Investigators Say Menendez Intervened on Friend’s Behalf

Senator Robert Menendez of New Jersey intervened with federal health officials on two occasions in the last four years in an effort to help a close friend in a billing dispute with Medicare, federal investigators said Wednesday.

Senator Robert Menendez, Democrat of New Jersey.
The senator's efforts were unavailing, but he persisted, the investigators said.
The senator's friend, Dr. Salomon E. Melgen, a Florida eye surgeon, is under federal investigation. A team of agents from the Federal Bureau of Investigation and the Department of Health and Human Services raided Dr. Melgen's offices in West Palm Beach and removed 30 boxes of documents and other material last week.
The revelation about the senator's involvement in the Medicare matter was reported by The Washington Post on Wednesday night.
Last week, The New York Times published an article detailing the senator's efforts to help Dr. Melgen, a major benefactor of his, revive a lucrative contract to provide port security in the Dominican Republic.
Dr. Melgen has been in a dispute with Medicare officials over billing for a drug used to treat certain types of macular degeneration, which can cause loss of vision and damage to the retina. By getting several doses of the drug from a single vial, investigators said, Dr. Melgen was able to make the drug go further, and as a result, he was able to treat more patients and file more claims with Medicare.
Thus, for example, Medicare might allow doctors to bill $2,000 for a vial, but the doctor sometimes filed claims for as much as $8,000, said the investigators, who spoke on the condition of anonymity because the inquiry was continuing.
While Medicare was trying to recover money from the doctor, the senator contacted federal officials and suggested that the agency was being unfair and needed to clarify its policy, the investigators said.
In 2009, they said, Mr. Menendez, a Democrat, called Jonathan D. Blum, a senior official at the federal Centers for Medicare and Medicaid Services, known as C.M.S. In 2012, they said, the senator expressed his concern in a meeting with Marilyn B. Tavenner, the acting administrator of the agency, which is part of the Department of Health and Human Services.
Both officials indicated to Mr. Menendez that they had no plans to change the payment policy for the drug.
The government eventually recovered some of the money from Dr. Melgen, but he is exercising his right to pursue an administrative appeal, challenging Medicare's determination that he had overbilled the program, the investigators said.
An aide to Mr. Menendez issued a statement on Wednesday night, saying that the senator had no knowledge of any Medicare fraud investigation involving Dr. Melgen's company. "Senator Menendez was never aware of and has not intervened in any Medicare fraud investigation on behalf of Vitreo Retinal Consultants," one of Mr. Melgen's companies, the aide said.
The Menendez aide confirmed that the senator has "in the past raised concerns with C.M.S. about conflicting guidelines and ambiguity in C.M.S. rules that are difficult for providers to understand." Mr. Menendez wanted to make sure that "providers were not penalized if C.M.S. clarified or changed the rules of the game retroactively," the aide added.
Alan Reider, a lawyer representing Dr. Melgen, issued a statement Wednesday night saying that his client was cooperating fully with the government and had not been told the focus of the investigation. Because Dr. Melgen is a Medicare provider, Mr. Reider said, his claims had been subject to audits by the Centers for Medicare and Medicaid Services, and he called the audits routine. "Those audits have been resolved administratively, consistent with Medicare requirements," Mr. Reider said.
The relationship between Mr. Menendez and Dr. Melgen has been drawing scrutiny since reports recently surfaced that Mr. Menendez had accepted two round-trip flights aboard Dr. Melgen's jet for personal vacations in the Dominican Republic in 2010. He failed to report them as gifts or reimburse Dr. Melgen at the time, as required. Then in January, he sent the doctor a check to cover the cost of the flights, with his aides saying that he failed to reimburse the doctor earlier because of sloppy paperwork.
Mr. Menendez has been helpful to Dr. Melgen. Two years ago, Dr. Melgen bought an ownership interest in a company that had a long-dormant contract with the Dominican Republic to provide port security. Mr. Menendez, who is chairman of the Senate subcommittee that holds sway over the Dominican Republic, subsequently urged officials in the State and Commerce Departments to intervene so the contract would be enforced, at an estimated value of $500 million.
While the focus of the investigation involving the raid late last month is not clear, Mr. Menendez finds himself defending his relationship with a major benefactor as he ascends to the chairmanship of the Senate Foreign Relations Committee.
William K. Rashbaum contributed reporting.

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