2011 Award Winners

Investigation of the Year
Investigation of the Year: Honorable Mention
Excellence in Public Awareness
Investigative Excellence Award
Medical Director

Investigation of the Year

United States of America v. Arun Sharmam M.D. and Kiran Sharma, M.D.

Presented to

United States Department of Justice
United States Attorney's Office
Southern District of Texas

United States Department of Health and Human Services
Office of Inspector General-Investigations
Houston Field Office

United States Department of Justice
Federal Bureau of Investigation
Houston Division

United States Office of Personnel Management
Office of Inspector General-Investigations
Western Region, Houston Office

United States Railroad Retirement Board
Office of Inspector General
Houston Domicile Office

Texas Office of the Attorney General
Medicaid Fraud Control Unit

National Insurance Crime Bureau
Texas Major Medical Task Force-Houston

Health Care Service Corporation
BlueCross BlueShield of Texas

CIGNA

A Kemah, Texas rheumatologist and his wife agreed to plead guilty and receive lengthy prison sentences for committing health care fraud over a 10-year period at several clinics in the Houston suburbs. Dr. Arun Sharma agreed to 15 years and his wife, Dr. Kiran Sharma, agreed to 8 years. In accepting the pleas, the court also ordered the forfeiture of more than $40 million including a $700,000 home, numerous parcels of real property, over $700,000 in cash found during a search of the home and more than $800,000 in cash found in safe deposit boxes. Ninety-nine bank and investment accounts also were included in the forfeiture order.

As part of the plea, Dr. Arun Sharma admitted that he and his wife billed private insurance companies and several federal health programs for procedures that were not performed. Instead of performing the array of sophisticated injections and procedures which were billed, the defendants injected a mixture of lidocaine and steroids for joint pain and wrote prescriptions for potent controlled substances. The defendants hired foreign medical graduates to falsify patient medical records in order to justify the billings, which amounted to $200 million. A pole-mounted camera outside one clinic showed patients, some from other states, lining up as early as 6:30 a.m. The defendants' billing records showed that more than 100 patients allegedly received injections in a day on 708 days; records for January 6, 2005 alone, indicated 279 alleged patients received injections. During the time of the conspiracy, the subjects wrote in excess of 126,000 prescriptions for controlled substances. Patients who did not have health insurance were charged $100 cash for the prescriptions, giving Arun Sharma the nickname "Dr. Franklin," referring to the portrait of the American Patriot appearing on the $100 bill.

For their extraordinary effort in this investigation involving reviewing 1000 boxes of records, conducting over 100 witness interviews in several states and serving 45 Grand Jury subpoenas, NHCAA proudly recognizes the investigative team.

Congratulations to

AUSA Albert A. Balboni
AUSA Jason Varnado
AUSA Kristine Rollinson
USAO Southern District of Texas

Special Agent Marguerite Hackney
Forensic Accountant Kathleen Anderson
Asset Forfeiture Investigator Pamela Jerding
Paralegal Specialist Martha Terrazas
Federal Bureau of Investigation, Houston Division

Special Agent Judy Sly
Department of Health and Human Services
Office of Inspector General-Investigations
Houston Field Office

Sgt. Gordon R. Lunsford
Texas Office of the Attorney General
Medicaid Fraud Control Unit

ASAC Casey Howard
U.S. Office of Personnel Management
Office of Inspector General-Investigations

Special Agent Ronald R. Sillavan
National Insurance Crime Bureau
Texas Major Medical Task Force, Houston

Special Agent Marion Eppright
Railroad Retirement Board
Office of Inspector General

Investigator Kenneth Kempf
Health Care Service Corporation
BlueCross BlueShield of Texas

Investigator Joanne Nunes, AHFI
CIGNA

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Investigation of the Year: Honorable Mention

United States of America v. SB Pharmco Puerto Rico, Inc.

