[Congressional Record Volume 146, Number 115 (Monday, September 25, 2000)]
[Extensions of Remarks]
[Pages E1578-E1579]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
ARE DRUG PROFITS NECESSARY TO RUN AN ONCOLOGY PRACTICE? NOT IN THE CASE
OF ONE FLORIDA PRACTICE! ONCOL- OGISTS PARTNERS HID $2.6 MILLION IN
DRUG PROFITS FROM OTHER DOCTORS--DIDN'T PUT DRUG PROFITS INTO THE
PRACTICE
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HON. FORTNEY PETE STARK
of california
in the house of representatives
Monday, September 25, 2000
Mr. STARK. Mr. Speaker, Medicare has delayed reducing the level of
reimbursement for various chemotherapy drugs, because of lobbying by
some oncologists and drug companies that the profits are essential to
cover the cost of running an oncology medical practice.
Hmmmmmmm.
Not in one Florida practice, where a lawsuit between several partners
who are gastroenterologists and oncologists reveals how the oncologists
pocketed millions in profits from drugs, didn't put the money into the
practice, and (apparently) the practice was successful in more than
meeting its costs.
I am happy that HCFA is going to review its reimbursement of the
costs of administering chemotherapy drugs. I hope they will check out
this court case, before they buy all the arguments of the industry.
The following excerpts from the court case were provided by an
attorney from Florida and I submit into the Congressional Record:
July 24, 2000.
Re Summary of Information that you may find Illuminating and
Helpful in Understanding the False Drug Pricing Scheme that
Generates Huge Kickbacks From Medicare and Medicaid to
Oncologists; Medical Practice Partners' Litigation Between
Gastroenterologists and Oncologists Over Profits from the
Sale of Chemotherapy Drugs From Medicare, Medicaid and
Private Insurance Being Kept Secretly by the Oncologist
Partners and not shared with the Gastroenterologist
Partners.
Dear Representative Stark: The original complaint in the
Chetan Desai, M.D., et al. v. Jayaprakash K. Kamath, M.D., et
al. case charges that two (2) oncologists made 2.6 million
dollars in profits from the sale of chemotherapy drugs
between 1993 and 1997 (page 4 para.10). Additionally, the
complaint charges that the two oncologists in 1997 overdrew
their compensation by approximately $385,000 (page 4,
para.11). By the time the Amended Complaint was filed, the
feuding doctor partners and their lawyers had realized that a
public fight in written documents over 2.6 million dollars in
chemotherapy profits for two oncologists in four years' worth
of practice may raise eyebrows of the court and law
enforcement. Therefore, the Amended Complaint and the
depositions were done with an agreement between the feuding
parties not to mention the 2.6 million dollars worth of
chemotherapy profits in four years for two oncologists gut to
only discuss chemotherapy profits in general and the
$385,000.00 1997 overdraw of compensation. Nevertheless, the
accounting exhibits, Plaintiffs' Exhibit No. 33, Defendants'
Exhibit No. 12 and Plaintiffs' Exhibit No. 34
[[Page E1579]]
show the tremendous profits in ``reimbursement'' for
chemotherapy infusion and other infusion drugs from Medicare
over the actual costs in obtaining the drugs from the
manufacturers.
The following are some excerpts from the depositions in the
case:
1. Geetha Kamath, M.D. is one of the oncologist defendants,
the wife of the gastroenterologist defendant who allegedly
changed the accounting system so that the oncologists got all
the benefit from the sales of oncology drugs. You will note
that the oncologists testified that it was common knowledge
among all the partners, administration and all physicians
generally that huge profits were made from the sale of
oncology drugs. However, the gastroenterologists and some
administrators (and physicians that we have interviewed in
other specialities that oncology) testified that they had no
idea that huge profits were made by oncologists merely from
the sale of the drugs from their reimbursement from Medicare
and Medicaid.
Excerpts of Testimony of the Deposition of Geetha Kamath, M.D.
(A) Deposition of November 6, 1998 of Geetha Kamath, M.D.
Page 156, Line 21.--I always thought that it was such a
well known fact that drugs are profitable; it's a known fact
in the medical community as far as I am concerned.
Page 163-164.--Exhibit No. 34 is a history of gastro and
onco collections which reflect the increase in collections by
oncologists between 1987 and 1995.
(B) Deposition of November 11, 1998 of Geetha Kamath, M.D.
Page 8, line 25 through Page 9, line 5.--Profit from
chemotherapy drugs went to the oncologists. Profits from the
sale of chemotherapy drugs were not shared by the
gastroenterologists.
2. Belur S. Sreenath, M.D. is a gastroenterologist
plaintiff. He sued the defendant oncologists because of their
failure to distribute money from chemotherapy profits.
Excerpts of Testimony of the Deposition of Belur S. Sreenath, M.D.
(C) Deposition of September 17, 1998 of Belur S. Sreenath,
M.D.
