelchairs in return for cash payments of $200.00 per beneficiary. According to the indictment, thousands of Medicare beneficiaries were brought by paid recruiters to Dr. Kim’s medical clinic in Houston between April of 2002 and October of 2003 for the purpose of securing a false or fraudulent Certificate of Medical Necessity. A CMN as it is called in the industry is necessary to bill Medicare for a physician approved motorized wheelchair. Dr. Kim allegedly assisted others in filing false and fraudulent claims for motorized wheelchairs at a cost of $4,200.00 a piece. The indictment seeks to forfeit approximately $13 million from Dr. Kim. Allegedly, Dr. Kim routinely approved wheelchairs for 20 to 60 patients a day who clearly did not meet the Medicare guidelines to receive such a device.

When it comes to government programs which depend upon the honesty of those providing services thereunder, there appears to be no end in sight with respect to the imagination of those willing to defraud the government of taxpayer money. Claims are filed under false pretenses and monies are paid based on certifications provided to the government. While the government’s audit function obviously is a problem and a cause for concern for all tax payers, the good news is that occasionally the government does get it right and does indict those who would defraud their government. Here, however, the proverbial horse is “already out of the barn” since taxpayers paid $29 million in fraudulent charges under the Medicare program. It appears that it is simply too easy (and too attractive to criminals) to rip off the Medicare program. Obviously, payment guidelines need to be tightened otherwise we can expect to read similar headlines in the future with respect to the Medicare and Medicaid programs.

The Food, Drug and Cosmetic Act prohibits pharmaceutical companies from marketing or promoting a drug for uses that the FDA has not approved. This practice is known in the industry as “off label marketing”. Increasingly, pharmaceutical companies have purposely engaged in off label marketing in order to increase profits at the price of public safety. Practitioners in this area see this every day. Whether the public and even the medical profession is aware of the extent of this practice is unknown. Nonetheless, it appears that the False Claims Act remains one of the best tools available to address this deplorable practice.

As an example of the problem, we noted in an article published in the Corporate Crime Reporter on May 8, 2007, that Medicis Pharmaceutical Corporation of Scottsdale, Arizona had agreed to pay $9.8 million to settle allegations filed under the False Claims Act against the company. Medicis promoted the use of a topical skin preparation called Loprox for use on children under the age of 10. The Justice Department and the whistleblowers involved, former Medicis employees, alleged that Medicis sales personnel had purposely targeted pediatricians urging these doctors to use Loprox as a treatment for diaper rash. This product had never been medically approved by the FDA for the treatment of diaper dermatitis or other skin disorders in children under 10. Nonetheless, Medicis sales personnel were aggressively marketing the product for these uses. While the story in the Corporate Crime Reporter did not detail how much profit had been generated from this off label marketing campaign, there was some accountability for this improper use of the product via the fine imposed. Unfortunately, and quite literally, we see these stories every day which is indicative of the fact that Big Pharma is pursuing profits over public safety.
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