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‘Corruption drove up health costs’

Lahey Clinic

The alleged “corrupt enterprises” of Ewart Brown and the Lahey Clinic contributed to rising healthcare costs for patients in Bermuda, according to the lawsuit filed in the United States.

The civil complaint, made by the Bermuda Government against Lahey, claims the former premier conducted “excessive, medically unnecessary and frankly dangerous scans” at his two private clinics for his own “enrichment” and gave the Massachusetts-based teaching hospital a cut of the fees he collected from insurers.

Dr Brown is also accused of offering and paying “kickbacks” to local physicians to “induce patient referrals for diagnostic scanning” at Bermuda HealthCare Services in Paget and at Brown-Darrell Clinic in Smith’s. The complaint states: “Brown scolded those same physicians when their patients cancelled their scans, thus depriving Brown [and Lahey] of revenue.”

It quotes an e-mail from Dr Brown to a physician in September 2008, in which he allegedly stated: “Two of yours cancelled because ‘they are feeling better’! Not good doc!”

A later e-mail from him said: “You must screen better so that [patients] won’t ‘get better’ and think they don’t need the CT”.

The more scans that were carried out, the more Dr Brown and Lahey profited, according to the claim, which says the island’s residents were the victims because their health insurance costs rose owing to the increased number of claims being submitted and paid out for diagnostic testing.

Patients were also subjected to tests they did not need, it is alleged, which may have caused them “physiological and psychological harm”.

The lawsuit says MRI and CT use in Bermuda, and at Dr Brown’s clinics, skyrocketed, resulting in Bermudians becoming “among the most scanned patients in the world”.

The complaint shows that:

• Between 2004 and 2012, CT scanning in Bermuda more than doubled, from 75 CT scans per 1,000 patients to 171.4 scans per 1,000 in 2012. The Cayman Islands, which has a population only slightly smaller than Bermuda, registered 57.5 scans per 1,000 in 2012

• Between 2004 and 2012, MRI use in Bermuda more than doubled, from 41.1 scans per 1,000 in 2004 to 84.4 scans per 1,000 in 2012. The Cayman Islands registered 27.1 scans per 1,000 in 2012

• Bermuda now registers among the highest users of MRI and CT scans in the world and the cost of healthcare per person in Bermuda is also among the highest in the world, rising from $7,000 per person in 2007 to $11,297 in 2013

• At Dr Brown’s two clinics, the rate of scanning of beneficiaries of public insurers — those on FutureCare, HIP or the government employee health plan — met or exceeded the national averages. For example, CT use increased more than threefold at the Brown-Darrell Clinic between 2009 and 2010. MRI use at Bermuda Healthcare Services nearly doubled between 2008 and 2012. The lawsuit alleges that Dr Brown “succeeded” in “imploring” insurers to raise the reimbursement fees they paid to healthcare providers for conducting such tests.

And the complaint claims that the actions of Dr Brown and Lahey led, in part, to an increase in the island’s standard premium rate, which is the price of the minimum health benefits package that must be included in every health insurance policy sold in Bermuda.

The rate is set by the Ministry of Health and Seniors after it assesses the claims history for everyone who has health insurance, ie, how many claims have been made by each person and for how much.

The complaint states that approved changes to the rate “have an impact on the cost of premiums paid by the insured population”, as well as the level of subsidies provided by the Government for certain Bermudians, such as children and seniors. Between the financial years 2007 and 2016, the rate more than doubled from $140.92 to $338.07.

In addition to the impact on the SPR, the lawsuit claims Dr Brown “constantly applied pressure to government officials to increase remuneration for tests undertaken” at his clinics. Each of the scans carried out at Dr Brown’s clinics were read by Lahey, for a “substantial percentage” of the reimbursement he was paid by insurers.

As such, according to the complaint, “any increase in the fees insurers paid Brown for imaging services resulted in increased remuneration for the Brown clinics, Brown and Lahey. Likewise, their respective revenues also increased proportionally with the number of scans performed.”

The Bermuda Health Council sets the fees each year for diagnostic imaging services such as MRI and CT scans, which are covered under the basic health benefits package. A spokeswoman said yesterday that it would be making no comment on the lawsuit.

Ricky Brathwaite, the council’s programme manager for health economics, told this newspaper last year there was nothing in law to stop a physician ordering as many tests as they saw fit.

He said conversations had been held with a small number of doctors about high ordering rates and the health council had also been asked by insurers to “facilitate discussions” with physicians regarding the issue.

The legal complaint from the Government says that at about March 2008, after Dr Brown had secured a new CT scanner for the Brown-Darrell Clinic with Lahey’s help, he and his “surrogates” implored the Health Insurance Association of Bermuda to raise reimbursement rates for diagnostic testing. “He succeeded,” claims the complaint.

Association president Holly Flook said yesterday: “We have no comment on this matter.”

Dr Brown said last year the health council had “never” approached him to discuss excessive ordering of tests at Bermuda HealthCare Services. He has said all tests ordered at his clinics were for “very necessary diagnostic procedures”.

In a statement released last night, the Argus Group said, despite the filing of the lawsuit, it would be “business as usual.”

Michelle Jackson, executive vice-president of Group Health said: “We are aware of the court proceedings involving the Bermuda Government and Lahey Hospital & Medical Centre and wish to assure our members that patient care, whether in Bermuda or in the USA, will not be interrupted or compromised in any way as a result.

“It’s business as usual at Argus and delivering on our brand promise ‘Our Interest Is You’ is core to our culture.

“Further, the Argus Group would like to reassure our members that claims coverage for medical services provided by Lahey will not be impacted by these proceedings and that we will continue to honour coverage for our members who are receiving and/or have received treatment at Lahey.”

A Colonial spokesman said the company did not wish to comment while BF&M failed to respond our inquiry.

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