The Department of Justice filed a civil antitrust lawsuit Monday against Blue Cross Blue Shield of Michigan, alleging that the insurer's most favored nation pacts with hospitals across the state raise prices, stifle competition from other insurers, and discourage discounts.
As a result of these MFN pacts, Michigan consumers pay higher prices for healthcare services and health insurance, said Christine Varney, assistant attorney general in charge of DOJ's Antitrust Division.
"Any time a dominant provider uses anticompetitive agreements, the market suffers. This cannot be allowed in Michigan. And, let me be clear, we will challenge similar anticompetitive behavior anywhere else in the United States," Varney said.
Andrew Hetzel, BCBSM vice president for corporate communications, said the suit is "without merit" and that the insurer would "vigorously defend our ability to negotiate the deepest possible discounts for our members and customers with Michigan hospitals."
"Negotiated hospital discounts are a tool that Blue Cross uses to protect the affordability of health insurance for millions of Michiganders. Through this lawsuit, the federal government seeks to deny millions of Michigan residents the lowest cost possible when they visit the hospital," Hetzel said.
DOJ's complaint focuses on the MFN clauses that guarantee that other health plans cannot get a better rate. DOJ alleges that BCBSM's MFN clauses with hospitals have caused hospitals to increase their prices to BCBSM's competitors and insulated BCBSM from competition. BCBSM has used MFNs or similar clauses in its contracts with at least 70 of Michigan's 131 general acute care hospitals, including major hospitals, the DOJ complaint alleges.
DOJ said the MFNs require a hospital either to charge BCBSM no more than it charges the insurer's competitors, or to charge the competitors a specified percentage more than it charges BCBSM, in some cases between 30% and 40%. The complaint further alleges that BCBSM's use of MFN has reduced competition in the sale of health insurance in Michigan by raising hospital costs to BCBSM's competitors, which discourages other insurers from entering or expanding in Michigan.
BCBSM agreed to raise the prices it pays some hospitals to get the MFNs, thus buying protection from competitors by increasing its own costs, the complaint alleges.
"When a large healthcare plan with a substantial market share, like Blue Cross, imposes an anticompetitive MFN in the marketplace, it harms competition and consumers. It prevents others from entering the marketplace and discourages discounting. The end result: fewer options and higher prices," Varney said.
Nonprofit BCBSM is the largest commercial health insurer in Michigan, with revenues exceeding $10 billion in 2009. BCBSM insures more than nine times as many Michigan residents as its next largest commercial health insurance competitor, covering more than 60% of Michigan's 3 million commercially insured residents.
Hetzel said the hospital discounts BCBSM negotiates "are a vital part of our statutory mission to provide Michigan residents with statewide access to healthcare at a reasonable cost."
"It does not make good business sense for Blue Cross Blue Shield of Michigan to reimburse a provider at a higher rate than we can otherwise negotiate," Hetzel said. "These kinds of low cost guarantees are widely used in a variety of contracts in a number of industries. In fact, the federal government routinely requires its own vendors to abide by these same low cost requirements."
The state of Michigan joined DOJ in its lawsuit, which was filed in U.S. District Court in Detroit.
A study, Contributing to a Healthier Economy in Northeast Ohio: The Impact of Summa Health System, shows that Summa's $2.86 billion in total economic impact to Ohio consisted of $1.2 billion in direct business, which includes institutional spending, employee spending, and spending by visitors to Summa facilities. It also included $1.6 billion in indirect impact—a multiplier effect caused by the re-spending of dollars in the local economy as a result of Summa's presence.
The largest economic impact occurred in Summit County, where the health system accounted for $1.6 billion in business activity and provided wage and salaried employment for nearly 7,000 direct and indirect full time employees in 2009, the report showed.
Summa, which includes six affiliated hospitals, health centers, a health plan, a physician-hospital association, a research group and multiple foundations, also provided significant economic impact across the neighboring counties of Portage ($228 million), Stark ($342 million), Medina ($119 million) and Wayne ($42 million), the report said.
The report, conducted by Tripp Umbach, projected that Summa's total annual business volume impact on Ohio will increase by approximately $2.6 billion by the year 2014, which was attributed to growth in capital expenditures, operating expenses and employment to support the health system's expansion.
Summa also issued its annual Community Benefit report. As the region's largest safety-net provider, Summa delivered $110.8 million in community benefit—including $31 million in the net cost of charity care, and $16.6 million in unpaid costs for Medicaid patients. Summa reported $21.6 million in bad debt, and $12.8 million in subsidized health services, such as senior health, HIV/AIDS care, and dental heath.