Presented to

United States Department of Justice
United States Attorney's Office
District of Massachusetts

United States Department of Justice
Consumer Litigation Branch
Washington, DC

United States Department of Justice
Federal Bureau of Investigation
Boston Division

United States Department of Veterans Affairs
Office of Inspector General-Investigations
Manchester Resident Office

Food and Drug Administration
Office of the Chief Counsel
Washington, DC

Food and Drug Administration
Office of Criminal Investigations
Boston Resident Office

United States Department of Health and Human Services
Office of Inspector General-Investigations
Boston Resident Agency

United States Department of Defense
Defense Criminal Investigative Service
Boston Resident Agency

United States Office of Personnel Management
Office of Inspector General-Investigations
Boston Resident Agency

The investigation of SB Pharmco Puerto Rico, Inc., a subsidiary of GlaxoSmithKline, resulted in a felony plea, criminal fine and forfeiture of $150 million, and a civil settlement of $600 million. This case involved the investigation of violations of current Good Manufacturing Practices (cGMPs) related to the manufacturing and distribution of certain adulterated drugs made at SB Pharmco's now-closed manufacturing facility located in Cidra, Puerto Rico, between 2001 and 2005.

The investigation revealed that manufacturing operations failed to ensure that finished products were free of contamination from microorganisms. It was further revealed that SB Pharmco's manufacturing process caused Paxil CR two-layer tablets to split. The splitting caused the potential distribution of tablets that did not have any therapeutic effect and tablets that did not contain any controlled release mechanism.

Finally, the investigation showed that SB Pharmco's Cidra facility suffered from longstanding problems of product mix-ups, which caused tablets of one drug type and strength to be commingled with tablets of another drug type and/or strength in the same bottle.

In this nearly 5-year investigation, the investigative team reviewed over 1.5 million corporate documents, interviewed over 100 witnesses and traveled extensively to secure witness statements. The team became virtual subject matter experts in various aspects of the technical world of pharmaceutical manufacturing to prepare for witness interviews. The team also invested significant time in the review and analysis of complex financial documents to create an intricate civil and criminal financial model used to secure the financial settlement.

Congratulations to

AUSA Shannon Kelley
AUSA Susan Winkler
USAO District of Massachusetts

Assistant Director Mark Josephs
Consumer Litigation Branch
United States Department of Justice

Senior Counsel Sarah Hawkins
Office of the Chief Counsel
U.S. Food and Drug Administration

Supervisory Special Agent Rita Iacone
Federal Bureau of Investigation
Boston Division

Resident Agent in Charge Donna Neves
U.S. Department of Veterans Affairs
Office of Inspector General-Investigations
Manchester Resident Agency

Special Agent Jenette Hernandez
Special Agent Kerri Navarro
Special Agent Steven Sawyer
U.S. Department of Health and Human Services
Office of Inspector General
Office of Investigations-Boston

Special Agent Michael Mangiacotti
U.S. Food and Drug Administration
Office of Criminal Investigations-Boston

Special Agent Patrick Hegarty
Defense Criminal Investigative Service
Boston Resident Office

Special Agent Christopher Gleason
U.S. Office of Personnel Management
Office of Inspector General-Investigations
Boston Resident Agency

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Excellence in Public Awareness Award

Presented to

EHFCN Awareness Campaign
Administered by the European Healthcare Fraud & Corruption Network (EHFCN)

The EHFCN Awareness Campaign is recognized for its important mission of raising awareness about the economic impact of health care fraud, and the importance of creating "a real anti-fraud and anti-corruption culture" throughout Europe. Using posters, media campaigns and the "International Fraud Prevention Month" as its promotion vehicles the Awareness Campaign has helped propel the creation of an anti-fraud culture within European healthcare systems among providers, suppliers, patients, payers and the European community.

Since 2008, the Awareness Campaign has been implemented in 12 European countries. The model has proven to be a simple yet effective outreach tool, garnering recognition from the European Parliament and serving as the subject of more than 100 news articles espousing the goals of the campaign and published in French, German, Spanish, Italian, Arabic and Russian.

NHCAA is proud to recognize the European Healthcare Fraud & Corruption Network's Awareness Campaign as an outstanding model to advance the public awareness of health care fraud and its destructive impact on global health care systems.

Accepting the award on behalf of the EHFCN Awareness Campaign is Paul M. Vincke, President of the European Healthcare Fraud & Corruption Network (EHFCN).

