Psych Crime Reporter

August 7, 2013

State considers reinstating license of psychiatrist convicted of child porn possession?

Filed under: child pornography,crime and fraud,license revoked,psychiatrist,Uncategorized — Psych Crime Reporter @ 2:34 pm

A former child psychiatrist who was felled by his lust for child pornography and spent time in federal prison is seeking forgiveness from those he betrayed — and a second chance.

And some of the most respected mental-health professionals in the area are rallying behind Dr. James H. Peak, suggesting that the man who served the medical community for nearly two decades deserves redemption.

Peak has petitioned the Montana Board of Medical Examiners for reinstatement of his medical license. A decision may come as soon as September.

“He has struggled with accepting the humiliation of public disclosure, but mostly with the fact that he has let his patients down,” said Michael J. Ramirez, clinical coordinator for the Montana Professional Assistance Program. “I believe that his remorse is genuine and heartfelt. He has paid his debt to society.”

Peak, 51, served just under 10 months in a Seattle federal prison after pleading guilty in August 2011 to possessing child pornography. He had been a child and adolescent psychiatrist at Billings Clinic, the state’s largest hospital, since 1994.

Since his release from prison, Peak has been working to restore not only his medical license but also his reputation and the trust he lost when his double life was exposed.

He is volunteering 20 hours a week at the South Central Montana Regional Mental Health Center in Billings, where he is helping update policies and procedures. He has no contact with patients.

As conditions of his probation and his treatment from the state Professional Assistance Program, Peak attends two 12-step programs, one for sex addicts and one for alcoholics. He regularly sees a psychiatrist and a social worker and participates in group therapy. And he attends a peer support group, which includes other licensed medical professionals. He also participates weekly in the Montana Sex Offender Treatment Program.

The court has restricted his contact with children and his use of computers. He was also ordered to register as a sex offender and is subject to random urinalysis and polygraph tests.

Along with the support of the Professional Assistance Program, Peak also has the loyal support of his wife, who is a prominent Billings physician, and their teenage daughter, said Ramirez, the program’s coordinator. Peak’s wife declined to be interviewed for this story.

The assistance program is funded by medical licensing fees and helps physicians and dentists whose practices have been jeopardized by sexual misconduct, substance abuse, psychiatric illness or other issues.

Ramirez said 90 percent of medical professionals who work with MPAP successfully return to practice.

He has been working with Peak since Peak’s arrest in February 2011.

“This man has been to hell and back,” Ramirez said, recalling one of their first meetings when Peak lay in the fetal position on his office floor.

“He is an example of courage, resilience, compassion and strength that will serve him, his future colleagues and patients well,” Ramirez said. “The best disinfectant is sunlight. … He doesn’t have anything to hide. Not anymore.”

Top of the world

From the outside, Peak seemed to have it all. He had a thriving practice serving troubled young patients. Even after his arrest, the parents of several of his patients praised his work, some even saying that Peak’s therapy may have saved their child’s life.

But Peak was battling an escalating addiction to child pornography that he said stretched back 30 years. As early as his own adolescence, he said he recalls being sexually attracted to young boys.

That attraction, he insists, never reached beyond fantasy and child pornography. He said he’s only had sexual relations with two women, all the while knowing something about him was “off.”

“I knew there was something wrong with me,” he said. “And I knew I could never tell anyone.”

He said he was mostly able to keep his inappropriate desires in check until the advent of the Internet, where pornography is more accessible and abundant. After viewing the child pornography he collected, he said he would despise himself, sometimes to the point of throwing away his computer.

He’d then be fine for a three or four months, he said, before caving in again.

Investigators say they found no evidence that Peak ever viewed pornography at work, and polygraph results confirm his insistence that he never touched a child inappropriately.

“I felt the powerful paradox of being a really good doctor, wanting to help people — and wanting to protect children — and this darker part of me that I tried to keep walled off,” Peak said.

