UCLA pays $10 million for retaliation against surgeon who exposed industry payments that may have compromised patient care

This case is just a small part of a larger problem at UCLA. Another small part of the problem, the behavior of Eugene Washington, dean of the David Geffen Medical School at UCLA, is discussed HERE.

UCLA'S $10 MILLION WHISTLE-BLOWER RETALIATION CASE:

"Shortly before Pedowitz joined UCLA in 2009, the university was already facing criticism from Congress over the failure of a top spine surgeon to report nearly $460,000 in payments he received from Medtronic and other medical companies while researching their products' use in patients, government records show.

"Dr. Jeffrey Wang, who left for USC Spine Center last fall, stepped down as head of UCLA's spine program in 2009 after U.S. Sen. Charles Grassley (R-Iowa) publicized his lapse in disclosure as part of a larger investigation into medical conflicts of interest.

"Several patients are now suing Wang and UCLA in state court for negligence, fraud and malpractice in connection with surgeries involving Medtronic's controversial Infuse bone graft."

"...'What good are all the policies if they protect the wrongdoers and fail to protect the actual whistleblower?' Quigley said. 'The university wanted to cover it all up.'"

UCLA surgeon Dr. Robert Pedowitz, who said the medical school allowed doctors to take industry payments that may have compromised patient care

UC OKs paying surgeon $10 million in whistleblower-retaliation case
The settlement ends a case brought by the ex-head of UCLA's orthopedic surgery department
By Chad Terhune
Los Angeles Times
April 22, 2014

University of California regents agreed to pay $10 million to the former chairman of UCLA's orthopedic surgery department, who had alleged that the well-known medical school allowed doctors to take industry payments that may have compromised patient care.

The settlement reached Tuesday in Los Angeles County Superior Court came just before closing arguments were due to begin in a whistleblower-retaliation case brought by Dr. Robert Pedowitz, 54, a surgeon who was recruited to UCLA in 2009 to run the orthopedic surgery department.

In 2012, the surgeon sued UCLA, the UC regents, fellow surgeons and senior university officials, alleging they failed to act on his complaints about widespread conflicts of interest and later retaliated against him for speaking up.

UCLA denied Pedowitz's allegations, and officials said they found no wrongdoing by faculty and no evidence that patient care was jeopardized. But the UC system paid him anyway, saying it wanted to avoid the "substantial expense and inconvenience" of further litigation.

[Maura Larkins: Closing arguments were about to begin in the case. UCLA had already invested "substantial expense and inconvenience", and would have incurred very little expense or inconvenience if it had simply allowed the closing arguments to go forward. The reason it settled was that it realized that the weight of the evidence showed that UCLA did indeed jeopardize patient safety and certainly violated conflict of interest standards and the legal rights of the whistle-blower.]

As department chairman, Pedowitz testified, he became concerned about colleagues who had financial ties to medical-device makers or other companies that could unduly influence their care of patients or taint important medical research.

He also alleged that UCLA looked the other way because the university stood to benefit financially from the success of medical products or drugs developed by its doctors.

One of the orthopedic surgeons that Pedowitz complained about testified at trial about receiving $250,000 in consulting fees in 2008 from device maker Medtronic. In memos to university officials, Pedowitz raised concerns about the financial dealings of other doctors as well.

Inside the courtroom Tuesday, Pedowitz sat in the front row with his wife and daughter as the judge told jurors that a settlement had been reached. He said he felt vindicated by the outcome.

"These are serious issues that patients should be worried about," Pedowitz said in an interview. "These problems exist in the broader medical system and they are not restricted to UCLA."

The seven-week trial in downtown Los Angeles offered a rare glimpse into those potential conflicts at a time when there is growing government scrutiny of industry payments to doctors.

Starting this fall, the federal Physician Payments Sunshine Act, part of President Obama's healthcare law, requires public disclosure of financial relationships between healthcare companies and physicians.

Many doctors and universities defend long-standing industry arrangements as essential for carrying out cutting-edge research and top-flight medical education.

In a statement Tuesday, the UC regents said they "resolved this lawsuit to end a prolonged conflict and permit UCLA Health Sciences to refocus on its primary missions of teaching, research, patient care and community engagement."

The statement added that "multiple investigations by university officials and independent investigators concluded that conduct by faculty members was lawful. Patient care was not compromised."

This latest settlement eclipses a $4.5-million payout the UC regents made last year to resolve a racial discrimination lawsuit filed by another UCLA surgeon.

