In Memoriam

I am listing the family, friends and fellow physicians that were lost to me and I note how grateful I am to still be alive to continue the pursuit of justice for me and others who were misdiagnosed.

William Hart MD

Robert James Provan JD

Larry Mason Lee JD

Kathy Sheley Ph D

Joshua Carreon

legal writer who was to be contracted to write my suit against the medical board in 2005

wheel chair activist recommended by Robert Provan to help advocate for ADA rights in Texas courts (died per 2005 Internet postings), subsequently discovered to not have died when I found current writings from him in a journal dated 2006


I only recently became aware of the controversy over the deaths of two U S Attorneys investigating healthcare fraud involving the purchasing of hospital supplies. The situation began when an independent medical supplier found he was shut out of the market by a consortium of suppliers. Thelma Quince Colbert and Shannon Ross’s unexpected deaths deserved a thorough investigation.

copy of post found and placed here on October 19, 2013 as follows

Dead, fired attorneys’ Medicare fraud probe linked to White House

Senator McCaskill knew about dead attorneys before Senate Gonzales hearing

by Tom Flocco

Lee’s Summit, Missouri—May 10, 2007—Tom—According to Medical Supply Chain CEO Samuel Lipari who is suing hospital supply company Novation LLC, Missouri Democratic Senator Claire C. McCaskill knew that seven U.S. attorneys—two assistants who turned up dead, three assistants who resigned or were fired and two U.S. attorneys who were also forced out—had something in common: all seven were investigating Medicare and Medicaid fraud in the United States healthcare system involving overcharging for hospital supplies and medical fees amounting to billions of dollars in fraud.

Claire C. McCaskill

Lipari’s suit against Novation has ties to the White House in that the President’s brother Jeb Bush joined the board of directors of Novation member Tenet Healthcare on April 12, 2007 and George W’s cousin’s company wrote software for hospital equipment global reference numbers, raising questions as to why Jeb Bush has become associated with a company involved in multiple lawsuits and fraud probes.

President Bush’s first cousin Jonathan Bush is CEO of Athena Health in Watertown, Massachusetts, the developer of Novation’s “CodeRyte” software program that “runs on an algorithm built into the system,” which “can read the data entry, find any required associations and automatically contact on-staff coders who can read the work and determine the appropriate code.”

Former Florida Governor Jeb Bush’s association with Novation’s Tenet Healthcare comes after Tenet was audited in 2004 by the California Department of Health Services after overcharging the state’s Medicaid program, Medi-Cal, by $11.9 million at Redding Medical Center, linked to a Tenet probe by fired San Diego U.S. Attorney Carol Lam, a 45-agent FBI raid and multiple subpoenas signed by a Dallas assistant U.S. attorney found dead the day before Senate healthcare anti-trust hearings.

San Diego and Memphis papers reported that Tenet Healthcare Corporation of Dallas has agreed to pay $21 million as part of a civil settlement with the federal government over allegations of kickbacks to doctors. The settlement also requires Tenet to close or sell the hospital where the kickbacks allegedly took place, Alvarado Hospital Medical Center in San Diego.

The settlement averts a third criminal trial over an alleged kickback scheme between 1992 and 2002 to pay doctors for referring patients to Alvarado. Two previous trials, in 2004 and 2005, ended in deadlocked juries.

Samuel Lipari

“The implication for fraud involving hospital equipment costs, multiple fee structures and insurance claims is quite high,” alleged Lipari, after we told him that Novation was one of the first in the healthcare group purchasing industry to endorse Athena Health and Jonathan Bush’s CodeRyte Global Locator Numbers (GLN) which are 13-digit reference numbers used to identify legal entities such as registered hospitals, specific hospital departments, warehouses or particular rooms or beds in a hospital.

U.S. intelligence sources allege that electronic medical coding can be manipulated to over-bill or essentially defraud the U.S. healthcare system in the same manner as election fraud activists have proven that electronic voting machines can be manipulated to fix U.S. elections, but also vote counts in foreign countries such as last week’s French national election.

A highly placed U.S. intelligence agent was asked to inquire among other federal insiders as to the full extent of healthcare fraud over the last ten years, after which the agent later said, “Intelligence officials in a position to know have estimated the real dollar figure to be about $ .5 trillion in stolen Medicare and Medicaid funds,” adding, “healthcare entities have defrauded the United States government to the extent that the whole system faces either bankruptcy or hyper-inflated costs.”

Senate Judiciary obstruction of justice

The Senate Judiciary Committee failed to question Attorney General Gonzales about the two suspicious deaths and three abrupt departures of assistant U.S. attorneys at the Dallas-Fort Worth U.S. Justice Department (DOJ) offices all within 90 days during an $84 billion Medicare fraud probe.

