The Department of Justice (DOJ) announced an indictment of a Nevada wound care physician for fraud in relation to expensive amniotic allografts. (Note that the conduct described below is alleged. Criminal charges are accusations, not findings of guilt.)
The defendant is Stephen Dubin, M.D. of Henderson, Nevada and charges include conspiracy to commit health care fraud plus five counts of health care fraud, alleging that ~$95 million were billed to Medicare for medically unnecessary amniotic wound allografts (with Medicare having paid out over $54 million on the false claims), plus alleged kickbacks from distributors.
As alleged in the indictment, “Dubin received illegal kickbacks, bribes, and rebates from two different allograft distributors. Some of these illegal payments were falsely structured to appear as legitimate “Rebate Agreements” while concealing their true nature and illegal payments. These purported rebates substantially reduced Dubin’s true net cost of acquiring the allografts. Dubin allegedly submitted claims to Medicare seeking reimbursement for the price listed on sham full-price invoices, instead of the actual price he paid for the allografts. Dubin and others allegedly kept as profit the difference between Medicare’s reimbursement and the price paid for the allografts. The indictment also alleges that Dubin received illegal kickbacks from one allograft distributor through payments from a pass-through bank account held in the name of a shell company in exchange for purchasing allografts from the distributor.”
Last September, I posted a blog by attorney David Traskey explaining the Antikickback Statue (AKS). For years I have been concerned about the legality of things like “selling the spread.” and the possibility that practitioners could end up facing criminal charges under the Antikickback Statute (AKS) for the profits they were making on the sale of Cellular and/or Tissue-based Products (CTPs), aka “skin substitutes.” Mr. Traskey explained the way in which contractual agreements with manufacturers or distributors could put practitioners at risk under the AKS. Keep in mind that the AKS applies both to those who offer or pay remuneration and those who solicit or receive remuneration. In other words, manufacturers and distributors can be charged under the AKS and that is happening.
Two years ago, a clinician sent me an example of 2 invoices provided by the manufacturer/distributor for the same amniotic product. One invoice shows the full price of the product at $15,200 and the other shows the discounted price at $9,120.00. It was left up to the clinician to decide which invoice to submit. This is probably the reason that auditors are demanding to see actual invoices and rebate agreements, as pointed out in a blog by Martha Kelso.
Allegations against Dubin Medical Consultants, Inc. also include:
- Application without regard to medical necessity including applications:
- To infected wounds
- To wounds not responding to treatment
- Without first completing or confirming conservative care
- In quantities that exceed the size of the wound
- Falsifying patient medical records to make it appear that applications were medically reasonable and met Medicare requirements
- Selecting allografts that would maximize his profit
“Selecting allografts that would maximize his profit” is an interesting allegation that deserves a separate blog. Without research data to show that a more expensive product is clinically superior to a less expensive product, clinicians may have a hard time explaining why a more expensive product was used. What are your thoughts on this?
–Caroline
Additional information:
- Henderson doctor indicted in $95 million Medicare wound care fraud scheme (Las Vegas Sun)
- Nevada doctor indicted in $95 million Medicare fraud scheme (Washington Times)
- Nevada doctor charged in $95M scheme to defraud Medicare to fund ‘lavish lifestyle’ (8 News Now)
- Nevada Doctor Indicted in $95 Million Medicare Wound-Care Fraud Scheme (Medical Daily)
Dr. Fife is a world renowned wound care physician dedicated to improving patient outcomes through quality driven care. Please visit my blog at CarolineFifeMD.com and my Youtube channel at https://www.youtube.com/c/carolinefifemd/videos
The opinions, comments, and content expressed or implied in my statements are solely my own and do not necessarily reflect the position or views of Intellicure or any of the boards on which I serve.
