From Senator Bernie Sanders Web Site Sen. Bernie Sanders, a member of the Senate health committee, said that real health care reform must address the billions of dollars in fraud and abuse that comes from the major corporations in the health care industry. "What we have seen for many years is the systemic fraud perpetrated by private insurance companies, private drug companies, and private for-profit hospitals ripping off the American people and the taxpayers of this country to the tune of many billions of dollars," Sanders (I-Vt.) said at a committee markup session. Sanders cited example after example indicating that virtually all of the major hospital chains, private insurance companies, and pharmaceutical companies have been involved in massive health care fraud over the past decade.
The Health and Humans Services Department inspector general reported in 2009 that 80 percent of the insurance companies participating in Medicare Part D, the prescription drug benefit, have overcharged subscribers and taxpayers, totaling an estimated $4.4 billion,[1] and typical estimates of the level of Medicare and Medicaid fraud are around $60 billion.[2]
The Five Largest Pharmaceutical Companies All Have a History of Fraud
#1: Pfizer
2009: A jury found that Pfizer owed the State of Wisconsin $9 million dollars for violating Wisconsin’s Medicaid Fraud law more than 1.4 million times by purposely overcharging the state for prescription drugs.[3] The company now faces potential fines between $140 million and $21 billion. 2004: Warner-Lambert, a division of Pfizer Inc., pled guilty to two felonies and agreed to pay $430 million to settle charges that it fraudulently promoted the drug Neurontin for a string of unapproved uses. Included in the award was a criminal fine of $240 million, the second-largest such fine ever imposed in a health care fraud prosecution.[4]
2002: Pfizer agreed to pay $49 million to settle charges that a subsidiary defrauded the Medicaid program by overcharging for the cholesterol-lowering drug Lipitor.[5]
#2: Johnson & Johnson
2008: The Texas attorney general charged Johnson & Johnson with funneling kickbacks to Texas health officials and distributing false marketing materials in order to get Risperdal, its schizophrenia drug, on the state’s Medicaid preferred list. The charges are still pending. Texas has spent millions of state Medicaid dollars on the drug, which some recent studies show performs no better than much cheaper generics, and can lead to diabetes and excessive weight gain, particularly in children.[6]
#3: Glaxo Smith Kline
2006: GSK agreed to pay $14 million to settle allegations that it engaged in patent fraud, antitrust violations and frivolous litigation to maintain a monopoly and block generic versions of its antidepressant Paxil from entering the market.[7] 2003: GSK signed a corporate integrity agreement and paid $88 million in a civil fine for overcharging Medicaid for its antidepressant Paxil and its nasal-allergy spray Flonase.[8]
2007: The Senate Finance Committee issued a report describing an “orchestrated plan” by GSK “to stifle the opinion of Dr. John Buse, a professor of medicine at the University of North Carolina who specializes in diabetes.” GSK intimidated Dr. Buse in order to prevent him from suggesting that a GSK drug, Avandia, carried cardiovascular risks.[9]
#4: Hoffman-LaRoche
1999: Hoffmann-La Roche agreed to plead guilty and pay a $500 million criminal fine for leading a worldwide conspiracy to raise and fix prices and allocate market shares for certain vitamins.[10]
#5: Sanofi-Aventis
2009: Aventis Pharmaceutical Inc., a wholly-owned subsidiary of Sanofi-Aventis, acknowledged that it violated the False Claims Act by misreporting drug prices for patients in the Medicaid Drug Rebate program. Aventis paid $95 million to settle the charges.[11] 2007: A special agent at the FDA’s criminal-investigation office testified before the House Energy and Commerce investigations subcommittee that Sanofi-Aventis had evidence that a safety study of its antibiotic Ketek contained fake data, but submitted it to the Food and Drug Administration anyway. The study was conducted by Sanofi-Aventis precursor Aventis before the drug was approved in 2004. The doctor who ran the site that enrolled the most patients in the controversial study ultimately pleaded guilty to fraud.[12] Other Notable Examples
2009: The U.S. government and 16 states have joined in two whistleblower suits against pharmaceutical giant Wyeth. The drug company allegedly failed to pay hundreds of millions in rebates to the Medicaid program.
The Largest Hospital Chains All Have a History of Fraud Hospital Company of America
1999: A Florida jury found two Columbia/HCA executives guilty on six counts of Medicare fraud and conspiracy.[13]
2000: HCA agreed to pay $745 to settle civil charges that it systematically defrauded Medicare, Medicaid and other federally funded health care programs.[14]
2000: HCA agreed to pay criminal fines and damages of $95.3 million.[15] 2003: HCA agreed to pay $631 more in civil fines and damages, bringing its total liability to $1.7 billion.[16]
NOTE: Rick Scott, who was CEO of HCA during 1990s (while the company was engaged in massive fraud), is President of Conservatives for Patients’ Rights, a group currently running ads against health care reform.[17]
Tenet Healthcare Corporation
2003: Tenet paid $54 million in fines to settle allegations that two doctors working in its Redding, Calif., hospital performed unnecessary cardiac procedures on patients in the interest of profits.[18] Justice Department prosecutors alleged that the two doctors involved performed procedures — including open-heart bypass surgeries — on patients who did not need them.
2006: Tenet agreed to pay $725 million in cash and give up $175 million in fees to resolve claims it defrauded the federal government for its over-billing of Medicare claims during six years of the 1990s.[19] Community Health Systems
2009: The United States recently intervened in a whistleblower suit against Community Health Systems Inc. (CHS) and three of its hospitals in New Mexico. The suit knowingly submitted claims for federal matching Medicaid funds.[20]
2000: CHS reached a $31 million settlement with the Department of Justice concerning overpayments based on up-coded billings to the Medicare, Medicaid, and CHAMPUS programs.[21]
Universal Health Services 2007: The Department of Justice subpoenaed Universal Health’s South Texas affiliates in 2007 in connection with an investigation under the False Claims Act and Medicare and Medicaid rules and regulations. The company is still under investigation.
