The big headline story on the New York Times Wednesday was Sliver of Medicare Doctors Get Big Share of Payouts, politely suggesting fraud. Lawyers and police are investigating how it happens that around “two percent of doctors account for about $15 billion in Medicare payments, roughly a quarter of the total.”
Ripoffs aren’t definite of course, but one doctor “earned” $21 million in 2012 alone, which is a lot of prescriptions for a guy whose first language isn’t even English. (That number beats the Lebanese doctor in Michigan who mooched $35 million from the Medicare bureaucracy over two years, as he dangerously misdiagnosed patients to get more expensive treatment.)
The winner of the current Medicare sweepstakes is Dr. Salomon E. Melgen, an immigrant from the Dominican Republic. The loser is the American taxpayer, doubly so when a healthcare recipient.
Doctor With Big Medicare Payments Is No Stranger to Scrutiny, New York Times, April 9, 2014
MIAMI — The doctor who was paid the most by Medicare is a South Florida ophthalmologist whose offices were twice raided last year by the F.B.I. and whose generous political contributions and cozy relationship with a New Jersey senator, Robert Menendez, are under investigation by federal public corruption prosecutors, a New York Times analysis of Medicare data shows.
Data released Wednesday by the Centers for Medicare and Medicaid Services shows that Dr. Salomon E. Melgen, 59, who moved to Florida from the Dominican Republic in the late 1970s, received $21 million in Medicare reimbursements in 2012 alone. The doctor billed mostly for Lucentis, a medication used to treat macular degeneration made by a company that pays generous rebates to its doctors.
The release of the Medicare figures was the latest in a series headline-grabbing disclosures that have dogged the doctor since January of last year. The millionaire surgeon, who lives in a 5,000-square-foot home in North Palm Beach and travels by private jet, is better known as the generous campaign contributor whose close relationship with Mr. Menendez, a Democrat, has been scrutinized by federal prosecutors.
He is a central figure in two different federal investigations. In January and October last year, F.B.I. agents were spotted carrying boxes out of his offices.
Dr. Melgen’s lawyer warned against presuming that the doctor’s high bills to Medicare meant he was engaged in fraud. In a statement released late Tuesday, his lawyer said the large reimbursements from the Centers for Medicare and Medicaid Services, known as CMS, were easily explained: The doctor has a big practice.
Dr. Melgen has 30 employees working for his company, Vitreo Retinal Consultants, in four different Florida offices.
“At all times, Dr. Melgen billed in conformity with Medicare rules,” the doctor’s lawyer, Kirk Ogrosky, a former Medicare fraud prosecutor, said in a statement. “While the amounts in the CMS data release appear large, the vast majority reflect the cost of drugs. The facts are that doctors receive 6 percent above what they pay for drugs, the amount billed by physicians is set by law, and drug companies set the price of drugs, not doctors.”
According to the records, Dr. Melgen gave 37,000 units of Lucentis, also known as Ranbizumab, to 645 different patients. Over all, he had 894 patients who underwent 92,000 procedures.
The F.B.I. started an investigation of Dr. Melgen last year, because he was accused of overbilling by “multi-dosing” a vial of medication that was supposed to be used for a single patient, but could be spread out among several. Under federal rules, the doctor was supposed to have thrown out the extra medication.
The doctor defended the practice, saying that federal law required a separate bill for each dose.
Dr. Melgen was forced to pay back $9 million he was suspected of overbilling. When faced with the federal investigation, he fought back by filing a federal lawsuit against the secretary of Health and Human Services to recover the money. The 2013 lawsuit, which noted that 70 percent of Dr. Melgen’s clients are Medicare patients, alleged that the government retaliated for the civil action by suspending the doctor’s Medicare payments.
Dr. Melgen catapulted from obscurity to notoriety last year, when questions were raised about his close relationship with Mr. Menendez, who had received free rides on the doctor’s private jet and stayed at the doctor’s home in a luxury resort complex in the Dominican Republic.
The senator eventually was forced to pay back the cost of the travel.
Dr. Melgen donated more than $700,000 to Majority PAC, a super PAC run by former aides to the Senate majority leader Harry Reid, which then spent $600,000 to re-elect Mr. Menendez. Mr. Menendez also publicly and privately helped his friend with business disputes. The senator made calls on Mr. Melgen’s behalf to the Department of Health and Human Services in the dispute over the injection dosing and advocated on behalf of the doctor during a Senate hearing into a port security contract in the Dominican Republic.
The hearing involved a port security company that Dr. Melgen had purchased in his native country in the hopes that the Dominican Republic would start screening every container on every outbound vessel. The Customs agency there refused to honor the contract, and Senator Menendez urged American officials to get involved.
Without mentioning his friend, the senator urged federal agencies not to donate equipment that would have competed with the doctor’s business plans.
Dr. Melgen has said the senator is “like a brother” to him, and said he never sought anything in return for the money he donated.
A spokesman for Senator Menendez declined to comment on the federal data about Dr. Melgen’s Medicare billings.
Dr. Melgen and his family in the Dominican Republic, who are powerful members of the political establishment there, are quick to remind people that the doctor did not make his fortune through medical billing.
For instance, he was an early investor in Seisint Inc., a service that created a data analyzing program, which he said helped federal agencies investigate the Sept. 11 terrorist attacks. The company was sold to LexisNexis for $775 million, providing a financial windfall for the doctor.
He has lost his share of money, too. According to lawsuits he filed, he was once swindled for $5 million in a Ponzi scheme and lost another $1 million to a former girlfriend who used his money to start a boutique. Two other federal lawsuits he and his wife filed blamed “false and misleading disclosures” for losses of more than $40 million from Citigroup and Bank of America.
The doctor and his wife also filed a suit over a nearly $6 million loss in an online gaming venture.
Dr. Melgen was the co-founder of Voxxi, a Hispanic-oriented news site, which has published laudatory articles about the doctor and the Senator.
His lawyer said Dr. Melgen has patients who travel from around the world to see him, and cautioned against analyzing raw Medicare data in a negative light.
“Dr. Melgen stands by his record of improving the vision and quality of life of patients from around the world,” Mr. Ogrosky wrote in the statement. “Dr. Melgen strongly supports transparency in government, but engaging in speculation based on raw data is irresponsible. Dr. Melgen and his employees provide a substantial amount of free services and drugs to patients who cannot afford to pay. The data is merely a reflection of Medicare’s spending for pharmaceuticals that are improving the lives of countless Medicare patients.”