“It was incredibly painful to discover that I was utilizing pornography that took advantage of children,” he said. “To become the thing I didn’t want to be was extraordinarily painful.”

His secret life began to unravel when a pornographic advertisement featuring little boys arrived in his mailbox. He contacted an FBI agent he knew about the ad and was told to contact a U.S. postal inspector.

The ad, it turns out, was part of a federal investigation. Peak’s illicit Internet activities had apparently come to the attention of federal authorities.

When he was later confronted by authorities, he consented to a search of his home and, according to court testimony, was “extremely helpful” in collecting and identifying evidence, including credit card statements confirming his purchases of child pornography.

“I’d like to say I turned myself in,” Peak said. “I didn’t do that. I didn’t have the courage to do that. I had to get forced into it.”

Peak, who said he was once suicidal, sees that initial call to the FBI as a cry for help. Deep down, he wanted to be caught.

“I was miserable,” Peak said. “I couldn’t go on like this. I was drinking a lot. I was an alcoholic. I was trying to medicate the pain of this illness.”

The most difficult part of his conviction was not the nine months and 18 days he spent in prison, he said. It was all the people he let down. He had patients he cared about and had fostered relationships of trust with.

Then, one day he was gone. Literally.

“I fell off the face of the earth,” he said. “I can never apologize for that enough. I feel bad about that every day.”

Many of his young patients were in need of therapy because they had been betrayed by adults. He struggles with whether he, too, has become another adult who let them down.

“When I’m in a bad mood, when I’m in my bad place, I become another one of those people, which is very difficult,” he said.

The road back

Peak realizes he will never be able to work with children again, but said he still has much to contribute as a practicing psychiatrist.

Other mental-health professionals agree, including Barbara Mettler, executive director of the Mental Health Center, where Peak is volunteering to update policies.

“We are a mental-health center,” Mettler emphasized. “We believe that with help, people can recover and get better. If we don’t provide opportunities for people to do that, who’s going to? I implicitly believe him when he says he has never touched a child. I think that’s worth giving this man a chance.”

Another advocate and mentor is Dr. Thomas Van Dyk, a psychiatrist and medical director at the Mental Health Center who encouraged Peak’s volunteer work there.

Van Dyk has known Peak for 18 years and said that with the exception of his prison term, he has met with him every week since his arrest. He describes Peak as an “excellent” psychiatrist and hopes he can eventually join the staff at the Mental Health Center.

“I’m proud of him for coming forward and working to get himself back in order,” Van Dyk said.

Before entering federal prison in Seattle, Peak was referred for a comprehensive psychosexual evaluation and treatment at a Texas facility that specializes in treating health care professionals. Reports from his treatment team indicated that he was a model patient and extremely motivated for change.

Michael D. Sullivan is director of the Billings-based South Central Treatment Associates, which specializes in the evaluation and treatment of juvenile and adult sex offenders and victims. He said that while there is no one-size-fits-all treatment, sex offenders can be rehabilitated. Much depends on the nature of the individual’s problem, he said.

The success of rehabilitation depends on several factors that include the makeup of an individual’s personality, his or her adaptive skills, the nature of the problem, and what he has done in terms of getting treatment.

“There are a lot of offenders deemed low-risk who are treatable and go on to lead productive lives,” Sullivan said.

Research also shows that the rates of recidivism for online offenders are relatively low when compared with average rates of recidivism found for hands-on sexual offenders.

As Peak awaits a decision on the reinstatement of his license, he is aware he has critics. None will be harsher on him than he is on himself.

“Jim Peak is having a difficult time forgiving Jim Peak,” MPAP’s Ramirez said. “That’s the hardest lesson, and it’s taking some time.”

Source: Cindy Uken, “Former child psychiatrist convicted for child porn seeks redemption,” Billings Gazette, August 3, 2013.


