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U.S. Probes Doctor Fees Paid By Baxter Unit

September 9, 1991

DEERFIELD, Ill. (AP) _ Federal agents are conducting a criminal inquiry into whether consulting fees paid to doctors by a Baxter International Inc. unit actually were kickbacks, the subsidiary Caremark Inc. said today.

Caremark denied any wrongdoing but said in a statement it will discontinue the consulting arrangements for Medicare and Medicaid patients effective Oct. 1.

The investigation by the inspector general’s office of the Department of Health and Human Services began Aug. 9, Caremark said. The office is responsible for reviewing reimbursements made to health-care providers by the federal programs of Medicare, which provides health insurance to older Americans, and Medicaid, which serves lower-income people.

A telephone call to the inspector general’s office was not returned this morning.

The probe is the second criminal review facing Baxter, an $8 billion company that is the world’s largest hospital supplier. Caremark, which receives about one-fifth of its $650 million annual revenues from Medicare and Medicaid, is the country’s largest provider of in-home health care.

The investigation concerns Caremark contracts that pay doctors $12 to $150 weekly to assist in evaluating homebound patients, the company said. It focuses on whether the fees are fair compensation for legitimate advisory services or kickbacks for steering chronically ill patients to the service.

Baxter spokesman Les Jacobson said the government has subpoenaed 800 contracts and the doctors’ financial records concerning payments of the fees.

Jacobson said the doctors are paid for going over charts, reviewing medications and issuing new treatment orders.

″If you look at the amounts being paid to doctors it cannot be construed as kickbacks,″ Jacobson said. ″It’s less by far than they would be receiving for the same services in the hospital.″

He said Caremark would stop paying the consulting fees for Medicare and Medicaid patients on Oct. 1 because such contracts are not included in new federal regulations defining permissible health-care business arrangements that take effect on that date.

In addition to this investigation, a federal grand jury in Chicago is looking into whether Baxter acted illegally in getting its name removed from a list of companies boycotted by Arab countries.

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