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29Nov/100

Senator Grassley: Again to the Rescue

This post was written by Jack D. Howard

Once again, there is a bad taste in the mouth over FDA’s appetite for whistleblowing. In posh sections of Virginia Beach, one might not have known that the FDA’s top criminal investigator was allegedly conducting high profile criminal investigations.

For one thing, a home office might not be quite as secure as a federal office building.

Iowa’s senior senator, Chuck Grassley (R), has disclosed a whistleblower’s allegation that the number one investigator for FDA’s criminal enforcement section, Terry Vermillion, has been acting beyond the safe scope of his employment. Besides the allegation of an unauthorized telecommute, Vermillion was also charged with specific instances of “alteration of internal agency reports,” and additional misconduct.

Vermillion announced his resignation over the 2010 Thanksgiving holidays (The Wall Street Journal, November 24, 2010). Vermillion, whose branch has been investigating allegations of doping in professional bicycle racing, reportedly refused any comment on the high-profile whistle blower’s anonymous allegations.

Grassley received the anonymous letter in September, but chose to begin an initially private investigation before pushing ahead with a more formal investigation. It was unclear as to whether additional data had been received from the anonymous whistle blower. Vermillion’s branch was large, even by Washington insider standards: Vermillion’s salary was $200,000 annually, and had grown to more than 200 employees with a $41 million budget.

Interestingly, in a pattern not uncommon among qui tam cases. The CI unit had been feeling heat for two years. In 2008, Senate and House Republicans criticized the unit for over-emphasizing drug cases, instead of corporate misconduct. And early in 2010, the GAO criticized the lack of “accountability” over Vermilion’s—a former secret service agent-- activities.

When it comes to whistleblowing, a fine art has emerged in the Nation’s Capitol. Some critics, however, are concerned the process is becoming more opera than openness.

Tagged as: Chuck Grassley, FDA, whistleblower No Comments

30Jun/100

Crankin’up the HEAT

This post was written by Josh

HEAT is the rather odd acronym for the Health Care Fraud Prevention and Enforcement Action Team. It is the brainchild of Attorney General Holder and Health and Human Services Secretary Sebelius, and despite the great stretches of the imagination it takes to make it work as an acronym (HCFPEAT doesn't exactly roll off the tongue), it seems to be taking a bite out of health care fraud.

HEAT is a coordinated effort between DOJ and HHS, and it has a Medicare Fraud Strike Force that has been going around various cities busting health care fraud perps. It's operating in various locations, including South Florida, but no, you are not likely to see Attorney General Holder wearing a Miami Vice suit and driving a go-fast boat into a medical center.

In recent testimony given before the House Ways and Means Subcommittee on Health and Oversight, Edward Siskel, the Associate Deputy Attorney General, stated that since May 2009, the Strike Force has been putting fear in the hearts of health care fraudsters. Strike Force prosecutors have filed over 120 cases charging more than 290 defendants and have obtained 16 convictions. The Strike Force also appears to have had a deterrent effect. In the twelve months since the Strike Force was announced, the Miami area has seen an almost $2 billion reduction in durable medical equipment submissions compared to the preceding 12 month period.

Deputy AG Siskel also notes in his testimony statistics all too familiar to qui tamers: the bulk of the DOJ's civil case load comprises suits against drug and medical device makers. Qui tam suits have proved to be an important weapon in the DOJ's fraud-fighting arsenal, and have helped the government to recover $24 billion since 1986. This goes to show that the civil justice system is just as important as the swaggering Task Force in the fight against health care fraud.

This article is brought to you by the QTT, the epicenter for whistleblowers and people interested in the False Claims Act, Qui Tam Provisions, and Medicare and Medicaid fraud. To discuss a potential case, please call Eric Young at 1 (800) 590-4116.

Tagged as: False Claims Act, FCA, fraud, government, health care, medicaid, medicare, Pharmaceutical, qui tam No Comments

6Jun/100

Medtronic Shelling out the Big Bucks

This post was written by Josh

Medical device manufacturer Medtronic has voluntarily disclosed that it paid almost $16 million in royalties and consulting fees in the first quarter of 2010. Of this amount, the vast majority--$14.2 million--went to orthopaedic specialists or surgeons, with $13.9 million of that in the form of royalties for surgical inventions. More than 200 doctors were the beneficiaries of Medtronic's largess, including 13 in Medtronic's squeaky-clean home state of Minnesota. One orthopaedic surgeon in Tenessee received almost $4 million in royalties!

Investigators with Senate Finance Committee under Senator Chuck Grassley have been investigating Medtronic's relationship with several orthopaedic surgeons for years. In 2006, Medtronic agreed to pay the government $40 million to settle allegations that the company paid kickbacks to surgeons to get them to buy Medtronic products. The DOJ described Medtronic's relationships with doctors as “sham consulting agreements, sham royalty agreements and lavish trips to desirable locations” which the company offered to doctors between 1998 to 2003.

Medtronic makes big money off of the products it allegedly pays doctors to endorse. For example, Medtronic made $815 million in 2007 alone off of Infuse, a spinal product, which was the subject of a whistleblower lawsuit. With such enormous profits at stake, it is not surprising that device manufacturers like Medtronic pay fees to doctors and sponsor junkets.

Once again, all of this goes back to the ever-increasing role drug and medical device companies play in our lives. Health care is such a big business (emphasis on business) that the major players like Medtronic will keep shelling out what seems like big bucks for serious ROI. As more Americans become insured under the new health care bill and a whole new market opens for drugs and devices, the pecuniary carrot will be all the more enticing to these companies.

Tagged as: corporate fraud, drugs, False Claims Act, FCA, fraud, government, hospital, medicaid, medicare, Pharmaceutical, qui tam, whistleblower No Comments

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