January 11, 2013

NY psychiatrist Gino Grosso sentenced on controlled substance conviction

Filed under: controlled substances,crime and fraud,psychiatrist — Psych Crime Reporter @ 4:50 pm

On July 3, 2012, psychiatrist Gino J. Grosso surrendered his license to the New York State Board for Professional Medical Conduct (BPMC), in response to a charge of professional misconduct. According to the BPMC’s statement of charges, on or about January 5, 2011, Grosso pleaded guilty to the felony of delivery of or possession with intent to deliver a controlled substance. He was sentence June 14, 2011 to no less than three nor more than 10 years in prison.

California psychologist Michele Bieraugel placed on probation after crash, DUI conviction

Filed under: crime and fraud,psychologist — Psych Crime Reporter @ 3:48 pm

On June 11, 2012, the California Board of Psychology placed Michele M. Bieraugel on five years probation with terms and conditions.

Bieraugel is described in the Board document as having “a long history of substance abuse, starting…at approximately the age of 12.”

Further, in adulthood, she attended rehabilitation on several occasions between 1998 and approximately 2010 and “continued a pattern of alternately relapsing and then rejoining her recovery group.”

On or about June 15, 2010, after consuming approximately one and half bottles of wine (and also having taken the tranquilizer Valium and the antidepressant Effexor), she crashed her car into the rear of another vehicle at the bottom of a freeway offramp. She was arrested and charged with driving under the influence of alcohol and other counts.

She pleaded guilty on August 17, 2010 to driving a vehicle with 0.08 percent or more, by weight, of alcohol in her blood. She was placed on five years probation, fined $1,865 and had her driving privileges suspended for six months.

January 2, 2013

Owner of chain of mental health centers pleads guilty to fraud

WASHINGTON – The owner of a string of community mental health centers pleaded guilty today in connection with a health care fraud and money laundering scheme involving defunct health care provider Health Care Solutions Network Inc. (HCSN), announced 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; Michael B. Steinbach, Acting Special Agent in Charge of the FBI’s Miami Field Office; and Special Agent in Charge Christopher B. Dennis of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG), Office of Investigations Miami office.

Armando Gonzalez, 50, of Hendersonville, N.C., pleaded guilty before U.S. District Judge Cecilia M. Altonaga in the Southern District of Florida to one count of conspiracy to commit health care fraud and one count of conspiracy to commit money laundering.  Under the terms of his plea agreement, Gonzalez will also forfeit his interest in property valued at several million dollars, including $987,910 in currency seized in July 2012 as well as several vehicles and properties located in Hendersonville.

According to court documents, HCSN operated community mental health centers (CMHC) at three locations in Miami-Dade County, Fla., and one location in Hendersonville.  HCSN purported to provide partial hospitalization program (PHP) services to individuals suffering from mental illness.  A PHP is a form of intensive treatment for severe mental illness.

According to Gonzales’s plea agreement, HCSN obtained Medicare beneficiaries to attend HCSN for purported PHP treatment that was unnecessary and, in many instances, not even provided.  HCSN obtained beneficiaries in Miami by paying kickbacks to owners and operators of assisted living facilities (ALF).  According to court documents, HCSN routinely admitted patients in Miami who were ineligible for PHP treatment because they suffered from medical conditions – including mental retardation, dementia and Alzheimer’s disease – that could not be effectively treated by PHP services HCSN was purporting to provide.

According to Gonzalez’s plea agreement, his employees routinely fabricated patient census data and patient medical records that were then utilized to support false and fraudulent billing to government sponsored health care benefit programs, including Medicare and the Florida Medicaid program.

Gonzalez pleaded guilty to directing his employees in North Carolina to routinely submit fraudulent PHP claims for Medicare patients who were not even present at the CMHC or on days when the CMHC was closed due to snow.  Similar to HCSN’s Florida operations, patients who were suffering from conditions such as mental retardation were improperly and routinely admitted to HCSN for purported treatment.  To increase its patient base, HCSN Hendersonville employed “marketers” in North Carolina who recruited ineligible patients from surrounding counties.  HCSN would then transport the patients daily and reward them for their attendance by giving them cigarettes.

