Wednesday, July 03, 2013

An interesting case

SAN DIEGO — A La Jolla oncologist was sentenced in San Diego federal court Tuesday to a year of probation, stemming from a scheme in which he and his practice treated patients with unapproved foreign cancer drugs, then fraudulently billed Medicare $1.7 million.

Dr. Joel I. Bernstein’s sentence is in addition to the one his medical corporation received Friday. His practice was ordered to pay a $500,000 fine, forfeit $1.2 million and make restitution to Medicare for $1.7 million.

The payments have all been paid, said his attorney, Charles Sevilla.

A federal judge also sentenced the practice to a year of probation, meaning officers can examine the company’s financial records at any time and submit to searches.

The case is one of many being investigated by the FDA that highlights the controversy over the pricing of pharmaceuticals in the U.S. and the cost of medical care.

More than two dozen of Bernstein’s patients and their caregivers packed into the courtroom Tuesday in support of the doctor.

“Doctors are trapped as an economic result of ‘big pharma,’” Dan Hentschke, whose wife was successfully treated by Bernstein, said outside the courtroom. “This was an economic crime, this wasn’t a treatment crime.”

Bernstein’s practice admitted to buying $3.4 million of foreign cancer drugs from 2007 to 2011 at significant discounts when compared to similar medicine approved by the U.S. Food and Drug Administration.

The office then submitted claims to Medicare for the drugs, using codes for similar approved cancer drugs. The insurance program for seniors and the disabled does not pay for non-FDA approved medicines.

The foreign drugs have the same active ingredients as those sold in the U.S., including brand names Boniva, Alimta and Eloxatin.

The doctor’s practice received $1.7 million from Medicare, and earned another $1.2 million in gross proceeds related to the drugs, according to court documents.

Bernstein himself pleaded guilty to a misdemeanor charge of introducing unapproved drugs into interstate commerce, admitting to buying the prescription drug Mabthera from Canada. The drug is intended to be used in Turkey, not the U.S.

Prosecutors said Bernstein and his office were well aware the drugs were not approved by the FDA, as evidenced by shipping labels from the United Kingdom, differences in the labeling and a 2008 warning letter from the FDA that a shipment of drugs had been confiscated. His attorneys have said there is no evidence his patients were harmed by the drugs.

The practice and Bernstein pleaded guilty to the scheme in January.

In addition to the criminal cases, the doctor and his practice paid $2.2 million to settle a civil False Claims Act lawsuit. That amount is being applied toward the restitution owed to Medicare, the U.S. Attorney’s Office said.

Bernstein, who went to medical school at Stanford University, declined to make a statement in court, saying his attorney had already spoken for him.

Prosecutors have not asked that his medical license be revoked, saying it is up to the California Medical Board. Bernstein has been a board certified physician since 1980 and has no other disciplinary actions, according to the board.

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