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Menendez trial highlights Medicare fraud issues

Though the trial of Sen. Bob Menendez is competing for national media coverage with a number of other major news stories, it has brought attention to several important issues, including health care fraud. Menendez is charged with bribery in a case that revolves around his friendship with co-defendant Dr. Salomon Melgen.

Melgen was convicted earlier this year of Medicare fraud. Prosecutors said the retinal specialist was involved in a scheme that defrauded Medicare of up to $105 million. Sentencing in that case has been delayed until after the conclusion of the current trial.

Former Health and Human Services Secretary Kathleen Sebelius recently testified that after a 2012 meeting with Menendez and then-Senate Majority Leader Harry Reid, she believed that Menendez wanted her to do something, though she isn't sure to this day what that something was.

Menendez, Reid and Sebelius discussed Melgen's Medicare billing dispute, she recalled in her testimony. The ophthalmologist had apparently overbilled the federal agency and had been ordered to repay $9 million. Melgen was fighting the order.

The question in the current trial is whether Menendez was raising a legitimate issue with Sebelius or whether he was raising the matter to help save his friend millions of dollars.

Central to the defense's claim that Menendez was raising a legitimate concern was Melgen’s billing for Lucentis, a medication used to treat diabetic eye disease. At $2,000 per vial, it was the most expensive Medicare Plan B medication.

Each vial contained enough of the drug for three doses, though regulations appeared to indicate that each vial could only be used for one dose. Melgen administered three doses from each vial, billing Medicare each time. The doctor argued that multi-dosing was permitted and the billing required.

We do not know what to expect from the trial, but we do know that Medicare billing disputes are complex matters that can in some cases involve administrative and criminal proceedings.

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