The AG’s Impressive Healthcare Justice Résumé

Illinois citizens are upset about the fraud, unfairness and profiteering that characterizes many aspects of the U.S. healthcare system, including overreaching insurance company or HMO practices, improper pharmaceutical marketing and pricing schemes and even healthcare providers taking improper side payments from vendors whose products or services they use or prescribe. Here in Illinois, we are fortunate to have an Attorney General who has been hard at work for years combating just the kinds of abuse and fraudulent practices so disturbingly portrayed recently in Michael Moore’s documentary, Sicko. Lisa Madigan’s team of experienced litigators and healthcare policy advisors has made some real progress remedying the impact of fraudulent healthcare schemes. Here are some of the highlights of accomplishments by the Attorney General in just the last couple of years.

-- Attacking Fraudulent HMO and Insurance Co. Practices

Attorney General Madigan has taken on HMOs, such as AmeriGroup, which was ordered to pay a judgment and Medicaid False Claim Act penalties totaling $334 million for shunning pregnant Medicaid patients it was paid to serve. See http://www.illinoisattorneygeneral.gov/pressroom/2007_03/20070313.html. She has prosecuted and settled numerous actions against insurance companies for improper bid rigging, contingent commissions and improper steering practices, and the HMO and insurance industries are well aware that Attorney General Lisa Madigan will not tolerate abusive HMO or health insurance practices in Illinois. Indeed, the Attorney General has, for example, channeled insurance abuse settlement funds, such as the $12 million she recovered from Zurich American to help fund the Illinois Comprehensive Health Insurance Plan (CHIP) for uninsured or low-income Illinoisans who are now able to obtain affordable insurance through CHIP. See http://www.illinoisattorneygeneral.gov/pressroom/2006_06/20060612.html and http://www.illinoisattorneygeneral.gov/pressroom/2006_08/20060801.html.

-- Challenging Pharmaceutical and Device Manufacturers’ Abusive Marketing

Pharmaceutical manufacturers have also been stung by the Attorney General’s pointed intolerance of healthcare fraud. Participating and/or leading over a dozen active investigations into pharmaceutical and device manufacturers off label marketing practices, improper average wholesale price billing practices to Illinois Medicaid and other Medicaid false claims, the Attorney General’s office has, for example, joined the Special Committee distributing the $38 million cy pres Neurontin award, and has assisted in distributing $800,000 of those settlement funds from that multi-state Neurontin off-label marketing settlement to be disbursed to Illinois researchers. See http://www.illinoisattorneygeneral.gov/pressroom/2006_04/20060413.html.

In addition, through the Attorney General’s participation in other multi-state investigations of pharmaceutical industry abuses, Illinois participated in settlements concerning the drugs Remeron ($36 million settlement, http://www.illinoisattorneygeneral.gov/pressroom/2007_04/20070410.html); OxyContin ($19.5 million settlement to states, http://www.illinoisattorneygeneral.gov/pressroom/2007_05/20070508.html); Lupron ($1.86 million distributed to Illinois Cancer Clinics http://www.illinoisattorneygeneral.gov/pressroom/2006_08/20060831.html); and Baycol ($8 million to states, along with critical clinical trial results disclosures http://www.illinoisattorneygeneral.gov/pressroom/2007_01/20070123.html).

The Illinois Attorney General’s Office also co-led an investigation of R.J. Reynolds related to its advertising and promotion of flavored cigarettes as violations of youth targeting provisions of the Master Settlement Agreement. The investigation ended in a settlement in which Reynolds agreed to a US ban of its Camel, Kool and Salem flavored cigarettes, and significant marketing restrictions that should make it virtually impossible for Reynolds to market flavored cigarettes to youth in the future. See http://www.ag.state.il.us/pressroom/2006_10/20061011.html.

Most recently, with an Illinois AAG, Pat Keenan, leading the multi-state NAMFCU team that collaborated with the US Attorneys in Philadelphia, Merck agreed to a settlement involving $649 million ($18.5 million to Illinois) in payments relating to Medicaid fraud and failures to pay rebates. See http://www.illinoisattorneygeneral.gov/pressroom/2008_02/20080207.html. Then, in May 2008 Illinois was part of the executive committee leading a multi-state group of 29 states that obtained significant reform, broad injunctive relief against improper marketing practices and $58 million ($3 million to Illinois) in consumer fraud penalties against Merck for improper marketing of Vioxx. See http://www.illinoisattorneygeneral.gov/pressroom/2008_05/20080520_merck.html.

