In this issue:

• Serono Offered Trips to France
• Home Health Owners Arrested in Spain Receive Jail Sentence
• United Health Insurance Settles DME Case

Serono Offered Trips to France

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.

In 1999, Serostim was not going to meet its sales forecast, so management ordered the regional sales directors to convince top prescribers to prescribe more Serostim. Their goal was to increase Serostim prescriptions by $6 million in six days. To do this, they offered top prescribers an all expense paid trip for the prescriber and a guest to an international conference on HIV being held in Cannes, France. In exchange, the doctors would agree to write at least 30 new prescriptions for Serostim within one week. Each 3-month prescription was worth about $21,000, so each doctor would have to generate $630,000 in Serostim scripts to get the trip. Read the rest of the article

Home Health Owners Arrested in Spain Receive Jail Sentence

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.

“The Hames thought they could run from the law but should have known that no fraudulent scheme is foolproof. It was only a matter of time before they were caught and brought to justice,” said US Attorney Richard B. Roper.

During the trial, the government proved that the defendants defrauded Medicare by creating false expense reports for their Irving, Texas home health agency. According to testimony, they used the Medicare payments to finance their luxurious lifestyle, including renovating their home into a castle. Read the rest of the article

United Health Insurance Settles DME Case

United Healthcare Insurance Company paid $3.5 million to settle a case that alleged that they defrauded Medicare by falsifying reports of how they handled phone inquiries. United Healthcare was acting as a Durable Medical Equipment Regional Carrier, responsible for processing DME claims submitted by Medicare providers and beneficiaries. United Healthcare did not admit any of the allegations.

The case was the result of a qui tam lawsuit brought by a former United Healthcare employee. The whistleblower will receive $647,500 of the settlement.

“This settlement demonstrates our continuing commitment to pursue vigorously allegations of fraud and abuse in Medicare,” said Peter Keisler, Assistant Attorney General for the Department’s Civil Division. “Medicare contractors, along with other health care providers, can and will be held accountable for their billing practices. This settlement demonstrates our unwavering pursuit of fraud and abuse.” Read the press release