Serono Sales Director Pleads Guilty to Kickbacks

Fraud Cases | Kickbacks

Adam Stupak, pleaded guilty on December 21, 2004 to offering three New York City doctors free trips to France if they agreed to write 30 new prescriptions for Serostim in one week. The illegal promotion was part of Serono’s “$6m-6 Day Plan” to increase demand for Serostim, an expensive drug used in the treatment of AIDS wasting.

A press release by the US Attorney in Boston describes the situation at Serono that prompted the promotion. Serostim, a growth hormone, was approved by the FDA in 1996 for the treatment of involuntary weight loss in patients with AIDS, which at the time was the leading cause of death among AIDS patients. Protease inhibitors came on the market at the same time as Serostim (generic somatropin). Protease inhibitors were so successful at controlling AIDS and preventing symptoms, that the market for Serostim started to dwindle.

Documents Said to Show Prozac Risks

News and Commentary
Documents Said to Show Prozac Risks - The British Medical Journal said it had sent documents to health regulators in the U.S. that it said appear to suggest a link between the antidepressant drug Prozac and suicidal behavior. [New York Times Healthcare News]

Are pharmaceutical companies hiding important information that the FDA should see? In addition to this article about missing documents, there has been a lot of attention given lately to possible links between Prozac and suicide. The New York Times Magazine recently featured a cover-story about anti-depressants and links to teenage suicide. There are going to be lawsuits over this for years to come.

Texas Home Health Fraudsters Sentenced to Prison

Fraud Cases

After leading investigators on an international chase, Lesa and Pete Hames and co-consipiritor, James Davis, were sentenced to prison December 16, 2004. The Hames inflated Medicare cost reports for their home health agency, causing Medicare to make millions of dollars in overpayments. Lesa received 102 month sentence, while Pete and James were sentenced to 70 months. In addition, they are required to pay almost $3 million in restitution.

2004 Year End Newsletter


This Issue:

  • 2004 Case Highlights
  • 3 Tele-seminars
  • Subscription Changes

2004 Case Highlights

  • Injectable Drugs cases made it to court several times this year. Lupron and Serostim continued to make news. Five urologists from four states were sentenced in the aftermath of a $1.2 million settlement from TAP Pharmaceutical. Lupron is an injectible drug used for treating prostate cancer. Physicians can bill Medicare and other insurers for injectible drugs. Because the free samples were given as a way for physicians to enhance their income, the samples are considered a kick-back. Without the kickbacks that TAP offered to urologists, an equivalent drug that is cheaper than Lupron would probably have been prescribed. In additions, Serostim abuse continues to be a problem. Read details

Gambro to pay $355 million in fraud case

News and Commentary | Fraud Cases | Kickbacks | Medicaid Fraud Cases | Medical Equipment Fraud Cases
Gambro US to pay $355 mln in fraud case - Gambro Healthcare US, Lakewood, Colo., said it will pay $355 mln to settle civil and criminal charges stemming from illegal relationships with doctors and pharmaceutical companies in an alleged decade-long fraud scheme that began in 1991. [Healthcare Fraud News]

The settlement resolves civil liabilities from alleged kickbacks paid to physicians, false statements made to obtain payment for unnecessary services, and payments made to Gambro Supply, a sham DME company.

CT Medicaid MMIS RFP - March 2005

Healthcare Policy and Technology

Connecticut has a tentative schedule for releasing their Medicaid MMIS RFP in March 2005. Maximus is assisting them with the MMIS procurement. CT MMIS Procurement Schedule

Private Sector Technology Group

Healthcare Policy and Technology

I attended the PS-TG meeting last week. It was held in conjunction with the NASMD Annual Conference in Washington, DC. The PS-TG is an industry group for Medicaid vendors. I’m running for Secretary.

Membership is only $50. I encourage all vendors interested in providing services to Medicaid programs to join. I’m encouraging the group to create a committee on Fraud that will address Program Integrity, SURS, Prior Authorization, Audit, eligibility and provider verification, and other issues related to fraud. Join now, so you can help Medicaid programs get the best services and products available.

Another Lupron Guilty Plea

News and Commentary | Fraud Cases | Kickbacks | Prescription Drug Fraud

November 15, 2004, Boston. Dr. John Romano, a urologist in Massachusetts pleaded guilty to fraud for charging Medicare and Medicaid for free samples of Lupron. Sentencing is scheduled for February 2005.

According to the US Attorney’s Office in Massachusetts, four other urologists have been sentenced in connection with this investigation. Dr. Joseph Olstein (Maine), Dr. Rodney Mannion (Indiana), Dr. Jacob Zamstein (Connecticut), and Dr. Joseph Spinella (Connecticut) pleaded guilty healthcare fraud. These doctors were sentenced to probation, in exchange for their help with the Lupron investigation, which resulted in a $1.2 million settlement from TAP Pharmaceutical.

Houston Couple Receive Huge Sentences

News and Commentary - Medicaid Fraud Costs Taxpayers Millions of Dollars

According to KPRC News, a Houston woman received a 67 year sentence for Medicaid fraud, while her husband received a 35 year sentence. See the news about a couple who used vans to recruit kids for free pizza parties and counseling. They did not provide the counseling, but they billed Medicaid at least $600,000 last year.

watch the video

The woman claims that she is in jail because of racism. “They know and I know it was a railroad deal, and I should not be (in a state women’s prison in Gatesville),” Dranetta Williams said.

Nov-Dec 2004 Newsletter


Lessons from Crime and Security Experts

Healthcare fraud is basically a security issue. We can learn a lot by looking at security and crime-fighting principles. The credit card industry only loses 6 cents per $100, while the healthcare industry loses at least 6 cents per dollar. We have a lot to learn. This month I’m reading: Beyond Fear by Bruce Schneier (security expert), Crime Fighter by Jack Maple (former NYPD Deputy Commissioner) and Where the Money Was by Willie Sutton (bank robber and jail breaker). These books can teach us many things about fighting fraud. The most important lesson I want you to take away is that fraud is crime and fighting fraud is security.

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