Medicare Compliance & Reimbursement

Post-Enron hostility to corporate fraud takes its toll on a lab exec.

The growing disgust with corporate misdeeds hit a former vice president of Damon Clinical Testing Laboratories Inc. hard Aug. 4, as a federal appeals court saddled him with a five-year prison term in a blistering opinion. William Thurston was originally sentenced by the trial court to three months in prison followed by supervised release for his role in a bundling scheme. But in United States v. Thurston (No. 02-1966 & 02-1967), the 1st U.S. Circuit Court of Appeals rejected the trial court's sentence and imposed the five-year statutory maximum. The case, which addresses claims submitted in the 1990s, involves the bundling of a rarely used blood test - a blood ferritin - into a popular blood test panel called a "LabScan." The ferritins were provided to physicians for free, or for a nominal cost, to keep them from complaining about the needless tests - but Damon, unbeknownst to the doctors, billed Medicare separately for the tests and generated millions in extra revenue. Thurston was convicted by a jury for his role in the case, but received a light sentence because of his charitable works, among other reasons. But charity wasn't enough to satisfy the 1st Circuit. "The ability to make large contributions should not keep a defendant out of jail," the appellate panel says. "Thurston's executive position at Damon, which gave him the resources to undertake many of his charitable works, also enabled him to perform the crime." The court argues that health care fraud is simply too serious not to come down hard on alleged perpetrators. "A five-year term of imprisonment in light of the nature of the crime reflects the seriousness of the offense, the need for congruity with 'blue collar' crime, and the need to deter other executives from similar law-breaking," the opinion says. The opinion is available at www.ca1.uscourts.gov/. Lesson Learned: With courts ready to dish out harsh sentences to health care executives, top-level buy-in to corporate compliance is more important than ever.