Cancer Patients Illegally 'Traded as Commodities,' Says Suit

Nick Mulcahy

August 22, 2017

The chief executives of two large Florida-based cancer treatment companies had an anticompetitive "gentleman's agreement" with each other in the southwest Florida marketplace that violated federal law, according to a whistle-blower civil lawsuit filed in federal district court in Fort Myers.

The lawsuit alleges that William Harwin, MD, of Florida Cancer Specialists (FCS), and Daniel Dosoretz, MD, of 21st Century Oncology (21C) agreed to divide up treatment services in southwest Florida.

FCS pledged to not offer radiation oncology services, and 21C pledged to not offer medical oncology services through a large swath of the state (Sarasota and Manatee Counties through Collier County).

Elsewhere in the state, the situation is different.

"Florida Cancer Specialists offers radiation oncology services in Florida. But once you hit Tampa and points south, they stop providing it," said Benjamin Yormak, the lawyer who filed the suit. "The situation is painfully obvious if you live in south Florida."

The two companies are both headquartered in Fort Myers, and the two chief executives are "believed to be friends," said Yormak.

FCS is the largest independent medical oncology/hematology practice in the United States, with more than 180 physicians, 130 nurse practitioners and physician assistants, and more than 90 locations, according to the lawsuit.

21C has more than 800 physicians and has 179 treatment centers in 17 states and foreign countries but has recently filed for Chapter 11 bankruptcy after paying $54.5 million in fines to the federal government for fraudulent billing, according to reports on News-Press.com, a southwest Florida newspaper.

The lawsuit is filed as a civil complaint under the Federal Anti-Kickback Statute but also includes allegations of Medicare and Medicaid fraud and unsafe medical practices.

No trial date has been set for the civil lawsuit, said Yormak.

The lawsuit was first filed in 2016 in US District Court, Middle District of Florida, Fort Myers Division and was released for public review in May of this year after the US Department of Justice completed its review of the allegations and decided not to intervene in the civil case at this time, said Kyle Cohen, an assistant US attorney in Fort Myers in the News-Press account.

In that news report, Cohen would not say whether a criminal investigation was underway; however, 21C said in a recent legal notice that a federal inquiry was underway into "certain potential criminal antitrust violations regarding market in Florida."

According to the civil suit, the way the arrangement between FCS and 21C played out violates the federal Sherman Anti-Trust Act because the chief executives and their companies engaged in "anticompetitive practices that involve the trading of [Medicare and Medicaid] patients as commodities, which is an illegal quid pro quo kickback scheme."

In the southern section of the Florida Gulf Coast, the companies "created an unlawful monopoly" because each one controlled the market for each specific service and suppressed competition, says the suit.

As part of this agreement, 21C would exclusively refer medical oncology patients to FCS and vice versa with regard to radiation oncology patients.

Clinical staff members in both companies were allegedly explicitly told to exclusively refer patients to each other.

This is an illegal kickback scheme "because both parties benefit financially from the anticompetitive agreement" as they "traded" patient referrals.

Patients were the losers, says the suit: "Patients in Southwest Florida have but one option for medical oncology and radiation oncology."

At one point in 2011, an independent third provider entered this market.

But Premiere Oncology, which offered both types of treatment, "struggled" and eventually sold its radiation oncology practice to 21C and its medical oncology practice to FCS — thus allowing the pair to retain their joint stranglehold on the marketplace, says the lawsuit.

21C has declined to comment on the lawsuit as part of its policy not to comment on pending litigation. FCS said in a statement that "we take these allegations seriously and are looking into the matter," according to news reports.

The whiste-blowers are Sharon Dill and Christina Sievert, who are ex-employees of FCS. Both were fired. Dill was vice president of human resources and Sievert was vice president of clinical financial services.

Dill and Sievert "were privy to conversations" as to how Premiere "was to be carved up" between the other two companies.

All of this was a double violation of federal law because the companies knew they were in violation of anti-kickback statutes — and yet they submitted claims to Medicare and Medicaid and received payment, which was further violation of law, says the suit.

In addition to the antitrust violations, the civil suit also alleges that FCS submitted false Medicare claims during the past 6 years.

Both Dill and Sievert "repeatedly confronted executives...with their concerns about fraudulent claims...but to no avail."

Sievert had access to "all billing policies" and to "instructions" given to FCS employees about billing.

The suit says that FCS repeatedly submitted fraudulent claims to Medicare for the pricey drug ferumoxytol (Feraheme, AMAG Pharmaceuticals) to treat anemia, which is common among chemotherapy patients.

In July 2015, Dr Harwin directed staff to restrict use of all iron therapy drugs and required all FCS physicians to use ferumoxytol — despite the fact that the drug is only indicated for patients with a dual diagnosis of iron deficiency and chronic kidney disease (CKD).

The orders prompted pushback from staff nurses and physicians, who were instructed by FCS to record all chemotherapy patients as having Stage I CKD in their medical records, says the lawsuit.

The suit also alleges that FCS "required" medical assistants to access patient ports, which are inserted under the skin to deliver intravenous chemotherapy over repeated sessions, "at most if not all clinic locations in the State of Florida." The task was included in medical assistant job descriptions, even though it is outside the purview of their legally restricted responsibilities.

One of FCS's nurses, Diane Cope, PhD, ARNP-BC, AOCNP, who was chair of the clinical directions team, was concerned their port practices were neither "clinically safe" nor "permissible" under state law. Dr Cope brought the issue to the attention of Dill, the human resources head, who also happened to be a cancer patient with a port that had been accessed by a medical assistant at FCS.

In July 2015, Dr Harwin reversed company policy, saying that medical assistants would no longer be allowed to access ports.

But the lawsuit alleges that "hundreds of thousands" of Medicare claims involved a medical assistant who illegally accessed ports.

Follow Medscape senior journalist Nick Mulcahy on Twitter: @MulcahyNick

For more from Medscape Oncology, follow us on Twitter: @MedscapeOnc

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