Attorney General Pam Bondi backed testing at center of massive fraud



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Florida’s top law enforcement officials knew by 2012 that Millennium Laboratories, the nation’s largest drug testing company, was defrauding Florida Medicaid of millions.

But that did not stop Attorney General Pam Bondi from urging Medicare to pay for high-priced and unnecessary drug screening tests at the heart of Millennium’s massive scam, even as her own office and federal prosecutors pursued civil charges against the company.

Hours after The Post reported on the letter Friday afternoon, Bondi, who previously declined to be interviewed for this story, wrote in an email that staffers had written the letter, and that, “Knowing what I know now, The Palm Beach Post is correct that the letter should not have been sent.”

The Department of Justice charged in October that Millennium reaped $15 million just by persuading doctors to test Medicare patients for the exotic street drug Angel Dust. It billed Medicare for 59 dead people. It bribed doctors and rigged research results.

And it made a mint from getting doctors to order expensive drug tests that were not needed, DOJ said.

In a March 2014 letter to the head of the federal Centers for Medicare and Medicaid Services, though, Bondi argued the tests were indeed needed. The letter directly benefited Millennium, a firm that once salvaged a key anti-drug initiative championed by Bondi and, through its high-powered lobbying firm, had deep ties to Bondi and Gov. Rick Scott’s legal team.

In October, Millennium, while not acknowledging wrongdoing, agreed to pay $256 million to resolve federal kickback and civil fraud charges. The company has been forced into Chapter 11 bankruptcy by its lenders, even as founder James Slattery and other insiders walked away with nearly $1 billion.

Florida’s Medicaid fraud unit, an arm of the Attorney General’s Office, is credited with mounting an especially strong investigation into the firm, working hand in glove with federal prosecutors and securing $8.9 million from Millennium to satisfy charges of unlawful Florida Medicaid billings for drug tests.

The unit’s aggressive prosecution appeared at odds with Bondi’s letter, which at times echoed Millennium’s sales pitches when arguing to keep payments coming for a test that boosted the company’s profits.

Just restricting access to the costly drug screens, she wrote, would hamper efforts to curb drug abuse. That, she wrote, was a priority of the DOJ, which was working with Bondi’s office even then investigating Millennium.

“I write to urge you to take swift action to halt the coordinated, nationwide efforts (of Medicare contractors) to effectively end the use” of such tests, she wrote. Medicare should not restrict access to “a critical diagnostic and treatment tool under the rationale of ‘cost savings.’”

The tests Bondi defended were among the same tests Millennium had been using to bilk Florida’s Medicaid program, federal prosecutors found.

But, Bondi wrote Friday, she signed a letter drafted by staff and intended to address her longtime concern over babies born to addicted mothers. It was never intended to assist a company under investigation, she wrote.

Further, “At the time that the letter was presented to me, our investigation had not risen to the level of my attention.”

Finally, said a spokesman, Millennium did not get a break from Bondi’s office: “We led a 49-state Medicaid fraud investigation into Millennium.”

Aggressive tactics

Bondi’s letter to the federal Centers for Medicare and Medicaid Services, or CMS, came as her office’s investigation of Millennium was in its second year. The DOJ investigation had been underway since at least 2012.

CMS had its own concerns about Millennium.

Medicare patients with no history of drug abuse were being tested by Millennium for everything from heroin to pot to Ecstasy. And it wasn’t just Medicare patients.

A 2015 Palm Beach Post investigation found that drug-testing urine has in recent years turned the South Florida addiction treatment industry into a multibillion-dollar bonanza. Young addicts with months of sobriety behind them and no indication of relapse were being tested daily, sometimes for $1,300 a pop. An FBI-led task force has been investigating for more than a year.

Millennium wasn’t the only lab to profit from this explosion in testing, but the San Diego firm is widely believed to be the biggest: In seven years, it eclipsed its rivals.

Its national reach naturally put it in South Florida, where Palm Beach County is an international destination for addiction treatment. And its aggressive sales tactics followed.

According to DOJ, Millennium instructed sales people to tell doctors that if they did not automatically test everyone, the Drug Enforcement Administration might accuse them of patient profiling or that Medicare might want its money back. They distributed deceptive research results showing that inexpensive tests were inaccurate. They showered clinic staff with gifts.

Internal company documents show that sales people were encouraged to tell doctors to test patients for nicotine, because smoking cigarettes was an indication of drug abuse; to test people on Ritalin, a drug typically prescribed for school-age children, because it was linked to cocaine use and to test pregnant patients who had little prenatal care because they were more likely to abuse drugs.

“I don’t care if they send it to me in a Ziploc bag,” one Millennium executive wrote. “I want their urine.”

Bondi jumped into the controversy after contractors working for CMS expressed concern about the mushrooming number of tests being used to confirm results of a cheaper “pee-in-a-cup” drug screens. That inexpensive test typically reveals the presence or absence of a drug.

