It has been six years since a pair of dentists talked Mirjana Lukic into having 13 teeth and a lot of her jaw removed. Lukic, who lives in Escondido, Calif., says the dentists recommended the treatment to relieve her headaches and warned, "if I didn't remove the teeth, I'd get cancer and die." But after the surgery, her headaches persisted, so she sued the dentists, Dr. James Shen and Dr. Rily Young of Huntington Beach, Calif. The case was settled confidentially in 2003.
Lukic questions the legitimacy of Shen's and Young's diagnosis: neuralgia inducing cavitational osteonecrosis (NICO). The small band of dentists who make the controversial NICO diagnosis say the condition is characterized by infected lesions in the jaw. They often advise patients to remove most or all of their teeth and parts of their jaws. A lawyer for dentists Shen and Young declined to comment.
Now, Aetna Inc. (AET) and some dental experts are arguing that the NICO diagnosis is bogus. The giant insurer is waging a legal fight against Cavitat Medical Technologies Inc., the Emory (Tex.) manufacturer of a scanning machine used in some NICO diagnoses, and the company owner, Robert J. Jones. In a suit brought in federal court in Denver, Aetna alleges that during the past six years, Cavitat and Jones, along with Shen and more than a dozen other dentists, deceived Aetna into paying out at least 400 claims for services related to NICO by using inaccurate diagnosis codes. Aetna's alleged losses could total millions of dollars.
The strange story behind the Cavitat machine and how it got onto the market illustrates serious flaws in the Food & Drug Administration's device-clearance process. And Aetna's allegations raise questions about whether automation of the claims process has left insurers vulnerable to fraud.
According to the American Dental Assn., NICO started appearing in the dental literature around 1979. The theory is that poor blood flow can damage bones and marrow in the jaw. NICO believers say that such damage can trigger pain as far afield as the heart. But the ADA hasn't endorsed the NICO diagnosis, and the Cavitat machine failed to win its Seal of Acceptance.
Dentists who diagnose NICO often remove suspect teeth and bone and send them to laboratories to confirm the disease. To critics such as Dr. Robert Baratz, a dentist and physician at Quincy Medical Center in Boston, this seems absurd. "A biopsy is not ripping out a quarter of someone's jawbone," he asserts. "That's assault and battery."
Don't tell that to Cavitat's Jones. A former airline pilot, he was once diagnosed with a bone disease that he says put him in a wheelchair. A dentist told him the problem was in his jaw. "He removed all my teeth and cleaned the bone out," Jones recounts in an interview. "I'm walking again. I'm well for the first time in 14 years." Jones says he invented the Cavitat machine in the early 1990s to detect problems such as his own. He describes the machine as a "sonar imaging device" that produces three-dimensional color graphs showing pores in the bone. Jones adds he has sold about 100 of them at $28,000 apiece.
Cavitat's Web site markets the device as "an aid" in diagnosing NICO and other jaw conditions. The company has sponsored several conferences, where dentists such as Dr. Wesley E. Shankland give presentations. According to Aetna's suit, Shankland once boasted to attendees at such a conference that "Stevie Wonder could use those things and make money." Shankland declined to comment on statements attributed to him. He said his talks were about diagnosing disorders, not specifically about using the Cavitat machine.
By making any references to NICO at all, though, Cavitat may be overstepping its FDA approval. In February, 2002, the machine was cleared for marketing under a process called a 510(k). This route typically allows manufacturers to market devices without doing extensive clinical trials, provided the devices aren't critical life-sustaining products. All they need to do is prove their products are essentially equivalent to another device on the market. Cavitat's clearance letter stated that it could be used only in conjunction with other methods of diagnosing disease. Marketing it as a stand-alone tool for detecting NICO would constitute off-label promotion, Aetna contends in its suit -- something no manufacturer is permitted to do under FDA rules. The FDA "rejected any mention of NICO," recalls Larry R. Pilot, a lawyer who represented Cavitat in 2002. Says Jones: "We never claim we image NICO. We image bone. That was cleared by the FDA."