In furtherance of the North Carolina fraud scheme, HCSN employees and licensed therapists routinely fabricated patient progress notes purportedly documenting intensive mental health therapy.  In reality, patients were crowded into dysfunctional groups that often exceeded more than 20 people. HCSN therapists would then produce bogus therapy notes for sessions that had little therapeutic value and, in many cases, never even occurred.

According to Gonzales’s plea agreement, he was the president of Miami-based Psychiatric Consulting Network Inc., which he used as a shell corporation to launder HCSN health care fraud proceeds.

According to court documents, from 2004 through 2011, HCSN billed Medicare and the Florida Medicaid program approximately $63 million for purported mental health services. The false and fraudulent billing resulted in more than $28 million in payments from Medicare and Florida’s Medicaid programs.

In addition to Gonzalez, former HCSN employees John Thoen, Alexandra Haynes, Serena Joslin and Sarah Da Silva Keller have pleaded guilty to health care fraud and related charges.  ALF owners Daniel Martinez, Raymond Rivero, Ivon Perez and Alba Serrano have pleaded guilty to health care fraud and related charges for their roles in the scheme.  Alleged co-conspirators Paul Layman and Wondera Eason are scheduled for trial on Jan. 14, 2013, before judge Altonaga in the Southern District of Florida.

The cases are being prosecuted by Special Trial Attorney William J. Parente and Trial Attorneys Allan J. Medina and Steven Kim of the Criminal Division’s Fraud Section.  The case is being 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, now operating in nine cities across the country, has charged more than 1,480 defendants who have collectively billed the Medicare program for more than $4.8 billion.  In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.

Source: “Leader of $63 Million Mental Health Fraud Scheme Pleads Guilty in Miami,” Department of Justice Office of Public Affairs press release, December 17, 2012.

Mental health clinic director sentenced to 100 months prison for fraud

Filed under: crime and fraud,inpatient treatment,psychiatric hospital or facility — Psych Crime Reporter @ 3:04 pm

WASHINGTON – A former clinical director for Biscayne Milieu, a Miami-based mental-health clinic, was sentenced today to 100 months in prison for his participation in a Medicare fraud scheme involving the submission of more than $50 million in fraudulent billings to Medicare, announced 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; Michael B. Steinbach, Acting Special Agent in Charge of the FBI’s Miami Field Office; and Special Agent in Charge Christopher B. Dennis of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG), Office of Investigations Miami Office.

Rafael Alalu, 47, of Miami, was sentenced today by U.S. District Judge Robert N. Scola Jr. in the Southern District of Florida.  Alalu was convicted on Aug. 24, 2012, of one count of conspiracy to commit health care fraud and two substantive counts of health care fraud, following a two-month jury trial.  The evidence at trial showed that Alalu participated in treating ineligible patients, concealing that fact by falsifying patient files and writing fraudulent group therapy notes, and instructing others to do the same.  In addition to the prison term, Alalu was ordered to pay more than $5.6 million in restitution, jointly and severally with his co-defendants.

Various owners, doctors, managers, therapists, patient brokers and other employees of Biscayne Milieu have also been charged with various health care fraud, kickback, money laundering and other offenses in two indictments unsealed in September 2011 and May 2012.  Biscayne Milieu, its owners, and more than 25 of the individual defendants charged in these cases have pleaded guilty or have been convicted at trial.  Antonio and Jorge Macli and Sandra Huarte – the owners and operators of Biscayne Milieu – and Dr. Gary Kushner – its medical director – were each convicted at trial of various offenses and are scheduled for sentencing in March 2013.