The Senate’s actions raise questions as to why McCaskill failed to pass Lipari’s March 26, 2007 letter to McCaskill explaining the fraud probe over to Chairman Patrick Leahy (D-VT) prior to the April 19 Gonzales Judiciary Committee hearing.

California’s Redding Medical Center is one of thousands of U.S. hospitals, nursing homes and clinics subject to the far-reaching Justice Department Medicare fraud probe researched by Fort Worth Civil Enforcement Head Thelma Colbert which resulted in multiple subpoenas signed by her boss, Dallas U.S. Attorney’s office Criminal Chief Shannon Ross—after which Ross was found dead on September 13, 2004, the day before Senate hearings on healthcare anti-trust violations—and just 55 days after Colbert turned up dead in her swimming pool on July 20, 2004.

The Senate Judiciary Committee also failed to interrogate Gonzales about circumstances involving the quick departures (35 days after Ross’ death) of three assistant U.S. attorneys in Colbert’s Fort Worth office—Leonard Senerote, Michael Uhl and Michael Snipes—and whether the Attorney General had them fired, forced them to resign or they were intimidated by the deaths of Colbert and Ross.

Given recent lengthy prison terms for several high corporate executives, the stakes are obviously high in a healthcare fraud case with ties to the White House; but were the stakes high enough to necessitate decimating the whole civil fraud unit in Dallas-Fort Worth?

The Democratic Senate Judiciary majority failed in its oversight by never questioning the Attorney General as to why he covered up the Colbert and Ross deaths, and why Lipari’s Medicare fraud probe and the Dallas-Fort Worth subpoenas have been derailed, essentially going nowhere.

No U.S. legal entity has questioned whether McCaskill or Leahy obstructed justice in the Senate’s Gonzales hearing under 18 United States Code 4 guidelines for reporting federal crimes, or whether meritorious evidence that the White House purposely quashed the Texas fraud case was also covered up, despite deaths and firings within a compact timeline.

It is not known whether the Dallas-Fort Worth subpoenas or Lipari’s Novation suit have been totally disrupted; but the Redding Medical Center findings indicate that a probe into electronic medical coding manipulation potentially linked to Medicare and Medicaid over-billing should be ordered by Congress to protect Medicare and Medicaid for America’s seniors.

Last Thursday we talked to Senator McCaskill’s deputy chief of staff Dana Postar who said, “We will get back to you with a statement regarding the disposition of Mr. Lipari’s case and any investigation into his charges,” after we told her about the first two stories at

The previous week we also talked to McCaskill’s press spokesperson Maria Speiser who told us, “We never received Mr. Lipari’s letter but I know about the case,” to which Lipari replied, “Senator McCaskill has the letter. In the presence of my attorney, I signed their ‘privacy waiver” seeking my signed permission for her office to commence an investigation of my case which we mailed to Sen. McCaskill’s office.”

While neither staffer has called us back with a statement, Sam Lipari told us that “Cory from Senator McCaskill’s constituent services staff called me on May 1, the day after your second story was posted online, asking ‘What can we do to help you?’ “

“Maybe Sen. McCaskill will question the Gonzales cover-up of the deaths and firings in Texas and help get my case back in gear,” said Lipari, adding, “her office also sent me another privacy waiver for an FBI investigation.”

Today the House Judiciary Committee will have the opportunity to question Mr. Gonzales.

We have a feeling that the questions for the Attorney General on Thursday morning will be somewhat tougher.

Maybe Chairman John Conyers will actually ask Gonzales what he knows about the five dead and fired U.S. attorneys probing Medicare fraud in Dallas Fort Worth and perhaps he will attempt to get to the bottom of Sam Lipari’s case.

The Bush-Clinton crime families have already stolen enough taxpayer funds from the U.S. Treasury; so it is hoped that the People’s House of Representatives will prevent further looting of Medicare and Medicaid funds so that America’s seniors will continue to be afforded proper medical care in their old age.

Federal whistleblower Mary Schneider contributed additional research for this report.

