Missouri court denies Fresenius appeal in Epogen billing investigation

Cold Comfort

After the 2002 settlement, the U.S. attorney issued a “cold comfort letter” to Fresenius which said the government didn’t have any present intention, based on the facts then known to them, to further investigate the company. But on April 25, 2002, six days after the cold comfort letter was sent, a complaint was filed against Amgen—the maker of Epogen—that accused the company of improperly creating physician protocols that overused Epogen, resulting in excess payments by Medicare. The complaint said that Fresenius didn’t use these protocols, though.

In the meantime, a U.S. Attorney in Missouri was investigating a competitor, Gambro Healthcare, which was later acquired by DaVita. In that investigation, the attorney was notified that Fresenius was submitting Medicare claims for Epogen that weren’t medically necessary. In April 2005, the Missouri attorney subpoenaed Fresenius about its Epogen policies and practices between Dec. 1 1996, and April 30, 2005.

The U.S. attorney also reviewed Medicare claims for Epogen and found Fresenius submitted a “significant number of claims for patients whose hematocrit levels exceeded 37.5 percent on a rolling average basis,” according to the court filing. Suggested target hematocrit ranges are between 30 and 36 percent.

The New Subpoena

Suspicious, the attorney investigating the claims issued another subpoena to Fresenius in February 2006 looking for more specific information, such as patient records and audits regarding the medical necessity of Epogen. Fresenius, however, moved to have the subpoenas quashed or modified for any documents prior to April 19, 2006—the date of the cold comfort letter.

Fresenius argued that previous settlements and the cold comfort letter meant the government couldn’t investigate its Epogen practices and policies before the date of the cold comfort letter. The U.S. District Court for the Eastern District of Missouri disagreed with Fresenius’ argument and denied the motion to quash the subpoenas.

Fresenius appealed the decision, and the court denied the appeal in the May 16 filing. “This is simply an assurance from the government that, based on the facts it then knew, it was not then planning any further investigation,” Judge Duane Benton wrote in the May 16 court filing. “The letter does not preclude the United States from investigating FMC based on new facts. In fact, allowing the preclusive effect FMC seeks would hinder the United States Attorney in carrying out lawful duties.”