Whistle Blown On Medicare Scam

Taxpayers Get Refund From A Big Provider Accused Of Padding The Bill

(CBS)  For people with osteoporosis, a painful bone disease, a simple medical device can help. Doctors use it to inject bone filler and repair tiny fractures.

The procedure, called kyphoplasty, can be done in about an hour without putting the patient to sleep.

But Kyphon, the company that made the device, stood to make a lot more money if patients were admitted to the hospital for expensive overnight stays, reports CBS News correspondent Sharyl Attkisson.

"Were you aware that patients could get up sometimes an hour later and walk out?" Attkisson asks Chuck Bates, who was a top sales manager for Kyphon.

"I was aware of that," Bates says. " … the sales people were going out to hospitals and to surgeons saying, 'You need to do this as inpatient.'"

"Which was unnecessary?" Attkisson asks.

"Which was unnecessary," Bates says.

As an outpatient procedure, Medicare would pay about $1,000 for kyphoplasty. But as an inpatient procedure, Medicare paid up to $10,000 -- your tax dollars.

Kyphon's net sales skyrocketed. The sales force was rolling in dough.

"As a salesman, you were making a lot of money," Attkisson says.

"The average sales rep made $220,000 a year," Bates says.

But the good times came crashing down when Bates found out through a hospital consultant that it's improper under Medicare to admit patients for what should be outpatient surgery. He felt he had to act.

"I mean, as a sales person, you love to make money, but you want to make money ethically," Bates says.

Around the same time, in an entirely different division of Kyphon, Craig Patrick was also raising red flags internally. One day, while briefing his superiors, Patrick says a top Kyphon official cut him off.

"In the middle of the presentation, the general counsel stopped and says, 'It's not your job to police the sales force,'" Patrick says.

"So the head lawyer of the company was telling you this?" Attkisson asks.

"Absolutely. I told him I understood what my job was, but we were breaking the law every day, and we needed to fix it," Patrick says.

Though the two men never met, they both ended up taking their stories to the Justice Department, which began a fraud investigation.

Kyphon recently settled the case, admitting no wrongdoing, but paying taxpayers back $75 million. Under whistleblower law, Bates and Patrick get to split $14 million.

A company called Metronic bought Kyphon last fall for nearly $4 billion and told us the whistleblower concerns were investigated thoroughly and appropriate action was taken.

When Kyphon was sold, the executives got major payouts. That top lawyer who Patrick says told him to keep quiet reportedly received $14 million cash, which goes to show that kyphoplasty was good for patients and corporate executives, but it was taxpayers left feeling the pain.

[wardoglrs]

Now these Neo Cons that didn''t speak the truth can get an Injection of the law... OUCH and get an extendid over night stay... IN PRISON... :[

[crazierdays]

Stealing tax dollars is awful but what about the poor people that got stuck in the hospital for nothing? You know, if you want to contract a disease or get sick....go to the hospital. I do believe the company needs to compensate the people for the risk they subjected them to. Thank goodness for these 2 guys.

[barbaraf4]

It is the tip of the iceburg.

[cyberus-2009]

Its good that these guys got a payout, because whistleblower laws or not, they are done in the business.

[xraytwonine]

it''s just human nature, capitalism... the very foundations that make this country awesome; awesome for those who have no morality.

[louiaianagal]

My mother had Kyphoplasty on two different occasions a few years apart. This procedure is used due to compression fractures of the spine. These fractures usually cause a lot of pain and for many the Kyphoplasty is the only thing that gives relief. Because of this procedure my mother was spared addiction to pain medication which I as a nurse have seen countless times. When a person gets to the point that their bones break for no other reason other than weak bones (osteoporosis) and especially when it is so painful they definitely NEED to be hospitalized. Why would anyone want to have ANY procedure done that is even remotely close to the spinal column on an outpatient bases and especially when they are already in major pain. I do not believe this is in any way an abuse of the system by Kyphon and I am totally thankful that the procedure was discovered and that my mother was indeed admitted to the hospital during these times. For those of you who do think so.....just wait until it is YOUR MOTHER!

Turn a nickel!! That is the only ethic of the average capitalist. Business school professors routinely teach their students that any morality or ethics are to be left behind when entering a boardroom, otherwise, the investors may not realize the full extent of "just return on investment".
Disgusting.

