Gambro Healthcare - Dialysis Fraud Pays Big Bucks

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http://www.opednews.com/articles/genera_evelyn_p_060331_gambro_healthcare___.htm

 

March 31, 2006

 

Gambro Healthcare - Dialysis Fraud Pays Big Bucks

 

 

by Evelyn Pringle

 

http://www.opednews.com

 

Medicare payments for dialysis, cost the US government $5 billion a

year. The global market for chronic dialysis services is worth

approximately $43 billion and the US market is the largest in the

world in terms of value.

 

Worldwide, by the end of 2005, the number of dialysis patients reached

1.5 million. Of that number, approximately 23% patients were treated

in the US, 20 percent in Europe, 17% in Japan, and 40% in the rest of

the world.

 

Having said all that, it will probably come as no surprise that most

of the major renal care facilities in the US have come under

investigation for fraud in recent years, to include Fresenius Medical

Care America, DaVita Inc, Renal Care Group, Quest Diagnostics, and

Bone Care International.

 

The 6th largest medical fraud case in US history was settled in

December 2004 against Gambro Healthcare, for $325 million. At the

time, Gambro was the third largest operator of renal-dialysis clinics

in the US. The settlement period covered fraud that occurred from

January 1, 1991, through September 30, 2004.

 

Gambro Healthcare is owned by a holding company, Gambro Inc, a

subsidiary of Gambro AB, headquartered in Stockholm, Sweden, which

produces dialysis products, operates dialysis clinics and markets

blood bank technology products.

 

In fiscal 2004, the company had revenue of $3.6 billion. Gambro had

revenue of $1.4 billion in the first nine months of 2005, with the

latter significantly lower than 2004 due to the company selling off

its US operations to DaVita in October 2005.

 

In December 2004, Gambro entered into an agreement to sell it's US

renal business to DeVita Inc for $3.05 billion and the FTC approved

the deal in October 2005. Since the sale of its US operations, Gambro

has around 11,300 employees in 40 countries.

 

The federal fraud investigation began in 2001, after Dr Steven Bander

filed a federal whistle-blower lawsuit against the company in St.

Louis, alleging fraudulent billing practices. Dr Bander is a kidney

specialist and served as Gambro's chief medical officer from 1995 to

2000, according to the lawsuit complaint.

 

In the end, the investigation involved the FBI, the Justice

Department's Civil Division and the Health and Human Services' Office

of Inspector General.

 

On December 2, 2004, the Department of Justice announced that Gambro

would pay more than $350 million in criminal fines and civil penalties

to settle allegations of fraud against government healthcare programs,

 

Gambro paid in excess of $310 million to resolve civil liabilities

stemming from kickbacks paid to physicians, false statements made to

procure payment for unnecessary tests and services, and payments made

to the sham equipment company Gambro Supply.

 

The settlement also required Gambro to pay $15 million to resolve

liability with the individual state Medicaid programs to include

Arizona, Arkansas, Alabama, California, Colorado, Connecticut, Kansas,

Kentucky, Michigan, Missouri, Nevada, Oklahoma, Texas, Virginia,

Florida, Georgia, Louisiana, Mississippi, North Carolina,

Pennsylvania, Tennessee, Wisconsin, Washington, Illinois, Maryland,

Massachusetts, New Jersey, New Mexico, New York, Ohio, Oregon,

Indiana, Utah, Iowa, Minnesota, Nebraska, New Hampshire, Rhode Island,

South Carolina and West Virginia.

 

Upon receiving his state's portion of the settlement last fall,

Connecticut Attorney General, Richard Blumenthal, said in a September

27, 2005 press release, " Gambro's conduct was reprehensible. Their

scams and schemes – including kickbacks, unnecessary tests and billing

fraud – stole precious funds intended to care for some of society's

neediest patients. "

 

According to the Department of Justice, the settlement resolved

allegations that Gambro Healthcare:

 

(1) Provided home dialysis patients equipment and supplies through a

" shell " durable medical equipment company, Gambro Supply, in violation

of Medicare regulations. By billing in this manner, Gambro received a

higher rate of reimbursement than it would have received if it had

directly submitted the claims for payment. Also, emergency home

dialysis supplies were not provided as billed by Gambro;

 

(2) Engaged in " hard coding " of diagnostic codes on submitted claims.

