Darlene Higginbothem, an executive for a Florida-based company that processes claims for Medicare, said Melgen was sent a letter in 2009 informing him he owed Medicare $8.9 million because of his billing practices, yet he continued those billing procedures.
In their fourth week in the bribery trial of the senator and the doctor, jurors heard testimony that Melgen called on the senator in 2009 to try to help him out of his financial jam.
Defense attorneys contend Menendez’s assistance was out of his genuine concern over inconsistencies in Medicare’s reimbursement rules for certain drugs. But prosecutors say Menendez’s intervention was the senator’s pay back to Melgen in return for lavish gifts of luxury hotel stays, free plane rides and sizable campaign contributions.
Melgen was convicted in Florida in April of bilking Medicare out of at least $90 million, but jurors in this case will not hear about the that conviction.
At the heart of this allegation is Melgen’s use of Lucentis, an injectable drug for patients with macular degeneration.
Higginbothem, a director for First Coast Service Options, said that rather than use a single vial – which costs $2,000 – of the drug per patient, Melgen split the vial into three or four doses and billed Medicare $1,800 per dose.
Melgen’s billing practices first came under scrutiny in 2007, Higginbothem said. She said it was determined that by multi-dosing each single vial of Lucentis he purchased, Melgen received $8.9 million over two years in Medicare reimbursement to which he was not entitled.
Melgen was first notified by letter of the overpayment in February 2009, she said. That was followed up by another letter in June, which was followed two months later by a letter demanding payment.
In an effort to to ward off the “demand” letter and to try to convince Medicare to reverse course about the drug dosage practices, two of Menendez’s staff members had a conference call with Medicare representatives as well as with about six others on July 22, 2009, Higginbothem said.
Higginbothem, continuing her testimony from Tuesday, said the staffers “disagreed quite aggressively” with the position of Medicare representatives and she labeled the conference call “quite contentious.”
The call didn’t resolve the matter and Melgen eventually repaid the $8.9 million over time in 2011 so that he could continue appealing his case, she said.
Several jurors seemed to grimace as Abbe Lowell, one of Menendez’s attorneys, hammered at Higginbothem about the amount of Lucentis is in a bottle versus how much is given to a single patient.
Defense attorneys have been trying to show Melgen had used the medication in a more cost-effective manner while still protecting the safety of patients, rather than cheating Medicare.