Doc makes fortune from worthless mental-illness drugs

Fraud of the Month: August 2016

imageMental illness made Dr. Fernando Mendez-Villamil rich and taxpayers that much poorer. 

The Miami psychiatrist spooned out epidemic levels of antipsychotic drugs to seniors in Medicare and lower-income people in Medicaid.

Mendez-Villamil became a national icon of overprescribing. He peddled nearly 97,000 scripts for powerful anti-psychotic drugs to Medicaid patients between 2007 and 2009. That was more than any doctor for mental-health meds in Florida. 

Years of plying people with unneeded drugs finally landed Mendez-Villamil in prison. He was one more swindler in a national epidemic of painkillers and other opioids that doctors and pharmacies are handing to addicts. Many overdose or die.

Insurance money pays for billions of dollars worth of the prescriptions. Insurance fraud thus is a major financier of opioid addiction in America today.

A U.S. Senate probe singled out Mendez-Villamil for profligate insurance over-billing. He was bounced from Medicaid in 2010 “without cause.” That was a fast-track sanction. It spoke to Medicaid’s concern about his peddling so many lower-income people with potent drugs they didn’t need.

Mendez-Villamil next soaked Medicare, doling out another 47,000 taxpayer-funded scripts to seniors in just two years. His busy practice justified the pills, he asserted to regulators with little success. Fed up, Florida’s medical board reprimanded and fined him. 

Along the way, Mendez-Villamil amped up his scamming. He took bribes and kickbacks to doll out bogus diagnoses of crippling psychiatric illness so thousands of people could falsely qualify for Social Security disability, Medicare and Medicaid. Fake mental illness diagnoses also falsely exempted many people from testing to become U.S. citizens. 

Anti-psychotic excess

Medicare, Medicaid and other federal programs lost more than $60 million in false and inflated claims.

Mendez-Villamil owned a $1-million mansion in Coral Gables. The place brimmed with expensive art — the feds impounded 221 paintings, prints, sculptures and other artworks when they raided his home. 

He was handed more than 12 years in federal prison and must repay at least $50 million that he stole from taxpayers. 

The conviction came seven lingering years after his prescribing habits came to the attention of the U.S. Senate. Some observers believe prosecutors and regulators took far too long to shut down Mendez-Villamil for good. 

“I know what I did was wrong, I was dishonest,” Mendez-Villamil admitted to the federal court before sentencing. “That’s not the way I was raised. ... I apologize for my behavior. I feel guilty. I’m sorry for the damage I have done.”

A strong rebuke came from the U.S. Senate, which singled out Mendez-Villamil for dangerous excess in hawking unneeded pills at taxpayer expense. 

U.S. Sen. Charles Grassley (R-Iowa) led the headline-getting Senate probe in 2009.

“When I started looking at top prescribers a few years ago, there was a frustration that state and federal authorities were slow to look at the problem,” Grassley told ProPublica after Mendez-Villamil’s conviction in July 2016. “That has to change. Patients are served badly by doctors who commit fraud.”


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