The first six months of 2010 were very productive for the nation's healthcare unions, and there is little to indicate that the tide is turning in management's favor, at least for the next year or so.
The 35th Semi Annual Labor Activity in Healthcare Report—conducted by IRI Consultants for the American Society for Healthcare Human Resources Administration—found union win rates in healthcare representation elections have held above 70% for five straight years.
Even more impressive, in the first six months of 2010 the Service Employees International Union won 91% of its representation elections, and the newly formed National Nurses United won 100% of its elections.
Clearly, when a healthcare union targets a hospital for an organizing campaign, it's highly likely that the union will succeed.
The report's findings indicate more aggressive attitudes by healthcare unions that show no sign of abating into 2011.
For example:
In 2009, there were a total of 220 organizing elections in the healthcare sector, and unions won 153 (70%) of them. In the first six months of 2010 there were 143 elections in the healthcare sector and unions won 105 (73%).
SEIU accounted for 39% of all organizing petitions filed in the first six months of 2010, up from 27% in 2009. AFSCME and UFCW, both with 11%, followed by IBT, with 8%, and NNU, with 5%.
27% of organizing petitions filed in healthcare organizations in the first half of 2010 were withdrawn, dismissed, transferred or nullified—down from 48% in 2009.
Unions won a staggering 89% of decertification elections in the first six months of 2010 versus 58% in 2009.
In 2009, there were 11 strikes that idled 2,614 workers, averaging 238 workers per strike. In the first half of 2010, there were seven strikes involving 13,898 workers, averaging 1,985 workers per strike.
IRI President Jim Trivisonno says unions are at a distinct advantage for a number of reasons, including pro-labor sentiment on the National Labor Relations Board, the White House, and (at least for the next month or so) in Congress, and workers' anxiety over the economy.
In addition to expanding their rank and file, Trivisonno says healthcare unions will tap their connections in the federal and state government to push for hot-button mandates like staffing ratios.
"You will begin to see decisions coming out, we are already seeing some, that are going to further provide unions with additional protections and rights, not just to organize, but with employee discharges, the ability to strike, permanent replacements, a host of things," he says.
Trivisonno says that—if Republicans take the House next month—NRLB will be pressed "to jam as many decisions in as they can, this very liberal NLRB, between now and August," when the term of President Obama's controversial recess appointment of labor lawyer Craig Becker expires.
"It will be a much less liberal board after August of next year. I would look for that. They will overturn cases that currently exist. Clearly they will be favorable to labor unions," Trivisonno says.
Organized labor often taps into the anxiety of workers during a recession, which Trivisonno says was shown in the spike in union victories in decertification elections. "Unions won nearly 90% of the de-cert elections in the first six months of last year. That number is off the charts," he says. "It's the economy again. Employees have concerns about downsizing and benefits. They are seeing these things happening, and the union says if you have a union contract this couldn't happen. Without a union contract, the employer is free to make changes."
Trivisonno believes that nurses unions' influence might increase as the economy recovers and the nursing shortage returns as an issue.
"You will see some additional union organizing and pushes for state and federal legislation around staffing ratios," he says. "In nursing, as staffing becomes a bigger issue, nurses will seek out unions in an attempt to fix that problem for them and potentially get staffing ratios in a collective bargaining agreement."
Trivisonno says NNU has accomplished a lot since its formation last year, and he credits the effective leadership and cooperation between NNU and SEIU for much of the success.
"The arrangement is the NNU gets the nurses, the SEIU gets everyone else," he says.
Newly elected SEIU President Mary Kay Henry doesn't have jagged relations that former SEIU President Andy Stern had with rival unions, and that allows her to work with them to patch up differences.
"Her approach is going to be to increase organizing and one of the best ways to do that is to align with other unions rather than competing," Trivisonno says.
There is still some distrust and friction between NNU and some state nurses associations, but Trivisonno says that that is lessening. NNU won a lot of admirers in labor with its aggressive tactics in several nurses' strikes this year, most notably stoppages in Minnesota and Philadelphia. NNU Executive Director Rose Ann DeMoro has made it clear that the union is not afraid to strike.
While labor finds itself very much in the driver's seat, Trivisonno says hospitals aren't entirely powerless. He says the best antiunion measures require proactive communication with staff.
