Alan Reider, Melgen’s attorney, said Wednesday that his client has returned the government money in dispute but is contesting the CMS audit finding so he can reclaim the money. Reider said Melgen believes he was following Medicare guidelines. Reider added that Melgen was not aware that his practice was under investigation until federal agents arrived at his clinic last week.
At issue in the reimbursement dispute is Melgen’s multiple use of individual vials for eye injections to treat macular degeneration. Federal auditors have said Melgen often billed the government three to four times for injections from a single vial, according to two federal officials and lawyers familiar with the case.
The government’s Medicare program reimburses providers $2,000 for each vial, so Melgen was billing $6,000 to $8,000 for each vial.
Melgen’s attorneys said the doctor was properly billing for treating four patients with medical injections, albeit from one vial.
After CMS ruled in 2008 that Melgen would have to repay the government, he and his legal representatives contacted Menendez’s office, arguing that the finding was unfair, the senator’s aides said. Menendez’s staff members had several conversations with agency officials to learn more about the billing rules and the details of Melgen’s case in particular, the aides said.
In July 2009, Menendez called Jonathan Blum, the Medicare director at CMS, to express concern, the aides said. Menendez brought up Melgen’s case, they said, in the context of broader concerns about the guidelines.
Then, in June 2012, Menendez raised Melgen’s case again at a meeting with CMS Acting Administrator Marilyn Tavenner, aides recounted. They said the primary subject of the meeting was the implementation of President Obama’s health-care overhaul.
The aides said Menendez never urged the CMS to take specific action on Melgen’s case.
Blum and Tavenner declined to comment through a spokeswoman for the Department of Health and Human Services.
Melgen frequently cited his connection to Menendez, according to two former federal officials and doctors in South Florida.
When federal health-care fraud investigators were questioning him several years ago about his billing practices, he invoked the senator’s name, the former officials said.
“He used Menendez’s name all the time. He would say, “Menendez is a good friend of mine, and he knows I never did anything wrong,’ ” said a former senior federal official familiar with the investigation.