Psychiatrist Pleads Guilty Role in $200 Million Medicare Fraud Scheme

Department of Justice
Office of Public Affairs
FOR IMMEDIATE RELEASE
Thursday, June 30, 2011

WASHINGTON - A Miami-area psychiatrist pleaded guilty today in U.S. District Court in Miami for his part in a fraud scheme that resulted in the submission of more than $200 million in fraudulent claims to Medicare, the Department of Justice, FBI and Department of Health and Human Services (HHS)announced.

Dr. Alan Gumer, 64, of Tamarac, Fla., pleaded guilty to one count of conspiracy to commit health care fraud. Gumer was charged on Feb. 15, 2011, with one count of conspiracy to commit health care fraud and four counts of health care fraud.

According to court documents, Gumer was a psychiatrist at American Therapeutic Corporation (ATC), a Florida corporation headquartered in Miami. ATC purported to operate partial hospitalization programs (PHPs) in seven different locations throughout South Florida and Orlando. A PHP is a form of intensive treatment for severe mental illness.

Gumer admitted that he signed evaluations, notes and other documents in medical files for patients who did not need the treatment for which ATC billed Medicare. Specifically, as a psychiatrist, Gumer knew that the patients attending ATC did not need intensive mental health treatment, and that the treatments offered by ATC were not the type of intensive treatments a PHP should provide. Gumer admitted that he signed these files without examining the patients, or writing and reading the statements he was signing. Gumer also admitted to writing prescriptions for psychiatric medications for patients who did not need them in order to make it appear to Medicare that the patients qualified for PHP treatment. According to court documents, Gumer also referred hundreds of ATC patients to a related company, the American Sleep Institute (ASI), for unnecessary diagnostic sleep disorder testing.

According to court filings, Gumer’s co-defendants and ATC’s owners and operators paid kickbacks to owners and operators of assisted living facilities (ALFs) and halfway houses and to patient brokers in exchange for delivering ineligible patients to ATC and ASI. In some cases, the patients received a portion of those kickbacks. Throughout the course of the ATC and ASI conspiracy, millions of dollars in kickbacks were paid in exchange for Medicare beneficiaries, who did not qualify for PHP services, to attend treatment programs that were not legitimate PHP programs so that ATC and ASI could bill Medicare for more than $200 million in medically unnecessary services.

According to the plea agreement, Gumer’s participation in the fraud resulted in $19.3 million in fraudulent billing to the Medicare program. Sentencing for Gumer is scheduled for Jan 19, 2012. Gumer faces a maximum of 10 years in prison and a $250,000 fine.

ATC, its management company Medlink Professional Management Group Inc., and the owners and lead manager of ATC, Medlink and ASI, were charged with various health care fraud, money laundering and other offenses in a separate superseding indictment unsealed on Feb. 15, 2011. Two of the three owners and the lead manager, as well as both ATC and Medlink, have pleaded guilty and have admitted to the fraudulent scheme and that more than $200 million in billings were submitted to the Medicare program as a part of the scheme. They are scheduled for sentencing on Sept. 14, 2011, by U.S. District Court Judge James Lawrence King. The trial of the third owner charged in the separate superseding indictment is scheduled to begin on Aug. 15, 2011.

The remaining 17 co-defendants named in the indictment in which Gumer was charged are scheduled to stand trial on Nov. 7, 2011, before U.S. District Judge Patricia A. Seitz.

An indictment is merely an accusation and defendants are presumed innocent unless and until proven guilty in a court of law.

Today’s guilty plea was announced by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida; John V. Gillies, Special Agent-in-Charge of the FBI’s Miami field office; and Special Agent-in-Charge Christopher Dennis of the HHS Office of Inspector General (HHS-OIG), Office of Investigations Miami office.

The criminal case is being prosecuted by Trial Attorney Jennifer L. Saulino of the Criminal Division’s Fraud Section. The case was investigated by the FBI and HHS-OIG and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida.

Since its inception in March 2007, the Medicare Fraud Strike Force operations in nine locations have charged more than 1,000 defendants that collectively have billed the Medicare program for more than $2.3 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG are taking steps to increase accountability and decrease the presence of fraudulent providers.

Anti-Smoking Drugs Can Create Suicidal Thoughts and Aggressive Behavior

In January of this year, David Collins killed himself with a shotgun just three months after he began taking Chantix (varenicline) a smoking cessation drug made by Pfizer. Linda Collins who is David Collins widow has filed a lawsuit in Indianapolis against Pfizer over Chantix (Champix in other countries) its side effects and its possible failure to provide warnings to users. Mr. Collins had no prior history of mental illness, but before his suicide Mr. Collins exhibited aggression and strange behavior. More details will be divulged once the lawsuit progresses and apparently increases in size (chantixsuicidelawsuits.com). The FDA had reported thirty nine suicides and nearly five hundred cases of suicide behavior or thoughts of suicide from the use of Chantix. These suicide behaviors regarding Chantix are similar to the black box warnings that all drug companies are compelled to divulge on their antidepressant labels. Just two months ago, the FDA required Chantix (varenicline) and Zyban to carry a black box warning due to side effects including depression, suicidal thoughts, and suicidal actions.
Zyban made by GlaxoSmithKline involves bupropion an antidepressant drug which acts as a norepinephrine and dopamine reuptake inhibitor and nicotinic antagonist. This drug is cross marketed as an antidepressant and smoking cessation drug. To our knowledge Chantix is not cross marketed as an antidepressant. But apparently Pfizer likes to cross market drugs legally or not. This week Pfizer settled with the Department of Justice for $2.3 billion, the largest health care fraud settlement in the history of the DOJ. It resolved their criminal and civil liability arising from the illegal promotion of certain pharmaceutical products. Pfizer “off labeled” drugs for uses the FDA didn’t previously approve of. $1 billion was allocated to resolve allegations under the civil False Claims Act that Pfizer illegally promoted the drugs Bextra, Geodon an anti-psychotic drug, Zyvox, an antibiotic, and Lyrica, an anti-epileptic drug. What is worse is that Pfizer is a habitual criminal company since they have been found guilty before in a similar case.
Tony West the DOJ Assistant Attorney General for the Civil Division was quoted by news releases, “Illegal conduct and fraud by pharmaceutical companies puts the public health at risk, corrupts medical decisions by health care providers, and costs the government billions of dollars”. Perhaps this massive fine will curtail Pfizer to some degree, but they will likely need at least three strikes. We think this is the beginning of more and more lawsuits against pharmaceutical companies for cross labeling, inadequate tests and warnings, and drugs that create suicidal thoughts, and aggressive behavior. Consumers need to fully perform their due diligence before taking drugs which have clear controversial effects. Chantix and Zyban have a new warning that the drug can produce suicidal thoughts and behavior. Do you want to stop smoking or stop life?