"You have to get ahead of it. Education is key from the board level to employees," he says. "The most important things are employee engagement. Unions don't like shared governance and (nursing) magnet status, and those are heavy engagement components. Communicate openly and honestly."
Lastly, he suggests, hospital leaders should have tools in place that can assess employees' attitudes in real time as critical issues are occurring. "A lot of people do opinion surveys once a year or ever other year. But there are periods in between those assessments where you have to constantly keep in touch with how employees are feeling," Trivisonno says. "There is always a triggering incident. Something happens that causes employees to consider having a labor union. Recognizing what that is and dealing with it quickly becomes a key piece of being prepared."
Most doctors don't follow practice guidelines for recommending colorectal cancer screenings, a study shows.
The survey of nearly 1,300 primary care physicians in the United States found that only about 20% of them recommend colorectal cancer screenings tests to their patients in accordance with current practice guidelines. About 40% of the doctors followed some of the practice guidelines, while the remaining 40% ignore practice guidelines.
NCI investigator Robin Yabroff said the survey suggests that by not using practice guidelines, many physicians either overuse or underuse screening tests. The underuse of CRC screenings may result in fewer earlier stage or pre-invasive cancers being detected, while overuse of screening results in expensive, unnecessary screenings and puts patients at risk for certain types of screening-related complications. The study results appeared Oct.14, in the Journal of General Internal Medicine.
CRC screening guidelines have been developed by the several groups, including the U.S. Preventive Services Task Force. The guidelines recommend screening for CRC using high-sensitivity fecal occult blood testing, flexible sigmoidoscopy, double-contrast barium enema, or colonoscopy. Initiating screening at age 50 is recommended, although the time between screenings varies.
Having multiple modalities available for screening allows physicians and patients to consider the risks, benefits and other attributes of CRC screening tests and to ultimately identify the option best suited to the patient. However, multiple screening modalities may also contribute to confusion about their appropriate use by physicians and patients.
IPC The Hospitalist Company, Inc., has acquired Post-Acute Medical Associates, PC, in Morristown, NJ; and Muhammad Syed, MD, PC, in Las Vegas, NV.
Combined, the two groups see about 20,000 patients annually. IPC already has hospitalist practices in both markets, thus the two newly acquired physicians' groups will join existing IPC practices.
"Like the dozens of local independent practices that have chosen to partner with us, PAMA and Syed will greatly benefit from the administrative, financial, and technology support IPC provides to our practices," says R. Jeffrey Taylor, president/COO of IPC The Hospitalist Company. "Partnering is an increasingly attractive option for the local independent practice to deliver the improved care and coordination that hospitals, skilled nursing facilities, payers, and the entire medical community demand from inpatient care today."
North Hollywood, CA-based IPC provides management services to hospitalist practices in more than 500 facilities, and employs more than 1000 affiliated healthcare providers.
CVS Pharmacy, Inc. will pay a record $75 million in civil penalties after admitting that it sold pseudoephedrine, a key ingredient in the production of methamphetamine, to criminals in 25 states.
As part of the agreement with federal prosecutors, the nation's largest retail pharmacy chain has also agreed to forfeit $2.6 million in profits the company earned from the illegal sales.
The $75 million portion of the settlement represents the largest civil penalty ever paid under the Controlled Substances Act.
"This historic settlement underscores Drug Enforcement Administration's commitment to protect the public's health and safety against the scourge of methamphetamine," said Michele M. Leonhart, DEA acting administrator. "CVS's flagrant violation of the law resulted in the company becoming a direct link in the methamphetamine supply chain.
DEA will continue to work with its state and local counterparts to disrupt the supply of methamphetamine, including inhibiting access to chemicals, such as pseudoephedrine, used to produce methamphetamine."
The U.S. Attorneys Office in Los Angeles, CA, which led the investigation, said the sales occurred in CVS stores located primarily in Los Angeles County; Orange County, CA; and Clark County, NV.
Between September 2007 and November 2008, prosecutors said, CVS supplied large amounts of pseudoephedrine to methamphetamine traffickers in Southern California, and the company's illegal sales led directly to an increase in methamphetamine production in California.
CVS, a subsidiary of Woonsocket, RI-based CVS Caremark Corp., eventually changed its sales practices, but only after it became aware of the government's investigation.
"This case shows what happens when companies fail to follow their ethical and legal responsibilities," said U.S. Attorney André Birotte Jr.
"CVS knew it had a duty to prevent methamphetamine trafficking, but it failed to take steps to control the sale of a regulated drug used by methamphetamine cooks as an essential ingredient for their poisonous stew," Birotte said.
