Don’t confuse Sutter’s $13 million 2022 settlement for cheating the government with the one it reached in 2021, this time for $19 million to resolve allegations that it violated the False Claims Act by knowingly submitting inaccurate information about the health status of beneficiaries enrolled in Medicare Advantage plans.
Again, the DOJ didn’t disclose the extent of Sutter’s false billing.
“Today’s settlement exemplifies our commitment to fighting fraud in the Medicare program,” said Hinds, then an acting U.S. Attorney, said in a news release. “Health care providers who flout the law need to know that my office will hold accountable those who pad their bottom line at taxpayer expense.”
The $32 million in fines for cheating the government was a love tap for a healthcare company racking up billions in annual revenues. A slightly more meaningful action was the $575 million settlement Sutter agreed to pay for price gouging and other anti-competitive practices. Sutter was able to get away with these activities because regulators allowed the health system to acquire dozens of hospitals, 12,000 physicians, and a host of healthcare centers specializing in cancer, cardiac, and other lucrative specialties.
No doubt Sutter assured regulators the acquisitions would serve the best interests of Northern California residents. Notably, Stephanie Hinds had nothing to do with the price gouging settlement, which was negotiated by California’s state attorney general and was featured on 60 Minutes.
Despite all the alleged wrongdoing, Sutter Health CEO Sarah Krevans, who held various senior roles with the “nonprofit” during her more than two decades with the health system, including five as the top executive, was allowed to retain the millions she received in compensation and never faced even a hint of jail time.
Krevans, who was paid $5.5 million in 2019, stepped down early last year.
DOJ’s AmerisourceBergen charges
The DOJ on December 29 issued a news release announcing that it filed a complaint against AmerisourceBergen charging that the drug distributor “violated federal law in connection with the distribution of controlled substances to pharmacies and other customers across the country, contributing to the prescription opioid epidemic.” The complaint alleged that “this unlawful conduct resulted in at least hundreds of thousands of violations of the Controlled Substances Act (CSA). The Justice Department seeks civil penalties and injunctive relief.”
Full disclosure: ABC is a former PR client of mine. That said, I worked with executives tied to the former CEO David Yost, who retired in 2011. It’s been years since I’ve last spoken with anyone still employed at the company and the transgressions described by the DOJ I believe mostly occurred after my involvement.
Yost was a CEO the public would like. He orchestrated the 2001 merger that created ABC, one of the rare corporate unions that proved successful. Yost routinely was ranked among CEOs giving shareholders the biggest bang for their bucks because he was considerably underpaid given his accomplishments. Yost flew economy and was a notorious cost cutter from whom Elon Musk could learn a lot. Under Yost, ABC’s plant in its lobby headquarters was plastic so the company wouldn’t have to pay someone to water it. BusinessWeek did a great job capturing what Yost was all about.
Although ABC has expanded into other areas since I worked with company, its core business is still delivering drugs to thousands of pharmacies across America. It’s a boring but complicated business with paltry profit margins of less than one percent. Many of America’s “nonprofit” hospitals have higher margins. ABC is ranked 10th in the Fortune 100 because it racked up $214 billion in 2021 revenues, but its net income was only $1.7 billion.
In its complaint, DOJ alleged that ABC was remiss in reporting unusual opioid activities at some of the pharmacies where it delivered controlled substances. As ABC notes on its website, all the pharmacies it delivered to were licensed and supposedly regulated and monitored by the Drug Enforcement Agency, an arm of the DOJ.
Joseph Lefebvre, who worked at ABC from 2002 to 2014, posted this on Linkedin:
Hopefully this goes to trial and the American people can see once and for all who is to blame for our opioid crisis. The fact is that only the DEA 1) controlled all licensing to Doctors, wholesalers, and pharmacies, and could have revoked a license any time. 2) The DEA also controls the product quotas. This means that the DEA, and no one else controlled how many pills were manufactured each year. The DEA could increase or decrease the quota on any molecule at any time. 3) The DEA was the only entity who was in possession of all prescribing/sales information in the US. This is a story about a government agency pointing the finger at everyone else to do their job. The DEA was asleep at the wheel, and its time to turn the table and put the DEA on trial!