According to the evidence at trial, the defendants and their co-conspirators caused the submission of over $50 million dollars in false and fraudulent claims to Medicare through Biscayne Milieu, which purportedly operated a partial hospitalization program (PHP) – a form of intensive treatment for severe mental illness.  Instead, the defendants devised a scheme in which they paid patient recruiters to refer ineligible Medicare beneficiaries to Biscayne Milieu for services that were never provided.  Many of the patients admitted to Biscayne Milieu were not eligible for PHP because they were chronic substance abusers, suffered from severe dementia and would not benefit from group therapy, or had no mental health diagnosis but were seeking exemptions for their U.S. citizenship applications.  The evidence at trial showed that once these ineligible patients were admitted to Biscayne Milieu, Alalu and others concealed the fraud by falsifying patients’ group therapy notes to reflect legitimate PHP treatment that was never provided, and directed others to do so.

The case is being prosecuted by Assistant U.S. Attorneys Michael Davis and Marlene Rodriguez of the U.S. Attorney’s Office for the Southern District of Florida, and by Trial Attorney James V. Hayes of the Fraud Section of the Justice Department’s Criminal Division.  The case was investigated by the FBI with the assistance of HHS-OIG, and was brought by the U.S. Attorney’s Office for the Southern District of Florida in coordination with the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section.

Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,480 defendants who have collectively billed the Medicare program for more than $4.8 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.

Source: “Clinical Director for Miami-based Health Care Clinic Sentenced to Prison for Role in $50 Million Medicare Fraud Scheme,” Department of Justice Office of Public Affairs press release, December 20, 2012.

December 18, 2012

Precedent: Psychiatrist goes to prison following patient’s axe murder

Filed under: crime and fraud,psychiatrist — Psych Crime Reporter @ 5:08 pm

MARSEILLES, France – A French psychiatrist whose patient hacked an elderly man to death was found guilty of manslaughter on Tuesday in a groundbreaking case that could affect the way patients are treated.

A court in Marseilles said Daniele Canarelli, 58, had committed a “grave error” by failing to recognize the public danger posed by Joel Gaillard, her patient of four years.

Gaillard hacked to death 80-year-old Germain Trabuc with an axe in March 2004 in Gap, in the Alps region of southeastern France, 20 days after fleeing a consultation with Canarelli at Marseilles’s Edouard Toulouse hospital.

Canarelli was handed a one-year prison sentence and ordered to pay 8,500 euros to the victim’s children, in the first case of its kind in France. Defense lawyers said the ruling would have serious repercussions for treatment of the mentally ill.

“If a psychiatrist lives in fear of being sentenced, it will have very real consequences and probably lead to harsher treatment of patients,” said Canarelli’s lawyer, Sylvain Pontier.

The court said Canarelli should have requested Gaillard be placed in a specialized medical unit or referred him to another medical team, as one of her colleagues suggested. Her stubborn refusal had equated to a form of “blindness”, the court president Fabrice Castoldi said.

Gaillard had already been forcibly committed to a secure hospital on several occasions for a series of increasingly dangerous incidents.

The victim’s son, Michel Trabuc, said he hoped the case would set a legal precedent.

“There’s no such thing as zero risk, but I hope this will move psychiatry forward and, above all, that it will never happen again,” he said.

Gaillard was not held responsible for his actions and was freed under medical supervision.

Source: Jean-François Rosnoblet, Vicky Buffery and Alison Williams, “French psychiatrist sentenced after patient commits murder,”
Reuters, December 18, 2012.

December 5, 2012

Psychiatrist pays Tennessee $325,000 for alleged overbilled psychotherapy services

Filed under: crime and fraud,Medicaid-Medicare fraud,psychiatrist — Psych Crime Reporter @ 9:29 pm

A Madison psychiatrist will pay the State of Tennessee more than $325,000 for allegedly overbilling TennCare patients for visits, Tennessee Attorney General Bob Cooper announced today.

