Living in the intergalactic capital of Medicare fraud, South Floridians are accustomed to the sight of blue-jacketed federal agents swarming a doctor’s office and marching out with boxes of files.
Normally this is unpleasant news for the doctor, and so it is for Salomon E. Melgen, a prolific eye surgeon whose medical facilities in Palm Beach County were raided Jan. 29.
But it’s even worse news for Sen. Bob Menendez, the New Jersey Democrat who is friends with Melgen. The doctor has donated a fortune to Menendez’s political campaigns, and brought the senator on vacation jaunts aboard his jet.
Originally, the story broke as a potential sex scandal when a conservative website reported that the FBI was investigating reports that Menendez consorted with underage prostitutes while hanging out with Dr. Melgen in the Dominican Republican.
The doctor and the senator deny it, but at this point gabby hookers would be the least of their worries. That FBI raid on Melgen’s West Palm Beach offices was strictly about Medicare money.
According to the Washington Post, U.S. healthcare officials have been scrutinizing the doctor’s practice for years. Of particular attention to the government was his billing methods for eye injections, laser treatments and other surgery.
For example, auditors found that Melgen was billing Medicare $6,000 to $8,000 for a vial of eye medicine for which he should have been reimbursed $2,000.
The doctor’s attorneys said he was using the same vial to treat more than one patient; therefore, multiplying the charges was proper. That explanation might have made sense to, say, a kindergarten class, but the auditors didn’t go for it.
Melgen was ordered to repay $8.9 million to the agency in charge of Medicare and Medicaid. He did.
Not many ophthalmologists can write a check that large, but not many ophthalmologists have their own jet, either.
Now Melgen is appealing the case and wants that money back. Twice during his tribulations, Sen. Menendez has reached out on his friend’s behalf to key federal officials.
Initially Menendez complained that the Medicare rules for billing eye injections were too ambiguous, and in a meeting last year he suggested that Melgen was being treated unfairly.
The senator’s office told the Post that Menendez didn’t do anything wrong, and was unaware that his buddy was the subject of an active fraud investigation until the FBI raid in January.
Likewise, the senator has said there was nothing improper about his urging U.S. officials to pressure the Dominican Republican on behalf of ICSSI, a company recently acquired by Dr. Melgen.
ICSSI has a security contract to X-ray cargo at seaports in the Dominican Republic, but the government there has balked at enforcing it. Cargo screening seems like an odd side business for an ophthalmologist, but apparently it made sense to Menendez.
Let’s try to see the situation through the senator’s eyes.
Okay, Dr. Melgen is a longtime golfing pal and a steadfast political supporter.
For years you’ve thought, wow, he must be a pretty fantastic doctor to live this lifestyle. The average mid-career ophthalmologist earns about $300,000 a year, so Melgen either operates like an octopus or he’s made some seriously shrewd investments.
So, when does that little light bulb go on in your brainpan that says maybe it’s time to back off the friendship? Perhaps back in 2008, when Dr. Melgen was ordered to repay that $8.9 million in Medicare and Medicaid disbursements.
That’s epic overbilling. But instead of quietly easing away from Melgen, Sen. Menendez started rattling cages, trying to help the doctor get the money back.
It was during that period when the senator twice rode on Melgen’s jet down to Melgen’s oceanfront villa at Casa de Campo. If it ever occurred to Menendez that Medicare might have paid for that plane, he didn’t let it spoil the trip.
Perhaps he was blinded by friendship. Or perhaps he was thinking about what the doctor would do for him in the 2012 election.
And Melgen came through big-time. One of his companies donated $700,000 to a Democratic “super PAC” that funneled $582,000 toward Menendez’s re-election.
Can your eye doctor afford to do that for a U.S. senator? If so, he or she will have an important friend for life in Washington.
Menendez was recently named chairman of the Foreign Relations Committee, a big deal. To avoid possible prosecution, he last week gave Melgen $58,500 to cover those jet flights to the Dominican Republic.
The two of them won’t be flying off again together anytime soon.
Melgen hasn’t been charged with any crimes, but it’s never a happy time when the FBI is raking through your business records.
Meanwhile, Menendez says he’s the victim of a smear campaign. He should get his vision checked, because it’s not 20/20.