The investigation uncovered thousands of violations of the Combat Methamphetamine Epidemic Act of 2005, which limits the amount of pseudoephedrine that a customer can purchase in one day.
CVS blamed the multistate illegal sales on "an electronic monitoring system flaw that has been corrected," and said the previously disclosed settlement would have no further impact on its finances.
In 2007, CVS implemented an automated electronic logbook system to record pseudoephedrine sales, but the system did not prevent multiple purchases by an individual customer on the same day. The government learned that violations occurred in California and Nevada, and in 23 other states where CVS failed to implement appropriate safeguards. The settlement addresses CVS's liability in 25 states.
"We are announcing today that we have resolved this issue, which unfortunately resulted from a breakdown in CVS/pharmacy's normally high management and oversight standards," said Thomas M. Ryan, chairman/CEO of CVS Caremark. "While this lapse occurred in 2007 and 2008 and has been addressed, it was an unacceptable breach of the company's policies and was totally inconsistent with our values. CVS/pharmacy is unwavering in its support of the measures taken by the federal government and the states to prevent drug abuse."
Ryan said CVS has strengthened internal controls to prevent future lapses, and has made "substantial investments to improve our handling and monitoring of (pseudoephedrine) by implementing enhanced technology and making other improvements in our stores and distribution centers."
In mid-2007, after Mexico banned the sale of pseudoephedrine, federal officials said Los Angeles County experienced an epidemic in a practice known as "smurfing," where individuals buy small amounts of pseudoephedrine in separate purchase to make methamphetamine. Smurfers discovered that CVS, unlike other large chain retail pharmacies, allowed customers to make repeated purchases of pseudoephedrine which exceeded federal daily and monthly sales limits.
Smurfers inundated CVS stores in Los Angeles and Orange Counties, and Las Vegas to purchase cough and cold remedies, sometimes cleaning out store shelves. For more than a year, CVS failed to change its sales practices to stop the illicit trade.
The government has agreed not to pursue criminal charges against CVS, which has accepted responsibility for the illegal conduct and has agreed to implement a compliance and ethics program over the next three years.
CVS has entered into a separate five-year compliance agreement with the DEA.
Orlando Health, the University of Florida, and Shands HealthCare have formed a free-flowing collaborative to expand physician training, develop interoperable electronic medical records systems, and improve quality and access to healthcare for 2.5 million people across a 20-county region in Central Florida.
At a ceremony on Thursday, officials at the three institutions signed a memorandum of understanding that provides a foundation for several cooperative initiatives, which they called a natural result of years of close working relationships.
"The formal affiliation of Orlando Health with the University of Florida and Shands will build on our longstanding and valuable relationship and enhance our collective energies as regional and statewide clinical leaders," says David S. Guzick, MD, senior vice president for health affairs at UF and president of the UF & Shands Health System.
"As the healthcare needs of patients throughout Central and North Central Florida continue to grow, we will seek out ways to collaborate on comprehensive clinical programs for adults and children and fortify our role as educational leaders in delivering the highest-quality education for future physicians and other health providers," he adds.
The agreement calls for the three institutions to form joint clinical programs in pediatrics, neuroscience, oncology, women's health, transplantation, and cardiovascular medicine, which will include a regional comprehensive cardiac care program. The collaborative will increase undergraduate and graduate medical residency and fellowship training at Orlando Health, facilitate clinical trials through UF's clinical research program, and collaborate on quality care and safety initiatives.
UF College of Medicine Dean Michael L. Good, MD, said the collaborative is "built upon existing partnerships" with physicians in three "tremendously strong healthcare organizations."
"Many of our doctors already work together," Good said. "This agreement allows us to collaborate on much broader scale between groups of physicians and divisions and departments, working with one another around the triad of best care, best educational opportunities, and providing the best environment for advancing new knowledge and discovery."
Orlando Health CEO John Hillenmeyer called the collaborative "a work in progress" with some of the details not finalized.
"There is not a structure," he said. "Now that we have arrived at this it becomes management's responsibility, and we're required by our boards to figure out how we are going to manage this process. While we have ideas, if you ask for a specific staff that is doing A, B, C, or D today, it's not there. But those plans are being laid right now."
Hillenmeyer said the three institutions agreed on front-end guiding principals, and will sort out the details as the collaborative matures.