Pedowitz, as part of his settlement, left the UCLA faculty, effective Tuesday. He had agreed to step down as department chairman in 2010 after initially voicing his concerns to top UCLA officials. He filed a whistleblower retaliation complaint in March 2011.

Experts in medical ethics say the UCLA case shows much more needs to be done within academia and by government regulators to address potential conflicts of interest in medicine.

Susan Chimonas, associate director of research at Columbia University's Center on Medicine as a Profession, said some medical schools are still reluctant to take on specialists who bring in considerable money from patients, medical research and patents on breakthrough products.

"Institutions can be dependent on the money these big-earning specialties like orthopedic surgery bring in," Chimonas said. "They are the cash cows and they can set their terms. This is not the first time I've heard of medical schools having policies that are not well enforced."

In an interview last week, the chief compliance officer at the UCLA Health System flatly rejected the notion that the university didn't enforce its policies or look fully into Pedowitz's allegations. She also said industry ties are unavoidable at a big medical school and rules are in place to prevent conflicts.

"We have processes in place to identify those relationships in a transparent fashion and ensure they don't have any inappropriate influence on the actions of the university," said Marti Arvin, chief compliance officer. "In order to meet our mission, it is important we have both the brilliant minds we have at UCLA and collaboration with industry."

Arvin said the university "thoroughly and objectively investigated those allegations of noncompliance raised by Dr. Pedowitz. We were able to determine the vast majority were unsubstantiated."

She said two doctors fell short of university expectations in their handling of outside income, but there was no violation of law or university policy in either instance.

Arvin cited the case of Dr. Nick Shamie, the orthopedic surgeon who testified at trial about receiving $250,000 from Medtronic for consulting work. She said department policy at the time didn't require Shamie to send that outside income through UCLA's faculty compensation plan.

At trial, Pedowitz said he was deeply troubled by the large amount of money Shamie was paid. He testified that he was particularly concerned that Shamie was trying to enroll patients in a research study involving Medtronic at the time.

"I saw this as an obvious problem," Pedowitz testified.

In court, Shamie said he abided by university policy and didn't pursue the study further because finding patients was too difficult. He couldn't be reached for additional comment.

The other physician cited by Arvin for a potential shortcoming was Dr. David McAllister, vice chairman of clinical operations for the orthopedic surgery department.

He didn't report payments from the Musculoskeletal Transplant Foundation, a nonprofit tissue bank that does business with UCLA, because he didn't think disclosure was required in that instance because it didn't involve a for-profit entity, Arvin said.

McAllister also declined to comment, referring a call to UCLA.

Shortly before Pedowitz joined UCLA in 2009, the university was already facing criticism from Congress over the failure of a top spine surgeon to report nearly $460,000 in payments he received from Medtronic and other medical companies while researching their products' use in patients, government records show.

Dr. Jeffrey Wang, who left for USC Spine Center last fall, stepped down as head of UCLA's spine program in 2009 after U.S. Sen. Charles Grassley (R-Iowa) publicized his lapse in disclosure as part of a larger investigation into medical conflicts of interest.

Several patients are now suing Wang and UCLA in state court for negligence, fraud and malpractice in connection with surgeries involving Medtronic's controversial Infuse bone graft. UCLA said it doesn't comment on pending litigation. Wang couldn't be reached for comment.

Shortly after raising his concerns, Pedowitz said, he was pressured to step down as department chairman in 2010. Pedowitz said he was further retaliated against by being denied patient referrals and prevented from participating in grants and other activities.

Before UCLA, Pedowitz worked at UC San Diego and as chairman of orthopedics and sports medicine at the University of South Florida.

Mark Quigley, an attorney representing Pedowitz, said the case could have been avoided if the UC system enforced the policies it already has in place.

"What good are all the policies if they protect the wrongdoers and fail to protect the actual whistleblower?" Quigley said. "The university wanted to cover it all up."

Novartis Accused of Paying Kickbacks to Boost Exjade Sales

Novartis Accused of Paying Kickbacks to Boost Exjade Sales
By Christie Smythe
Bloomberg Business Week
January 08, 2014

A Novartis AG (NOVN) unit was accused by the U.S. and a group of states of paying kickbacks to a specialty pharmacy to boost sales of Exjade, an iron-control drug that can cause kidney and liver failure.

U.S. District Judge Colleen McMahon in Manhattan today unsealed a complaint filed against Novartis Pharmaceuticals Corp. by the U.S., 26 states and the District of Columbia alleging that the drugmaker had paid kickbacks to BioScrip Inc. (BIOS:US) to encourage patients to refill prescriptions.

