Subject: Health-Fraud Inquiry Leads To 100 Arrests
Date: Published: 7/1/92 (91 lines)
Source: Wall Street Journal. Copyright Dow Jones & Co. Inc.

    Health-Fraud
    Inquiry Leads
    To 100 Arrests
    ---
    Druggists, Doctor Charged
    With Insurance Scams
    Tied to Cheating on Bills
    ----
    By Hilary Stout
    Staff Reporter of The Wall Street Journal

    WASHINGTON -- Federal agents arrested more than 100
 people, including at least 82 pharmacists and one physician,
 in an undercover operation that government officials called
 the biggest "criminal fraud investigation of the health-care
 industry."
    In a news conference to announce the arrests, William
 Sessions, director of the Federal Bureau of Investigation,
 said the individuals charged were involved in numerous
 schemes to cheat both private insurance companies and
 Medicaid, the federal-state health insurance program for the
 poor.
    The arrests were the culmination of a nearly two-year
 investigation termed "Operation Goldpill," according to Mr. 
 Sessions.  He said the schemes involved fraudulent billing for
 prescription drugs.  "Many millions of dollars" are involved,
 he said.  But he declined to give a more precise figure.  In
 addition, millions of dollars of assets were seized at some
 56 pharmacies.
    More than 1,000 FBI agents and 120 federal law-enforcement
 officers participated yesterday in making the arrests,
 searches and seizures in more than 50 cities across the U. S.,
 according to the FBI director.  No drug manufacturers were
 charged.
    Mr. Sessions was joined at the news conference by Attorney
 General William Barr; Health and Human Services Secretary
 Louis Sullivan; Food and Drug Administration Commissioner
 David Kessler; and officials of the Drug Enforcement
 Administration.
    Dr. Sullivan blamed this and other alleged health-fraud
 schemes for the soaring medical costs plaguing the country.
 "Elimination of waste, fraud and abuse in medical finance and
 delivery must be a part of our health-care reform strategy,"
 he said.
    The officials allege:
    -- Pharmacists filled prescriptions with generic drugs and
 billed for the brand-name product, which is considerably more
 expensive.
    -- Insurers, including Medicaid, were charged multiple
 times for the same prescription.
    -- Insurers and Medicaid were billed for prescriptions
 that were never written or filled.
    -- Prescriptions were only partly filled.  This forced the
 patient to return for the remainder, giving the pharmacist
 two dispensing fees.
    In one alleged scam, a doctor prescribed medicine for a
 Medicaid beneficiary who wasn't ill.  The doctor then billed
 Medicaid for the drug, and the patient had the prescription
 filled by a pharmacist who also was involved in the swindle.
 The patient then sold the prescription drug at 10% of the
 value to a person known as a diverter.  The diverter, in turn,
 resold the medicine to a pharmacy or another person, who then
 repackaged it and sold it to an unsuspecting public.
    One of the most frightening ramifications of such a scheme
 is that "these drugs are often stored in unacceptable and
 unsanitary conditions," Mr. Sessions said.  "In one case,
 storage temperatures exceeded 110 degrees Fahrenheit."  He
 showed a photograph of the AIDS drug AZT tossed in paper bags
 and squashed cardboard boxes.  "This causes pills to loose
 their potency or even decompose, he said.
    The FDA's Dr. Kessler said the fraud involved mostly
 commonly prescribed drugs.  He urged people who take medicine
 filled by pharmacies that have been closed to check with the
 physician who prescribed the drug.
    "Patients should not stop taking their medicine," he
 asserted.  To address public concerns, the FDA has set up a
 temporary hotline, which will be staffed from 9 a.m.  until 9
 p.m. EDT. The number is 1-800-332-5568.
    Officials said there was no indication that the scams were
 part of a nationwide drug conspiracy.  They said the
 investigation is continuing and could result in more people
 arrested, including more doctors.

[This article is made available here by Dow Jones Co. for the
 personal and non-commercial use of callers to this bbs, in the
 hope that it will be of some help to those who are suffering
 from the disease and others who are seeking to help them.]