Former Managers Charge AHF With Kickbacks for HIV Referrals

TALLAHASSEE, Florida—Three former managers of the AIDS Healthcare Foundation have charged in federal and state "whistleblower" complaints that AHF "knowingly engaged in a multi-state kickback scheme designed to defraud Federal health care programs, including Medicare, Medicaid and HIV/AIDS grant programs sponsored by the Health Resources and Services Administration ('HRSA') and the Centers for Disease Control and Prevention ('CDC'), two agencies located within the U.S. Department of Health & Human Services ('HHS)," according to the complaint filed in U.S. District Court in Florida. AHF is specifically charged with "conduct[ing] an organization-wide criminal effort across at least twelve states to enhance funding from federal health care programs in violation of the anti-kickback statute (42 U.S.C. § 1320a-7b(b)) by paying unlawful financial inducements to employees and patients in order to generate referrals to AHF’s various service centers, including clinical services, insurance services, pharmacy services and testing services. The resulting illegal referrals produced thousands of 'false and fraudulent' claims under the Federal Civil False Claims Act ('FCA'), 31 U.S.C. §§ 3729, et seq. and Florida False Claims Act, §§ 68.081 et seq., Fla. Stat., and caused at least tens of millions of dollars in fraudulent payments by federal health care programs, including Medicare and Medicaid, as well as HIV/AIDS assistance programs funded by HRSA and CDC." Essentially, AHF is charged with paying "bonuses" and "commissions"—or what the law describes as "kickbacks"—to its HIV testing personnel "to increase the volume of HIV test referrals to AHF’s testing locations" and paid those testing center "linkage coordinator" employees to "refer patients with positive test results to AHF clinical service centers." As a result, "AHF then sought additional reimbursement under Federal Health Care Programs for rendering services to those patients," in violation of several federal and state statutes. In one scenario found in AHF's internal records, titled "Commission Based Testing Formula," an employee who conducted 146 HIV tests within one month and identified one of those subjects as HIV-positive would receive a bonus of $280 in addition to his/her salary. "AHF encouraged its linkage coordinators to promptly contact any HIV positive patients referred by AHF’s testers and link those patients to AHF clinical services," the Florida complaint charges. "In furtherance of that effort, linkage coordinators were authorized to pay for patient meals at local fast food restaurants and even pay the transportation costs for those patients to travel to AHF clinical service centers. Patients were also incentivized to frequent AHF clinical service centers for treatment and testing of sexually transmitted diseases ('STD'), for returning to AHF service centers for ongoing medical care and for remaining STD negative every few months. More generally, remuneration in the form of gift certificates and cash payments valued at up to $50 or more was paid to any AHF Public Health Division ('PHD') employee—including but not limited to the AHF linkage coordinators who met with referred HIV positive patients—who was responsible for referring patients to AHF for services, including pharmacy and insurance services. Patients, moreover, were plied with valuable gifts for frequenting AHF pharmacies, including a monthly allotment of multivitamins and nutrition shakes worth more than $50." And why did they do this? Well, it seems that many if not most of AHF's contracts with government agencies require that each AHF location perform a certain minimum number of HIV and STD tests per quarter, and treat a certain minimum number of infected patients per month, and if the actual tests and treated patients fall below those minimum numbers, the contracting agency will reduce its payments to AHF by a certain amount. For example, under AHF's contract with the state of Florida, if AHF fails to conduct a minimum of 950 HIV tests quarterly, the state will deduct $24.86 for each test not performed from AHF's payment. Similarly, if AHF fails to "screen, test or treat" at least 750 individuals per quarter, the state will deduct $52.50 for each non-performed procedure below 750. The Florida complaint then goes into the plaintiffs' view of AHF's motivations for engaging in the illegal kickback scheme. "Although formed as a non-profit entity, AHF exhibited a for-profit corporate mindset and a voracious appetite for any and all revenues associated with HIV-patient referrals," the plaintiffs charge, apparently based on their personal experiences with the company. "The illegal incentive schemes that AHF implemented were designed to channel patient referrals to all corners of AHF’s operations, from testing services to clinical services to pharmacy services to insurance services (AHF marketed a managed care insurance product for Medicaid patients known as 'Positive Healthcare')." Some adult industry supporters have suggested that one of the main reasons why AHF has so unrelentingly pursued the industry over condom/barrier protection use in content production is because AHF would like to be the "go to" HIV/STD testing and treatment facility for the industry. The charges by the whistleblowing former managers would appear to lend credence to that presumed motivation. Also, AHF president Michael Weinstein's opposition to the proliferation of PrEP drugs like Truvada, which protect against HIV infection, might also be explained by the organization's money lust. The complaint then goes on to note some of the actions taken by Weinstein personally to try to increase AHF's "market share." "Weinstein specifically directed staff to raise the patient financial incentive to $50 immediately and to implement the incentive program nationally throughout the AHF organization," the complaint states, referring to a recent AHF "Leadership Summit." "Weinstein also directed a patient financial incentive of $50 to those falling out of care to induce them to return to AHF medical care and also a financial incentive of up to $50 every few months to remain in AHF care, as well as an additional financial 'bonus' at the end of one year of such care. "AHF’s strategy is further reflected in its business records, which carefully track numbers and percentages of HIV-positive patients who were linked into AHF Healthcare Centers and AHF Pharmacies, and their associated revenue streams," the complaint later states. "AHF maintained weekly 'Linkage to Care' reports that tracked HIV-positive patients who were linked to AHF care... AHF financial records tracked the numbers of patient referrals into AHF Healthcare Centers and Pharmacies and their associated revenue impact... Those records also disclose that AHF’s Pharmacy Division was an enormous revenue generator, being responsible in 2012 alone for more than $300 million in total revenue... AHF’s fraudulent kickback scheme may have caused Federal Health Care Programs to pay in the range of $20 million in HIV care costs in just a single year. The total losses to the government over the entire life of the illegal scheme, of course, will be much higher." And guess what? If the manager plaintiffs' claims are upheld, AHF could be required to repay the government not only $11,000 "for each and every false and fraudulent claim made and caused to be made by Defendant arising from their unlawful conduct as described herein," AHF could also be held liable for treble (three times) the total amount by which it allegedly defrauded the various state and federal agencies with which it has contracts. Of course, when the three whistleblowers (also called "relators") reported the above-noted actions to their superiors at AHF, they were fired. "The resulting illegal referrals produced thousands of 'false and fraudulent' claims under the Federal False Claims Act and Florida False Claims Act and caused tens of millions of dollars in payments by federal health care programs," said James P. Gitkin of Salpeter Gitkin, LLP, one of the attorneys for the fired managers, in a press release. "Furthermore, AHF violated numerous other False Claims Act provisions by its malicious retaliation against relators Jack Carrel, Mauricio Ferrer and Shawn Loftis, including violating their civil rights through unlawful termination of employment. We plan to hold AHF accountable for all these violations."  How this lawsuit will affect AIDS Healthcare's/Weinstein's ongoing attacks on the adult industry remains to be seen.