Feds: Chicago psychiatrist took kickbacks, filed false Medicaid claims
BY JON SEIDEL Staff Reporteremail@example.com November 15, 2012 2:10PM
Updated: November 15, 2012 10:16PM
A Chicago psychiatrist faces $2 billion in penalties after the United States filed a civil health care fraud lawsuit against him Thursday, claiming he took kickbacks from drug companies and submitted at least 140,000 false Medicare and Medicaid claims for antipsychotic medications he prescribed to thousands of mentally ill patients in area nursing homes.
Michael J. Reinstein, 69, of Skokie is also accused of submitting at least 50,000 Medicare and Medicaid claims falsely stating he provided “pharmacologic management” for his patients at more than 30 area nursing homes and long-term care facilities.
The U.S. Attorney’s office said Reinstein has been providing psychiatric medical services in the Chicago area since 1973, and he’s maintained an office in Chicago’s Uptown neighborhood since at least 1999. That’s where Illinois’ densest concentration of mentally ill nursing home residents is found, according to the government.
Reinstein couldn’t be reached for comment on the lawsuit. A spokeswoman for one of the drug companies involved, Teva Pharmaceuticals, declined to comment other than to say it is cooperating with the investigation. The government is seeking triple damages under the False Claims Act, plus a civil penalty of $5,500 to $11,000 for each false claim he’s accused of filing.
“This is the largest civil case alleging prescription medication fraud against an individual ever brought in Chicago,” said Acting U.S. Attorney Gary Shapiro.
The feds wouldn’t comment on why they went after Reinstein with a civil case instead of criminal allegations, but did note that the investigation is continuing.
The lawsuit by the government follows a 2009 report by the Chicago Tribune and ProPublica about Reinstein and his record of prescribing risky drugs.
The alleged fraud began when Florida-based IVAX Pharmaceuticals began encouraging Reinstein to switch his psychiatric patients using Clozaril — the trade name for the drug clozapine manufactured by Novartis to treat symptoms of schizophrenia — to IVAX’s generic form of the drug.
Reinstein refused until August 2003, according to the lawsuit, when Novartis told him it would be withdrawing its “support” to him for Clozaril. Reinstein agreed to switch his patients to the generic IVAX drug if the company agreed to pay him $50,000 under a one-year “consulting agreement,” pay his nurse to speak about the drug, and fund a clozapine research study by Uptown Research Institute, with which he was affiliated.
Suddenly Reinstein became the largest prescriber of generic clozapine in the United States, according to the government. The lawsuit said that “stands in stark contrast to its extremely limited use by other physicians.” “Clozapine is one of the least-prescribed atypical antipsychotics in the United States,” attorneys wrote in the complaint.
In fact, it said, about 4 percent of all schizophrenia patients receiving atypical antipsychotics received clozapine, and it was prescribed to less than 2 percent of nursing home residents for whom claims had been submitted to Medicare for an atypical antipsychotic.
Reinstein, the lawsuit said, had more than 50 percent of his patients on the drug. And at one nursing home, he prescribed it to 75 percent of the residents.
Government lawyers said he knew, because most of his patients are indigent nursing home residents, the drugs he prescribed were dispensed by pharmacies that submitted claims for the prescriptions to Medicaid and, after Jan. 1, 2006, Medicare Part D. They were materially false because they were generated by kickbacks, the lawyers said.
Between 2003 and 2006, the government said, IVAX continued to compensate Reinstein so he’d keep prescribing clozapine.
The company paid for his travel to Miami in February 2004 and March 2005, according to the lawsuit, and it agreed to pay airfare, lodging, meals and entertainment expenses for his wife and several others. IVAX also paid for Reinstein and his “entourage” to go on a fishing trip and picked up the check for at least one dinner that cost more than $1,000 during the first trip, and paid for an $800 boat cruise, a golf outing and at least two dinners costing more than $1,400 each during the second.
Also in February 2004, according to the lawsuit, IVAX agreed to give Reinstein free medication for his personal use. The drug company renewed its $50,000 “consulting agreement” with the doctor in August 2004 and October 2005, and it renewed a similar agreement with his nurse in August 2004.
From 2003 and 2006, Reinstein also repeatedly convinced IVAX to pay for tickets to professional sporting events, according to the lawsuit.
Reinstein began switching large numbers of his patients off clozapine in April 2005, the government said, before IVAX merged with Teva Pharmaceutical Industries in January 2006. He moved them to Fazaclo, a dissolvable form of clozapine manufactured by a competitor. By the time the merger was complete, attorneys said, he’d reduced the number of patients on the IVAX drug by half.
Teva representatives became concerned and paid in April 2006 for Reinstein, his wife and others to travel again to Miami. During that trip, the lawsuit said, Teva paid for Reinstein to go on a $2,300 boat cruise and for two dinners worth $1,700 each.
Teva also asked Reinstein how it could encourage him to prescribe more of its clozapine for his patients. Reinstein allegedly said Teva should hire an associate of his from Chicago, Kim Nguyen. Lawyers said Teva agreed and hired Nguyen in May 2006, and Reinstein put several hundred patients back on Teva’s clozapine.
Reinstein’s deal with Teva expired in August 2006, the lawsuit said, but the company agreed to a one-year, $50,000 “speaker agreement” in April 2007 made retroactive to November 2006. They entered new agreements again in June 2008 and 2009, according to the government.
Teva made its last payment to Reinstein on Nov. 3, 2009, lawyers said, after an article appeared in the Chicago Tribune questioning the appropriateness of Reinstein’s use of clozapine. Government lawyers said Reinstein contacted Teva shortly after the story was published and asked it to stop paying him.
Teva continued to employ Nguyen, the lawsuit said, until July 15, 2011.