Retesting the urine when there’s no drug found in the first test is known as a “negative confirmatory test.” A more expensive test, it can detect a broad array of substances. However, it is also not intended to be routine.

For one thing, said attorney Marc Vezina, who represented Brevard County doctors in a whistleblower suit against Millennium, if the first test shows what you were looking for, “Why would you keep looking? If you heard the hoof beats you were expecting, why would you keep looking for zebras?”

But Millennium, which declined comment, persuaded doctors to order confirmatory tests on the same urine sample for virtually all patients, all of the time — even though doing so without considering the specific medical needs of a Medicare or Medicaid patient violates federal law.

These tests were a linchpin of both Millennium’s spectacular growth and, prosecutors said, its multimillion-dollar fraud.

The letter

In a four-page letter peppered with inaccurate medical data, and in language that at times echoed Millennium’s internal sales pitch memos, the attorney general argued in favor of confirmatory testing when the cheaper test showed no evidence of drugs.

“It is widely understood in the medical community” that the inexpensive pee-in-a-cup tests often were inaccurate, Bondi wrote.

Millennium had made the same argument. In fact, while the cheaper tests can return inaccurate results, they are regarded in the medical field as reliable. Millennium rigged research data to suggest otherwise, then instructed its salespeople to spread the fiction, court filings and company documents show.

Bondi also wrote that the confirmatory tests were needed because it was easy to cheat on the cheaper test: “Indeed, a simple Google search of ‘how to beat a drug test’ will yield tens of millions of hits in less than a second.”

Millennium salespeople had been told to tell doctors: “There are a 100 ways to pass a (cheaper) drug test. Google how to … and you will see!”

“There are people gaming the system, no doubt about it,” said Dr. Stuart Gitlow, past president of the American Society of Addiction Medicine and founder of a physician training program in addictive disease. But, he said, Bondi and Millennium miss the point: “We don’t need to do $1,200, $1,500 tests every other day to detect them.”

Some addiction specialists never test at all.

Millennium also pushed for doctors to test for an older class of legal antidepressants, a practice that generated $55 million in billings. The antidepressants are rarely abused, but Bondi told CMS that data existed showing expectant mothers failed to report antidepressant use 50 percent of the time, and thus needed to be tested.

However, “We cannot find any information that backs up the 50 percent claim,” said Kate Connors, spokeswoman for the 58,000-member American Congress of Obstetricians and Gynecologists.

Describing a growing incidence of NAS, a syndrome in some newborns whose mothers are addicted to drugs, Bondi also said that if a cheaper urine test comes up negative for opioid or antidepressants, “either because of its unreliability or because the mother purposefully beat the drug test, the only way the physician can protect mother and baby is to confirm the results” of the cheaper test.

“Taking this critical diagnostic tool away from a woman’s OB-GYNs,” she wrote, “is unconscionable.”

Connors, though, said that, “We certainly would not agree with the language used in the letter to describe NAS, nor does it appear to be medically appropriate.”

But this, too, was a Millennium sales push. A Millennium marketing memo advised that, “We’ve started to identify a new niche market in OB/GYN as physicians get more and more concerned” about “an alarming increase in the incidence of babies born with an addiction to pain meds.”

“Let’s explore this avenue to boost our new business.”

Bondi wrote that it was not her intention to support dishonest practices by any company.

“The letter presented to me only discussed the general concept of drug testing,” she wrote, and not, she believed, the testing tightly linked to Millennium’s Medicare billings.

Flurry of alerts

Two years before Bondi’s letter, Brevard County’s Omni Healthcare Inc. was seeing a broad array of unexpected tests, and unexpectedly expensive bills, as their doctors started using Millennium for lab work.

“One of our poster children was a 96- or a 97-year-old man who was on Xanax for depression,” said Vezina, Omni’s attorney.

The elderly man had memory loss. Doctors wanted to make sure he was taking his medication.

But instead of a test that may have cost $15, said Vezina, Millennium was racking up billings of $400 or $500 per test.

That’s because, instead of only testing for Xanax, they were testing the elderly man for street drugs: cocaine, methamphetamine and PCP, a horse tranquilizer linked to biker gangs better known as Angel Dust.

“I say if you can find a senior citizen who is taking PCP, God bless him,” Vezina said.

Omni ordered its doctors to stop using the company. It filed a whistleblower suit alleging Millennium was defrauding Medicare and Florida Medicaid.

Vezina formally notified Bondi’s office of what it found. That was in early 2012, two years before Bondi sent her letter.

The same year, ex-Millennium employees filed several whistleblower suits, alleging fraudulent practices. A Massachusetts federal grand jury took testimony on the company.

