Menendez also advocated on his friend’s behalf to the U.S. State Department and at a Senate hearing, where he pushed for enforcement of a $500 million port security contract in the Dominican Republic that would directly benefit Melgen. The doctor owns half of a company that won the contract from the Dominican government a decade ago, but is now stalled.
On Thursday, Menendez acknowledged that his office contacted Medicare officials to help Melgen, but the senator denied he sought to intervene improperly in billing disputes between the doctor and the government.
Menendez said he contacted the U.S. Centers for Medicare & Medicaid Services to ask generally about billing practices and policies. “The bottom line is, we raised concerns with CMS over policy and over ambiguities that are difficult for medical providers to understand and to seek a clarification,” Menendez told The Associated Press.
The senator called federal health officials in 2009 and met with them again in 2012, each time urging them to change what he called an unfair payment policy. Medicare ordered Melgen to repay the government program $8.9 million, and he complied, but he is appealing the decision.
Melgen’s lawyers assert he did not bill Medicare fraudulently. They contend the doctor differed with the program over its reimbursement policy for Lucentis.
Medicare reimburses $2,000 for each vial of the drug used to treat macular degeneration. The policy is that one vial is used for each patient. But Melgen is suspected of using one vial for as many as four patients, while submitting claims of up to $8,000, as if he had used separate vials for each, according to sources familiar with the billing dispute.
In a 2012 report by the Health and Human Services’ inspector general, the agency recommended that Medicare officials stop using the drug because it was so costly, noting there was a cheaper and equally effective alternative called Avastin. In 2010, Medicare approved $1.1 billion in reimbursements for Lucentis, a drug manufactured by Genentech.
When Menendez contacted federal officials in 2009 and 2012, Melgen was dealing with several financial setbacks. In 2008, the Internal Revenue Service filed a $6 million tax lien against Melgen’s Palm Beach estate. Melgen satisfied that lien in 2011, but the IRS slapped a new $11.1 million tax lien on Melgen that same year.
Richard Dansoh, Melgen’s Miami lawyer, told The Herald Thursday that Melgen has satisfied all his tax obligations, although public court records do not reflect that.
Over the years, Melgen has steered more of his campaign money to Menendez — at least $655,700 — than any other politician. That’s far more than all the money the Florida doctor has contributed to Florida members of Congress.
The sums of campaign cash have invited extra scrutiny, as has the fact that the New Jersey senator isn’t Melgen’s elected official in Congress. Usually in Washington, a constituent’s interests are represented by their home-state congress member or senator.
Sources told The Herald that the doctor has asked various members of Congress over the years for help with one of his lawsuits, his port deal, Medicare and a tax issue. For the tax issue, a consulting company wrote Menendez and four Florida lawmakers on Melgen’s behalf after the November election.