"Rather that try to figure it out on the front end and probably create barriers for getting things done, we'd rather say we've agreed to this and we are going to go about it," he said. "I can assure you we did not dream this up two weeks ago. This has been going on, parts of it, for several years. We just thought the time was right to go to both of our boards and to announce to the public that we are working together. As details on particular programs evolve, I'm sure there will be more activity."
Through the collaboration, Orlando Health physicians could receive faculty appointments, teach UF medical students or graduate medical trainees, or participate in UF-sponsored clinical trials.
The agreement could increase the use of Orlando Health as a training site for UF medical residents and fellows. The clinical faculty from UF's College of Medicine also could participate with Orlando Health medical staff on clinical services.
The alliance creates additional opportunities for the physician groups to work together to develop joint clinical protocols that will enhance quality and safety for patients.
More than 2.5 million Floridians across nearly 20 counties are served by the three health-care organizations.
With an eye towards healthcare reform mandates, the collaborative will develop compatible electronic medical information systems to ensure easy access to patient records. They hope to provide services ranging from primary care to the most complex, such as transplantation, and will share common values in education, research, and charitable care.
"We really do have an opportunity with this number of physicians and connected organizations to make some serious initiatives in delivery system reform, which is what healthcare reform is all about," Hillenmeyer says.
Seventy-three defendants—including alleged members of an Armenian-American crime syndicate called Mirzoyan-Terdjanian—have been indicted for crimes involving more than $163 million in fraudulent billing of Medicare and insurance companies across the nation, the U.S. Department of Justice says.
The announcement came Wednesday after indictments were unsealed in California, Georgia, New Mexico, New York and Ohio. Law enforcement officials in the national, multi-agency investigation reported 52 arrests on Wednesday, in what the DOJ says is the largest prosecution of a Medicare fraud scheme committed by one criminal enterprise.
The defendants are charged with highly-organized, multi-million dollar schemes to defraud Medicare and insurance companies by submitting fraudulent bills for medically unnecessary treatments, or treatments that were never performed, DOJ alleges.
According to the indictments, the defendants allegedly stole the identities of doctors and thousands of Medicare beneficiaries and operated at least 118 different phony clinics in 25 states that submitted bogus Medicare reimbursement claims.
"The international organized crime enterprise known as the Mirzoyan-Terdjanian, fleeced the healthcare system through a wide-range of money making criminal fraud schemes," says Kevin Perkins, FBI assistant director of the Criminal Investigative Division.
"The members and associates located throughout the United States and in Armenia, perpetrated a large-scale, nationwide Medicare scam that fraudulently billed Medicare for more than $100 million of unnecessary medical treatments using a series of phantom clinics," Perkins said. "We want to restore the confidence in the nation?s healthcare system and assure practitioners we will not stand by and let their identities be used for criminal gain."
Acting Deputy Attorney General Gary G. Grinder said the emergence of the Mirzoyan-Terdjanian operation "signals a dangerous expansion that poses a serious threat to consumers as these syndicates are willing to exploit almost any program, business or individual to earn an illegal profit."
Here is the breakdown for the defendants:
* Forty-four defendants were charged in two indictments unsealed Wednesday in New York with racketeering conspiracy and conspiracy to commit: healthcare fraud, bank fraud, money laundering, fraud in connection with identity theft, credit card fraud and immigration fraud.
* Seven defendants were charged in New Mexico with healthcare fraud, mail fraud, wire fraud, money laundering conspiracy, money laundering, forfeiture and aggravated identity theft.
* Six defendants were charged in Georgia with healthcare fraud, conspiracy to commit healthcare fraud, money laundering conspiracy and aggravated identity theft.
* Six defendants were charged in Ohio with healthcare fraud, mail fraud, conspiracy to commit mail fraud, wire fraud, conspiracy to commit money laundering and aggravated identity theft.
* Ten defendants were charged in two indictments in California with conspiracy to commit bank fraud, bank fraud, money laundering, conspiracy to launder monetary instruments, criminal forfeiture, aggravated identity theft, aiding and abetting, and causing an act to be done.
Federal prosecutors say Mirzoyan-Terdjanian is named for its leaders, Davit Mirzoyan and Robert Terdjanian. The gang is based in Los Angeles and New York, and its operations extend throughout the United States and internationally.
Among the defendants charged with racketeering is Armen Kazarian, who is alleged to be a "Vor," a term translated as "Thief-in-Law," which refers to a member of a select group of high-level criminals from Russia, Armenia, and other countries that had been part of the former Soviet Union. This is the first time a Vor has been charged with racketeering, and the first time since 1996 that a Vor has been arrested on a federal charge.
