Factoring in Greed: Hemophilia Insurance Scam in Alabama

If you wonder why insurance companies may be scrutinizing our factor usage and insisting on log forms, even checking our inventory, read this article on, posted February 19, 2012, by Brendan Kirby. All it takes is one bad apple; maybe four?

“MOBILE, Alabama — Four people convicted in a Medicaid kickback case face prison sentences ranging from a little less than 2 years to a little more than 4 years, according to a preliminary estimate of advisory sentencing guidelines…

“A jury in Mobile convicted Lori Skowronski Brill and her estranged husband, Butch Brill, of conspiracy to commit health care fraud in a scheme to overbill Alabama Medicaid for an extremely expensive family of blood-clotting agents known as Factor. Testimony at the trial indicated that the medication, used to treat hemophilia and other disorders, can cost up to $1 million a year for a single patient, in extreme cases.

“An FBI agent testified that investigators found hundreds of thousands of dollars’ worth of Factor rotting in the garage of Lori Brill’s home in Robertsdale in the summer of 2009. Prosecutors alleged that she and others falsified logs to make it appear as though clients of her patient advocacy business were using more Factor than they actually were.

“That increased the payments Brill received from specialty pharmacies who paid her for patient referrals. The jury also convicted brothers Jeff and Chris Vernon, who ran Medfusion Rx in Birmingham at the time, of paying kickbacks to Brill for the patient referrals.

“A sentence of at least 2 years and 3 months and no more than 2 years and 9 months in prison for Lori Brill. A sentence of at least a year and 9 months and no more than 2 years and 3 months in prison for Butch Brill. A sentence of at least 3 years and 5 months and no more than 4 years and 3 months in prison for the Vernon brothers. It will be up to U.S. District Judge Kristi DuBose to determine the correct calculation of the advisory guidelines. She can sentence the defendants within those ranges but does not have to follow the recommendations.

“At the June 8 sentencing, DuBose also will determine how much money the defendants must forfeit to the government. The indictment sought $29 million. That represents all of the money paid by Medicaid for the hemophilia drugs, not just the illegitimate amount.”

This isn’t the first time something like this has happened. There are people in jail right now for doing dirty deeds with our kids’ factor, while as you know from my work, people in developing countries are dying for lack of factor. Lori Brill had more factor spoiling in her garage than most of the countries of Africa have put together. Justice is served.

Great Book I Just Read
Lucy’s Legacy by Don Johanson

A brilliant and engaging look at our possible origins as humans. Johanson is the paleontologist who in 1974 discovered “Lucy,” an australopithecus afarensis who made headlines around the world as the oldest known hominid at 3.2 million years old. Was she the “missing link”? Much has happened since her discovery, and Johanson describes the different theories of human evolution: where are the gaps in knowledge? What do we suppose? What do we know? He shows how paleontologists piece together theories based on findings–and even the scientists sometimes disagree with one another!: larger brain size in later hominids, occurring when we began to walk as bipeds. Tool use in certain hominids but not others; migration of certain species. Did we evolve in one linear formation or were there several hominds existing at the same time? My only frustration was that the book was a bit disjointed. The first part is heavy on minutiae of his wanderings to various African discovery sites, including what he had for breakfast, lunch and dinner on one day! I think if you are new to Africa, you’ll find the travelogue interesting. Much more interesting is the second part, when he dives into the theories of man’s origins and evolution. I learned so much and was intrigued by how long it takes for these scientists to clean and construct a 3 million year old skull (years sometimes!), and how plentiful hominid parts are in the Great Rift Valley in Africa. Johanson has so much passion for the subject; after finishing the book I immediately downloaded the Kindle version and watched a Nova show on the subject. (Beware: the Kindle version does not have the Epilogue on Ardie!) Great stuff and thought provoking! Four/five stars.

Three Cups of Bitter Brew: Charities Gone Bad

Last Sunday night’s “60 Minutes” was a shocker for me. I don’t watch TV–at all–but made time to watch this. Jon Krakauer of Into Thin Air fame exposed best-selling author and humanitarian Greg Mortenson as a fraud. Up until now, Greg Mortenson was someone I admired and even met at a book signing. His rapid downfall is a warning to all charities.

