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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