Missouri court denies Fresenius appeal in Epogen billing investigation

ST. LOUIS—A Missouri federal court denied Fresenius’ appeal to drop or modify a subpoena regarding an investigation into the dialysis provider’s Epogen billing practices to Medicare, according to a May 16 court filing.

The majority of dialysis patients receive Amgen’s Epogen to treat anemia associated with kidney failure, and the bill is largely footed by Medicare. In 2005, Medicare paid approximately $2 billion for Epogen. The drug is often prescribed using algorithms that lower or raise the dose based on changes in the patient’s blood, and there have been widespread accusations that there is a financial incentive to prescribe more Epogen in order to receive more reimbursement.

Fresenius’ Epogen billing has been investigated for more than a decade, and the company has paid substantial settlements as a result. After the last settlement was paid in 2002 the government formally said it had no plans to further investigate Fresenius.

New Epogen billing claims piqued the interest of federal attorneys, though, and they decided to issue new subpoenas to Fresenius. However, Fresenius argued that the previous investigations already settled precluded the company from having to submit documents before 2002. The court, however, disagreed and upheld the subpoenas. Fresenius appealed the decision, but the appeal was denied, according to a May 16 court filing with the U.S. District Court for the Eastern District of Missouri.

Past EPO Investigations

Investigations into Epogen billing date back to October 1995 when a U.S. attorney in Massachusetts investigated National Medical Care, which was later acquired by Fresenius. That investigation turned up more than 6 million pages of documents, according to the court filing. As a result of the investigation, Fresenius entered into a series of guilty pleas and agreed to pay the government approximately $253 million.

Later, the Office of the Inspector General reviewed approximately 4,600 Epogen claims made by Fresenius and released a report in December 2001 that said the dialysis provider “generally established adequate internal controls and procedures to ensure that claims submitted for [Epogen] are supported and billed with Medicare rules and regulations.”

However, in their 2001 report, the OIG randomly sampled 200 claims and found 14 cases in which more Epogen was given to patients than prescribed by physicians. After further investigation, the U.S. attorney in Massachusetts said Fresenius improperly billed Medicare. This led Fresenius to enter into a civil settlement in May 2002 by paying the government approximately $1.6 million.