I found the original NYT article on the enormity of the healthcare fraud to be investigated on the Masimo company website as follows:

Here is the article as found on the Masimo company page on October 19, 2013 and it kind of makes those investigations and prosecutions of fraudulent behaviors by clinics (fly by night and otherwise) look like small potatoes by comparison :

August 21, 2004

Wide U.S. Inquiry Into Purchasing for Health Care
The Justice Department has opened a broad criminal investigation of the medical-supply industry, apparently to determine whether hospitals and other medical care providers are fraudulently overcharging Medicare and other federal and state health programs for a wide array of goods – from rubber gloves to drugs to X-ray machines.More than a dozen medical-supply companies recently received federal subpoenas in what appears to be a wide-ranging investigation into the way suppliers market products to clinics, hospitals and nursing homes that serve Medicare and Medicaid patients, and whether those institutions properly account for the purchases.Industry executives expect many hospitals to receive similar requests in coming weeks.The central issue, according to current and former industry executives, is whether the industry’s use of rebates, discounts, barter arrangements and refunds to hospitals and other medical centers means that Medicare and Medicaid are being charged higher prices for products than the hospitals are actually spending.

The investigation appears to be centered on the medical-supply industry’s dealings with Novation, a company in Irving, Tex., that is an industry leader in negotiating the contracts that thousands of hospitals, clinics, nursing homes and other facilities use to buy drugs and other supplies.

About $20 billion a year in medical products and services are sold under contracts arranged by Novation, which is owned by about 2,200 of the hospitals and care centers that use its services. They include well-known medical centers like New York- Presbyterian Hospital, Yale-New Haven Health Services and Baylor Health Care System in Dallas.

Because Novation is the link between thousands of health facilities on one side, and hundreds of medical goods and services companies on the other, the scope of the federal investigation appears to be broad.

A Novation official confirmed this week that the company was recently served with a federal subpoena demanding that it produce documents.

“This matter is in the very early stages,” Novation’s senior vice president, Jody Hatcher, said in an e-mail reply to a reporter’s questions. “Novation will fully cooperate with the U.S. attorney’s office to provide the requested documents.” Mr. Hatcher did not characterize the type of documents sought.

Mr. Hatcher also cautioned against drawing any inferences from the subpoena’s references to various sections of the United States Code that deal with health care offenses.

“These subpoenas can be issued without any finding of misconduct,” he said. “It would be misleading to state or imply that Novation, or any of its constituents or vendors, has violated any of the statutes you referenced.”

Hospitals and clinics are financed with public money to a great degree, through programs like Medicare that reimburse many of the costs they incur in treating patients. If a hospital submits an erroneous cost report to Medicare, it can receive a larger reimbursement than it is due. If this is done knowingly, it can constitute Medicare fraud, which can carry fines and a 10-year prison sentence.

The federal investigation came to light after one medical products company, Becton, Dickinson, disclosed last week in its quarterly financial report that it had been served with a subpoena. Becton, Dickinson, the world’s largest maker of medical needles and syringes, said in the report that it believed its transactions with Novation had “fully complied with the law,” that it would cooperate and that it was not currently a target of the investigation.

Some of the other big companies to be served with subpoenas are the drug makers Merck, Bristol-Myers Squibb and Genentech; the G.E. Healthcare medical equipment unit of General Electric, and Cardinal Health, a big manufacturer and distributor of drugs and medical supplies.

Based on the federal codes cited in a copy of one of the subpoenas, investigators are seeking evidence of health care fraud, conspiracy to defraud the United States, theft or bribery involving programs receiving federal funds, obstruction of investigations and other possible violations. The subpoena was signed by Shannon Ross, criminal chief of the United States attorney’s office in Dallas.

A spokeswoman for that office declined to discuss the subpoenas or to confirm that an investigation was in progress, citing longstanding policy. Most of the companies also declined to discuss the matter, other than to say that they would cooperate with investigators.

Novation’s primary business is to pool the purchasing volume of about 2,200 hospitals, as well as thousands of nursing homes, clinics and physicians’ practices, and to use their collective power to negotiate contracts with suppliers at a discount. In many cases, the contracts offer special rebates to hospitals that meet certain purchasing targets. Although Novation is not well known outside the industry, it wields formidable power because it can open, or impede, access to a vast institutional market for health products.

Novation’s business practices, which were the subject of an investigation in 2002 by The New York Times, have drawn criticism from several parties , including the antitrust subcommittee of the Senate Judiciary Committee. The practices under scrutiny include questionable payments in the awarding of contracts and incomplete accounting of the rebates paid to hospitals and other medical centers.

The chairman and ranking member of the subcommittee, Mike DeWine, Republican of Ohio, and Herb Kohl, a Wisconsin Democrat, have been monitoring Novation and other companies involved in the group purchasing of health products. In hearings, they have expressed concerns about possible abuses and have publicly called on companies in the industry to adopt heightened ethics policies or risk tighter regulation. The subcommittee is expected to hold another hearing on the issue next month.

