Disposable Income
A Memphis gynecologist billed $41 million while reusing "dirty" medical devices on thousands of women
This Week In Blunders – July 5-11
“The glorification of profit … is harming both care and health. Health care should not be an engine for excessive private gain.” – Donald M. Berwick
If there’s an award for the most despicable medical billing fraud, I nominate Dr. Sanjeev Kumar, 45, a Mayo-trained gynecologic oncologist who ran the Poplar Avenue Clinic in Memphis.
Typically, medical billing fraud involves schemes like billing for services that were never rendered or upcoding for more expensive treatments than patients received.
Not Kumar. He found a way to reuse single-use medical devices in thousands of hysteroscopies and then billed private and government insurers as if he’d used new ones.
This is a stressful, highly personal, in-office procedure for detecting cancer. A scope and a grasper is inserted into the vagina, pushed through the cervix, and into the uterus for a biopsy, and then snip, snip.
Kumar did more than 15,000 of these procedures between September of 2019 and April of 2024. But he only purchased about 200 hysteroscopes.
“Thousands of women were subjected to hysteroscopies with biopsy using the dirty devices,” prosecutors said.
He billed more than $41 million for this service and netted more than $4.8 million from Medicare and Medicaid alone.
On Wednesday, Kumar was sentenced to 20 years in prison. Restitution will be determined in a hearing scheduled for Oct. 2. The FBI is looking for victims. The personal-injury lawyers are circling.
I might ask D. Michael Dunavant, U.S. Attorney for the Western District of Tennessee, to second my nomination:
“This defendant used his medical license to target a vulnerable population of women seeking treatment in extremely personal and intimate procedures. He was motivated by greed, disregarded clear medical risks, and caused significant physical and psychological harm to his victim-patients.”
CVS is too big to jail
As big as Kumar was with his $41 million fraud, he wasn’t nearly as big as the nation’s largest pharmacy chain.
CVS spent the week writing checks instead of hiring criminal defense lawyers.
The company agreed to resolve two healthcare fraud cases involving nearly half a billion dollars, including allegations that it improperly billed government healthcare programs for insulin prescriptions and that its Omnicare subsidiary submitted more than 3.3 million false prescription claims to Medicare, Medicaid and TRICARE.
The smaller settlement, $36.5 million, resolved allegations that CVS pharmacies billed Medicare and Medicaid for insulin refills that came too early, dispensed more insulin than patients needed and manipulated prescription days’ supply, causing government programs to pay claims they otherwise would have rejected.
The larger case involved Omnicare, which filed bankruptcy after a federal jury found the company submitted millions of false claims. After a judgment that approached $950 million, CVS agreed to settle for $440 million.
Unlike Kumar, CVS did not plead guilty to a crime.
No executives were charged. Nobody is headed to prison. Instead, the company put up money to put the cases behind it, a familiar outcome in corporate healthcare fraud, where enormous civil settlements are often the price of doing business.
A prescription for prison
Not too-big-to-jail this week was the founder of a California telehealth startup that turned ADHD treatment into what prosecutors called an online Adderall pill mill.
Done Global founder Ruthia He was sentenced to six years in federal prison and fined $1 million for orchestrating a $90 million scheme that prosecutors said used quick ADHD diagnoses to illegally distribute Adderall over the internet.
Her co-defendant, the company’s former clinical president, Dr. David Brody, received two years in prison and a $1 million fine as well.
If you think Adderall is overprescribed, here’s a case that supports your thesis.
According to the Justice Department, Done Global spent more than $40 million on social media advertising, luring patients with promises of quick diagnoses and easy access to stimulants.
Done Global’s scheme produced more than 37 million Adderall pills while defrauding the insurers and government healthcare programs who can’t seem to adequately cover all of their members’ medial needs.
But unlike CVS, it’s Done.
One thing I’ve noticed when it comes to white collar crime: If you make dupes of venture capital or private equity investors, there’s no two-tiered justice system for you. Christopher Kirchner is a case in point.
Read More: Chris Kirchner – Slync (Business Blunders Hall Of Shame)
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