Crooked Practices at Lahey Clinic

What’s turned up so far, by order of audacity:

Medicare/Medicaid Fraud/Billing Unnecessary tests, 2005 

The United States filed a civil complaint in federal district court under 28 U.S.C. § 1345 alleging that the Lahey Clinic Hospital billed Medicare and received payment for tests and other diagnostic procedures performed by its clinical laboratory when Lahey knew, or reasonably should have known, that the tests were not reasonable and necessary for diagnosis or treatment of illness or injury of Medicare beneficiaries.   The United States sought restitution for these overpayments, including an accounting, disgorgement of improper gains of over $311,000, and prejudgment interest, under common law theories of unjust enrichment and payment under mistake of fact. (Feb. 2005)

http://oig.hhs.gov/oas/reports/region1/11000506.pdf

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TAP Pharma —  Bribery kickbacks 2001

One case that captured particular attention involved TAP Pharmaceuticals and the Lahey Clinic in Boston. To retain the Lahey market for its prostate cancer drug, Lupron, and prevent a switch to cheaper competitor drugs, TAP apparently held out the inducement of $100,000 in additional funding and support to the Lahey Clinic. Federal prosecutors filed charges against TAP, and in October 2001 the company settled the case, paying out $875 million.6 Prosecutors are now investigating allegations of kickbacks and the “sale” of free samples by TAP employees and several physicians at Lahey. TAP has already admitted that its salespeople helped physicians bill Medicare and Medicaid for free samples of Lupron dispensed to patients. A jury acquitted eight TAP employees of bribery charges in July 2004, but five urologists have been convicted of health care fraud (in light of their cooperation with government investigators, they were sentenced to probation). Investigations against physicians in the TAP case have added a potent dimension to enforcement.”7

http://content.healthaffairs.org/content/24/4/949.full 2001

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OIG Audit 2010  “…the Clinic was overpaid $121,268.”

http://oig.hhs.gov/oas/reports/region1/11000506.pdf
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(Pharma Fraud: http://www.justice.gov/archive/dag/pubdoc/hcfacreport2009.pdf )

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In Burlington, Massachusetts, Lahey Clinic Hospital, Inc. paid $843,896 to settle allegations that it improperly submitted claims to Medicare for drug infusion therapy, chemotherapy, and blood transfusion therapy services for multiple units of these services when only one unit per date of service should have been billed to Medicare. http://www.justice.gov/archive/dag/pubdoc/hcfacreport2009.pdf

http://cardiobrief.org/2010/03/15/us-attorneys-office-investigating-medtronic-over-ties-to-lahey-clinic-cardiologists/

US Attorney’s office investigating Medtronic over ties to Lahey Clinic cardiologists

Posted on March 15, 2010 by Larry Husten

Medtronic has disclosed that it is being investigated by the US Attorney’s Office in Massachusetts about its relationship with cardiologists at the Lahey Clinic. The statement appears in the company’s most recent quarterly report.

As previously reported by CardioBrief last November, interventional cardiologist David Gossman is suing his former employer, the Lahey Clinic hospitals in Burlington, Massachusetts, after he was fired for complaining about the hospital’s relationship with Medtronic. The story was originally reported by Thomas Burton in the Wall Street JournalHealth Blog and by Molly Hamill in Courthouse News Service.

As we wrote in November:

According to Hamill, Gossman claimed that the hospital was offered ”access to the CoreValve, a new heart valve that will be in clinical trials in the U.S. soon, predicated on the purchase and increased utilization of other products made by Medtronic.” Gossman’s court complaint says that Medtronic made the offer to Lahey Clinic’s director of interventional cardiology, Thomas Piemonte. Gossman says that Piemonte earns fees as a lecturer on the Medtronic Speakers Bureau and that his wife works for Medtronic and owns stock in the company.

Following the Medtronic offer, Gossman claims, Piemonte and cardiology chair Richard Nesto “pressured other doctors at the hospital to increase use of Medtronic products, and told a new doctor that her low use rate of the Medtronic heart stents jeopardized the hospital’s access to cutting-edge medical technologies,” Hammill writes.

Gossman was fired soon after he attended a lecture about his hospital’s IRB where he raised a “hypothetical” question: “If a medical device company approaches a hospital offering access to a new investigational device, but predicates access to the device on increased utilization of other products sold by the company, what would be the position of the IRB regarding this arrangement?”

A Medtronic spokesman told the WSJ’s Burton that “that kind of behavior [as described in the suit] wouldn’t be allowed by our code of conduct.” Burton also quoted a spokesman for the Lahey Clinic who said “Gossman was dismissed because he ‘repeatedly demonstrated himself to be unsuited to the kind of collegial practice’ that exists at Lahey.”

Here is the text from Medtronic’s quarterly report:

On February 22, 2010, the Company received a civil investigative demand from the United States Attorney’s Office for the District of Massachusetts pursuant to the federal False Claims Act seeking documents relating to the relationship of the Company with the Lahey Clinic, specifically relating to cardiologists at the clinic, CoreValve, Inc. (CoreValve) and the Lahey Clinic, and certain employees of both the Company and the clinic among other topics. The Company will comply as required with the terms of the civil investigative demand.

Here is a link to an Associated Press story reporting the Medtronic disclosure.

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