Pharmaceutical & Insurance Fraud

Medical, Pharmaceutical, Health Insurance Fraud

Types of Fraud

1) Billing: Inflated, Double, Phantom, Unbundling, for unnecessary equipment or procedures
2) No Fault Claims Insurance: Provider fraud, insured persons fraud
3) Malpractice in conjunction with fraud: malpractice must occur after and separately from malpractice
4) Pricing: Medicare/Medicaid, FDA
5) Violations of Anti-kickback law: Physician paid referral, E-health website regulations

Acts, Statutes, Laws

1) Anti-kickback law
2) False Claims Act (Qui Tam/Lincoln Act)
3) No Fault Claims
4) “Whistleblower Protection”
5) Drug Pricing Program and Prescription Drug Marketing Act
6) Food, Drug, and Cosmetic Act

Case Studies

1) Pfizer – Warner Lambert Division
2) Schering-Plough
3) Astrazeneca
4) Bayer
5) GlaxoSmithKline
6) Tap Pharmaceutical Products
7) PharMerica Inc.
8) King Pharmaceuticals
9) Eli Lilly and Co.
(First 9 are major pharmaceutical fraud cases violating False Claims Act)
10) Ackerman v. Metropolitan Life Ins. Co.
11) Wickline v. State of CA
12) Simcuski v. Saeli
13) Detwiler v. Bristol Myers Squibb Co.

Strategies of Prosecution

1) Billing/Insurance Fraud (Violations of False Claims Act): Provide evidence of inflated, doubling, or unbundled billing, or arrangement between patient and physician to receive free services for Medicaid/Medicare insurance number. Proof of feigned injuries or treatment by secondary medical reviewer for insurance claim.

2) Proving Fraud in a Medical Malpractice suit: Provide evidence that physician had intentionally concealed prior malpractice or made factual misrepresentations regarding a previous malpractice, leading to faulty therapy or cure that patient justifiably relied upon, leading to patient damages. Must be separate and distinct from damages from the current malpractice case in question. (Simcuski v. Saeli)

3) Anti-kickback Law Violations: Provide evidence of any compensation a physician may have received in exchange for recommending a product – in the form of financial incentive, paid “vacation” conferences, “consulting fees,” etc.

4) Off-Label Marketing (Violations of Food Drug and Cosmetic Act): Pharmaceutical products not approved by the FDA for an intended use may be prescribed for a primary or secondary use by physicians, but are not eligible for reimbursement and are prohibited to be marketed by pharmaceutical companies. Any evidence otherwise would suggest fraud.

Defense Strategies

1) Medical Malpractice versus Medical Fraud: Damages from fraud in a medical malpractice action must be separate and distinct from damages from malpractice. Fraud often dismissed in place of malpractice. NY Law maintains that to establish a claim of fraud, the patient must show elements of fraud and that physician knew of own malpractice and deliberately concealed malpractice, resulting in misguided recommendations/therapy that led to patient damages. Only in this context does fraud apply.

2) No Fault Claims, Overbilling, Excessive Treatment: Insurer should prove lack of claims’ medical necessity in treatment or price. Insurer may submit a claim denial form to Commissioner of Health within 30 days after Insurer has knowledge of patterns of overcharging or excessive treatment. Burden of Proof for overcharging and excessive treatment rests on Insurer and its counsel.

3) Anti-Kick Back Law Defense for E-health Co.’s Referring Physicians: Must show that referral service did not exclude any participants who qualified, did not receive differential payments by participants, did not require the participant to provide services to a referred person, and/or made disclosures to the patient seeking the referral. In general, to show that both E-health Company and physician are “recommending” pharmaceutical products to patient and no quid pro quo arrangements occurred.