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Investigative Excellence Award

Presented to

WellPoint, Inc.
(BlueCross BlueShield of Georgia)

Based on proactive data mining, investigators in the Special Investigations Unit at WellPoint-BlueCross BlueShield of Georgia, detected suspicious billing patterns by a provider group, Wellness One. Wellness One was treating patients employed by a self-insured employer that offered generous chiropractic benefits for which WellPoint performed services under an Administrative Services Organization contract. Bills also were being submitted for family members of the employees. Employee interviews elicited that the employees and their family members were enticed to go to one of several Wellness One clinics around the Atlanta area by offers of free lunches, massages, gas cards, raffle tickets for BMW and Hummer leases, as well as turkeys and pies at holiday time. Out of pocket expenses were waived as well. Twenty-six undercover visits to a clinic by an SIU investigator corroborated the information obtained by the interviews along with a pattern of billing for services not rendered.

The information developed by the SIU was turned over to the FBI which conducted additional undercover visits leading to the execution of several search warrants. The case was referred to the United States Attorney's Office which indicted three principal chiropractors associated with Wellness One. On June 24, 2011, one of the chiropractors was sentenced to 58 months in prison and court-ordered restitution of $6.6 million.

If left undetected, the fraud could have had serious consequences for the employees and their families because the fraudulent billings depleted their rehabilitation benefits. BlueCross BlueShield of Georgia will replace all fraudulent chiropractic benefits to each employee's account for future need and usage.

Congratulations to

Lee S. Arian
Staff Vice President

Alanna M. Lavelle, MS, AHFI, CPC
Director of Investigations

Walter J. Malham, CFE
Senior Investigator

Bret Mastronardi, CFE
Senior Investigator

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Medical Director Award

Presented to

John S. Yao, MD, MPH, MBA, MPA, FACP
Senior Medical Director, Blue Shield of California

The National Health Care Anti-Fraud Association is proud to honor John S. Yao, MD, MPH, MBA, MPA, FACP with the 2011 NHCAA Medical Director Award.

Dr. Yao serves as Senior Medical Director of Medical & Payment Policy as well as chairs Blue Shield of California's Medical Policy Committee, Payment Logic Committee, and Pharmacy & Therapeutics (P&T) Committee. He is well respected by his colleagues in the SIU. Steven Price, Senior Investigator for Blue Shield of California states, "Dr. Yao is one of the most knowledgeable, professional and sincere individuals that I have had the opportunity to work with."

Dr. Yao joined Blue Shield in 2003 bringing with him an extensive public health background. Prior to joining Blue Shield, he was Senior Medical Advisor at the U.S. Department of Health and Human Services in Washington, DC, and held appointments as Medical Director and later, Chief Medical Officer in California with the U.S. Public Health Service. Other prior work experience includes Medical Director at CIGNA Healthcare, Inc. and Assistant Clinical Professor at the University of California, San Francisco. Dr. Yao is a Fellow of the American College of Physicians (FACP). He is board certified in Internal Medicine and practiced as an internist and in emergency medicine. He received his MD degree from the F. Edward Hebert School of Medicine in Maryland, and a Masters in Public Health from Columbia University.

Beyond his work with Blue Shield of California, Dr. Yao has worked tirelessly to promote involvement of health plan medical directors in the fight against health care fraud. Dr. Yao is an active member of the NHCAA Medical Directors Advisory Group as well and the BlueCross BlueShield Association Medical Advisors Network.

A passionate and experienced speaker, Dr. Yao's frequent presentations at NHCAA conferences are typically standing room only. Dr. Yao possesses the unique ability to take complex health care issues and explain them in a way that is easily understood by non-clinicians. Dr. Yao speaks nationally on aberrant billing practices and contemporary and cutting edge technologies.

In summarizing Dr. Yao's contributions to the health care anti-fraud field, Meredith Matthews, MD, Chief Medical Officer at Blue Shield of California states, "Dr. Yao has worked diligently in an effort to prevent abusive billing practices that inflate the overall cost of health care."

NHCAA is delighted to name Dr. John Yao as the recipient of the 2011 NHCAA Medical Director Award.

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