Mortenson’s book Three Cups of Tea has been a New York Times bestseller for about two years. Though not a particularly well-written book, it nonetheless describes a fascinating, life-changing journey: an aborted 1993 attempt on K2, Mortenson’s descent and separation from his team, and his stumbling half-dead into a remote Pakistani village. The residents cared for him, and he witnessed their utter poverty and lack of schools. He in turn pledged to build them a school someday. He turned this event into a mission, and the Central Asia Institute (CAI) was founded, a non-profit that in 2010 reported it has built over 171 schools in Pakistan and Afghanistan, providing education to over 64,000 children, including 54,000 girls. One of the highlights of the book was when Mortenson was captured for eight days by the Taliban, but won them over and left them cheering for his success.

Inspirational, motivational, miraculous… and not true.

This was devastating news to those of us who work in the international humanitarian world, who know how difficult it is to get funds, who see projects falter, who sacrifice many weeks and months, sometimes years. We also cheered for the success of someone like Mortenson, who accomplished what seemed impossible. His small charity grew, thanks to his best selling book, and according to “60 Minutes”, raked in about $60 million last year.

Shoddy journalism or outright lies? Mortenson never stumbled into a village following his K2 attempt. The Taliban never did capture him. Seems that people are coming out of the woodwork now to discredit Mortenson.

Krakauer is an excellent writer and dogged journalist, citing sources for his evidence, and naming names. One of the most disconcerting points is the tangled finances at CAI, which are obscured, poorly documented, and lack transparency. Book sales royalty goes to Mortenson, enough to make him a millionaire. Well, that’s America; nothing wrong with that. But when it is made from fabricated stories passed as nonfiction, and when they make up the backbone of the book? How about this: while he rakes in the millions, he charges CAI for the travel, posh hotels, chartered planes, and all expenses. This is wrong, wrong, wrong. According to the report, he rarely turns in expense reports. Seems that no one quite knows where a lot of the money goes.

Krakauer even visited the school overseas. Half of the visited schools are empty. Mortenson has overseen the building of many schools and many do work. But something just doesn’t add up. CAI’s own audited financial statement states that over 50% of their program expenses are spent on domestic “outreach”—50%!—and not on the schools themselves. The outreach means Mortenson’s speaking engagements, which you recall, earns him millions.

I donated money to CAI after I met Mortenson. He seemed quiet, humble and hard working. It’s his personal story that is so compelling, and now I learn it is fabricated. Who knew that he was fudging stories, milking the public’s sympathies, painting himself as an American Mother Theresa, all the while skimming and dipping the millions pouring in?

What’s worse is that this will have a ripple effect for so many charities, at a bad time in America with rising consumer costs, high unemployment and political dissatisfaction. I know so many true heroes out there, working without the masses worshipping them, I don’t think Mortenson set out to defraud the public; I think he truly wanted to make a difference but when we started our hero-workshop, the story became a myth, the myth launched sales, and money poured in, Mortenson went to the Dark Side.

It’s a tale that hemophilia charities and their donors should note well. Get a professional audit; check and document your sources before printing anything; separate professional revenues and expenses from the nonprofit ones if you work in both; submit original receipts, even for one cup of coffee; executive directors cannot and should not serve on their own boards; boards of directors should be allowed to make policies and enforce them, even to the founder; ensure that most of your program money is spent on the people you are trying to serve, and not on publicity, overhead or travel. And never think you are above the law.

Thanks to Krakauer, the attorney general of Montana will be investigating CAI to see if the charges are true. This is a bitter brew for all in charities.

Great Book I Just Read
Three Cups of Deceit by Jon Krakauer

This is the book that knocked the halo off of Greg Mortenson and cracked open an investigation into CAI’s finances and programs. A very quick read, Krakasuer painstakingly reveals the journalistic shoddiness of Three Cups of Tea, the fabrication of stories to enhance sales of the book, the recklessly spending by Mortenson to advance his own hero-status on the backs of public donations—including the “Pennies for Peace” campaign that encouraged school kids to save pennies to build schools in Pakistan and Afghanistan. All lies? That remains to be told, but surely this book rips apart the story that became a dream come true and now threatens to become a nightmare. Four stars.

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