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Feds charge Dr. Fesen, Hutch clinic
False insurance claims allegedly made for unneeded treatments
new_deh_dr fesen-hutch clinic Dr. Mark Fesen mug
Dr. Mark Fesen
Click here to see the entire court filing document.

 WICHITA – Charges were filed Friday against Dr. Mark Fesen and the Hutchinson Clinic for illegally billing Medicare and the insurance company Tricare for more than $30 million in unnecessary cancer, other medications and treatments, said U.S. Attorney Stephen McAllister in the District of Kansas. The five-count complaint filed in the Wichita Federal Court is based on the False Claims Act.

The 45-page filing outlined the charges and cited nine examples of patients who had received treatments. “Based on the information laid out above, these patient examples are not isolated examples, but instead representative examples of the medically unnecessary services Fesen and Hutchinson Clinic repeatedly billed to Medicare and Tricare. This is supported by the clinic’s own internal audits that found widespread problems with Fesen’s chemotherapy regimens, and particularly his use of Rituxan,” the document reads.

In asking for a jury trial, the U.S. Attorney’s Office is seeking damages from both Fesen and the clinic (individually and collectively).


The charges

• Count one (false claim): Fesen and the clinic knowingly presented or caused to be presented false or fraudulent claims to Medicare and Tricare for payment or approval.

They did so by knowingly ordering and administering drugs, treatments, or services not medically necessary and then submitting claims for payment from government insurers. As a result, the United States was damaged in amount to be determined at trial, subject to trebling under the False Claims Act.

The United States is also entitled to a civil penalty of $5,500 to $11,000 for each false claim, as adjusted by federal regulations.

• Count two (false records): They knowingly made, used, or caused to be made or used false records or statements material to false or fraudulent claims.

They did so by incorrectly diagnosing patients or certifying that treatments were medically necessary when they actually were not. As a result, the United States was damaged in an amount to be determined at trial, subject to trebling under the False Claims Act.

The United States is also entitled to a civil penalty of $5,500 to $11,000 for each false claim, as adjusted by federal regulation.

• Count three (reverse false claim): The clinic knowingly concealed or knowingly and improperly avoided an obligation to pay money to the government.

It did so by failing to return overpayments identified or that should have been identified as a result of repeated audits, warnings, and reviews of Fesen’s oncology practices. As a result, the United States was damaged in an amount to be determined at trial, subject to trebling under the False Claims Act.

• Count four (unjust enrichment): The United States conferred a benefit on Fesen and the clinic by payment of certain health-care claims, a benefit neither Fesen nor Hutchinson Clinic was entitled to because those payments were for claims for medically unnecessary services.

By obtaining government funds that they were not entitled to, Fesen and Hutchinson Clinic were unjustly enriched and are liable to pay such amounts, to be determined at trial, to the United States.

• Count five (payment by mistake): The United States paid claims submitted by Fesen and Hutchinson Clinic for reimbursement for certain cancer treatments on the mistaken understanding that they were medically necessary, when in fact they were not.

Had the United States known the truth, it would not have paid such claims. Payment was therefore by mistake. 

As a result of such mistaken payments, the United States has sustained damages in an amount to be determined at trial.


Background

According to the complaint, between 2008 and 2011, Frank Tra, a clinical pharmacist who worked in Hutchinson Clinic’s oncology department, repeatedly informed Hutchinson Clinic that Fesen was prescribing medically unnecessary and inappropriate chemotherapy, and that he continued to do so even after an outside review and Fesen was put on notice that he was improperly prescribing and administering cancer drugs. 

According to the filing, Fesen himself was repeatedly told how his conduct violated Medicare and Tricare rules and that he was submitting claims for medically unnecessary services.

From May 28, 2008, through Dec. 31, 2011, Fesen and Hutchinson Clinic were responsible for at least 289,407 claims to Medicare for Fesen’s treatments, and were paid over $30 million. Of those payments, $17 million was paid just for chemotherapy and other cancer drugs.

Hutchinson Clinic and Fesen billed Medicare at least 1,316 times for Rituxan administered to Fesen’s patients.

For these, Medicare paid Fesen and Hutchinson Clinic approximately $3.8 million. This total does not include the costs of infusion, which were billed to government insurers along with every dose of Rituxan.

In that same span, Fesen and Hutchinson Clinic were responsible for at least 10,743 claims to Tricare for Fesen’s treatments, and were paid $545,938.61. Of those claims, Tricare paid $251,266.29 for chemotherapy and other cancer drugs.

From approximately 1993 until Dec. 31, 2011, Fesen was employed as an oncologist at Hutchinson Clinic, and he was also a stockholder. From at least 2008 through 2011, Fesen was an enrolled Medicare provider.

From at least 2008 through 2011, Hutchinson Clinic submitted claims to Medicare and Tricare for oncology services ordered or performed by Fesen on Medicare and Tricare beneficiaries.

Hutchinson Clinic’s billing department would then bill the appropriate insurance carrier based on the services provided by Fesen.