Archive for January, 2010

Kickbacks to Nursing Homes — The Case of the Fraudulent Pharmacy

Another story ‘ripped from the headlines;’ this one about manufacturers paying kickbacks so that nursing homes will prescribe their medications.

Johnson & Johnson Accused of Drug Kickbacks
By NATASHA SINGER
Published: January 15, 2010
Johnson & Johnson paid kickbacks to the nation’s largest nursing home pharmacy to increase the number of elderly patients taking the antipsychotic Risperdal and several other medications, according to a complaint filed Friday by the office of the United States attorney in Boston.

J.B. Reed/Bloomberg News
Risperdal is approved to treat schizophrenia, but not specifically approved to treat problems in elderly people with dementia.
The payments violated the federal anti-kickback statute and led Omnicare, a pharmacy company specializing in dispensing drugs to nursing home residents, to submit false claims to Medicaid, the complaint charged.
The government’s civil complaint joins a whistle-blower suit against Johnson & Johnson brought by two former employees of Omnicare, which has headquarters in Covington, Ky.
Johnson & Johnson said Friday it was reviewing the complaint and intended to address the government’s lawsuit in court. The complaint charges that Johnson & Johnson, based in New Brunswick, N.J., and two of its subsidiaries, Ortho-McNeil-Janssen Pharmaceuticals and Johnson & Johnson Health Care Systems, paid tens of millions of dollars to induce Omnicare to buy and recommend Risperdal for elderly patients as well as the drug maker’s prescription pain relievers Duragesic and Ultram, and the antibiotic Levaquin.
The complaint charges that Omnicare’s pharmacists engaged in intensive efforts to persuade physicians to prescribe the drugs from 1999 to 2004, a period in which the pharmacy’s annual purchase of Johnson & Johnson medications nearly tripled to more than $280 million, from about $100 million. During the same period, the pharmacy’s annual purchase of Risperdal rose to more than $100 million, according to the complaint filed in United States District Court in Massachusetts.
“Kickbacks in the nursing home pharmacy context are particularly nefarious,” Carmen M. Ortiz, the United States attorney for Massachusetts, said in a statement Friday. In return for Omnicare’s efforts, the drug maker allegedly paid the pharmacy company kickbacks in the form of rebates based on the market share of some Johnson & Johnson drugs, sponsorship of Omnicare meetings, grants and payments for Omnicare data, like the prescribing habits of doctors, of the kind that Omnicare had previously provided the drug maker for free, the complaint said.
“When it comes to the sometimes questionable practice of promoting brand-name drugs to doctors and their patients, this case represents the lowest of the low,” Senator Herb Kohl, the Wisconsin Democrat who is the chairman of the Senate Special Committee on Aging, said in an e-mail message sent Friday in response to a reporter’s question. “Nursing home residents comprise a vulnerable population that should be able to trust that their physician’s advice is based on medical expertise, not financial self-interest.”
Although the events described in the complaint took place several years ago, Mr. Kohl wrote that the aging committee was continuing to investigate the issue of the overuse of antipsychotic drugs in nursing homes.
Johnson & Johnson issued an e-mail statement in response to a reporter’s question.
“We believe airing the facts will confirm that our conduct, including rebating programs like those the government now challenges, was lawful and appropriate,” the statement said. “We look forward to the opportunity to present our evidence in court.”
Omnicare, with a market capitalization of about $3.1 billion, serves more than 1.4 million residents of nursing homes, assisted living and other health care facilities in 47 states and Canada, according to the company’s Web site.
Last November, Omnicare paid $98 million to settle civil charges by the government that it had violated the False Claims Act for engaging in kickback schemes with Johnson & Johnson and a smaller drug maker.
The settlement agreement did not include any finding of wrongdoing or any admission of liability by Omnicare, the company said in a statement issued in November. Omnicare denies the contentions of the federal complaint settled last fall and denies any liability related to those contentions, the statement said.
The government has regulations in place to protect nursing home residents from medication mismanagement, like being sedated with psychiatric drugs for the purposes of discipline or convenience. The Department of Health and Human Services requires nursing homes to arrange for an outside consulting pharmacist to review a patient’s medication regimen at least once a month.
These outside pharmacists have a duty to report any irregularities to the attending physician; the pharmacists also have the ability to recommend that a physician remove, change or add medications to a patient’s drug regimen, the complaint said.
But the government’s complaint in the Johnson & Johnson case raises the question of whether some companies have used the consultant pharmacists — the very people entrusted by the government with safeguarding the integrity of nursing home drug prescriptions — for corporate gain.
In this case, according to the complaint, Omnicare’s consultant pharmacists worked to increase Risperdal’s market share.
“If true, these allegations represent a cynical manipulation of the laws intended to protect nursing home residents, as well as yet another rip-off of the Medicaid program,” Senator Charles E. Grassley, the Iowa Republican who has investigated the corporate conduct of certain drug makers, said in a statement Friday in response to a reporter’s question. “If consultant pharmacists aren’t independent, both the patient and the taxpayer lose.”
In one company document among the court exhibits, for example, Omnicare said that its efforts generated a record market share high of 55.5 percent for Risperdal in the first quarter of 2000.
“This market share represents Omnicare’s ability in persuading physicians to write Risperdal in the areas of behavioral disturbances associated with dementia,” the Omnicare document said.
But Risperdal, which is approved by the Food and Drug Administration to treat schizophrenia and bipolar disorder, is not specifically approved to treat behavioral problems in elderly people with dementia. In fact, in 2005 the F.D.A. required that the labels of certain antipsychotic drugs, including Risperdal, carry a black box label warning that elderly people with dementia-related psychosis treated with such drugs were at an increased risk of death compared with those taking a placebo.
In the e-mail message to a reporter, Mr. Kohl noted that the government’s complaint was not the first charge against a drug company for improperly marketing antipsychotic drugs to aging populations.
Last January, the drug maker Eli Lilly pleaded guilty to a misdemeanor and paid $1.415 billion to settle criminal and civil charges that the drug maker had marketed its antipsychotic Zyprexa for the treatment of elderly people with dementia.
The exhibits attached to the complaint depict the efforts of Omnicare and Johnson & Johnson to increase market share for Risperdal against competing antipsychotics like Zyprexa and Seroquel from AstraZeneca.
In an Omnicare letter to Johnson & Johnson in 2001, an executive wrote that the pharmacy planned to spend about $173 million on Johnson & Johnson products.
The executive wrote in capital letters, “We are selling more high-priced drugs (read Risperdal here) for the pharmaceutical industry!!”