Novation has also been attacked by other companies, in past testimony to the subcommittee and through civil suits brought by small medical suppliers that accused it of freezing them out of a big share of the market for medical products. But until now, Novation was not known to have been named in a criminal investigation.

In July, Becton, Dickinson, paid $100 million to settle a lawsuit in which a smaller needle manufacturer accused it of working with Novation and other purchasing companies to freeze competitors out of the institutional market. Becton, Dickinson denied any improper behavior in that case, saying it settled to avoid protracted and costly litigation.

A spokesman for Premier Inc. of San Diego, the nation’s second-largest hospital purchasing company, said that Premier had not received a subpoena. Novation was created in 1998 as a joint venture of two networks of nonprofit hospitals, VHA Inc. of Irving, Tex., and University HealthSystem Consortium of Oak Brook, Ill. The two networks are cooperatives that also provide services like consulting and data analysis for their members.

VHA, the larger of the two networks, holds the larger stake in Novation. It is composed of about 1,400 nonprofit hospitals – about one-fourth of the nation’s total – and 800 other health facilities. Many of its members are small and relatively obscure, but some are large and well known. Besides New York-Presbyterian, Yale-New Haven and Baylor, they include Massachusetts General Hospital in Boston and the University of Pennsylvania Health System in Philadelphia. A spokesman for VHA referred questions about the investigation to Novation.

University HealthSystem Consortium is much smaller than VHA but consists of many prestigious teaching and research hospitals, including Johns Hopkins Hospital, N.Y.U. Medical Center, Mount Sinai Medical Center and various facilities of the State University of New York. Its hospitals are considered an extremely attractive market by suppliers, because they tend to perform unusual procedures and buy more high-end devices.

An official of University HealthSystem Consortium said that the organization had not been subpoenaed but that the consortium “would assist Novation in responding to the subpoena that they have received.”

People in the medical-supply business who were aware of the subpoenas said the investigators wanted records of payments made by suppliers to Novation and to the hospitals and other facilities that use its contracts.

“It’s about the money, and you’ve got to be able to track where the money goes,” said a former Novation executive, who would discuss Novation’s operations only anonymously because he was “concerned about being completely blackballed” in the industry.

The executive said he had been contacted by an investigator from the Department of Health and Human Services’ Office of Inspector General, who asked for the same type of information the Justice Department is seeking: the nature of the payments that suppliers make to Novation, how Novation picks which companies will be awarded contracts and what Novation does with the payments it receives from suppliers.

In most cases, suppliers are not permitted to make gifts or payments to purchasing agents for health facilities that receive Medicare money, because of the risk that some might offer kickbacks in their efforts to win business. But Novation operates within a “safe harbor” of the anti-kickback law, created specially for hospital purchasing groups.

The provision allows Novation to accept payments from suppliers with no legal consequence, as long as those payments do not exceed the safe-harbor limit, which is 3 percent of the suppliers’ sales through Novation’s contracts.

Over the years, these payments have become customary in the business. They are called administrative fees, because they are supposed to cover the cost of administering the contracts.

But industry records show that some companies have made other types of payments to Novation as well, and the total payments have sometimes exceeded the safe-harbor limit, sometimes surpassing 10 percent. Companies also contribute seed money to various initiatives and programs conducted by Novation’s parent, VHA, and to a related foundation, the VHA Health Foundation, which finances health-delivery projects undertaken in VHA hospitals.

Because businesses set up as cooperatives are barred from retaining capital, Novation and its two parent companies are required each year to distribute all of these payments to their member hospitals, after subtracting operating expenses. Those yearly distributions, as well as the rebates to hospitals that meet their purchasing contract targets and certain in-kind contributions, effectively lower the hospitals’ purchasing costs.

But because Novation is not publicly traded, there is no public accounting of these distributions. Some of the distributions are not made in cash, meanwhile, but in coupons that hospitals can use to purchase consulting services from VHA.

Hospital officials say privately that the complexity of these flows of funds makes it next to impossible to state the true costs of the drugs and other supplies they purchase each year, when they report their expenses to Medicare.

The former Novation executive said he believed that the federal investigators might see similarities in those arrangements to payments that drug companies have made to doctors who prescribed their brands – payments that have led to multibilliondollar settlements by some pharmaceutical companies.

“Pharmaceuticals are referred to in the press because the average reader can associate with them more,” the former executive said. “Consumers don’t buy operating-room tables or X-ray machines, or that kind of stuff, but you’ve got the same sort of thing going on. And it’s huge, huge money.”

© 2013 Masimo Corporation. All Rights Reserved.

Lipari’s attorney was subsequently targeted by the judiciary and disbarred. Coincidental? Or a way of obstructing first amendment rights?


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