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tazzygirl -> Executives to pay for health care fraud (5/31/2011 8:40:12 AM)
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WASHINGTON — It's getting personal now. In a shift still evolving, federal enforcers are targeting individual executives in health care fraud cases that used to be aimed at impersonal corporations.
The new tactic is raising the anxiety level — and risks — for corporate honchos at drug companies, medical device manufacturers, nursing home chains and other major health care enterprises that deal with Medicare and Medicaid.
Previously, if a company got caught, its lawyers in many cases would be able to negotiate a financial settlement. The company would write the government a check for a number followed by lots of zeroes and promise not to break the rules again. Often the cost would just get passed on to customers.
Now, on top of fines paid by a company, senior executives can face criminal charges even if they weren't involved in the scheme but could have stopped it had they known. Furthermore, they can also be banned from doing business with government health programs, a career-ending consequence.
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Many in industry see the more aggressive strategy as government overkill, meting out radical punishment to individuals whose guilt prosecutors would be hard pressed to prove to a jury.
The feds say they got frustrated with repeat violations and decided to start using enforcement tools that were already on the books but had been allowed to languish. By some estimates, health care fraud costs taxpayers $60 billion a year, galling when Medicare faces insolvency.
"When you look at the history of health care enforcement, we've seen a number of Fortune 500 companies that have been caught not once, not twice, but sometimes three times violating the trust of the American people, submitting false claims, paying kickbacks to doctors, marketing drugs which have not been tested for safety and efficacy," said Lewis Morris, chief counsel for the inspector general of the Health and Human Services Department.
"To our way of thinking, the men and women in the corporate suite aren't getting it," Morris continued. "If writing a check for $200 million isn't enough to have a company change its ways, then maybe we have got to have the individuals who are responsible for this held accountable. The behavior of a company starts at the top."
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A test case is playing out with an 83-year-old drug company chief executive, Howard Solomon of New York City-based Forest Laboratories. Forest makes antidepressants, blood pressure drugs and other medications. Last month, the inspector general's office notified Forest that Solomon could potentially be banned from doing business with federal programs.
The power to ban or "exclude" an individual rests with the inspector general. It's routinely applied to low-level violators, but rarely to people of Solomon's rank. In the industry, they call it the "death penalty."
Last year, a Forest subsidiary pleaded guilty to criminal charges as part of a settlement with the Justice Department in which the company also agreed to pay $313 million to resolve long-running investigations. Prosecutors charged that Forest deliberately ignored an FDA warning to stop distributing an unapproved thyroid drug, promoted the use of an antidepressant in treating children although it was only approved for adults and misled FDA inspectors making a quality check at a manufacturing plant.
http://www.msnbc.msn.com/id/43223962/ns/business-us_business/
This should be interesting to watch.
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