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In re Grand Jury Subpoena Duces Tecum

Decided: August 4, 1976.

IN RE GRAND JURY SUBPOENA DUCES TECUM


Rimm, J.c.c. Temporarily Assigned.

Rimm

On July 2, 1974 the Bureau of Medical Care Surveillance, New Jersey Division of Medical Assistance and Health Services, opened an inquiry concerning the Medicaid billing of Nor-Lin Pharmacy. Such inquiry allegedly revealed a relatively high average prescription price and an in-depth field audit ensued. During such field audit, which was conducted on July 10, 11 and 12, 1974, a random sampling was taken of Medicaid billings and compared with prescriptions on file or handwritten notes of telephone prescriptions written on store stationery. This comparison allegedly revealed that Medicaid was billed for a greater quantity of prescription drugs than indicated on prescriptions on file in the pharmacy. Specifically, the quantity of drugs billed to Medicaid allegedly exceeded the quantity of drugs stated on prescriptions by 13.7% in 1970, 21.% in 1971, 33% in 1972, 38.3% in 1973 and approximately 38% during the first four months in 1974.

On August 29, 1974 Samuel Bonow (movant), owner of the pharmacy, was required to appear at a conference with representatives of Medicaid. He was also requested to bring with him 206 prescriptions paid by Medicaid, apparently during the period 1970 thru April 1974. Bonow did in fact produce such prescriptions.

During the conference Bonow allegedly stated that the aforementioned billing discrepancies were attributable to the fact that patients sometimes requested more medication than prescribed and that such requests were granted after telephone consultations and additional drugs dispensed as required by Medicaid regulations N.J.A.C. 10:51-1.5(C) and state law N.J.S.A. 45:14-14 and N.J.S.A. 45:14-16. Bonow maintained, however, that despite any discrepancies the patients had received all medication billed to Medicaid.

This matter was subsequently referred to the New Jersey Division of Criminal Justice, which conducted further investigations. Investigator Mish of that Division avers in an affidavit submitted to this court that:

4. * * * I personally interviewed 9 recipients where Nor-Lin had billed for larger quantities than that indicated on their prescriptions. Of the 9 witnesses interviewed, all denied having requested the dispensing of medication in excess of that called for on their respective prescriptions.

5. Based on my experience and training and my knowledge of the billing pattern of Nor-Lin Pharmacy and my interviews with witnesses, I suspect that the irregular billing pattern is a continuous one existing to the present time. Production of all Medicaid prescriptions, all purchase invoices, and prescription profiles of Medicaid patients from January 1, 1970, to the present time is essential so that a Grand Jury can evaluate whether a crime has been committed and if so, the scope of the offense or offenses.

This matter is presently being investigated by the Atlantic County grand jury, which, on April 2, 1976, served a subpoena duces tecum upon Bonow commanding him to appear and bring with him the following records covering the period from January 1, 1970 to the present: (1) prescriptions and records of prescriptions paid by Medicaid and filed during the above period; (2) invoices and vouchers pertaining to the purchase of prescription drugs; (3) inventory records of prescription drugs; (4) correspondence with physicians or records of telephone conversations with physicians regarding the prescribing for medicaid patients, and (5) prescription profiles of Medicaid patients.

Bonow brings this motion pursuant to R. 1:9-2 seeking to quash the subpoena duces tecum. This rule provides in pertinent part:

Movant maintains that compliance with the terms of the subpoena would be unreasonable and unduly oppressive because of the long period of time for which records are demanded and because of the sheer physical size of the records themselves. Moreover, during oral argument, counsel for movant related that transactions involving Medicaid patients constitute only a very small percentage of the pharmacy's business and, therefore, most of the information contained in invoices, vouchers and inventory records of prescription drugs would not be relevant to the grand jury's inquiry.

The State, on the other hand, in support of tts contention that the subpoena is reasonable, points out that the Division of Medical Assistance and Health Services reimburses pharmacists for medication dispensed to Medicaid patients upon submission of Medicaid claim forms which state the type and quantity of medication dispensed and correspond by number to a particular prescription on file. The State also points out that information pertaining to medication dispensed to any particular patient is contained on the patient profile which is required to be kept on file by N.J.A.C. 13:39-9.13. Thus, the State maintains that in order to verify services billed to Medicaid, the claim forms submitted must be compared with the prescriptions or memoranda or oral prescriptions on file and patient profiles, and further, in order to determine whether the pharmacist purchased a quantity of medicine at least equal to that for which he billed Medicaid, his billings must be compared with his purchase invoices in conjunction with his inventory records.

Movant relies upon State v. Cooper , 2 N.J. 540 (1949), in support of his contention that the subpoena is unreasonable and ...


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