Doctor Settles Kickback Allegation

Dr. Charles R. Denham, of Laguna Beach, has agreed to pay $1 million to settle allegations that he accepted kickbacks to promote use of a surgical antiseptic in national guidelines for hospitals, the Justice Department announced Monday, March 2.

The settlement does not include a determination of liability.

Denham is a patient safety consultant who operates the consulting company Austin-based Health Care Concepts Inc. and the research organization Texas Medical Institute of Technology, both of which are also parties to the settlement. Both businesses will be excluded from Medicare, Medicaid and all federal health programs as part of the settlement, says a statement from the U.S. Department of Health and Human Services’ inspector general.

An email to Denham’s place of business did not yield a reply.

The settlement resolves allegations that Denham received monthly payments that cumulatively totaled $11.6 million from San Diego-based CareFusion Corporation while serving as the co-chair in 2009 and 2010 of the National Quality Forum’s safe practices committee, which establishes guidelines for the nation’s hospitals.

The settlement contends that Denham solicited payments in exchange for influencing National Quality Forum’s recommendation of CareFusion’s product, the antiseptic skin cleaner ChloraPrep, in violation of the Federal Anti-Kickback Statute.

“Quality and patient safety must drive medical recommendations,” said Inspector General Daniel R. Levinson of the federal Health and Human Services Department. “Doctors that put profits ahead of this core value must be held accountable.”

“Kickback schemes undermine the integrity of medical decisions, subvert the health marketplace and waste taxpayer dollars,” added Acting Assistant Attorney General Benjamin C. Mizer of the Justice Department’s Civil Division in a statement.

Since January 2009, the Justice Department has recovered a total of more than $23.8 billion through False Claims Act cases, with more than $15.2 billion of that amount recovered in cases involving fraud against federal health care programs.