allegations

SPOTLIGHT: Settlements between PBMs, states not tough enough

Wed, 04 Jun 2008 06:59:52 -0400

Recently, the industry has seen a string of cases in which pharmacy benefit managers have agreed to fork over settlements over allegations of bad behavior. Most recently, this includes the instance in which Express Scripts struck a $9.5 million agreement with 28 states over its attempts to steer patients into brand name drugs. However, these settlements are nowhere near tough-enough to deter erring PBMs from continuing with crooked practices, argues Los Angeles Times columnist David Lazarus. He argues that it will take "stronger medicine" to turn the industry around. Article

Former Chicago hospital CEO hit with more federal charges

Fri, 30 May 2008 06:59:55 -0400

Ah, you've gotta love the guys who just won't give up. After years of being knee-deep in an operation riddled with bad behavior, the war still goes on for former administrator and co-owner Peter Rogan, the former owner Edgewater Medical Center. Edgewater, a bankrupt Chicago hospital, collapsed in 2002 after years of his management, with a vice president and four doctors heading to jail for various civil and criminal violations.

The latest news is that Rogan has been hit with federal perjury and obstruction of justice charges, part of a long-running battle with the government over $64 million in civil penalties he owes related to a healthcare fraud scheme that brought down the hospital. He was detained this week in Canada this week, reported while returning from China, U.S. officials are seeking to get Rogan back into the U.S. to hold a trial on the new criminal charges.

Two management firms that helped to run Edgewater Medical Center agreed in 2003 to pay $2.9 million to resolve related criminal and civil healthcare fraud cases, involving a colorful string of allegations including hundreds of unnecessary angioplasties and unnecessary hospitalizations and millions in kickbacks.

To learn more about the charges:
- read this Chicago Tribune article

Express Scripts pays $9.5M settlement over drug switching

Wed, 28 May 2008 06:59:58 -0400

Pharmacy benefit manager Express Scripts has agreed to pay a total of $9.5 million to 28 states and the District of Columbia to settle allegations that it engaged in deceptive prescription-switching practices. The attorneys general involved had been investigating the company, arguing that Express Scripts switched patients to brand-name cholesterol drugs in an attempt to maximize the volume rebates it got from drug manufacturers. While patients were told they'd benefit from the switch, they actually ended up incurring some expenses from the change, according to the Pennsylvania AG's office. In signing the agreement, the company didn't admit any wrongdoing.

Under the terms of the settlement, Express Scripts agrees that it no longer will solicit patient drug switches if the cost exceeds that of the original script, if the original drug has a generic equivalent while the switch doesn't, if the original drug's patent will expire in six months, or if the patient was switched within the last two years. Express scripts also agreed to disclose any financial incentives it may have for soliciting a prescription switch and to reimburse patients for any related costs they might incur.

To learn more about the settlement:
- read this Modern Healthcare piece (reg. req.)

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Medtronic Spine settles false claims charges for $75M

Fri, 23 May 2008 06:59:56 -0400

A subsidiary of Medtronic Spine agreed this week to pay the federal government $75 million to settle allegations that it caused submission of false claims to Medicare by a subsidiary. The allegations concerned Kyphon Inc., bought by Medtronic Spine in November 2007 for $3.9 billion after whistleblower allegations had already been made. In addition to the settlement,
Kyphon has entered into a Corporate Integrity Agreement with HHS's Office of Inspector General.

Kyphon was accused of submitting fraudulent claims for kyphoplasty procedures, minimally invasive surgeries used to treat compression fractures of the spine caused by osteoporosis, cancer or benign lesions. According to the allegations made by whistleblowers, Kyphon engaged in a marketing scheme that caused some hospitals to bill Medicare for inpatient kyphoplasties when cheaper outpatient procedures would have been clinically appropriate. The allegations came from two former Kyphon employees, who under the False Claims Act will receive a total of $14.9 million for having reported the allegations.

To learn more about the settlement:
- read this article from Business First of Buffalo

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Merck agrees to $58M settlement on Vioxx ads

Wed, 21 May 2008 06:59:58 -0400

Merck has agreed to a $58 million settlement with 29 states and the District of Columbia to settle allegations that it downplayed heart risks created by Vioxx in direct-to-consumer advertising. Under the terms of yesterday's agreement, Merck will submit all new TV ads for its drugs to the FDA for seven years, and follow all agency-suggested changes before airing the ads. Merck also agreed to end its practice of "medical ghostwriting," in which paid consultants or employees, rather than physicians listed as lead authors, wrote studies on Vioxx.

