Case Highlights

Highlights from the 2008 Spring semiannual report.

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Healthcare Investigations

Bristol-Myers Squibb Co. Pays More Than $499 Million to Resolve Allegations of Illegal Drug Marketing and Pricing
As part of a civil settlement, the Bristol-Myers Squibb Co. (BMS) and its wholly owned subsidiary, Apothecon, Inc., agreed to pay $499 million plus interest to resolve allegations relating to a variety of Federal and State claims. The Government alleged that BMS fraudulently set and maintained inflated prices for a wide assortment of oncology and generic drug products, paid various forms of illegal kickbacks to physicians and pharmacies, promoted off-label uses of the antipsychotic drug Abilify, and knowingly misreported its best price for the antidepression drug Serzone. BMS entered into a 5-year corporate integrity agreement (CIA) with OIG as part of the resolution of this case.

Dermatologist Sentenced for Upcoding Surgical Procedures
A Michigan dermatologist was sentenced to 10 years and 6 months in prison and ordered to pay approximately $1.3 million in restitution and a $175,000 fine for upcoding surgical procedures, billing for medically unnecessary procedures, and improperly billing for follow-up office visits. The dermatologist falsely informed patients that they had cancer when, in fact, laboratory results indicated that their tissue specimens were benign. He then performed surgeries based on these false diagnoses.

A Durable Medical Equipment Company's Scheme
A Durable Medical Equipment (DME) company owner was sentenced to 151 months in prison and ordered to pay $3,467,083 in restitution. He was convicted by a Federal jury for his scheme involving fraudulent prescriptions for non-commercially-available aerosol medications so that they could be illegally "compounded." In this scheme, a pharmacist, as opposed to a pharmaceutical manufacturer, made the non-approved medications. The unapproved medications were then billed to the Medicare program. Pharmacy owners involved in the scheme returned half of the Medicare reimbursement to the DME company owner for each fraudulent prescription. Patients and physicians involved in the fraud scheme were also paid cash kickbacks.

Public Health-Related Investigations

Select Agents and Toxins: A California laboratory (Laboratory) agreed to resolve its liability for an alleged violation of the Select Agent Regulations. OIG alleged that the Laboratory transferred vials of a select agent to two laboratories located in Florida and Virginia in a manner that violated the transfer requirements. During the transfers, the select agent was released from the shipped vials. An investigation of the packaging for the shipments revealed several violations of regulations governing the shipment of the select agent. OIG specifically alleged that the Laboratory violated the transfer requirements of the select agent regulations by failing to comply with the applicable shipping and packaging laws when transferring a select agent. In addition, OIG alleged that the Laboratory failed to comply with security and access requirements by allowing an individual not authorized to have access to select agents to package the shipments of the select agent and that the Laboratory's responsible official failed to ensure compliance with the shipping and packaging requirements of the select agent regulations. Under the terms of the settlement, the Laboratory agreed to pay OIG $450,000 to resolve these allegations. As a separate matter, the Laboratory's compliance is subject to monitoring by CDC.

Child Support Investigations

New York: A man was sentenced to 5 years' probation and ordered to pay $296,935 in restitution for failure to pay child support. As conditions of probation, he must make restitution at a rate of 25 percent of his monthly net income; disclose his monthly finances to the U.S. Probation Department; and participate in outpatient and inpatient drug treatment, if necessary, with random drug testing. Special conditions of his probation include no contact with his ex-wife and their children and no medications unless prescribed by a medical doctor.

Nevada: Pursuant to his guilty plea for failure to pay child support, a Nevada man was sentenced to 5 years' probation and 6 months' home detention. He was also ordered to pay $82,731 in restitution. After his indictment, he remained a fugitive for more than 18 months before an investigation by OIG, along with the U.S. Marshals Service, led him to turn himself in. Thereafter, he made several regular payments. The investigation revealed that he earned a six-figure salary during his nonpayment period.

Employee Fraud and Misconduct

Maryland: A former NIH employee, was sentenced to 45 days in prison, followed by 3 years of supervised release and ordered to pay $24,221 in restitution for theft of Government property related to her unauthorized use of a Government credit card. From November 2004-September 2006, she was authorized to use an NIH commercial credit card to purchase approved supplies and services. During this period, she made more than $24,000 in unauthorized charges, including purchases of travel services, a laptop computer, shoes, clothes, DIRECTV service, jewelry, furniture, and household items.