Named in the agreement is psychiatrist A.K.M. Fakhruddin who is alleged to have overbilled patients for psychotherapy visits. Such practices are illegal under the Tennessee Medicaid False Claims Act. The settlement, which included substantial penalties, represents nearly three times the amount Fakhruddin is alleged to have taken from the program.

An investigation by the TennCare Provider Fraud Task Force revealed that from May 2007 to December 2010, Dr. Fakhruddin billed for extensive 45-50 minute psychotherapy visits when in most cases he was performing brief medication management services with minimal psychotherapy.

“In a few instances, he billed for more than fifteen hours in a day when the actual time spent with patients was a fraction of that amount,” Attorney General Cooper said. “The Task Force takes very seriously the misuse of taxpayer dollars and will continue to work diligently to end such practices. ”

The fraud concerned billings for over 150 patients. The Task Force includes the Attorney General’s Office, TennCare, the Tennessee Bureau of Investigation’s Medicaid Fraud Control Unit and the Office of Inspector General. It is charged with pursuing fraud by any TennCare provider. General Cooper noted, “The Task Force concentrates on every aspect of Medicaid Fraud, which includes not only physicians and drug companies but also mental health services.”

Inspector General Deborah Faulkner stated, “The State of Tennessee is aggressively investigating TennCare fraud and abuse from every angle by working in unison to achieve the overarching goal of protecting taxpayer resources. The cooperation between our Offices is an example of a successful collaboration to stop TennCare fraud.”

Dr. Fakhruddin, who intends to retire and sell his practice, has denied any wrongdoing. There were no allegations of patient harm.

Source: “State Cracks Down on Psychotherapist for Overbilling TennCare,” press release of the Tennessee Attorney General, December 3, 2012.

December 4, 2012

Convicted psychiatrist seeks to avoid prison; will be sentenced Dec. 7

Filed under: crime and fraud,prescription drugs,psychiatrist — Psych Crime Reporter @ 2:11 pm

His lawyer is asking that an 82-year-old New City psychiatrist who admitted in June to illegally distributing prescription drugs be sentenced to a fine and community service rather than prison time.

Aristide Esser faces up to 20 years in federal prison when he is sentenced Dec. 7 by Judge Kenneth M. Karas in U.S. District Court in White Plains.

John E. Finnegan, a lawyer for Esser, said in a sentencing memorandum filed Friday that the psychiatrist had a distinguished career before it was derailed in 2011 by at least four incidents where Esser illegally prescribed Seconal, a sedative, to cooperating witnesses. Esser’s conduct, Finnegan said, was illegal but did not fit the pattern of recent arrests of doctors, many of whom are accused of operating so-called “pill mills.”

“He was not engaged in ‘drug dealing’ in the traditional sense of the term, involving large-scale distribution for profit,” Finnegan wrote in court papers, before writing that some of Esser’s prescriptions resulted from patients’ “skillful manipulations and persistence.”

Prosecutors, meanwhile, have said that Esser told the cooperating witness that he would “gladly medicate” the witness’s friends, should they also need prescriptions.

Prosecutors have said that Esser’s 2011 conduct is just the latest in a string of incidents regarding Esser’s alleged overprescription of drugs to patients. Esser was previously ordered to stop prescribing opiates after a 2001 investigation by the state Department of Health, which accused him of giving opiates to substance abusers without proper evaluation or monitoring, according to court papers.

In the sentencing memorandum, Finnegan said Esser grew up in Indonesia during the Japanese occupation in World War II. Esser’s father and uncle were executed by the Japanese. Esser moved to Holland in 1946, before eventually going to medical school and, in 1961, coming to the United States to serve as a research fellow at Yale University. He later moved to Rockland County, where he practiced psychiatry for decades.

Seconal was widely used in the 1960s and 1970s but has been less popular among recreational users in recent years. A parade of famous musicians, artists, writers, and others were said to have used or abused Seconal, including Tennessee Williams, Judy Garland, and Jimi Hendrix. Garland died June 22, 1969, after a suspected Seconal overdose.

