February 16, 2017: Oncology Practice, Doctor and Practice Manager Pay $1.7 Million to Resolve Allegations They Billed Medicare for Illegally Imported Drugs
NEWARK, N.J. – A Monmouth County doctor, his oncology practice, and his wife, who managed the practice, have agreed to pay the United States $1.7 million to resolve allegations that they illegally imported and used unapproved chemotherapy drugs from foreign distributors and illegally billed Medicare, U.S. Attorney Paul J. Fishman announced today.
“Illegally imported drugs avoid the FDA’s rigorous oversight and manufacturing standards,” U.S. Attorney Fishman said. “Health care providers who import those drugs are exposing their patients to serious risks of harm from contaminated or counterfeit products.”
“Patients receiving cancer treatment drugs should be assured that the medications meet FDA’s standards for safety and quality,” Jeffrey J. Ebersole, special agent in charge, FDA Office of Criminal Investigations’ New York Field Office, said. “OCI will continue its vigilance over the prescription drug supply chain to ensure that the drugs reaching patients comply with federal law, and that those who attempt to circumvent the agency’s oversight will be brought to justice.”
The settlement announced today resolves allegations that The Oncology Practice of Dr. Kenneth D. Nahum, Nahum himself, and his wife, Ann Walsh, of Colts Neck, New Jersey, ordered cancer drugs from a foreign distributor. From April 1, 2010, until January 31, 2011, Walsh allegedly ordered chemotherapy drugs from the foreign distributor for use at the practice, which was owned by Nahum and operated in Howell, New Jersey, and Wall, New Jersey. These drugs had not been approved by FDA for sale in the United States.
Doctors at the practice allegedly injected the drugs into their patients, and the practice then submitted claims to Medicare for reimbursement for the drugs and infusion services. Since Medicare will only reimburse for drugs that have been approved for use in the United States, the practice allegedly violated the federal False Claims Act.
U.S. Attorney Fishman credited special agents of the FDA’s Office of Criminal Investigation, under the direction of Special Agent in Charge Ebersole, and special agents of the U.S. Department of Health and Human Services – Office of the Inspector General, under the direction of Special Agent in Charge Scott J. Lampert, with the investigation leading to today’s settlement.
The government is represented by Assistant U.S. Attorneys Sarah Wolfe of the U.S. Attorney’s Office in Trenton, and Andrew A. Caffrey III and Charles Graybow of the U.S. Attorney’s Office Health Care and Government Fraud Unit in Newark.
U.S. Attorney Paul J. Fishman reorganized the health care fraud practice shortly after taking office, including creating a stand-alone Health Care and Government Fraud Unit to handle both criminal and civil investigations and prosecutions of health care fraud offenses. Since 2010, the office has recovered more than $1.32 billion in health care fraud and government fraud settlements, judgments, fines, restitution and forfeiture under the False Claims Act, the Food, Drug, and Cosmetic Act and other statutes.
The claims settled by this agreement are allegations only, and there has been no determination of liability.
The Oncology Practice and Nahum: Michael B. Himmel Esq. and Matthew M. Oliver Esq., Roseland, New Jersey
Walsh: Salvatore T. Alfano Esq., Bloomfield, New Jersey
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