This practice resulted in the submission of false statements and bills

being submitted for ancillary medications and services which were not

medically necessary (bone density studies, nerve conduction studies,

electrocardiograms, carnitor, epogen, vitamin D and iron); and

 

(3) Hired and compensated physicians as medical directors for their

dialysis clinics based on the number and volume of anticipated patient

referrals to Gambro clinics.

 

Gambro also violated the Anti-Kickback Act, the DOJ said, by entering

into joint venture relationships with physician partners and

contractual dealings " premised upon the number and volume of

anticipated patient referrals. "

 

" Kickbacks of this type are prohibited, " according to the DOJ, " to

ensure that health care providers do not make treatment decisions

based upon improper financial considerations rather than the

necessity, reasonableness, quality and effectiveness of services. "

 

As part of the overall scheme, Gambro Supply was set up as a medical

equipment company, to inflate billings in a way that would allow the

company to earn nearly $500 more per patient each month. The company

billed for the rate charged at clinics rather than the lower rate it

should have billed for home dialysis.

 

In addition, Gambro Supply, then known as REN Supply Corp,

intentionally left a line blank on Medicare application forms in 1993

and 1996 to conceal its connection to the parent company, which made

it possible to collect the extra $500 per person.

 

According to court records, in St Louis, Gambro Supply pled guilty to

one felony count of execution of a health care fraud scheme, paid a

$25 million fine and was permanently barred from the Medicare program.

 

This was the second time in four years that Gambro paid large fines

for ripping off government programs. In 2000, the company and two

subsidiaries, Dialysis Holdings Laboratory services and Gambro

Healthcare Laboratory Services, paid over $53 million to settle

charges of health car fraud similar to the allegations in the later

investigation.

 

The $53 million settlement resolved charges that the firms submitted

false claims to Medicare, Medicaid and Tricare, the Defense

Department's health care program, for laboratory services provided to

End Stage Renal Disease patients, according to the US Department of

Justice.

 

In a move that seems kind of silly in hindsight, as part of the 2000

settlement, Gambro entered into a 5-year integrity agreement with the

Department of Health and Human Services' Office of Inspector General.

Under the agreement, reportedly designed to promote compliance with

federal program requirements, Gambro agreed to provide compliance

training to employees, undergo annual independent audits and submit

annual reports to the Office of Inspector General.

 

" The corporate integrity agreement provides important safeguards to

prevent misconduct and requires ongoing monitoring of the companies to

help ensure compliance with federal health care program requirements, "

Inspector General June Gibbs Brown said at the time.

 

In light of the recent $300 million plus 2004 settlement, its probably

safe to assume that signing the " integrity agreement " was a

meaningless gesture on the part of Gambro.

 

However, for whatever its worth, if anything, Gambro was required to

sign another " integrity agreement " as part of the December 2004

settlement.

 

The charges above beg the questions of how many patients received

unnecessary testing, medications and equipment, and how many patients

went without services that were billed for? Also, how much

out-of-pocket money did patients lose in co-payments as a result of

bogus billings for services not rendered or for services rendered

needlessly?

 

Gambro also has a long history of causing death and injury by

producing faulty products. On June 19, 1998, the New York Times

National News Brief reported that four " hemodialysis patients died and

at least 40 others required hospitalization because of defective

tubing that damaged their red blood cells. "

 

Gambro issued a nationwide recall of the products. A company press

release at the time said the " blood tubing sets may be associated with

incidents of hemolysis that have been reported in Nebraska, New

Jersey, Alabama, Massachusetts, and Maryland within the past three (3)

weeks. "

 

Hemolysis is the medical term for the destruction of the red blood

cells, according to the company.

