A Medical Device Daily

Charlie Crist, the attorney general for the State of Florida has filed a lawsuit against Tenet Healthcare (Dallas), charging that Tenet improperly inflated charges for medical procedures "to the detriment of Florida public hospitals."

The suit alleges that Tenet violated the federal and Florida RICO statutes by making inflated Medicare charges. Crist is seeking damages in the millions of dollars, plus fees and costs.

"We are taking this action today because the deck has been stacked against the taxpayers in Florida and other states around the country," said Crist. "The evidence will show that Tenet gamed the system to enhance its profit margin at the expense of public hospitals."

In response, E. Peter Urbanowicz, Tenet's general counsel, in a prepared statement, called the charges "unwarranted, and we will defend ourselves vigorously."

"Frankly, we are surprised that the plaintiffs would bring this suit, more than two years after Tenet voluntarily reduced the amount of outlier payments we received from the Medicare program and adopted stringent new policies governing such payments well before federal regulators promulgated such policies for the entire hospital industry."

Urbanowicz added that the suit makes no claims that Tenet's Florida hospitals engaged in any behavior that harmed any other Florida hospitals.

Crist, however, said that when Tenet artificially inflated its charges, its costs increased on paper, but not in fact, and thus were "manufactured." He said Tenet made improper access of the Outlier Pool, thereby depriving public hospitals of access to legitimate reimbursement.

Crist's suit also charged Tenet with violating Florida's Deceptive and Unfair Trade Practices Act and unjust enrichment. In another action, Crist recently filed suit against a suspended Tampa, Florida, physician, Lehel Kadosa, alleging that he billed Medicaid for more than $200,000 for services never provided. Kadosa was charged following an investigation by the attorney general's Medicaid Fraud Control Unit.

Kadosa, according to the suit, billed Medicaid for injections designed to relieve lower back pain, including amounts charged for imaging that is supposed to verify that the needle is inserted in the correct position.

However, investigators determined that Kadosa did not use imaging and instead blindly inserted a needle into the patient's lower back, thus placing his patients at risk. Medicaid was then billed for the use of imaging that never took place. "Patients were not only provided substandard care, they were depending on an unlicensed physician," said Crist. Kadosa faces a $10,000 fine for each count, plus triple the State of Florida's damages. Last year, he was arrested by the Medicaid Fraud Control Unit for providing prescriptions for Vicoden, Alprazolam and Methadone to patients who did not have a medical need for the drugs. He allegedly then made false entries in medical records to make the prescriptions appear justified.

Kadosa's license to practice medicine in Florida has been suspended by the state's department of Health since November 2004.

In other legalities:

• Align Technology (Santa Clara, California), the inventor of the Invisalign method of straightening teeth, reported that the San Francisco County Superior Court has issued an order for a stipulated preliminary injunction (SPI) in Align's multi-claim lawsuit against defendants OrthoClear (San Francisco), OrthoClear Holdings and seven former Align employees.

The SPI extends the terms of a Feb. 18 temporary restraining order (TRO) against the defendants and cancels a March 8 hearing regarding the requests for preliminary injunction. The SPI also extends the terms of a Feb. 18 TRO granted in OrthoClear's cross-complaint against Align.

On March 1 the San Francisco County Superior Court ordered that the existing TRO remain in place until the earlier of either a trial, written agreement by the parties or further court order, or with respect to the preliminary injunction regarding non-solicitation of Align employees or consultants only, until Oct. 27.

On Feb. 18, the Court granted Align's request for and issued a TRO prohibiting OrthoClear and the individual defendants from "disclosing, using, lecturing upon or publishing any proprietary information [IP] belonging to Align without the express prior written permission of Align."

On Feb. 2 Align filed a multi-claim lawsuit in San Francisco County Superior Court alleging that OrthoClear and the individual defendants' plan to unlawfully use Align's IP, confidential information and employees. The lawsuit alleges that OrthoClear and other defendants are in breach of contractual obligations, statutory law and common law for attempting to disrupt Align's business operations and gain access to Align's customer relationships and trade secrets. On Feb. 15, OrthoClear filed a multi-claim lawsuit against Align and certain of its officers, alleging a variety of claims ranging from unfair competition to conspiracy.

Align was founded in March 1997; Invisalign was FDA-cleared in 1998.