An Alexandria, Virginia-based clinic and its operators have agreed to settle Federal Trade Commission charges that they made false and misleading advertising and marketing claims in connection with their impotence treatment. The FTC alleged that Genetus Alexandria, Inc. falsely represented that a physician would examine every patient and diagnose and treat the underlying cause of a patient's impotence, that their treatment was unqualifiedly safe, and that their treatment program would arrest each patient's impotence. Further, the FTC alleged that the respondents billed patients' insurance companies for medical tests that were not performed. Additionally, the respondents represented that their treatment program was covered by patients' medical insurance, when, in many instances, that was not the case, the FTC alleged.
The proposed settlement to these and other allegations would prohibit the respondents from misrepresenting the nature or extent of a physician's participation in any treatment procedure, the safety or efficacy of any treatment procedure, and the extent to which a treatment is covered by a patient's medical insurance.
In addition to Genetus Alexandria, Inc., the FTC's complaint detailing the allegations names as respondents Galen Medical Centers, Ltd., alleged to be a successor to Genetus; George Oprean, president and a director of Genetus and Galen; and Linda Huffman Oprean, the vice-president and director of Genetus Alexandria, and a director of Galen. Linda Oprean was licensed as a registered nurse in the state of Virginia from June 1991, until July 1994, when the Virginia Board of Nursing revoked her license.
According to the complaint, defendants Genetus, and George and Linda Oprean advertised and promoted their impotence treatment program to the public through radio advertisements and printed materials.
The radio advertisements, some of them featuring George Oprean, contained such representations as:
- At Genetus, you'll be medically evaluated, tested and treated and when you leave on your very first visit, you will be functional again...; and
- By calling xxx-xxxx, you can permanently arrest your impotence....
According to the FTC, Genetus and George and Linda Oprean provided patients and prospective patients with an informational letter that outlined the "Genetus Program." The letter told patients that they would be given a complete medical evaluation by a physician to find out the underlying cause of their impotence and described the treatment process -- injection of the drug Prostaglandin E1 which, the letter claimed, has no side effects or contraindications. The letter concluded with the representation: IN MOST CASES YOUR INSURANCE WILL COVER THE MAJORITY OF THE COSTS, IT DEPENDS ON YOUR COMPANY AND YOUR COVERAGE.
According to the FTC's complaint, these representations were false because:
- many patients were examined, evaluated, and treated only by respondent Linda Oprean, who is not a physician;
- not every Genetus patient received a medical diagnosis or treatment for the underlying cause of his impotence;
- Prostaglandin E1 has possible side-effects and its use is contraindicated for certain patients; and
- the treatment program offered by Genetus did not arrest each patient's impotence.
The complaint also alleges that respondents Genetus and George and Linda Oprean misrepresented that Linda Oprean was a 'nurse practitioner' and that, in most cases, the costs of their treatment program would be covered by the patients' health insurance. In fact, according to the complaint, not all the medical and laboratory tests billed by Genetus were performed; many patients were diagnosed and had services performed or ordered by Linda Oprean; and many claims were signed by Linda Oprean without a physician's knowledge or permission. For these reasons, the costs of Genetus' treatment program were not, in most cases, covered by patients' health insurance. In addition, patients were otherwise responsible for paying for most or all of the amounts billed by Genetus because the amounts Genetus charged for some items bore no reasonable relationship to the costs of those goods and services and substantially exceeded the amount the insurers had agreed to pay for them.
The proposed consent agreement to settle these charges, announced today for a public comment period, would prohibit Genetus Alexandria, Galen Medical Centers, Ltd., and the Opreans from misrepresenting the safety or efficacy of any treatment, the extent of a physician's participation in any treatment, or the qualifications or credentials held by those providing any treatment.
The proposed settlement also would bar the respondents from misrepresenting that patients would be treated for the underlying cause of their impotence, that drugs used in treating impotence -- Prostaglandin E1, Papaverine, or Phentolamine, or any combination of them -- have no side-effects or contraindications, that any impotence treatment procedure is unqualifiedly safe, or that any treatment will arrest impotence.
Further, the proposed settlement also would prohibit the respondents from falsely representing the extent to which medical insurance would cover the costs of any treatment; that medical procedures were performed; and that claims submitted to insurance companies were signed, or approved for signature by a physician.
In addition, the proposed settlement would prohibit Genetus, Galen and the Opreans from attempting to collect any payments from customers of Genetus on any outstanding accounts receivable of Genetus.
Based on the respondents' sworn financial statements, the proposed settlement does not call for immediate payment of consumer redress. However, if the FTC later finds that the respondents have misrepresented their financial standing, then Genetus and the Opreans will be required to pay substantial consumer redress.
Finally, the proposed settlement contains a number of record keeping requirements designed to assist the FTC in monitoring the respondents' compliance with the terms of the settlement.
The Commission vote to accept the proposed consent agreement for public comment was 5-0. The proposed settlement will be published in the Federal Register shortly and will be subject to public comment for 60 days, after which the Commission will decide whether to make it final. Comments should be addressed to the FTC, Office of the Secretary, 6th Street and Pennsylvania Avenue, N.W., Washington, D.C. 20580.
NOTE: A consent agreement is for settlement purposes only and does not constitute an admission of a law violation. When the Commission issues a consent order on a final basis, it carries the force of law with respect to future actions. Each violation of such an order may result in a civil penalty of up to $10,000.
Copies of the complaint and proposed consent agreement, and an analysis of the agreement to aid in public comment are available from the FTC's Public Reference Branch, Room 130, at the above address; 202-326-2222; TTY for the hearing impaired 1-866-653-4261. To find out the latest news as it is announced, call the FTC NewsPhone recording at 202-326-2710. FTC news releases and other materials also are available on the Internet at the FTC's World Wide Web site at:
(FTC Matter No. 942 3161)