Source: Erik Shilling, “New City psychiatrist, 82, seeks to avoid prison in drug case,” The Journal News, November 26, 2012.

November 24, 2012

State halts Medicaid payments to psychiatrist Michael Reinstein; federal suit fraud, kickback allegations

Filed under: crime and fraud,Medicaid-Medicare fraud,psychiatrist — Psych Crime Reporter @ 2:19 pm

The Illinois Department of Healthcare and Family Services has suspended Medicaid payments to a controversial Chicago psychiatrist who the federal government says fraudulently prescribed antipsychotic medication to thousands of mentally ill nursing home patients.

The action means that Dr. Michael J. Reinstein, also accused in a federal lawsuit of accepting kickbacks from drug companies, will be prohibited from billing Medicaid, and that any unprocessed bills already submitted will not be paid, said Bradley Hart, Medicaid inspector general.

Hart said the 180-day suspension could be extended pending the status of the federal lawsuit, which was filed last week.

Meanwhile, another state agency, the Illinois Department of Financial and Professional Regulation, has filed a formal complaint against Reinstein that mirrors the federal accusations and could lead to disciplinary action on his medical license. A preliminary hearing is set for Dec. 17.

The two-count complaint alleges that Reinstein “routinely and continuously” prescribed to elderly patients various psychiatric medications, including clozapine, also known by its brand name, Clozaril, despite the risk of potentially life-threatening side effects, including seizures and death.

The “respondent knew and/or should have known that clozapine is considered to be a drug of last resort for elderly patients,” the complaint says.

The complaint also alleges that Reinstein prescribed the treatment in exchange for financial compensation from IVAX, the manufacturer of generic clozapine, and Teva Pharmaceutical Industries Ltd., the company that IVAX later merged into.

Reached by phone Monday, Reinstein, 69, said he was unaware of the payment suspension and couldn’t comment on it. But he said he prescribed the drug appropriately.

“I feel my treatment with clozapine was justified,” he said. “I think for the severely mentally ill population that I treat, the patients I use clozapine with, it was the best choice. I am confident that I will be vindicated.”

He said he will borrow money if necessary to continue his medical practice, which includes working at four hospitals, 20 nursing homes and his office in the Uptown area.

Acting U.S. Attorney Gary Shapiro said last week that the federal lawsuit filed against Reinstein represented “the largest civil case alleging prescription medication fraud against an individual ever brought in Chicago.”

A joint 2009 investigation by the Tribune and ProPublica, a nonprofit investigative journalism group, revealed Reinstein’s unusually heavy reliance on clozapine, which has been linked to at least three deaths. In 2007 he wrote more prescriptions for clozapine than all the doctors in Texas combined, the investigation found. The Illinois Department of Financial and Professional Regulation mentioned the series in its complaint.

In their lawsuit, federal authorities alleged that Reinstein submitted at least 140,000 false claims to Medicare and Medicaid for antipsychotic medications he had prescribed based on the kickbacks he received from pharmaceutical companies instead of the medical needs of his patients.

He also allegedly submitted 50,000 more claims to Medicare and Medicaid in which he falsely stated he had properly monitored the conditions of his patients at more than 30 area nursing homes and long-term care facilities, according to the lawsuit.

The suit seeks triple damages under the False Claims Act as well as hefty civil penalties for each of the tens of thousands of alleged false claims — a total that could easily reach millions of dollars if authorities prove the allegations against Reinstein.

Federal authorities said they are continuing to investigate Reinstein. Hart said his department is assisting them, including calculating the amount of payments for which they may seek restitution.

Source: Deborah L. Shelton, “Watchdog Update: Medicaid payments to psychiatrist halted,” Chicago Tribune, November 20, 2012.