-- Ensuring the Healthcare Middlemen Work to Consumers’ Advantage

Attorney General Madigan was also active in the multi-state investigation of Medco, one of the nation’s largest Pharmacy Benefit Managers, resulting in the landmark 2004 settlement of $29 million paid to the states and significant injunctive relief aimed to open Medco’s financial dealings with the drug industry to scrutiny by health care plans and others http://cc.msnscache.com/cache.aspx?q=73438812053115&mkt=en-US&lang=en-US&w=d7172596,73acfd8b&FORM=CVRE. More recently, a similar investigation of the PBM, Caremark, ended in another record-setting consumer protection multi-state settlement in which Illinois has played a lead negotiating role, and obtained a settlement of $41 million for 28 states and the District of Columbia, including $3 million to Illinois. See http://www.illinoisattorneygeneral.gov/pressroom/2008_02/20080214.html.

Finally, Attorney General Madigan made it a clean sweep of PBMs with a multi-state settlement with Express Scripts in May 2008, requiring ESI to cease misleading practices and drug switching and to reimburse Illinois $ 650,000 of a $9.3 million settlement negotiated by the 29-state multi-state group. [May 27, 2008 Press release link not live yet]

-- Keeping Healthcare Providers Honest

Healthcare providers participating in fraudulent schemes to cheat patients or Medicaid have also been prosecuted aggressively by the Attorney General. For example, one Chicago doctor, who routinely “gang billed” the Illinois Department of Health and Family Services for treating all members of a family when one member had actually been treated is currently in jail serving as sentence of over four years. See http://www.illinoisattorneygeneral.gov/pressroom/2006_06/20060609.html.

In current matters, the Attorney General has filed suit against dozens of radiology centers who are alleged to have entered into sham “lease” agreements with doctors under which the doctors pay a reduced rate for MRI and CT scans but charge the patient’s insurance company a higher rate, pocketing the difference as referral kickback. See http://www.illinoisattorneygeneral.gov/pressroom/2007_01/20070117.html. The AG has challenged the practice of “double-bunking” premature babies in hospital neonatal units. In addition, the Attorney General has sued two Champaign clinics who are alleged to have conspired to refuse to treat all new Medicaid patients in order to pressure the legislature to increase Medicaid reimbursement rates and accelerate reimbursement payments from Illinois. See http://www.illinoisattorneygeneral.gov/pressroom/2007_06/20070614b.html. The Attorney General is also continuing her prosecution of a nursing home, Pavillion of Forest Park and its Medical Director, Dr. Jason Garti, under indictment for gross neglect of a long term care facility resident. [See Press Release 9/12/05]. This case should go to trial before the end of 2008.

-- Proposing Real Reforms to Guide Healthcare Entities to Keep Patients First

Finally, the Attorney General has by no means confined her proactive healthcare policy initiatives to the courts; rather, she has pushed for very significant legislation in Illinois to hold tax-exempt non-profit hospitals accountable for actually providing charity care and to stop unfair hospital billing and collection practices. See http://www.illinoisattorneygeneral.gov/pressroom/2006_01/20060123.html and http://www.illinoisattorneygeneral.gov/pressroom/2006_02/20060215.html. Attorney General Madigan also pushed hard to enact that Illinois Fair Patient Billing Act, which went into effect in 2007, and is designed to protect health care consumers from price gouging, unfair billing practices, and abusive collection tactics. Under the Fair Patient Billing Act, all Illinois hospitals are required (among other things) to notify patients of the availability of financial assistance, provide detailed billing information, and follow a specific protocol prior to submitting patients to collection actions. In the past couple of years the Attorney General’s office has worked to safeguard important state consumer protections which have been threatened by preemption provisions in proposed federal healthcare-related legislation. See http://www.ag.state.il.us/pressroom/2006_04/20060425b.html.

More recently, the Attorney General submitted extensive comments to the FDA discouraging the FDA from relaxing restrictions on pharmaceutical companies distributing articles describing or promoting off-label uses of FDA-approved drugs. Based on the Attorney General’s extensive investigations of the overzealous marketing of pharmaceuticals the OAG has investigated, it is apparent that a relaxation of the restrictions on off-label marketing by pharmaceutical companies will exacerbate the harms caused by over-reaching marketing practices. Accordingly, the Attorney General collaborated with the Oregon Attorney General to oppose the FDA’s proposed new guidance on distribution of off-label articles. [See letter posted by FDA http://www.regulations.gov/fdmspublic/component/main?main=DocketDetail&d=FDA-2008-D-0053].

Most recently, Attorney General Madigan has pushed for legislation to ensure families of nursing home residents get more complete disclosures from nursing homes http://www.illinoisattorneygeneral.gov/pressroom/2008_05/20080522.html and for legislation to reduce the healthcare bills to uninsured patients. See http://www.illinoisattorneygeneral.gov/pressroom/2008_05/20080527.html.