Why I Choose My Medical Malpractice Cases Carefully — The Case of the Maligned Medic

Just to show that I understand the ‘other side’ of what I do, here’s a very compelling story from the New York Times about a doctor in Massachusetts who was sued because of the death of a patient.  This story underlines why people shouldn’t assume because an adverse result occurs that the doctor must have malpracticed, and explains why I’m very, very selective when it comes to medical malpractice claims.

A Patient Dies, and Then the Anguish of Litigation

By JOAN SAVITSKY, M.D.

Published: December 28, 2009

It was just an average busy, stressful day at work, in May 2004, when the deputy sheriff arrived with a summons. I sucked in my breath, signed the receipt and returned to my desk piled high with charts, messages, lab results and forms. I was being sued for medical malpractice.

That was how it started. Eventually I peeked at the text of the complaint, which was riddled with accusations. Apparently, my conduct was “malicious, willful, wanton or reckless,” and I had “negligently, carelessly and without regard” for my patient’s health treated her in such a manner that she had died the previous year.

At night I lay awake going over and over what happened. My patient was a relatively young woman who had developed an aggressive colon cancer; her illness was unexpected, and her course was tragic. I felt that I had treated her as I would wish to be treated.

But now her children, whom I barely knew, were coping with their own complex emotions, which I imagined to be grief, very likely anger and frustration, and perhaps misunderstanding. Filing a malpractice suit somehow addressed this. And now it would hang over all of us for years. It was as if a noxious subtle film had settled all around, making everything vaguely unfamiliar and unpleasant. I had become a little unfamiliar to myself.