Also in 2012, the state’s Agency for Healthcare Administration, which oversees Medicaid in Florida, wrote both Millennium and Bondi’s office stating that Millennium’s practice of giving Florida doctors pricey specimen cups for free — as long as the doctors then sent the urine to Millennium for expensive testing — was probably a kickback scheme.

But, according to federal prosecutors, even after AHCA put both the attorney general and Millennium on notice, the company continued to bilk Medicare and Medicaid.

Influential friends

While this was occurring, Millennium was establishing influence, courting goodwill and spreading cash in Tallahassee.

It poured $67,500 into the Republican Party of Florida, which donated thousands to Bondi’s campaign and paid thousands more for her consultants, polling, travel, phones and staff.

The year AHCA notified Bondi’s office of Millennium’s fraud, the company beefed up its lobbying roster with Heffley & Associates, whose influential principal, Richard Heffley is a leading Republican strategist.

It hired the powerhouse law firm of GrayRobinson to lobby on its behalf and GrayRobinson staffers directly poured more than $10,000 into Bondi’s campaign beginning in 2010, the year Millennium hired the firm. Bondi’s first chief of staff was a GrayRobinson lawyer.

Pete Antonacci, a longtime GrayRobinson shareholder and lobbyist until Gov. Rick Scott tapped him to be general counsel in 2013, was the governor’s top lawyer when Bondi penned her letter.

Before that, Antonacci served as the governor’s appointee as Palm Beach County state attorney. Now, he heads the South Florida Water Management District.

Antonacci said he never lobbied on behalf of Millennium while with GrayRobinson, never discussed Millennium with Bondi, was unaware of Bondi’s letter and did not know of the state investigation into Millennium.

As then-general counsel to the governor, Antonacci expressed some surprise that he had not been told by the attorney general’s office that Florida was, according to Bondi, leading a 49-state investigation into Millennium involving millions of dollars in Florida Medicaid fraud.

When Antonacci stepped down in 2014, Scott replaced him with Timothy Cerio, another GrayRobinson attorney and Millennium’s lobbyist since 2010. Cerio only quit his post as a Millennium lobbyist days after Scott announced the appointment in December 2014.

Through Gov. Scott’s press office, Cerio declined comment on whether he had spoken to Bondi about either the Millennium investigation or her letter, citing the fact that he was not only a Millennium lobbyist while at GrayRobinson, but Millennium’s lawyer. As such, said Scott spokeswoman Jackie Schutz, Cerio is bound by attorney-client privilege and cannot discuss any Millennium legal issues he may have talked to Bondi about.

A $312,000 gift

Millennium also played a key role in keeping Florida’s Prescription Drug Monitoring Program alive — a signature issue for Bondi.

Florida in 2009 was reeling from a tsunami of the prescription opiate Oxycontin. Pill mills, clinics where prescriptions were handed out like candy, attracted addicts and dealers from throughout the country, making Florida a narco-tourism mecca.

With an average of eight Floridians fatally overdosing every day, lawmakers authorized what Bondi said was a crucial tool for battling the abuse: a statewide database tracking prescriptions that would let law enforcement spot patients and doctors engaged in dubious prescribing patterns.

But lawmakers balked at paying for the database.

In 2010, as Bondi was campaigning for office and arguing in favor of financing the database, Millennium and its founder, Slattery, stepped up to save it.

Millennium gave $312,000 to keep the database afloat. Slattery was the first to chair the fledgling nonprofit organization designed to oversee the database, for which he won effusive, public praise from Florida’s Office of Drug Control. GrayRobinson provided legal work.

As a result, the database survived until early 2011, when, within weeks of being sworn in, Bondi successfully led a high-profile effort to stop the Legislature and Gov. Rick Scott from killing it.

It’s not surprising Millennium would have thrown such a public life preserver to the database effort. Even as illicit schemes fattened the bottom line, both Slattery and the company positioned Millennium as the ethical leader in an industry beset by corruption.

The same year AHCA told Bondi’s office about Millennium’s kickback strategy, Millennium helped push through a new Florida law cracking down on shady lab operators.

Millennium President Howard Appel said it reflected the company’s broader national strategy, “to highlight the need for ethics and compliance in the industry by whatever means necessary.”

In October, DOJ unveiled its case against Millennium, detailing kickbacks, bribes and inflated billings to Medicare, Medicaid and other federal health companies stretching to 2008.

The company agreed to pay $256 million to resolve the case and remain in the Medicare program.

Of the $8.9 million to settle excessive drug testing claims involving Florida Medicaid, the state keeps $4.6 million; the federal government keeps the rest.

Slattery no longer heads the company he created. But he left with a windfall, records show. After payments to the government, companies he controls and family trusts ended up with an estimated $500 million.

CMS, meanwhile, wasn’t swayed by Bondi’s argument. Facing increasing evidence of overbilling for drug screens, it has clamped down on such payments.

Staff writer Christine Stapleton and researcher Melanie Mena contributed to this story.



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