Making the complexities of 510(k) even murkier is the fact that the FDA sometimes appears to second-guess its decisions. On Sept. 5, 2003, it sent Jones a warning letter describing three violations related to two clinical studies that Cavitat submitted during the clearance process. The studies were conducted by Dr. Jerry Bouquot, who coined the term NICO and is now a professor of dentistry at the University of Texas's dental branch at Houston. But 20 days later, the agency sent another letter, this time to Bouquot, saying an inspection "revealed no significant deviations from FDA regulations." In an interview, Bouquot says that he spent a day with the investigators answering questions about how the Cavitat scans were interpreted in the studies, as well as about his relationship with Cavitat. "They didn't find anything wrong here," he says, adding that "I never accepted a penny for any reason whatsoever from Cavitat." In an e-mail to BusinessWeek, the FDA said only: "This case is closed. The firm adequately responded to the cites in the warning letter."
Some experts say the 510(k) process is flawed because the FDA relies on manufacturers to determine whether new devices are similar to earlier ones, and companies tend to provide minimal information backing up those claims. "It's easy to manipulate the system to get on the market," says Dr. Suzanne D. Parisian, a consultant and former chief medical officer at the FDA's Center for Devices & Radiological Health. Marjorie G. Shulman, consumer safety officer in the Office of Device Evaluation at the FDA, says the 510(k) system is adequate. The agency carefully inspects manufacturers and evaluates their data, she adds.
The abbreviated 510(k) approval process may explain why some devices have run into trouble. In 2001, St. Jude Medical in St. Paul, Minn., received 510(k) clearance to market a connector that can be used in place of sutures during heart-bypass surgery. But one research paper subsequently warned about a potentially high rate of complications. St. Jude discontinued the product in 2004, saying in a press release that the market was weak because of a drop in surgeries. St. Jude was hit with more than 20 lawsuits over the device, all but six of which it says it has "resolved." It took a net charge of $9 million to cover potential liabilities. A spokeswoman for St. Jude says: "The rate of complications seen in patients with the device was comparable to that of patients where sutures were used."
Fewer devices are getting through the 510(k) process lately, although the FDA declined to say why. In 2004, applications dropped 14%, to 3,635, while the number turned down jumped 29.5%, to 114, according to the agency's Web site. The FDA cleared 3,460.
Aetna says it has discovered 429 claims improperly filed for NICO treatment -- none of which would have come to light had Cavitat not filed suit first against the insurer. In September, 2004, Cavitat alleged that Aetna interfered with its ability to do business by publishing an explanation of why it won't pay claims for NICO treatments. "They intend to put us out of business," Jones says. John B. Shely, an outside lawyer for the insurer, counters that "Aetna believes it is important that consumers, employers, and health-care professionals have information about what is covered, and Aetna is legally entitled to publish that information." When Aetna started investigating Cavitat's charges, it discovered the alleged wrongful claims and countersued.
The Aetna case blasts Cavitat customers such as Dr. Michael Margolis, a dentist in Mesa, Ariz., who has spoken at Cavitat seminars. Aetna alleges that Margolis advocates that his patients prepare for surgery with "'hydrocolon therapy,' or what he crudely calls 'a tube up the booty cleans things out."' Margolis confirms this but says Aetna is taking his comments out of context. "If they don't want to pay for it, that's their business, but they don't have the right to tell me I can't do something," he says. The Arizona State Board of Dental Examiners disciplined Margolis in April, 2004, for recommending that a Cavitat-scanned patient have five teeth removed. Margolis is suing the board. "I didn't do anything wrong," he says.
Aetna ended up paying for the claims it's now disputing because, like most other large insurers, it has become almost completely automated. Dentists and physicians submit claims that describe procedures using numeric codes assigned by outside agencies such as the American Medical Assn. There are no specific codes for NICO-related procedures. Aetna alleges that Cavitat's Jones coached dentists on how to use codes that describe treatments similar to those advocated for NICO so they would fly through the computer systems undetected. "We published [existing] insurance codes," says Jones. "There's nothing illegal, no misrepresentation, no insurance fraud."
It's likely that other insurance companies have been paying for NICO, too. "If Aetna lost millions, the loss to the entire industry could be in the tens of millions," estimates Evelyn Ireland, executive director of the National Association of Dental Plans. "When we pay claims that are miscoded, premiums go up," Ireland adds. "It ends up costing the consumer."
By Arlene Weintraub and Amy Barrett, with Susann Rutledge in New York