New Jersey Oncology Practice: The Drug Order Behind the Medicare Bill

A New Jersey oncology practice, its physician-owner and its practice manager agreed to pay $1.7 million in an imported chemotherapy settlement over allegations that they billed Medicare for unapproved imported drugs and infusion services. The alleged conduct began with the manager’s orders to a foreign distributor and reached patients in the treatment chair.

The Justice Department announced the settlement on February 16, 2017. The physician and manager lived in Colts Neck, New Jersey, and the physician owned the practice, which operated in Howell and Wall. This imported-drug billing case turned on the approval status of the chemotherapy the practice allegedly bought and administered.

What the Government Alleged About Imported Chemotherapy

The government alleged that the practice manager ordered chemotherapy drugs from a foreign distributor between April 1, 2010, and January 31, 2011. The government alleged that the drugs lacked Food and Drug Administration approval for sale in the United States. Doctors at the practice allegedly injected them into patients, and the practice submitted Medicare claims for the drugs and infusion services.

The settlement agreement’s description of the claims identifies that same period as the dates of service covered by the resolution. In its announcement, the Justice Department explained its False Claims Act allegation by saying Medicare reimburses drugs approved for use in the United States.

The government warned that importing drugs outside Food and Drug Administration oversight put cancer patients at risk. We see an ugly bargain in the allegations: the patients received drugs that bypassed the approval system, while Medicare got the bill for both the drugs and the work of injecting them.

Who Ordered the Drugs and Who Treated the Patients

The agreement adds that the manager identified in the announcement was a registered nurse responsible for ordering drugs at the practice. It identifies the physician as the practice’s owner and an oncologist who offered chemotherapy infusion services through the business. Those responsibilities explain why an account of the case needs both the purchasing decision and the treatment operation.

The government’s announcement assigns the alleged ordering to the manager, administration to doctors at the practice, and Medicare claim submission to the practice. The investigation leading to the settlement involved special agents from the Food and Drug Administration’s Office of Criminal Investigations and the Office of Inspector General at the Department of Health and Human Services.

A purchasing employee, nurse and biller may therefore know different parts of the same transaction. The person who knows where the drug came from may hold information that never appears in the description on a Medicare claim.

What Evidence Does a Whistleblower Need?

For an imported chemotherapy claim, useful evidence connects the purchased product, the treatment and the Medicare bill. We examine the records behind those connections with the person who understands how the practice worked. An order, an inventory entry and an administration record each answer a different question about the drug’s path through the office.

In buy-and-bill, a practice acquires drugs, holds inventory, administers treatment and submits claims for the drug and administration services. For this kind of allegation, we also need to understand which product the practice purchased and used.

The money behind buy-and-bill makes the purchasing side worth understanding. Medicare’s standard drug-payment benchmark uses manufacturer-reported average sales prices, rather than the practice’s own invoice. Acquisition discounts, vial size and waste affect what the practice makes on treatment. Someone who knows the supplier and purchase price can help explain the economics behind the claims we are examining.

The Journal of AHIMA’s 2017 article Busting Bad Medicine: a Call to Action Addressing Healthcare, Fraud, Waste, and Abuse describes checking the treatment date, treatment type and nurse or physician signature in the patient’s record. It then makes the point that gives an insider’s account its value:

A nurse may recognize the product used in treatment, while someone in purchasing can explain the supplier and orders. A biller may know how that treatment became a claim. We connect those accounts to the purchases, inventory, doses and what the practice billed so the case explains what happened between the order and the bill.

When the Drug Supply and the Claim Tell Different Stories

Another oncology settlement shows why the supply records matter. At Progressive Oncology & Hematology in Frederick, Maryland, the government alleged that the practice billed for chemotherapy obtained free through charitable or grant programs, divided single-use vial waste among patients while billing each for a separate vial, and billed for prescribed drugs never administered.

Those allegations concerned the source, quantity and delivery of the drugs being billed. In the New Jersey case, the government’s allegation concerned imported products lacking approval for U.S. sale. Both accounts show why an oncology billing review needs the actual drug supply beside the claim: what the practice obtained, what reached the patient and what the government was asked to fund.

What the Settlement Required Beyond the Payment

The practice, physician and manager owed the settlement payment together. The agreement also limited who they could bill for the disputed treatment, a point that matters to employees working patient accounts.

The agreement prohibited seeking payment for the covered health care bills from patients, their parents or sponsors, legally responsible individuals, or third-party payers. The cancer patient was not the fallback payer.

The Insider’s Account Behind a Whistleblower Case

A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers. In a physician practice qui tam case, we work with you to connect the decisions you saw to the claims for government money. For an oncology employee, that knowledge may begin with a drug order, the product used for treatment or the way the practice billed for it.

You Know What Reached the Treatment Chair

If you know the drugs your practice bought and the claims it sent to Medicare, speak with our whistleblower experts about the gap between them. We build your strongest healthcare whistleblower case around that knowledge, bring in healthcare fraud whistleblower lawyers who understand oncology drug billing, and stay beside you throughout the case.