The film settled on everything at home and at work. I loved my patients and my practice, but this made me wary and mistrustful of them — and of myself.

Medicine can be a minefield of uncertainties; no matter how thoughtful and careful we are, physiology is infinitely complex and fate is capricious, and occasionally something blows up in your face. If this happens, you have to integrate the experience, but for a while you lose your bearings. It is discombobulating. When this is followed by litigation, the effect can be paralyzing. And the lawsuit felt like an assault. Being sued, even with assurances that “it’s nothing personal” and that my insurance would most likely cover any settlement, was in fact deeply personal. The experience was devastating.

Still, I coped well enough. I was able to see patients and almost lose myself in their stories. One day I went in to see a delightful 95-year-old woman for a blood pressure check. In the middle of the visit, she gave me a piercing look. “You’ve got something on your mind,” she told me. “You take care of yourself.”

A few months later, my lawyer, Amy, arrived, a brisk, no-nonsense woman hauling a suitcase full of records. We spent an exhausting and inconclusive morning reviewing the case and the questions it raised. I couldn’t tell if she thought I might win or lose the suit. This was the first of many such marathons.

I had been cautioned not to discuss the details of the case with anyone except my defense team. At one point, I told Amy that I had decided to keep a journal of the experience. Apparently, this was a bad idea. A journal could be subpoenaed, and even if it contained no evidence of wrongdoing, the plaintiff’s lawyer could very likely find something that would be used against me. So talk only to Amy and my claims representative; other than that, suck it up.

After the initial flurry of activity, things subsided, and more than a year elapsed before I was deposed. For a grueling four hours, the plaintiff’s lawyer asked a lot of questions, but he did not hold my feet to the fire, and then that was that. It is often the case that these suits drag on for years, so I was taken by surprise when, in fall 2007, a trial date was scheduled for Oct. 27, 2008, in Middlesex Superior Court. In January 2008, I left my primary care practice after almost 30 years. I can’t say it was because of being sued, but I can’t say it was irrelevant either.

In September 2008, Amy and I resumed the process of reviewing records and discussing strategy. In early October, I was coached on how to testify: keep your feet on the floor, do not cross your legs or fold your arms. Don’t put your fingers together and pontificate. For heaven’s sake, don’t slump. Answers should be crisp and cogent, but do not hesitate more than three seconds before responding. Look at the jury. Don’t lose your cool during the cross-examination. And above all, relax and be yourself.

On Oct. 16, 11 days before trial, I got an urgent e-mail message from Amy. It turned out that the plaintiffs and their law firm had “irreconcilable differences.” These differences weren’t spelled out, but it appeared that the lawyers had decided they were not going to win the case. They couldn’t have figured this out four and a half years earlier? Before all this wasted time, the emotional anguish, and the more than $150,000 spent by my insurance company in the run-up to trial?

The plaintiffs, my patient’s children, refused to let their lawyers drop the case. I could imagine that they didn’t feel well served by this process. They met with their lawyers to resolve this, but neither side gave in. As this slowly unfolded, my mood turned from stoic resignation to a toxic muck of apathy and irritation.

On Oct. 23 everyone except me went in front of the judge. The plaintiffs’ lawyers asked to withdraw from the case, and the family requested a continuance, which would allow the case to be tried at a later time with a new set of lawyers. Amy opposed the continuance. The judge denied the continuance and ordered everyone to proceed with the trial as scheduled.

Just before Amy left, the children and their lawyers conferred again. The lawyers told them that they were unlikely to win and that they would have to pay for the expert witnesses if the case went forward. Finally, the family agreed to drop it, and they all went before the judge to seal the deal.

Amy called me. All in all, I thought I was pretty cool about the whole thing by now. The initial turbulent emotions had been squeezed out or tamped down, and I was ready for whatever happened. But when she told me the news, I started to cry.

Dr. Joan Savitsky is an internist in the Boston area.