Separately, federal and state officials announced that the Elmsford, New York-based specialty pharmacy agreed to pay $15 million to resolve the claims against it.

Federal and state officials alleged that government health programs Medicare and Medicaid paid tens of millions of dollars in reimbursements based on false claims for the drug.

“This arrangement between Novartis and BioScrip was dangerous for patients and is against the law,” New York Attorney General Eric Schneiderman said in a statement. “Our lawsuit against Novartis and our agreement with BioScrip send a clear message: Drug companies cannot pay pharmacies to promote drugs directly to patients.”

Kickbacks, Calls

According to the complaint, Novartis paid kickbacks to BioScrip from February 2007 to May 2012 in the form of patient referrals and rebates. To hold up its end of the bargain, BioScrip made tens of thousands of calls to patients to try to convince them to keep taking the drug, federal and state officials alleged.

Julie Masow, a spokeswoman for Basel, Switzerland-based Novartis, said in an e-mailed statement that the company disputes the allegations in the complaint related to its interactions with BioScrip and intends to defend itself.

The company “is dedicated to improving patient health and supports patient medication adherence programs,” including outreach by pharmacies, Masow said.

Exjade was approved by the U.S. Food and Drug Administration in November 2005 to treat chronic iron overload due to blood transfusions, according to the complaint. In January 2010, the agency required the drug to feature a “black box” warning highlighting the potential for kidney failure, liver failure and gastrointestinal hemorrhage that in some cases were fatal, according to the complaint.

Increasing Refills

Novartis wanted to increase the refills of the drug because “its own market research had shown that a significant percentage of physicians and patients were opting to discontinue Exjade therapy” because of side effects, the officials said in the complaint.

In late February 2007, Novartis told BioScrip that because it generated lower levels of refills compared with other pharmacies, it had been placed on a “performance improvement plan,” according to the complaint.

Novartis “expects that the specialty pharmacies it works with conduct vital patient outreach in a manner wholly consistent with NPC’s commitment to patient care,” Masow said. “BioScrip reached out to patients using its own protocols to provide education, counseling and information about proper administration of the medicine and to fulfill prescriptions that have been prescribed by a patient’s treating physician.”

Officials are seeking triple damages against Novartis and civil penalties under the False Claims Act.

The case is ABC v. DEF, 1:11-cv-08196, U.S. District Court, Southern District of New York (Manhattan).

Dr. Drew Pinsky responds to allegations he received GlaxoSmithKline payments

Dr. Drew Pinsky responds to allegations he received GlaxoSmithKline payments
By Michelle Castillo
July 4, 2012
(CBS News)

After being accused of taking payments from GlaxoSmithKline to promote the antidepressant Wellbutrin, Dr. Drew Pinksy told CBS News everything he said was in accordance with the law and accurate according to his medical experience.

"In the late 90s I was hired to participate in a 2-year initiative discussing intimacy and depression which was funded by an educational grant by Glaxo Wellcome," Pinksy told HealthPop in a statement. "Services for the non-branded campaign included town hall meetings, writings and multimedia activities in conjunction with the patient advocacy group the National Depresive and Manic Depressive Association (NDMDA). My comments were consistent with my clinical experience."

Pinsky - a board-certified internist, addiction medicine specialist, and radio and television personality - was mentioned in a complaint filed by the U.S. government against the pharmaceutical company, according to the Forbes.

The document states that Pinksy allegedly received two payments in March 2009 and April 2009 from GlaxoSmithKline totaling $275,000 to promote Wellbutrin SR. The Wall Street Journal reported in June 1999, he made statements on "Loveline," a television and radio show he co-hosted, saying that he prescribed Wellbutrin to depressed patients because it "may enhance or at least not suppress sexual arousal" as much as other antidepressants are known to do. Pinsky was also reported to have made comments on other media, including another national radio program called "David Essel - Alive!," Forbes added. In both instances, he did not disclose that he was paid by the company to do so, and he promote uses of Wellbutrin that had not been approved by the Food and Drug Administration.

GlaxoSmithKline recently plead guilty and had to pay $3 billion in the largest settlement of health care fraud in U.S. history, HealthPop reported. The company was charged with unlawful promotion of certain prescription drugs.

California doctors sue Aetna for coverage denials

Is it possible that both the doctors and the insurance companies are ripping off patients? Doctors are apparently getting kickbacks for referring patients.