The agreement follows a $4.85 billion settlement, which is still pending, that ended most lawsuits resulting from findings that the drug doubled risks of heart attack and stroke. Merck withdrew Vioxx from the market in 2004.

To learn more about the new agreement:
- read this Kaiser Daily Health Policy Report item

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FL system settles federal claim over MD overpayments

Tue, 13 May 2008 06:59:56 -0400

Baptist Health South Florida has agreed to pay the federal government $7.75 million to settle allegations that it paid an oncology group excessive compensation to generate referrals for two of its hospitals.The payments flowed out of a contract under which the Oncology Hematology Group of South Florida provided radiation-related services to the Baptist Hospital of Miami and South Miami Hospital between 2003 and 2005.

The deal comes from voluntary disclosures by Baptist Health, which discovered, investigated and voluntarily disclosed the overpayment to the Department of Justice. Since discovering the problem, the system has bolstered its screens to make sure such overpayments can't take place again, according to CEO Brian Keeley.

To learn more about the settlements:
- read this piece in The Miami Herald

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Studies show problems with four big-name drugs

Tue, 29 Apr 2008 06:59:56 -0400

It looks like yet another set of popular drugs are facing allegations that they pose safety risks. Drugs named this week in unfavorable studies include Fosamax, which may create heart problems for women who take it for osteoporosis and epilepsy med Dilantin, which may put young women at higher risk of developing osteoporosis. Another study concludes that diabetes drugs Avandia and Actos double or triple the odds of non-spinal fractures, particularly among patients who took the drugs for a year or more. Particularly given other drug safety controversies still very much in the public eye, this can't be giving pharma marketers a warm and fuzzy feeling.

To find out more about the studies:
- read this FiercePharma item

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GA health system settles false claims suit for $5.1M

Fri, 25 Apr 2008 06:59:55 -0400

Savannah, GA-based Memorial Health has agreed to pay $5.1 million to settle a suit claiming that it made excessive payments to ophthalmologists. The suit, which was filed by a physician whistleblower, contended that the system's Memorial University Medical Center paid ophthalmologists at "levels which were not commercially reasonable," then billed for federal reimbursement for their services. The system, for its part, denies any wrongdoing and disputes the allegations contained in the suit, but needed to bring the matter to a close, executives said in a written statement.

To learn more about the suit:
- read this Modern Healthcare piece (reg. req.)

UnitedHealth suffers financial setback

Wed, 23 Apr 2008 06:59:58 -0400

After years of allegations that management engaged in financial manipulations to feather their own nest, some might see this as a bit of karma. Having already missed its first quarter financial targets, UHG has had to cut its full-year profit outlook. The company, which expects 2008 revenue around $82 billion, lowered its profit outlook by 40 cents a share to about $3.60. While UHG faces some unique challenges, this mirrors losses posted by other health plans, many of which seem likely to kick up premiums substantially at their next opportunity.

One major factor in UHG's adjusted prediction was customer losses. The company lost 530,000 commercial members during Q1 of this year, including 250,000 from its PacifiCare unit. Meanwhile, enrollment in its Medicare Part D program fell by 290,000. To boot, medical costs went up faster than income, despite raised premiums in 2006 and 2007.

This comes just as the air has started to clear from its former CEO's departure. Less than 18 months ago, former CEO William McGuire left the company with a mindbogglingly-golden parachute, options worth $1.78 billion at the time. Since then, McGuire has been forced to give up at least $400 million in assets, after regulators concluded that the options were back-dated to give him the highest possible value.

To learn more about UHG's financial picture:
- read this Modern Healthcare piece (reg. req.)

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Senate questions device maker payments to surgeons

Wed, 27 Feb 2008 06:59:58 -0500

Last year, five makers of orthopedic implants paid more than $221 million to surgeon consultants--and some Senate members want to know why. Today, the Senate Special Committee on Aging is holding a hearing to discuss the practice of paying surgeons such consulting fees. This comes as part of a larger effort by the committee's chairman, Sen. Herb Kohl (D-WI), who's filed legislation that would require device makers and drug companies to disclose consulting payments.

The hearing comes on the heels of antikickback settlements by Zimmer Holdings, Biomet, Stryker Corp., Smith & Nephew and DePuy Orthopedics. The companies agreed late last year to disclose consulting payment levels in exchange for a pass on allegations that they violated antikickback laws by paying doctors to use their products exclusively. The Senate will have a lot to chew on with just the information that these companies have already disclosed. Not only did they pay $221 million out to surgeons in 2007, they paid out more than $800 million between 2002 and 2006, investigators found.

To get more details on the investigation, including consulting business arrangements:
- read this Wall Street Journal article

Related Articles:
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