Page 23, line 6 through 23.--The gastroenterologists do not
make any money from the sales of drugs. They write a
prescription and the patients go to the patients' pharmacists
and get their prescriptions filled. (essentially the same
testimony on page 24, line 20-25)
Page 39, line 21 through Page 40, line 5.--He sued the
oncologists because they diverted the profits from
chemotherapy drugs in the amount of $385,000.00
Page 72.--The gastroenterologists were aware that
oncologists were being paid more from insurance companies and
Medicare; however, they didn't know that the large profits
were from the sale of chemotherapy drugs.
Page 124.--That Dr. Sreenath knew in 1997 the revenue from
one oncologist, Dr. Geetha Kamath was $2,490,000.00 and Dr.
Sreenath's total revenue was only $363,909.00 but he only
understood that each oncologist was making a lot more money
than he was but he didn't know that it came from the profits
from the sale of chemotherapy infusion drugs.
Page 127.--He first relized that there was so much
chemotherapy profits in the end of the year of 1997.
3. Pothen Jacob is a gastroenterologist partner suing for
his share of the 2.6 million dollars in chemotherapy drug
profits.
Excerpts of Testimony of the Deposition of Pothen Jacob
(D) Deposition of July 14, 1998 of Pothen Jacob:
Page 107.--More than 2.6 million dollars in profits from
chemotherapy drugs were paid by GOA to the defendants from
1993 to the filing of the suit in April 1997.
Page 51.--The oncologists are paid for a professional
component when they administer the chemotherapy drugs and
they also get reimbursed separately for the oncology drugs
administered.
Page 60.--Medicare pays for the chemotherapy drugs at a
parallel or same time that the oncologists have to pay the
manufacturers for the chemotherapy drugs.
Page 61.--The dramatic difference in revenues between the
oncologists and the gastroenterologists are the chemotherapy
drug profits received by the oncologists.
Page 66.--Gastroenterology physicians' receipts were lower
in 1995 and 1996 because reimbursement was lowered for
gastroenterology services and the cost of malpractice
insurance was higher.
Pages 71-72.--Endosopic procedures are personally done by
gastroenterologists. Chemotherapy is not personally
administered by an oncologist but by a nurse.
Page 83.--For drugs by gastroenterologist, the patient pays
the cost, either buying from GOA at cost or buying it from
the pharmacy.
Page 155.--The first time he learned of the extent of
chemotherapy sales' profits in GOA was in the middle of 1997
when they were investigated entering MSO.
4. Debra Mitchell was the administrative nurse who was
demoted in salary by the administrator physician partner, Dr.
Jay Kamath, husband of one of the oncologists. He hired a
second administrator just to work for the two oncologists.
Excerpts of Testimony of the Deposition of Debra Mitchell
(E) Deposition of July 14, 1998 of Debra Mitchell, R.N.:
Page 75-76.--In December of 1997, oncologist Dr. Geetha
Kamath had revenue of $2,497,938.00 and oncologist Anil
Raiker had revenue of $1,327,570.00
Page 82-83.--The old reports only showed Medicare
allowables. The new reports showed the amounts being
reimbursed by Medicaid (reviewing Exhibit 11).
Page 83.--GOA first began tracking the cost of the
chemotherapy drugs in November of 1996.
Page 85.--The only doctors that saw the chemotherapy
reports were the oncologists. The GI doctors were never given
copies of the chemo reports.
Page 86-87.--In November of 1996, the witness was told by
the accountant Odalys Lara there's profit in chemotherapy
drugs. Exhibit No. 12 sets up the spread sheet showing the
month to date and the year to date profits for each of the
oncologists for the sales of chemotherapy drugs.
5. Odalys Lara was the CPA for GOA from April 1994 to the
date of her deposition on September 3, 1998.
Excerpts of Testimony of the Depositon of Odalys Lara
(F) Deposition of September 3, 1998 of Odalys Lara, C.P.A.:
Page 14.--When she began, she did not know that there was
any profit in the sale of chemotherapy drugs.
Page 25-26.--She first found out there was profits in the
sale of chemotherapy drugs in July or August of 1997.
Page 32-33.--Plaintiffs' Exhibit No. 4 is a report of
infusion and chemotherapy drug profits by year in 1994, 1995,
1996 and 1997.
Page 35.--In 1994 profits from the sale of infusion and
chemotherapy drugs for two oncologists went from $489,000.00
in 1994 to $814,000.00 in 1997. From 1994 to 1997, 2.6
million dollars in chemotherapy and infusion drug profits
were made by the two oncologists. Those totals do not
indicate the reimbursements from private insurance which is a
separate figure. These figures only include Medicare's
reimbursements. It is a conservative figure because insurance
companies reimburse more.
There's some very good gem testimony regarding the huge
profits made by oncologists from Medicare for the sale of
infusion and chemotherapy drugs. Also there is excellent
testimony about how the knowledge of these huge chemotherapy
drug sales profits was kept secret from partner physicians
who were not oncologists. However, these gems are buried in a
morass of deposition harangue.
I trust that this information will be useful for people
reviewing the frauds against the Medicare and Medicaid
Programs in the infusion, and oncology drug business.
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