[soshljustic]

"It is the tip of the iceburg." In agreement with Barabara, I cannot be objective at all. Whether Fraud by providers or Fraud by John Q Public who after all risky behaviors,demands to be babied and refuses to care for him/her self, turns to the medical system, does not follow medical advice, thereby wasting untold millions in medical resources. The nation cannot afford national healthcare for the US spoiled brat with the runny nose who runs to the ER. A deep learning curve needs to occur first in this country before instituting national health care. This country which for so long has een focused on ***, cannot seem to name all bodily parts and the functional uses, and how best to care for them. The citizenry has been the largest fraudulent user of healthcare ever. You own and live in your body, dont you think you should know what it does and how best to care for it? Physicians and hospitals are last resorts, not resorts away from work or school!!!!!!!

[zcotter]

Consider that most of these patients are in terrible pain. They are old and frail. Finding the fine line between pain control and stoned is difficult in the elderly. Medicare frequently tosses people out of the hospital too early based on diagnosis. Sure a 35 year old can recover faster than an 85 year old but the length of stay is based on the diagnosis. Perhaps these procedures should be started in an out patient setting but you have to have inpatient resources available for those who are not able to be safely sent home that day. Most of these patient are probably already in the hospital for pain that is out of control and cannot be managed at home. If this is your dad, what do you wanna do, discharge him to stay at home in pain till you get an outpatient appointment or just git''er done? The rules for this procedure should be flexible to meet the patients needs. A rigid rule regarding the setting is cruel and dangerous for some patients.

[babooph]

let this be a lesson to any company that does not hire a well connected lobbyist to bribe the politicians .

[randynason]

In the strictest sense of the word, the definition here is fascist capitalism. For the people caught in the middle who cannot help themselves, the outcome is criminal.

[nurse70-2009]

THERE ARE MANY WAYS TAXPAYERS ARE ABUSED EVERY DAY. WE HAVE DOCTORS AT OUR FACILITY THAT GET PAID 150.00 PER VISIT FROM MEDICAID TO ASSESS PATIENTS AND DO NOT EVEN STEP ONE FOOT IN THAT PATIENTS ROOM. I HAVE HAD FAMILIES QUESTION THIS BECAUSE THEY RECEIVE MEDICAL STATEMENTS AND ASK WHEN THEIR LOVED ONE WAS LAST EXAMINED? I ENCOURAGE THEM TO CONTACT THE DOCTOR AND THE STATE RUN MEDICAID PROGRAM,BUT TO MY KNOWLEDGE NONE HAVE DONE THIS. IF SOMEONE SUSPECTS FRAUD THEN QUESTION IT . I WOULD NO DOUBT LOSE MY JOB IF I RAISED ANY CONCERNS. THE U.S. HEALTHCARE SYSTEM IS SO BROKEN! A COMPLETE OVERHAUL IS IN ORDER NOW BEFORE THERE IS NO HEALTHCARE FOR THE COMMON CITIZEN THAT IS STUCK BETWEEN THE CRACKS.

[Markus]

IT ISN''T ONLY THE HEALTH,(AND I USE THIS WORD LOOSELY),profession.I CALL IT CORPORATE FINACIAL RAPE.SAIL THE WHOLE THING OUT TO SEA,AND SINK IT TO THE BOTTOM,WITH ALL THE PRACTITIONERS ON BOARD.THEN LET''S START OVER FROM THERE.THEY CAN ALL GO WHERE THEY BELONG...................TO HELL.GREEDY BAST***s!!!!

[Markus]

IT ISN''''T ONLY THE HEALTH,(AND I USE THIS WORD LOOSELY),profession.I CALL IT CORPORATE FINANCIAL RAPE.SAIL THE WHOLE THING OUT TO SEA,AND SINK IT TO THE BOTTOM,WITH ALL THE PRACTITIONERS ON BOARD.THEN LET''''S START OVER FROM THERE.THEY CAN ALL GO WHERE THEY BELONG...................TO HELL.GREEDY BAST***s!!!!

[dashortround]

Corporations have no heart or soul, and they simply can''t be trusted. They HAVE to be regulated and watched constantly.

Corporate management people can''t be trusted either. There are more criminals per square yard in the corporate board rooms of this nation than than there are in your average prison cell block.

