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Due to the controversy swirling around Medicaid, I am surprised that one
story I broke open in Saving the Corporate Soul never received national
attention. I'm still waiting for 60 Minutes to call me about Zachary
Bentley.
Zachary Bentley says he's no Ralph Nader. The business manager and corporate
officer of a drug infusion service, Ven-A-Care, based in Key West, Florida,
is shaking up the pharmaceutical industry all the same.
It's true; Zachary never planned to lead a crusade for corporate reform. In
1990 he simply was sitting at his desk wading through paperwork when he
noticed something amiss with a Medicare payment. He received a $56
reimbursement for a pharmaceutical that had cost his company only ten
dollars. In theory, 80 percent of the drug was to be paid for by Medicare
and 20 percent by the beneficiary. Zachary did some quick math and figured
that the beneficiary's co-payment alone surpassed the actual cost of the
drug. Convinced that the Florida Medicare carrier had erred, he tore up the
check and asked the agency to re-process the reimbursement.
Days later, the carrier got back to him and informed him that there was no
mistake. Puzzled, Zachary searched for answers. What he found shocked him.
More than a few doctors and clinics are billing Medicare based on
"wholesale" prices that pharmaceutical companies give the government
program. The pharmaceutical companies then sell the drugs to the health care
providers at a much lower cost. The providers reap exorbitant profits and,
because the windfall operates like a government-funded kickback,
pharmaceutical companies also come out big winners.
Zachary reported his discovery to federal and state agencies, yet was
troubled by their muted response. He knew intimately the impact of sky
rocketing drug costs on people suffering from debilitating illness. At the
time, Ven-A-Care primarily delivered intravenous drug care to clients in
their homes as an alternative to visiting a hospital. Most of its business
was AIDS-related, and Ven-A-Care gained local acclaim for extending
treatment to patients even after their health insurance ran out.
In an ironic twist of fate, the kickback program would threaten the survival
of Ven-A-Care a year later. It all started when National Medical Care, a
leading kidney-dialysis chain then owned by W.R. Grace & Co., invited
Ven-A-Care to join in a new business venture in 1991. The proposal included
doctors who were in a position to prescribe expensive infusion drugs to AIDS
patients. "They promised us that we would become wealthy if we shared drug
revenues with the physicians because they would order large amounts of drugs
that cost far less than the prices reported to Medicare," recalls Zachary.
The scheme already had paid off handsomely for National Medical Care in the
kidney dialysis business, he alleges, and they saw an opportunity to expand
the model to AIDS treatment.
When Zachary and his partners declined to join the venture, National Medical
Care went to Plan B. The corporation enticed several Key West physicians who
up to that point in time had referred their clients almost exclusively to
Ven-A-Care to order drugs directly through its system. In several cases,
National Medical Care employees went into the doctors' offices and took over
their billing practice. Ven-A-Care's business took a serious hit; the owners
cut salaries and took out loans to keep the company afloat.
Convinced that it could not operate with integrity in its drug infusion
practice, Ven-A-Care turned into a full-time whistleblower. "We were fed up,
and decided to shine the light of day on these shady practices," says
Zachary. His company has since been party to several lawsuits against major
drug companies.
Rising healthcare costs in the United States have stabilized in the last few
years with one exception, the price of prescription drugs. But Zachary
clarifies that he is not fighting the escalating cost of drugs itself. He
has a much more modest goal to demand drug companies to practice
transparency in pricing. Once fair representation is achieved government and
health insurance groups can make informed decisions about what they can
afford to pay for. |