One doesn’t need to rely on Lefebvre’s or my defenses of ABC. One week before the DOJ filed its suit against ABC, a Delaware judge tossed a shareholder action alleging that ABC’s board should be held culpable for the company’s role in the opioid crisis. The judge dismissed the suit because a West Virginia judge after a two-month trial determined that ABC acted responsibly.
“The West Virginia court found on the merits after a lengthy trial that AmerisourceBergen had an adequate anti-diversion program in place,” the Delaware judge wrote. “That finding knocks the stuffing out of the plaintiffs’ claim.”
ABC agreed to $6.7 billion in settlements for its alleged role in the opioid crisis, which puts to shame the $573 million love tap 47 states attorneys general and other regulators let McKinsey off with for the consulting firm’s leadership role fueling the opioid crisis.
I urge you to read this New York Times story detailing how McKinsey had its consulting tentacles in all aspects of pharmaceutical narcotics sales, ranging from the harvesting of the raw materials to devising sophisticated marketing strategies on how to enlist doctors to become narcotics prescribers. As the opioid crisis progressed, McKinsey also advised U.S. government agencies on how to mitigate the fallout, while simultaneously advising its pharmaceutical clients on how best to deal with those agencies.
The DOJ so far hasn’t brought any actions against McKinsey for its role in the opioid crisis, despite some very damning activities.
Tara Reade Subpoena
The Daily Caller last month reported the DOJ issued a subpoena probing Twitter for information on Tara Reade’s accounts in 2020 months after she issued allegations about being sexually assaulted by President Joe Biden in 1993. The agency was looking for detailed information including: subscriber name; address; records of session times and durations, to include attempted, failed or unauthenticated logins; length of service (including start date) and types of service utilized; telephone or instrument number or other subscriber number or identity, including any temporarily assigned network address; and means and source of payment for such service (including any credit card or bank account number).
Perhaps the DOJ had reason to suspect Reade was guilty or connected to some illicit activity, but writer Lee Smith, who did a superb job packaging the so-called “Twitter files” and other publicly available information into a compelling but frightening narrative, speculated that the DOJ wanted to determine which reporters had contacted the former Biden aide and possibly planning stories.
That’s alarming if Smith’s speculation was correct, as was this story that revealed Rep. Adam Schiff’s office ordered Twitter to suspend New York Post contributor Paul Sperry. Even Twitter’s censors who routinely followed government instructions were initially taken aback by the demand but ultimately followed the order.
The U.S. Constitution states that “Congress should make no law…abridging the freedom of speech, or of the press.” Representatives when they are elected to office are required to take an oath swearing to “support the Constitution of the United States.”
Ordering that a journalist be banned from a public forum is a violation of both the letter and spirit of the Constitution. Notably, Sperry is a columnist for the New York Post, the publication that reported damning allegations about President Biden’s son Hunter weeks before the election that also was suppressed by Twitter. The mainstream media has since confirmed the Post’s story was true.
“People need to understand just how fragile our democracy is in order for us to protect it,” Schiff said in a June interview.
He’s right. But American democracy is especially fragile when those sworn to protect it trample on the free speech rights of U.S. citizens. The mainstream media is nonplussed by these seeming violations because they were part of a concerted effort to destroy Donald Trump, so in their minds the means justified the ends.
As writer Lee Smith outlined, the FBI’s initial infiltration of Twitter was focused on destroying Trump, but later the censoring effort was widened to include other government agencies who ordered the censoring of critics who opposed or questioned the Biden Administration’s pandemic policies.
As George Orwell warned, “We know that no one ever seizes power with the intention of relinquishing it. Power is not a means; it is an end.”
Reach the writer at eric@starkmanapproved.com. Confidentiality is assured.
