The Herald Bulletin

February 6, 2014

Fraud allegations 'baseless,' health center says

By Scott L. Miley and Ken de la Bastide
The Herald Bulletin

INDIANAPOLIS — Allegations that the Madison County Community Health Center committed fraud to obtain grants and Medicaid funding are baseless and irresponsible, according to attorneys representing the health center.

A lawsuit filed by a former physician at the health center, 1547 Ohio Ave. in Anderson, should also be dismissed, a health center attorney says.

The attorney responded this week to a federal False Claims Act lawsuit filed by Dr. Nilda Durany, who worked at the health center from March 2010 to September 2011.

Durany filed the lawsuit in December 2012 alleging that some of the center's doctors improperly prescribed medication as a way to receive federal and state funding. She was initially joined by the U.S. Attorney and Indiana Attorney General in the lawsuit against the health center, CEO Anthony J. Malone and then-medical director Dr. Frank Campbell. The U.S. Attorney and Indiana Attorney General later declined to intervene in the lawsuit.

Attorney Richard Winegardner, an Indianapolis lawyer representing the health center, filed a response Tuesday to meet a court-imposed deadline to answer Durany's claims.

In part, Durany claimed that approximately 90 percent of health center patients are on some type of controlled drug that requires a prescription. She said the most prevalent prescribed drugs were a “cocktail” of Lortab, Klonopin and Soma. Lortab is a painkiller. Klonopin is an anti-anxiety drug. Soma is a muscle relaxant.

Also, many of those prescriptions were written on Campbell’s pre-signed prescription pads although Campbell did not personally examine some patients who received the prescriptions. Last month, Campbell lost his medical license last for allowing assistants to use prescription pads he had pre-signed. In Indiana, prescriptions must be signed and dated on the day of an examination.

In responding to Durany's complaint, attorneys said she failed to specifically identify false claims allegedly made for payment. She also failed to specify why any prescriptions were medically unnecessary, the attorney said.

While Durany "confesses that 90 percent of her own patients were prescribed what she characterizes as dangerous controlled substances, she is unable to point to any actual fraudulent claims that were submitted to government health care programs as a result of any unnecessary treatment MCCHC may have provided ..."

The complaint asks for an award of damages equal to three times the amount paid by the federal government for allegedly false claims for Medicare and Medicaid reimbursement and federal grants, plus civil penalties of between $5,000 and $11,000 for each false claim. In addition, the complaint seeks the maximum monetary damages permitted under the Indiana False Claims Act – the amount is not specified – along with an award of attorney’s fees incurred in the lawsuit.

In a separate filing in the case, attorneys said Durany did not have standing to allege fraud against the the health center and the lawsuit should be dismissed. Durany committed fraud by not disclosing the existence of the federal lawsuit in her filing for Chapter 7 bankruptcy, said Winegardner.

Durany, who now lives in Indianapolis, voluntarily filed for bankruptcy on July 7, 2013, seven months after filing the federal complaint. In her bankruptcy filing Durany listed assets of $79,590 and liabilities of $111,582.70. She lists a former residence in Winter Park, Fla., with value of $70,000; there are two mortgages on the residence, she claims. She also lists an average monthly income of $1,416 from Social Security and average monthly expenses of $1,335.

The voluntary bankruptcy filing was made through Anderson attorney James D. Gillespie.