The following are brief summaries prepared by section volunteers of new developments in Florida health care law that may be of interest to members of the Health Law Section. The summaries are presented for general information only as a courtesy to section members and do not constitute legal advice from The Florida Bar or its Health Law Section. 

Fraud and Abuse 

OB/GYN Fraud Alert

State and Federal Authorities are Prosecuting Physicians for claims related to non US FDA Mirena IUDs

November 2011: Last month a physician in Jacksonville, Florida was indicted for Health Care Fraud related to claims submitted to the Federal Health Care Programs for Bayer manufactured intra-uterine devices sold under the Mirena name.  Apparently there are a number of investigations currently underway related to such purchases. 

The fraud, as alleged by authorities, relates to the use of Non-FDA approved devices, which can be purchased from Canadian and other internet pharmacies at nearly half the cost of the products in the United States. Federal health care programs pay for the implantation of the birth control device, marketed under the Mirena name by Bayer Pharmaceuticals, but manufactured in Finland by Bayer.  The payment takes into account the cost of the device from data received from manufacturers.  The devices sold in the United States and in the rest of the world under the Mirena name are apparently identical products, but the packaging is slightly different.  According to the FDA and prosecutors, the different packaging, and the manufacture at a non-FDA approved facility, makes the product misbranded and therefore unsafe for use in the United States although it might be identical in every other way.  Federal Health Care programs only pay claims for FDA approved devices.  Therefore, a claim made to a federal health care program for a service including the use of a non-FDA approved device may be subject to an allegation of fraud or false claims.  Also, under Florida law, the commercial purchasers of drugs and devices are required to purchase such drugs or devices from a supplier who can issue a valid audit trail, or pedigree, tracing the origins of the device from the manufacturer or purchaser.  The failure to obtain a drug or device from an appropriate source under the pedigree laws renders the product misbranded or adulterated under the law.

Reported by:  Karina P. Gonzalez predicts $9 Billion to be Recovered in 2012 False Claim Act cases reports big cases queued up or already settled including:

  • Merck: The Vioxx off-label marketing fraud, settled for $950 million.

  • GlaxoSmithKline: A series of drug frauds is said to be settled in principle for $3 billion. 

  • Abbott: Reserved $1.5 billion to settle litigation associated with the illegal marketing of Depakote. 

  • Amgen: Reserved $780 million to settle litigation associated with the illegal marketing of Aranesp.

  • NYC:   $70 million for Medicare billing fraud.

  • LHC Groups, a home health care provider, will pay $65 million for billing fraud.

  • Ranbaxy: A settlement in excess of $400 million is expected for adulteration of HIV drugs. 

  • Sandoz (Novartis):  The company has agreed to pay $150 million for Average Wholesale Price fraud involving a series of drugs.

  • Maxim: The company has agreed to pay $150 million for Medicaid home health care fraud. 

  • Johnson & Johnson:  The company has agreed to settle a criminal charge related to illegal marketing of Risperdal, and a civil settlement in excess of $1 billion is expected. 

  • Wellcare: The company has reached a preliminary deal with DoJ for a sum in excess of $137 million, to settle a case involving billing for newborn health care services. 

U.S. Senators probe insurers and labs for possible kickback violations

Senate Finance Committee Chair Max Baucus (D, Mont.) and Sen. Charles Grassley (R, Iowa) sought information from three health insurance companies and two clinical laboratories regarding the practice of steering tests to certain labs in exchange for discounts, also known as “pull through.” 

Reported by: Jonathan Kroner