A Florida ophthalmologist, whose records were seized last year by federal authorities, was paid nearly $21 million by Medicare in 2012, more than any doctor in the country.
Dr. Salomon Melgen, 59, of North Palm Beach, has been locked in a five-year dispute with the government, which made him repay $9 million he allegedly overbilled for his use of the drug Lucentis. The highly expensive medication is used to treat macular degeneration, the most frequent cause of blindness in the elderly. Melgen, whose practice is 70 percent Medicare patients, has sued to get the money back.
Wednesday, the Centers for Medicare and Medicaid Services (CMS) released nationwide figures on how much doctors had been paid by Medicare. Melgen ranked first, having received $20.8 million in 2012, the most recent year for which figures are available. The doctor, who runs four Florida clinics under the name Vitreo Retinal Consultants, billed mostly for Lucentis treatments.
Use of the drug is controversial because of its cost. Genentech, the pharmaceutical company which markets Lucentis at about $2,000 per dose, also markets the drug Avastin at about $50 for an equal dose. Medical trials, including a two-year study cited in 2012 in The Journal of American Academy of Ophthalmology, determined Avastin works just as well to treat most cases of “wet” macular degeneration in the elderly.
Avastin was originally developed as an anti-cancer drug. While the federal Food and Drug Administration has not approved it for treatment of macular degeneration, many doctors regularly use it for that purpose.
The drug company gets paid for the medication, but Medicare allows doctors to charge 6 percent of that amount for administering it. A doctor using Lucentis can bill Medicare 30 to 40 times as much for injecting it as he would for Avastin.
The Medicare statistics show Melgen treated 645 patients and gave them 37,075 doses of Lucentis. The cost of the drugs was $11.778 million. His total payment for 2012 also included $2.5 million for his work and overhead was listed at $6.1 million, all paid by Medicare.
According to a 2010 New York Times report, Genentech was also paying “secret rebates” to doctors who used Lucentis, which reached as much as tens of thousands of dollars every quarter. Only the biggest users were offered rebates and were not allowed to discuss the terms of the agreements, the Times said.
Melgen’s attorney, Kirk Ogrosky, based in Washington, told The Palm Beach Post he did not know whether Melgen had received “discounts or rebates” from the company, but said they would have been above board, not “under the table.”
Ogrosky said Melgen received large payments from Medicare because of the size of his practice, which includes 30 employees.
“At all times, Dr. Melgen billed in conformity with Medicare rules,” Ogrosky wrote in an email. “While the amounts in the CMS data release appear large, the vast majority reflects the cost of drugs. The facts are that doctors receive 6 percent above what they pay for drugs, the amount billed by physicians is set by law, and drug companies set the price of drugs, not doctors.”
“Dr. Melgen treats his patients using both Lucentis and Avastin,” Ogrosky wrote. “Each patient’s course of treatment is determined on a case-by-case basis, entirely based upon what is in the best medical interests of that individual patient.”
When asked why the use of Avastin was not included in the breakdown of payments to Melgen published by CMS, the way his use of Lucentis is, Ogrosky said since Avastin is not FDA-approved for treatment of macular degeneration he assumed Melgen had included the cost of the drug in some other category in his charges to Medicare. Such use of drugs by doctors is not illegal and not prohibited by Medicare.
Ogrosky said using the raw data released by CMS to judge his client was “irresponsible” and said Melgen “stands by his record of improving the vision and quality of life of patients from around the world.”
CMS released the information for 880,000 health care providers who collectively received $77 billion in Medicare payments in 2012, under Medicare Part B. It measured spending on “6,000 different types of services and procedures provided, as well as payments received by individual health care providers.”
Melgen battled Medicare over billing since at least 2009. Last year, FBI agents raided his West Palm Beach offices on Metro Centre Boulevard twice and removed boxes of documents. He was accused of overbilling Medicare when it was found that he was using one vial of Lucentis to treat several patients, when Medicare rules stipulate only one patient can be treated from that vial. He was forced to repay the government $9 million.
Melgen then sued the U.S. Department of Health and Human Services, which oversees Medicare, admitting he had treated more than one patient from a vial of medication but had not hidden that fact from Medicare and had not overbilled. In court pleadings, his attorneys contend the policy is not prohibited by the CMS and was upheld in a 1981 federal court decision and other rulings. His lawsuit is pending. HHS ordered a suspension of all Medicare payments to Melgen’s practice. That suspension was reversed and he is receiving Medicare payments today.
Melgen, a native of the Dominican Republic, lives in the gated Captain’s Landing community near North Palm Beach and owns a private jet. He has also come under federal investigation for his relationship with U.S. Sen. Robert Menendez, D-N.J. Melgen donated $700,000 to a political action committee, which in turn spent $600,000 to help Menendez. The senator also accepted free flights from Melgen to a resort in the Dominican Republic and stayed at Melgen’s home there. Menendez came under Senate ethics scrutiny and was forced to pay $58,000 in reimbursement.
According to a New York Times investigation, Menendez spoke to HHS on Melgen’s behalf in the billing dispute at least twice, starting in 2009, and also helped plead Melgen’s case in other business interests. Menendez has said he did nothing improper on those occasions.
About the doctor
Dr. Salomon Melgen had two offices raided last year by the federal government. He’s in a dispute after the feds he was overpaid $9 million for his use of the macular degeneration drug Lucentis. He sued in federal court. He has offices in West Palm Beach, Wellington, Port St. Lucie and west of Delray Beach.