Never trust a corporation.

[longtree-2009]

Take these people be they corporations, medical professionals, hospitals who are preying on the elderly and fine them, revoke any and all licenses. They are no better than *** offenders who prey on young children.

[slim1h2o]

It''s aaaalllll about the money. The more you have, the better the care you receive.

Just like the Justice system. The more money you have, you receive justice.

[greeneyes222]

I''d like to see those wealthy Kyphon executives and any others perpetrating this kind of fraud lose those astounding profits as a part of the settlement. The IRS should be able to come up with appropriate numbers. Only when they''re held personally responsible will this kind of gouging end.

[ofbyfor1]

Corporations have no heart or soul, and they simply can''''t be trusted. They HAVE to be regulated and watched constantly.

Posted by DaShortRound at 01:56 AM : Aug 09, 2008

To quote an old saying, ''the business of business is business''. In other words, they''re in it to make money. We all know that, and there is nothing wrong with that, per se.

But the opportunity to make even MORE money, especially when you think that no one is looking over your shoulder, can often lead to simple GREED, as exemplified by this story and so many others like it.

Business, in and of itself is NOT a bad thing. However, business without a watchdog can easily become a thief.

It is for this very reason that history has shown that regulation is an absolute necessity in order to keep corporations honest.

Complete deregulation is a fraud and I would be suspicious of any business that fights any form of regulation.

[imprisonkarl]

The media acts like this is a secret -- Big Pharma et. al ripping off Medicare.

Hellllooooo! Medicare was designed to fail, from its inception.

The Rethuglicans never wanted it, and set up all kinds of obstacles to ensure that it would fail. The inability to negotiate for lower drug prices and little to no oversight were just two of the many, many loopholes designed to weaken and eventually destroy the program. Duhhhhh.

But of course, the gutless wonders in the MSM rarely mention that.

[omnibus66]

Fraud and overcharging are rampant in the medical industry, and this Congress and administration have shown little or no inclination to do anything about it.

Witness the massive, highly obscene ripoff of tax dollars provided to the drug companies under the Medicare Prescription Drug Plan passed by Congress and signed by Bush. Bought and paid for by the drug lobby.

Let''s hope that a new president an new Congress will actually turn a deaf ear to the lobbyists and do what is right for a change. But don''t hold your breath.

Also a note to the Obama haters posting here. This is an article about Medicare fraud, not presidential politics. TAKE YOUR HATE-MONGERING SOMEPLACE ELSE!

[hypnotoad72]

To quote an old saying, ''''the business of business is business''''. In other words, they''''re in it to make money. We all know that, and there is nothing wrong with that, per se.

But the opportunity to make even MORE money, especially when you think that no one is looking over your shoulder, can often lead to simple GREED, as exemplified by this story and so many others like it.

Business, in and of itself is NOT a bad thing. However, business without a watchdog can easily become a thief.

It is for this very reason that history has shown that regulation is an absolute necessity in order to keep corporations honest.

Complete deregulation is a fraud and I would be suspicious of any business that fights any form of regulation.

Posted by ofbyfor1
----------------------

Best post of the day.

[tootall10142]

GREED IS HAVING ITS LUNCH. THE DESERT IS BITTER SWEET!

[nextgenman]

Kyphon, a Republican company said......

[dannbetty]

The whistleblowers split 14 million and the crooked attorney gets 14 million, These scams against the people of this country need to tried as treason with severe penalty.

[mcdonaj3]

Just another example of a huge Federal program with poor oversight. One can only imagine how much fraud there will be with the sub-prime mortgage bailout.

[stevenga777]

NBC blacksout Olympic ceremony in America - American fans angered
Aug 8, 4:32 pm EDT

Buzz Up Print
NEW YORK (AFP) - The rest of the world might have been dazzled by the Beijing Olympic opening ceremony but angry US viewers clamoring for a glimpse of the spectacle on Friday were made to wait after a media blackout.

US network NBC, which owns exclusive rights to Olympics coverage in the United States, refrained from showing the opening ceremony live, preferring instead to delay coverage by 12 hours for a prime-time evening slot.

A spokesman for NBC, which paid nearly 900 million dollars for Olympic broadcast rights, said the decision was taken to maximize viewing figures.

