UPROOTING MEDICAL CORRUPTION

USING THE FALSE CLAIMS ACT

By Nicholas Regush

Fight fire with fire. Hit the corrupt medical companies where it hurts - in the bank account and get the investors riled. I’m not referring to small fines and minor social degradation ceremonies, but rather fines in the hundreds of millions of dollars, criminal prosecution, major embarrassment and big-time intimidation.

And guess what? Little old you can do it - if you have knowledge of medical fraud and the guts to follow through.

In October, 2001, TAP Pharmaceuticals agreed to pay the U.S. government and state governments a total of $875 million dollars to settle charges of Medicare and Medicaid fraud.

The lawsuits, for example, charged that TAP paid illegal kickbacks to doctors to prescribe the prostate cancer drug, Lupron. (This is a drug that is, for example, also widely prescribed on an FDA-approved basis for endometriosis and widely prescribed without FDA approval for fertility therapy.)

TAP allegedly gave doctors gifts, such as TV sets, VCRs and some quality resort time (you know, the so-called "educational seminar), in exchange for prescribing Lupron, which is more expensive than the competition’s alternative.

Now, here’s where you might come in: The lawsuits were initiated by whistleblowers who ended up getting $95 million out of the settlement.

If you are aware of a company defrauding the government, you can sue in the name of the government. It’s known as a "qui tam" action and it is a provision of the Federal Civil False Claims Act.

The Act serves as an incentive to private citizens who want to blow the whistle on companies or contractors that are stealing from the government, and therefore the taxpayers. In return for their efforts, the whistleblower can collect 15 to 30 per cent of the amount that is collected.

Many of the early suits were filed against defense contractors. These days, there is more action in other domains, including the medical. Lawsuits have, for example, been successfully filed for Medicare fraud in home health services, billing Medicare for procedures using unapproved cardiac devices and inflated reimbursement claims to state Medicaid services.

To initiate a lawsuit of this type requires a lawyer and good research to determine if fraud has been committed. Then a complaint is filed under seal in a U.S. District Court. At this point the Department of Justice (DOJ) has 60 days to dig in and determine whether there is a case (with extensions this can sometimes drag out for year or even longer). Should the DOJ decide it wants in, it will then take the case over. If the government declines, the claimant can still go ahead and try to prosecute the case.

There are some additional points to all this that change the way the case can develop - but the bottom line is: if there is a good case of fraud, it is likely the government will take it up.

One lawyer I spoke with recently is convinced that qui tam actions against health fraud represent a major avenue for private citizen activism. He is presently working with someone who has considerable evidence that a medical device is being widely used without approval, is harming patients and, in the process, the government is being defrauded.

He believes the qui tam approach has the potential, if enough people have the incentive and guts to use it, to change the way medical business is conducted in the U.S. If enough people scream "fraud," and big enough fines are awarded, and people are also prosecuted for criminal offences, then this might offer a way to uproot some of the medical corruption that is destroying modern medicine.

I do not share his degree of optimism, but I think this approach may bring down some of the big offenders and scare the greed out of some of the doctors who are enamoured of things like free TV sets and educational experiences on the beach.