False Claims Act Update & Alert |
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Taxpayers
Against Fraud Education Fund | Washington, D.C. |
WWW.TAF.ORG |
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Taxpayer Group
Awards Taxpayers Against Fraud, an organization devoted to combating fraud against the Federal Government, has named Ven-A-Care of the Florida Keys and its principals -- Mark Jones, Luis Cobo, Dr. John Lockwood and Zach Bentley -- Whistleblowers of the Year for 2006 for their extraordinary work in combating fraud against the Federal Government in the prescription drug arena. Said TAF President James Moorman, "Ven-a-Care of the Florida Keys have helped recover hundreds of millions of dollars stolen from U.S. taxpayers and are, to this day, working to change the way prescription drugs are priced under Medicare, Medicaid and other government-funded health care systems. "The Ven-a-Care partners have demonstrated, as no others have before, that much of the health care fraud we see in this country is not one-off rip-offs, but business plan frauds that permeate entire sectors of the U.S. health care system. What Ven-a-Care has shown is that if you invest in research and investigation and pursue False Claims Act cases suits with a concerted plan of action, you can change the culture of the health care system. _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
Mark Jones, Luis Cobo, Dr. John Lockwood and Zach Bentley did not intend to go to war with the pharmaceutical industry -- they simply wanted to run their own business. The four friends owned a company called Ven-A-Care of the Florida Keys to provide home infusion therapy to HIV-positive patients and elderly residents with kidney failure. The business made a profit, but no one was getting rich. It was a small business like any other. What the business offered the Ven-a-Care partners was economic independence in one of the most beautiful spots on earth. What could be better than that? When National Medical Care (NMC) approached the four partners in 1991 and asked them if they wanted to be bought out on unusually lucrative terms, they told NMC they were not interested. NMC (now called Fresenius) had offered the Ven-a-Care partners both a carrot and a stick: they could fold up shop and join with NMC and become rich, or NMC would drive them out of the infusion therapy business in Key West, Florida. The Vent-A-Care partners declined the offer and, true to its word, NMC did indeed drive them out of business. But something was not quite right. There was not enough money in the local infusion therapy business for anyone to go so aggressively after that market. How could NMC make so much money when Ven-a-Care could not? What the Ven-a-Care partners discovered was that NMC was paying kickbacks to doctors who prescribed medicines and services that were not needed, and then billing Medicare and Medicaid exorbitant sums far in excess of what infusion therapy actually cost. The papers and marketing materials NMC gave Ven-a-Care gave the game away, and the Ven-A-Care partners realized that NMC was engaged in a significant fraud against the government. Thus it came to be that Ven-A-Care filed a False Claim Act case. The case against NMC was eventually settled for $486 million ($385 million under the False Claims Act), and the Ven-a-Care partners were awarded over $40 million for their efforts in bringing the fraud to justice. By all rights the Ven-a-Care partners could have retired and gone fishing. But they did not. Instead, they went to work changing the way the prescription drug industry operates in America. In 1990 the Ven-a-Care partners had received a check from Medicaid for $56 reimbursement for drug that had cost the company only $10. They looked at other drug reimbursements and began to notice a pattern of over-reimbursement. Something was wrong here too, they thought. A quick calculation on the back of an envelope showed the 20 percent beneficiary's co-payments were often greater than the actual cost of the drug. Thinking that the Florida Medicaid program had made a mistake, Ven-a-Care tore up the check and reported the error to the state, asking them to reprocess the reimbursement. But Florida Medicaid said it was not in error -- the $56 figure was the price the drug company had reported to the state as being the "Average Wholesale Price" for the medication. Ven-a-Care was due the full amount they had received. And so, once again suspecting a massive fraud scheme at hand, Ven-a-Care filed their first False Claims Act case alleging pharmaceutical fraud. In January of 2001, one year after Fresenius had settled their National Medical Care case, Bayer pharmaceutical settled a marketing the spread and concealment of best price case initiated by Ven-a-Care. Other pharmaceutical company settlements have followed: A case against Dey Pharmaceuticals was settled in 2003 for $18.5 million; a case against Schering-Plough's Warrick Pharmaceutical subsidiary was settled in 2004 for $27 million, and a case against Roxane Laboratories was settled for $10 million in 2005. This year, GlaxoSmithKline settled a case brought by the Ven-a-Care whistleblowers for the sum of $150 million. The case involved fraudulent misrepresentation of the true "Average Wholesale Price" of the anti-nausea drugs Zofran and Kytril.Ven-a-Care isn't done. They have cases on file in Boston, Miami, Austin, Los Angeles and elsewhere. It seems highly unlikely that pharmaceutical over-billing of government health plans will continue as business-as-usual now that Ven-a-Care has opened the doors to this troubling practice.
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