"It''''s a business decision," the spokesman told AFP. "It protects our affiliates, our advertisers, and shows it to the largest number of viewers possible," he added.

Bizarrely, the co-hosts of NBC''''s breakfast television show barely mentioned the ongoing ceremony during their broadcast, which was reportedly pre-taped.

[wogerwabbit]

Posted by terrorislamv at 08:44 AM : Aug 09, 2008

Hey man, go post your useless drivel in a more appropriate article... give us a break from your incessant jabbering.

[legacyabq]

terorislamv:

I think you should start taking your medication again. You are hyper-manic, and possibly schizoid.
And by the way, Jefferson and Madison lived and died 150 years before the world wars, to which you seem to refer, though it''s hard to tell. perhaps you mean the war of 1812? Either way: *** ?!?

[legacyabq]

oops, my apologies. I thought you were nuts. You mean the Barbary Wars, I wasn''t reading closely enuff. Still, what does that have to do with Medicaid scams?
Kind of ranting a little, aren''t you?

Still, since the wars you refer to actually exist, I retract my opinion of your schizo-affective disorder, in leiu of new evidence! LOL, sorry, just kidding around
: )

[demwatcher]

"Kyphon, a Republican company said......

Posted by nextGenMan at 10:30 AM : Aug 09, 2008"

Records show a lot of Libs in there.

[element51]

So here we have a company that got caught. That''s good. But what will happen? Nothing. Maybe a little fine but that''s about it. Lawyers will make a small fortune getting these people off but there won''t be any real recovery of taxpayer money. And this is only one of thousands of rip-offs that are going on every day. In an earlier post someone spoke of the need for regulation. They are right. This all goes back to Ronald Reagan when he came into office and began to de-regulate everything. Once the regulations were gone it opened the floodgates and look where it has gotten us. We have released the wolves and allowed ourselves to become the prey. We must demand that congress bring some sanity back into government but the chances of that are slim and none.

[stn_sage]

Posted by terrorislamv at 07:12 PM : Aug 09, 2008
---------------------
It''s nice to see that CBS doesn''t discriminate against mentally insane rightwing nutjobs! But, maybe they SHOULD!

terrorislamv, you moron, stop posting your B.S. non-topical comments on every story on this site!

We''re tired of your B.S.! Go conduct your jihad against Americans and freedom somewhere else!

[terrorislamw]

CHINA STINKS,,,

ALWAYS HAS,,, ALWAYS WILL,,,

the U.S. government has warned Americans against muggings, beatings and even carjackings, especially in the nightlife and shopping districts of large cities.

[phlashlite]

Great question someone asked... Why isn''t the general counsel going to jail instead of collecting 14 mil?!?

Let''s see, you can steal millions in taxpayer dollars and prosecutors will cut you a deal where not only do you not go to jail, you get to enjoy the fruits of your criminal activity and you don''t have to admit any wrongdoing... while the taxpayers get fleeced.

Contrast this with the jail time someone would get for possession of a couple of grams of marijuana (which is not nearly as harmful as alcohol). Is our justice system out of whack or what?

[phlashlite]

Great question someone asked... Why isn''t the general counsel going to jail instead of collecting 14 mil?!?

Let''s see, you can steal millions in taxpayer dollars and prosecutors will cut you a deal where not only do you not go to jail, you get to enjoy the fruits of your criminal activity and you don''t have to admit any wrongdoing... while the taxpayers get fleeced.

Contrast this with the jail time someone would get for possession of a couple of grams of marijuana (which is not nearly as harmful as alcohol). Is our justice system out of whack or what?

[babycake6440]

you wanna talk about medicare fraud, go to some little small towns in louisiana and you will see medicade fraud, the docters are making a killing off of just colds, pain . they go to the er and say i hurt my toe its bruised they get put in the hospital and get their fix they mybe in there a week. go for their weekly check-up right back in the hospital .direct admited. thats what you call medicade fraud. louisiana hospitals and doctors need to be invesgated.

[metamorph2_0]

Show me one patient that thinks they should not have had an inpatient stay with a collapsed spine. Perhpas the whistleblower also saw a fast path to some money as he was tired of working in sales. The truth and what is ethical get''s lost. WOuld it be ethical to not allow a peron to rest after having a procedure to correct a collapsed spine and have them have to drive themselves home from an outpatient clinic?