Insurance Investigators and Your Claim: The Case of the Irritating Investigator

A Typical Insurer's Private Investigator (no, I'm just joking . . . )

A LETTER FROM THE INTERNET: I’m often asked about the role of ‘private investigators’ in personal injury claims.  In response, here’s a letter that I responded to on Avvo.com, a web-based attorney information service that I participate in, that might interest readers:

“hello,

i was involve in a car accident. i know that sometimes insurance companies hire private investigator if they think that there is a fraud or the case amount is high. i was wondering what is high amount?

thanks
emmy”

SETTING THE RECORD STRAIGHT ON INVESTIGATORS:

Here’s my answer to Emmy’s letter:

Dear Emmy,

Sorry for your accident. Of course, my naturally suspicious mind is driven to this question: why are you worrying about an investigator? In the words of most defense attorneys and insurance adjusters: ‘Do you have something to hide’?

WHAT A PRIVATE INVESTIGATOR DOES: To answer your question more seriously: having worked as both a defense lawyer, representing insurers, and as a plaintiff lawyer representing injured persons, I can tell you with some measure of certainty that there is no ‘high amount’ that triggers an investigation. The insurance adjusters will deploy investigators when a claim ‘looks’ suspect (for an extreme and somewhat exaggerated example, a person with a sprained pinkie saying that they’re disabled for life will likely be subject to surveillance if there’s an ongoing claim). The decision to send out someone to follow a claimant and see how they’re spending their time in real life is based on subjective criteria, and, in my experience, is often left to the adjuster’s discretion.

DOES “SIZE MATTER”: Of course, if a claimant is seeking minimal compensation, an insurer may decide that it’s not cost efficient to spend $2,000 – $3,000 to deploy an investigator, and might decide to settle the claim at a low level rather than incur that cost on top of the settlement cost. However, increasingly insurers seek to ‘send a message’ to claimants by aggressively investigating what they feel are suspect claims.

These ‘investigators’ are an annoyance. They’re hired to develop evidence, whether by observation or often by photograph or video, that a person isn’t as badly injured as they claim. In my practice, from both sides of the aisle, I’ve rarely seen an investigator hired by an insurer who was an accurate, independent, direct and honest reporter of what they observe.

THE INSIDER’S GUIDE TO INVESTIGATORS: More often, in my experience, these ‘investigators’ (really, paid spies) recognize who’s paying the bill, and rather than acting as independent witnesses, they turn themselves into advocacy witnesses to try to help the insurance companies or defense firms who pay for their services. These ‘investigators’ (sometimes retired adjusters; often, retired or disabled former law enforcement or private security officers) often hide or selectively record evidence of a claimant’s activity in an effort to try to ‘amplify’ the actions of an allegedly injured person. In other words, when the person looks healthy, they start the video recorder; when they look injured, they turn the recorder off. Not only that, but insurers and defendants, under the rubric of ‘work product’, try to hide the existence of such ‘spies’ and their videos until the eve of trial (a process I’m very critical of, and which I believe is based on old and discredited practice).

MALIS|LAW PUTS THEIR INVESTIGATORS TO WORK — FOR YOU!: I’ve developed several pre-trial techniques for ‘smoking the investigator out’, and if your attorney is savvy, he or she will know what to do to make sure that there are no rude surprises as you approach trial or settlement of your case.  The good news is that often these investigators can be discredited by good, aggressive cross-examination in discovery or at trial; their bias exposed; and their opinions weakened. Even better, their ‘spying’ sometimes proves disability, rather than disprove it.

In many of my larger cases, I’ve been able to take this investigative evidence and use it to coerce the insurer to pay more for the claim, by showing that the ‘paid spy’ actually learned that my client was more severely injured than even the insurer thought.  MALIS|LAW bloggers can see an example of this in practice in my December, 2009 post about a construction accident case that we settled for $900,000 in total benefits that we already published in this blog, “The Case of the Deleted Defect” .

HONESTY IS THE BEST POLICY; YOU HAVE NOTHING TO HIDE: Despite this pernicious practice, although in my experience these investigators may occasionally disclose someone working when they claim to be disabled, it’s never happened to me or my clients. As I advise clients and others often, an injured person’s best weapon in personal injury litigation is their honesty.  If you can perform an activity, admit it.  If you can’t, tell your lawyer what you can’t do and why.  Ultimately, frank and honest disclosure of the extent of your injury is always to your benefit, and will generally help your lawyer obtain a fair and full settlement for you.

