Poplar Bluff doctor charged with fraud

Friday, June 26, 2009

ST. LOUIS -- A Poplar Bluff, Mo., doctor is free on bond after appearing in a St. Louis federal court Wednesday on a health-care fraud charge.

Dr. Devendra K. Varma made his initial appearance before Chief U.S. Magistrate Judge Mary Ann Medler after authorities served a federal search warrant on his clinic earlier in the day, according to Jan Diltz, public affairs officer for the U.S. attorney's office in St. Louis.

Varma, who was released on $50,000 bond, was ordered to appear at 9:30 a.m. July 13 for a preliminary hearing, Diltz said.

If convicted, Diltz said, Varma faces a maximum punishment of 10 years' imprisonment and a $250,000 fine.

The charge against Varma stems from an investigation into the billing practices at Haven Hills Medical Clinic and Central Pharmacy Inc., both at 1611 Lurlyn Road, by the Office of Inspector General of the U.S. Department of Health and Human Services. The investigation began in September after the Poplar Bluff Police Department alleged that Varma was overprescribing controlled substances to Medicare beneficiaries and Medicaid recipients. William Young, an agent with the inspector general's office, said in an affadavit that overprescriptions resulted in the clinic receiving Medicare and Medicaid payments it was not entitled to at a higher level than it was entitled to, and the pharmacy receiving payments for medically unnecessary prescriptions.

The clinic, he said, is owned by Dr. Varma and his wife, Veena. In addition to the pharmacy, it also includes an on-site laboratory.

Young said Veena Varma is the "owner of the permit" for the pharmacy.

Local authorities, Young said, had been investigating allegations that Varma was prescribing pain medication to "known drug addicts and dealers." The police, he said, had seen patients selling their medications on the clinic's lot and in their cars immediately after leaving the clinic.

The prescriptions, he said, were written by Varma and filled by Central Pharmacy.

Young said he also learned that laboratory services, provided to Medicare beneficiaries and Medicaid recipients by the clinic, were either not being provided or were medically unnecessary.

"As an example, regardless of the patient's presenting problems, all patients had to have finger sticks before they were allowed to see Varma," Young said. "If a patient refused to have the finger stick performed, [he or she was] instructed to leave the clinic without seeing Varma."

The clinic billed the finger sticks and laboratory tests to various insurance programs, including Medicare and Medicaid.

Pertinent address:

1611 Lurlyn Road, Poplar Bluff, Mo.

Map of pertinent addresses

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