The Institute of Medicine elected 65 new members and four foreign associates to its prestigious ranks at its 40th annual meeting this week in Washington, DC.
"It is a great pleasure to welcome these distinguished and accomplished individuals to the Institute of Medicine," IOM President Harvey V. Fineberg said in a statement to media. "Each of these new members stands out as a professional whose research, knowledge, and skills have significantly advanced health and medicine and who has served as a model for others. The Institute of Medicine is greatly enriched by the addition of our newly elected colleagues."
A complete list of the new members and associates can be found at theIOM Web site.
New members are elected by current members through a process that recognizes people who have advanced the medical sciences, healthcare, and public health. IOM stipulates that at least one-quarter of its members be selected from outside the health professions, from such fields as the natural, social, and behavioral sciences; law; engineering; and the humanities. The new members raise the IOM's active membership to 1,649 and 96 foreign associates. With 72 members holding emeritus status, IOM's total membership is 1,817.
The members make a commitment to volunteer on IOM committees, boards, and other activities. Projects completed during the past year include studies on the cardiovascular effects of secondhand smoke, nutrition standards for the federal school meals programs, prevention and control of viral hepatitis, strategies to reduce hypertension and sodium intake, and a major summit on integrative medicine.
Also this week, IOM announced that it has received a $2 million gift to establish the Leonard D. Schaeffer Fund and create an endowed executive officer position. IOM's current executive officer, Judy A. Salerno, will be the first to hold the position. The gift comes from Schaeffer, an IOM member and founding chairman/CEO WellPoint Inc., and his wife. The money will be used to support core expenses and program activities, such as the convening of studies, production of workshops, and communication of IOM?s findings and recommendations.
Federal inspectors identified $167,064 in "unallowable and unsupported costs" at the California Transplant Donor Network, including nearly $100,000 that was not adequate documented, and $19,000 that was spent on a CEO's retirement party.
The audit of 2007, released this month by the Department of Health & Human Services' Office of Inspector General, determined that at the June 2007 retirement party for long-serving CEO Phyllis Weber "CTDN catered for 300 guests, including CTDN’s employees and their spouses, the board of directors, the audit and finance committee, and transplant center officials. The estimated Medicare share of the unallowable costs related to kidney procurement was $9,620."
In addition, "CTDN reported $6,019 of overhead costs and administrative and general costs related to entertainment and alcohol, including $2,619 for transportation and lodging for dancers for a donor family gathering; $2,337 for alcoholic beverages purchased by CTDN personnel; $577 for a party held for individuals who were not CTDN employees; and $486 for ushers’ services at the donor family gathering. The estimated Medicare share of the unallowable costs related to kidney procurement was $3,053," OIG reported.
In a three-page response to OIG's audit, CTDN CEO Cindy Siljeslrom defended the $18,967 spent on the retirement party for Weber. "Based on the length of service and the role this executive played in founding this organization, CTDN believes the costs to be reasonable," Siljeslrom wrote. "However, given the unusual circumstances around the event, CTDN does not plan to sponsor such an event in the future."
OIG sorted the total $167,064 in misspent funds in 2007 into $65,912 of unallowable costs, and $101,152 unallowable costs.
CTDN was unable to provide adequate documentation for $99,168 of the reported $101,152 in unsupported costs, and OIS determined that no documentation existed to account for $1,984 of costs. OIG estimated that Medicare's share of the unsupported costs related to kidney procurement was $51,304.
The $65,912 of unallowable costs tallied by OIG included costs incurred for donations and gifts, the retirement party, entertainment, lobbying, and meals. Federal inspectors estimated that Medicare’s share of the unallowable costs related to kidney procurement was $33,431.
CTDN agreed with many of the OIG findings, but also defended some of the expenses as reasonably associated with fundraising, publicity, and raising public awareness, including events such as the Donor Family Gathering, which allows transplant recipients and their families to thank and share their stories with organ donors and their families.
"In order to participate in community events that provide a forum for community outreach and education CTDN is often asked to contribute to the cost of the event as funding for these types of activities is extremely limited," Siljeslrom wrote. "Volunteers are recruited as additional resources for the events. CTDN occasionally identifies a small way to thank those who volunteer to support this part of our mission. Hence the gifts to non employees."
CTND said it had documented the $99,188 identified by OIG as unsupported "and believes that all the costs are legitimate." However, CTND concurred that the documentation was inadequate.