Corporate Compliance

OB/GYN indicted on Medicaid fraud

Compliance Monitor, October 14, 2009

A federal grand jury indicted Arkansas OB/GYN, Kelly Dean Shrum, 41, on healthcare fraud and money laundering, according to a Department of Justice (DOJ) release. Shrum allegedly used an intrauterine device (IUD) that has not been approved by the FDA for distribution in the United States, which is a violation of the Food, Drug, and Cosmetic Act.
During the investigation at Shrum’s facility, Arkansas Center for Women LTD, federal agents found several non-approved versions of the Bayer manufactured IUD, Mirena. Shrum billed the Arkansas Medicaid program for the more expensive, FDA-approved Mirena, when she was, in fact, providing Medicaid beneficiaries with the cheaper, non-FDA approved version of the device.
According to the DOJ, Shrum dealt in transactions exceeding $10,000 withdrawn from the account which Medicaid deposited her reimbursement funds. If convicted, Shrum faces three years in prison and a $10,000 fine.

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