California doctors sue Aetna for coverage denials
Jul 3, 2012
By Toni Clarke
(Reuters)

Thousands of doctors in California are suing the health insurance company Aetna Inc claiming the company routinely denies patients access to out-of-network doctors even when the patient has purchased a policy giving them the right to choose providers.

The lawsuit, filed in the Los Angeles County Superior Court, accuses Aetna of threatening patients with denial of coverage if their members visit doctors outside the Aetna network of providers, and of threatening doctors with having their Aetna contracts terminated if they refer patients outside the network.

The lawsuit was brought by the Los Angeles County Medical Association, California Medical Association and a coalition of health care organizations and providers.

Aetna claims the suit is in retaliation for a suit filed by Aetna in February claiming several California providers, including Bay Area Surgical Management (BASM)and seven ancillary facilities, sent Aetna members to BASM without revealing that physicians had an ownership interest in the facility or were getting paid by BASM for their referrals.

"We have sued some of these same doctors and surgery centers named in the suit for their egregious billing practices in February of this year," Cynthia Michener, a spokeswoman for Aetna, said in an email. "This is a countersuit disguised as a class action lawsuit."

Michener said Aetna would "continue to pursue medical providers whose charges are so grossly out of line."

She cited as examples facilities and doctors who have charged $73,536 for a kidney stone fragmentation when an average in-network charge would be around $7,612. Or those that have charged $37,572 for a knee procedure that would cost about $10,500 with an in-network physician.

Michener was not immediately able to say what the average cost of these procedures would have been in out-of-network facilities that are not being sued by Aetna.

The lawsuit brought by the physicians accuses Aetna of false advertising, breach of contract, unfair business practices, and both intentional and negligent interference with healthcare providers.

The lawsuit seeks an end to the practices, an immediate injunction, compensation for patients and physicians and punitive damages.

"Despite making tens of millions of dollars selling policies with out-of-network benefits, Aetna has engaged in a campaign to retaliate against its members who attempt to use their out-of-network benefits, and the physicians who refer these members to out-of-network providers," the lawsuit states.

U-T: Scripps Mercy Cited In State Probe; 4 Fired

U-T: Scripps Mercy Cited In State Probe; 4 Fired
Investigators Say Workers Took Gifts, Steered Patients Into Certain Nursing Homes
Janet Lavelle, U-T San Diego
March 7, 2012

SAN DIEGO -- Scripps Mercy Hospital has fired four case managers and overhauled operations after state investigators found the employees broke state and federal laws by taking gifts from a nursing home owner and by steering patients into certain homes instead of giving them a choice when they left the hospital.

The California Department of Public Health launched an investigation in mid-November and two state Department of Justice investigators also participated.

Health department officials issued a deficiency report detailing the violations and last week approved a Plan of Correction that Scripps Mercy filed in response.
The state Department of Justice has filed no charges and “there is nothing we’re actively doing with this,” said Lynda Gledhill, press secretary for state Attorney General Kamala Harris.
Officials at the five-hospital Scripps Health system released a lengthy statement Tuesday, which said in part, “Scripps does not condone this type of behavior by employees. We work to ensure patients have a voice in their care. We regret this happened and have taken steps to prevent it from happening again.”
Those steps included demoting one supervisor and reorganizing the case management leadership, tightening auditing and conflict-of-interest procedures, and holding employee training classes.
Scripps spokeswoman Janice Collins said, “We started implementing a lot of the changes in January.”
Scripps Mercy, which employs 15 case managers, started its own investigation in October after getting a complaint from a patient who hadn’t been given a choice in nursing homes, Collins said.
State law requires hospitals to give a patient being transferred to a skilled nursing facility a list of options, without offering a recommendation, and then honor the patient’s choice.
In November, state and hospital investigators looked at medical records for 108 patients referred to nursing homes between May and October 2011. Interviews with patients and their families were compared with medical records and discrepancies were found involving five case managers who gave patients few or no choices among nursing facilities but documented that they had.
The five case managers told investigators they had gotten a free dinner boat cruise from one nursing home owner, and one case manager, who also received a $50 gift card, said “an established relationship” with that operator influenced her, according to the state report. One case manager also failed to disclose that her son worked at the nursing home, a violation of state conflict-of-interest laws.
The report didn’t name any nursing home facilities or operators. State Department of Public Health officials could not say Tuesday whether any nursing home has been cited as part of the investigation, department spokesman Ralph Montano said.