 

Customers who received the products were notified " to immediately

cease using them, quarantine any inventory, and arrange for their

return to GAMBRO Healthcare. "

 

" A total of four patient deaths have been reported following dialysis

treatment, " the press release wrote. " Symptoms reported include

abdominal pain, nausea, vomiting, cyanosis, chest pain, and flushing

that occurred during and/or following dialysis treatment, " it warned.

 

The tubing was manufactured in Tijuana, Mexico, according United Press

International, and as many as 6,000 sets of tubing may have been shipped.

 

In another product malfunction, on August 16, 2005, Gambro issued a

" Worldwide Safety Alert " to all users of its Prisma System dialysis

machine explaining what actions to take to reduce the problems with

the device that resulted in excessive fluid removal.

 

The Prisma System is specially designed to perform the complete range

of continuous renal replacement therapy for critically ill patients in

the intensive care unit.

 

In this country, the FDA now says nine deaths and 11 serious injuries

have been linked to the Prisma System. Since the device was introduced

in 1997, approximately 1,900 units have been distributed to facilities

in the US, and about 5,000 were sold worldwide. The system serves

about 80% of the market for acute dialysis care in this country.

 

On January 5, 2006, Gambro Dasco, SpA, a production unit located in

Italy, received a warning letter from the FDA reflecting continued

concerns about the safety, adequacy and effectiveness of Gambro renal

systems. The FDA also issued an import ban, calling for the detention

of all Gambro's dialysis machines shipped from Italy until the issues

are resolved.

 

In addition to the Prisma, the ban covers the Phoenix machine, used in

outpatient dialysis care, and the company's newest product the

Prismaflex machine, which is said to be an improved version of the

Prisma System.

 

That letter arrived shortly after the FDA sent a 13-page report to

Gambro following a September 2005, inspection of the company's plant

in Italy where the Prisma System is produced. The report listed

numerous violations at the plant, and said more than 90 incidences of

serious problems with the device, had been reported to Gambro but had

not been reported to the FDA, including deaths. The report

specifically noted Cambro`s:

 

1. Failure to submit reports to FDA after receiving information that

reasonably suggested that one of your marketed devices may have caused

or contributed to a death or serious injury, as required by 21 CFR

803.50(a)(1). For example:

 

a) A patient died on June 6, 2004, two days after the Prisma removed

100 cc too much fluid from the patient. This event should be reported

as a device-related death.

 

b) A facility reported that a Prisma contributed to the death of a

patient on November 20, 2004, after multiple alarms for air in the

blood and a blood leak. This event should be reported as a

device-related death.

 

The report also lists more than 17 events that should have been

reported under serious injuries.

 

Until recently, Gambro claimed user error was the sole cause of the

problems with the Prisma system. However, in a letter to renal

caregivers in January 2006, the company's medical director, Juan

Bosch, MD, acknowledged that software glitches might be giving users

incorrect readings on fluid removal.

 

On February 27, 2006, the FDA sent another letter to all Renal

Dialysis Caregivers, stating: " The FDA has become aware of additional

serious injuries and deaths associated with the use of the Gambro

Prisma® Continuous Renal Replacement Therapy (CRRT) device since the

release of our preliminary Public Health Notification in August 2005. "

 

" We want to emphasize again that special caution must be used when

operating the Prisma® System to prevent excessive fluid removal from

patients, " the agency wrote.

 

" Caregivers must adhere strictly to the labeled operating

instructions, including the Manufacturer's Instructions for Use,

Operator's Manual, and the User Interface on the Prisma® System

control panel, " it warned.

 

The FDA now points out that device " design issues may also be

contributing to the problem, and this is currently under investigation

by both the FDA and the firm. "

 

More information for injured parties can be found at Lawyers and

Settlements.com

 

http://www.lawyersandsettlements.com/articles/gambro.html

 

By Evelyn Pringle

 

 

 

Evelyn Pringle is a columnist for Independent Media TV and a freelance

investigative journalist focused on exposing corruption in government

 

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