Suit alleges false Medicare claims

Nov. 15, 2012 at 3:57 PM
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CHICAGO, Nov. 15 (UPI) -- A civil suit filed Thursday alleges a Chicago psychiatrist received illegal kickbacks from drug companies and submitted false Medicare and Medicaid claims.

The federal suit filed in Chicago alleges Dr. Michael J. Reinstein submitted at least 140,000 false claims to Medicare and Medicaid for anti-psychotic medications he prescribed for thousands of mentally ill patients in area nursing homes, the U.S. Justice Department said.

In addition, the suit alleges Reinstein, submitted at least 50,000 claims to Medicare and Medicaid, falsely saying he provided "pharmacologic management" for his patients at more than 30 area nursing homes and long-term care facilities.

The suit says the department seeks triple damages under the False Claims Act, plus a civil penalty of $5,500 to $11,000 for each alleged false claim.

Reinstein, 69, of Skokie, has provided psychiatric medical services in the Chicago area since 1973, the department said in a statement. Since at least 1999, he has maintained an office in Chicago's Uptown neighborhood, which has the densest concentration of mentally ill nursing home residents in Illinois, the statement said.

Prior to August 2003, Reinstein prescribed Clozaril, the trade name for clozapine, manufactured by Novartis, and often had more than 1,000 patients using the medication at any given time, the department said. For many years, Novartis paid Reinstein to promote Clozaril, the complaint alleges.

When Novartis' patent for Clozaril expired in 1998, Reinstein resisted pharmacy and drug company efforts to switch his patients to generic clozapine and continued to be the largest prescriber of Clozaril to Medicaid recipients in the United States, the department said. However, in July 2003, Novartis told Reinstein it would withdraw its support for Clozaril, and ended the regular payments.

In August 2003, Reinstein agreed to switch his patients to generic clozapine, manufactured by IVAX Pharmaceuticals Inc., based in Miami, the suit said -- if IVAX agreed to pay Reinstein $50,000 under a one-year "consulting agreement"; pay his nurse to speak on behalf of clozapine; and fund a clozapine research study by a Reinstein-affiliated entity known as Uptown Research Institute, the suit alleged.

IVAX agreed and Reinstein began switching his patients from Clozaril to IVAX's clozapine, the suit alleged, and he became the largest prescriber of generic clozapine in the country.

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