November 19, 2012

US Attorney files fraud lawsuit against Illinois psychiatrist Michael Reinstein

Filed under: crime and fraud,prescription drugs,psychiatrist — Psych Crime Reporter @ 12:39 pm

The U.S. Attorney for the Northern District of Illinois filed a federal fraud lawsuit today against a Chicago psychiatrist profiled by ProPublica and the Chicago Tribune in 2009 for his voluminous prescribing of antipsychotic drugs to nursing home patients.

In a news release, the government says that Dr. Michael Reinstein “received illegal kickbacks from pharmaceutical companies and submitted at least 140,000 false claims to Medicare and Medicaid for antipsychotic medications he prescribed for thousands of mentally ill patients in area nursing homes.”
Original Story

In Chicago’s Nursing Homes, a Psychiatrist Delivers High-Risk Meds, Cut-Rate Care

by Christina Jewett, ProPublica, and Sam Roe, Chicago Tribune, Nov. 10, 2009

ProPublica and the Tribune reported in 2009 that Reinstein prescribed more of the risky antipsychotic clozapine to patients in Illinois’ Medicaid program in 2007 than all of the doctors in the Medicaid programs of Texas, Florida and North Carolina.

The government accuses Reinstein of billing Medicare and Medicaid for managing his patients’ medications, “knowing that he did not engage in substantive evaluations of his patients’ medical and psychiatric conditions to properly manage their medications,” the U.S. attorney’s office said in its release. “Instead, he allegedly prescribed medications to his patients based on his receipt of kickbacks from pharmaceutical companies.”

Prosecutors allege that Reinstein’s prescribing decisions were motivated by money and perks from pharmaceutical companies. He allegedly switched patients from one brand of clozapine to another based on money and other enticements he received from a pharmaceutical maker.

Before August 2003, the government alleged, Reinstein prescribed Clozaril, brand name for clozapine made by Novartis, which paid him to promote the drug.

When the drug went off patent in 1998, the lawsuit says, Reinstein resisted attempts to switch his patients to cheaper, generic versions. But when Novartis stopped paying Reinstein in 2003, the lawsuit says, he switched his patients to a generic version made by IVAX Pharamceuticals.

That company had agreed to pay him a consulting fee, pay his nurse to speak on the drug’s behalf and fund a research study at an affiliated institute, according to the lawsuit.

“While generally only four percent of schizophrenia patients who were prescribed antipsychotics received clozapine, during the time Reinstein was allegedly accepting kickbacks from IVAX, more than 50 percent of his patients were prescribed IVAX’s clozapine,” the U.S. Attorney’s office said in its news release. “At one nursing home, Reinstein had 75 percent of the 400 residents on IVAX’s clozapine.”

Ivax paid other perks to Reinstein and his associates, including airfare, entertainment expenses, a fishing trip, a boat cruise and a golf outing, the lawsuit says.

In 2006, Reinstein began switching to clozapine made by a different company but moved some patients back when he received additional perks and funds, the lawsuit says.

In an interview, federal prosecutor Eric Pruitt would not comment on whether his office would pursue criminal charges against Reinstein or whether any legal action would be taken against the pharmaceutical companies that allegedly paid the physician kickbacks.

A call left at the office of Reinstein’s attorney was not immediately returned.

The 2009 investigation by ProPublica and the Tribune showed that Reinstein’s high prescribing had serious consequences for his patients. Autopsy and court records showed that by 2009 at least three patients under Reinstein’s care had died of clozapine intoxication. One of them, a 50-year-old man, had five times the toxic level of clozapine in his blood when he died, according to his medical records.

Reporters determined that, based on his Medicaid prescribing alone, Reinstein he would have to work 21 hours a day, seven days a week to see each of his patients for 10 minutes. Research has found that the typical U.S. psychiatrist sees about 35 patients per week; Reinstein was seeing 60 each day, he wrote in an audit report in 2007.

Source: Charles Ornstein and Tracy Weber, “High-Prescribing Chicago Psychiatrist Faces Federal Fraud Suit,” ProPublica, November 15, 2012.

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