Senator Menendez and the limits of constituency service

New Jersey Senator Robert Menendez is beset by questions regarding his activities on behalf of his friend Dr. Salomon Melgen. The Center for Medicare and Medicaid Services (CMS) has found that Melgen’s eye clinic overbilled Medicare by $8.9 million. Melgen is appealing these findings.

Senator Menendez is facing an ethics committee probe regarding two 2010 trips he took aboard Dr. Melgen’s private jet to a fancy vacation spot in the Dominican Republic. Two years later, Menendez wrote a $58,500 personal check to reimburse Melgen for expenses related to these junkets.

Senator Menendez has twice interceded at the highest levels of Medicare policymaking to help Melgen in this effort. The Senator interceded with Jonathan Blum, who directs Medicare within CMS. He also interceded with the acting CMS Administrator Marilyn Tavenner.

Dr. Melgen seems to be in serious trouble. FBI agents and other law enforcement officials raided the offices of his company, Vitreo-Retinal Consultants. These officials are apparently investigating allegations of fraudulent billing. As the New York Times reports:

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.

Whatever Menendez knew or did, Melgen seems to have crassly traded on this relationship in his dealing with others:

Melgen frequently cited his connection to Menendez, according to two former federal officials and doctors in South Florida.

When federal health-care fraud investigators were questioning him several years ago about his billing practices, he invoked the senator’s name, the former officials said….

In Florida, it was more threatening, several doctors in the South Florida region recounted. After one local eye surgeon criticized Melgen’s treatment methods in discussions with other Florida doctors, Melgen warned that he had important friends in the Senate, including Menendez, said two doctors familiar with the exchange. They said Melgen cautioned that his Washington friends could arrange an intensive federal audit of the surgeon’s practice.

It’s not clear that Senator Menendez had any inkling of these comments. These do cast further doubt on Menendez’s choice of friends.

The case raises three distinct but inter-related issues.

First, there is the issue of whether Senator Menendez accepted improper favors from a close friend and major donor. It strains credulity to believe that someone forgot to pay or declare $58,500 vacations due to sloppy paperwork. But there’s nothing very interesting about this question from a health policy perspective.

The second question is more complicated. What are the appropriate bounds of legislators’ intervention within our complicated Medicare and Medicaid systems? Medicare and Medicaid fraud, abuse, and overpayments are serious problems that involve millions of dollars paid to powerful and sophisticated organizations able to use many political, legal, and administrative levers to avoid proper accountability for their actions.

Auditors and law enforcement officials have a difficult job. They seek to recover or question millions of dollars in payments made to influential medical providers, academic medical centers, community hospitals, nursing homes, and other powerful organizations. Obviously this process requires stringent due process standards and legal recourse for individuals and organizations accused of wrongdoing. It also requires more than the usual distance from political meddling.

Leaving aside any issues of Senatorial impropriety, the professionals at CMS need the space to do their jobs. In so many ways, senators and representatives–across the ideological spectrum, and in both parties–are far too involved in micro-managing Medicare and Medicaid on behalf of parochial constituencies, political benefactors, and friends.

Powerful Senators shouldn’t intercede with top CMS officials on behalf of a specific donor in this way. Ironically, the cause of both democracy and transparency are best-served when unelected bureaucrats are granted some ability to follow explicit procedures and rules, and are kept somewhat insulated from direct supervision or pressure by elected legislators.

Finally, there is the issue of patient well-being. Dr. Melgen appeared on auditors’ and  peers’ radar screens because of his aggressive pattern of eye injections, surgeries, and laser treatments. His outlier status had implications for Medicare spending. It also had implications for his patients.

For all I know, he is an outstanding clinician who obtains superior results. If–as I fear may be the case–Melgen pursued the most aggressive treatment that could be defended, his macular degeneration patients may have received more eye injections, laser surgeries, or other interventions than they actually needed. This is not harmless, independent of the cost. It’s a serious problem independent of Dr. Melgen’s potential legal or ethical culpability regarding his billing.

Senator Menendez has been a valuable supporter of health policies that I support, including the Affordable Care Act. I’m especially saddened that he behaved so badly in this case.


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