A Few Thoughts on ‘Personal Responsibility’ in the New Year — The Case of the Seductive Spin

Happy New Year, to clients, attorneys, and readers all!

RESPONSIBILITY IS A SOCIAL ISSUE: As I sit here reflecting on the lessons of the past and hopes for the future (a traditional New Year’s meal if there ever was one) I wanted to talk to you a bit about a concept near and dear to my heart — personal and social responsibility — the essential social contract that our system of civil responsibility is founded upon.

I am no paragon of virtue, but I recognize that I have a broader duty than to simply make money for my clients. I hope that my upcoming post on the ‘maligned medico’ makes it clear that I, like many of my brother and sister attorneys, see the other side of what I do (watch for that next week!). Of course there is more than one side to any story, or any case. And, of course, no case is perfect, which means, often, that there will always be defenses to any claim asserted by any party I sue.

HAVE WE LOST SIGHT OF ‘TRUTH’ IN OUR SYSTEM? — If there’s any theme that keeps surfacing in some of my major cases, though, it’s that of insurers, defendants and, sometimes, attorneys on the other side trying to seek any possible excuse for deflecting blame, instead of stepping up, assuming ownership of what they’ve done wrong, and trying, through the best means possible, to make things right. Over and over again, I’ve seen sued parties fail to produce, ‘lose’ or destroy evidence which would demonstrate their negligence or wrongdoing; pointed fingers in any other direction than their own; and, at times, negligent and liable parties even denying their own confessions of fault at some point after the accident.

At the same time, I must be as honest as I can and admit that I sometimes encounter this same kind of behavior from clients, especially the occasional ‘player’. As my article on ‘prior pain’ indicates, I preach to all of my clients that the truth will ‘set them free’, and that fibbing or distortion, in the face of dedicated and careful investigation, will always harm them. Unfortunately, that advice isn’t always followed. Invariably, my prediction of the dangers of a client discrediting themselves by distortion generally come true. I feel little comfort in knowing that when it happens, ‘I told them so.’

I tell attorneys on the other side of my cases that ‘we’re all pilgrims in search of the truth’, and despite the hokiness (or pompousness) of that claim, I truly believe it. I govern my behavior with other attorneys, defendants and insurers on that principal, with the knowledge that my clients, both in the short and longer terms, benefit from that policy and from my reputation, which I hope is a strong one.

THE SOCIAL PRESSURE TO ‘SPIN‘:  While it would be easy to blame this kind of ‘spin’ on defense attorneys or insurers (and believe me, I often do) I think that there’s another dynamic in play, that’s more social and socialized. Whether our political system, our media, or perhaps my profession have made this happen, I can’t say, but truth telling has become less a social imperative and more of a strategic weapon to be deployed (or withheld) at a party’s option.  Our system is designed to frustrate lies.  Sometimes, whether you’re on the inside (like myself) or on the outside, you have to ask; is it doing a good job?  Or has winning become so paramount in our society that we’ve made the truth forfeit to our chance of winning?

A HOPE IN THE COMING YEAR: From today’s public perspective on attorneys, this may sound ironic coming from a lawyer, but in the new year, I hope to see fewer insurers preaching ‘responsibility’ and more practicing it; fewer defendants ducking responsibility and more accepting it; and, overall, more seeking of the truth and less attempts at selective, self-advantaged distortion of it. Short term, some individual parties, whether claimants or tortfeasors, will be unfairly disadvantaged (although I highly doubt it!)   In the long term, though, I remain convinced that the wrongfully injured, and justice, will benefit most.

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FAQs, Interesting News and Law-Related Rants

Daniel Malis uses this blog to publish answers to frequently asked questions, convey interesting news and make the occasional law-related rant. If you have any questions or want to contact Daniel Malis, please see the Contact page of the MALIS|LAW Website.