McMillen's firm vows to comply with probe Agents focus on role of health provider in billing government

November 20, 1997|By David Folkenflik and Tom Bowman | David Folkenflik and Tom Bowman,SUN NATIONAL STAFF Sun staff writer Ellen Gamerman contributed to this article.

WASHINGTON -- Federal agents who seized records Tuesday from a company led by former Rep. Tom McMillen of Maryland are investigating whether the firm defrauded the federal government by submitting chiropractic bills for reimbursement as though they were for conventional medical procedures, U.S. officials said.

Most chiropractic services are not covered by federal health insurance plans. It is not clear to what degree, if at all, McMillen was personally involved in the purported scheme. He was said to be returning to Washington from California yesterday, and he did not respond to repeated efforts seeking comment.

Federal officials have maintained an unusually tight lid on their investigation and have released no information about it.

McMillen, 45, a former University of Maryland and NBA basketball player, is chairman of President Clinton's Council on Physical Fitness and Sports. A Democrat, he represented Anne Arundel County and part of Prince George's County in Congress for three terms before being unseated by Rep. Wayne T. Gilchrest, a Republican, in 1992.

Tuesday, after a yearlong investigation, armed officials from the U.S. Postal Investigative Service and the Defense Department's Criminal Investigative Service raided the Capitol Hill office of Complete Wellness Centers Inc., a fast-growing but financially volatile company that provides traditional and alternative treatment for physical ailments.

Company offices in Fredericksburg, Va., and the Florida home of one of the company's officers were also searched for documents, company employees said. According to someone familiar with the investigation, McMillen's Washington apartment was also searched. Virginia-based federal prosecutors have asked a federal grand jury to investigate.

For nine hours Tuesday, investigators pored over billing records and computer systems involving Medicare, the Federal Employees Health Benefits Program, Blue Cross/Blue Shield of Virginia and CHAMPUS, the Civilian Health and Medical Program of the Uniformed Services.

Complete Wellness Centers yesterday released this statement in the name of McMillen, its chairman and CEO:

"We are surprised by the actions of the government inasmuch as the company does very little business with the various federal health benefit programs mentioned in the warrants and does very little billing for its affiliated clinics. Management is unaware of any billing improprieties. The company intends to cooperate fully with the investigative agencies involved and to resolve whatever issues may be presented."

At its centers, Complete Wellness offers a range of medical and health care, involving staff that includes physicians, physical therapists and alternative health care providers such as chiropractors, acupuncturists and massage therapists.

The company has had a rocky start since its public stock offering earlier this year. But it has accelerated its expansion in recent months, having grown to 69 affiliated clinics from 42 between July 1 and Sept. 30. Three days ago, the company announced that it lost a little more than $2 million, on revenue of nearly $5.3 million, over the first nine months of 1997.

In late September, the company announced plans to acquire a national network of 147 weight management centers and RxPress Inc., a mail-order pharmacy.

Last week, in a news release touting the promotion of a top official, McMillen referred to the complications caused by such fast expansion. He acknowledged the need for the company's president to "devote more time to various financial, accounting, systems and management issues facing a rap- idly growing public company such as ours."

The stock was valued at $6 a share during its initial public offering in February. News of the raid by investigators sparked a surge of trading yesterday in the stock, with shares plummeting to 75 cents during the day before ending at $2 1/2 , off 50 cents for the day.

One Defense Department official, who asked not to be identified, said yesterday that investigators were focusing on whether bills for chiropractic service were routed through clinic physicians, whose care is more readily reimbursable. Chiropractors are not paid for the care they provide under the Pentagon's health care plan.

"Chiropractors could get around that by sending in the bill and using the doctor's provider number," the Pentagon official said.

The grand jury investigation is being spearheaded by the U.S. attorney's office in Alexandria, Va., which refused to comment. John Russell, a Justice Department spokesman in Washington, said, "We don't comment on criminal matters."

Company officials said the intense inquiry took them by surprise.

The company's new chief operating officer, Eric S. Kaplan, denied that the company had defrauded the government but said the clinics would cooperate "100 percent" with investigators.

A West Palm Beach chiropractor, Kaplan called the investigation an example of government bias against alternative medicine. "There is a true crime here," said Kaplan, author of "Dr. Kaplan's Lifestyles of the Fit and Famous -- A Wellness Approach to Thinning and Winning."

"Why deny the public access to the kind of care they want?"

Robert S. Libauer, a company consultant who lives in Baltimore, said he wonders why federal officials did not just approach company officials for information.

"Why did the government come in the way they did?" asked Libauer, who is also a significant stockholder. "The big puzzle to me is why weren't [company officials] asked what the government needed? Nobody in the company had any knowledge about anybody being unhappy with anything. We had no warning."

Pub Date: 11/20/97

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