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Dr. Kelly Shrum sentenced in misbranding/fraud case

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Posted: Wednesday, October 5, 2011 12:00 am | Updated: 5:06 pm, Thu May 24, 2012.

A sentence and fines were handed down Friday in the case of Dr. Kelly Shrum of Monticello.

In November of 2010, a federal jury found Shrum, an obstetrician/gynecologist, guilty of one count of misdemeanor misbranding in violation of the Food, Drug, & Cosmetic Act and one count of health care fraud. The charges stemmed from allegations that Shrum, 43, misbranded and billed Medicaid for Mirena IUD contraceptives manufactured in Finland by Bayer and purchased through a Canadian pharmacy instead of from Bayer’s designated United States sales distributor. At the time, Shrum was practicing in Pine Bluff.

Shrum was sentenced by the Honorable James M. Moody to five years probation on each count of his conviction, to be served concurrently. He was ordered to serve 200 hours community service each year of his probation and to pay $204,194.49 restitution and to forfeit $75,000 of proceeds from the health care fraud.

Of the sentencing, Drew Memorial Hospital CEO Michael Layfield said, “The entire Drew Memorial Hospital family, the hospital board, medical staff and employees, are very pleased with Judge Moody’s decision to only give Dr. Shrum probation for what many of us consider to be a hypertechnical and extremely unusual prosecution for his obtaining birth control devices for his patients at a fraction of the cost charged by pharmaceutical suppliers in the U.S.”

Layfield added: “Judge Moody’s probation decision is important because that means that there will be no interruption of Dr. Shrum’s delivery of excellent obstetric and gynecological care to our patients. Since Dr. Shrum came to Drew Memorial about two years ago, he has delivered approximately 340 babies and provided 640 gynecological surgeries and, consequently, has been a critical part of our effort to meet the health care needs of the citizens of our area. We very much appreciate Dr. Shrum’s dedication to the care of our patients that come from all over Southeast Arkansas.”

The sentencing announcement was made by Christopher R. Thyer, United States Attorney for the Eastern District of Arkansas, and Patrick J. Holland, Special Agent in Charge of the Food and Drug Administration’s Office of Criminal Investigations for the Kansas City Field Office.

“The conviction, and subsequent sentencing of Dr. Shrum, is a significant case in the protection of the taxpayers’ health care and their money from health care fraud,” stated Thyer.

“This office is committed to continuing our relationship with the Food and Drug Administration and Arkansas Attorney General’s Office to protect the citizens who put their trust in physicians to provide them with approved drug products.”

“Americans must have confidence that their health care providers are receiving and administering drugs that fully comply with U.S. laws,” said Holland. “The FDA will aggressively pursue all those who seek to profit from causing the importation and distribution of misbranded foreign drugs.”

This investigation began in April of 2009, with an anonymous tip to the Medicaid Fraud Control Unit of the Arkansas Attorney General’s Office hotline regarding Shrum’s use of an intrauterine device (IUD) that had not been approved by the Food & Drug Administration for distribution in the United States. During the execution of a search warrant at Shrum’s former

office at the Arkansas Center for Women, LTD in Pine Bluff, federal agents located non-FDA-approved IUDs, which were labeled in Scandinavian and Turkish languages.

From January of 2008 through June of 2009, Shrum billed the Arkansas Medicaid Program as if he was providing Medicaid beneficiaries with the FDA-approved, Bayer manufactured IUD, Mirena ®, when in fact, he was providing the beneficiaries with a non-FDA approved IUD. In that time period, Arkansas Medicaid paid Shrum over $162,000 on fraudulent claims for Mirena.

During the same time frame, Shrum was paid by TRICARE, private insurance companies, and self pay patients, for the non-FDA-approved IUD for an additional $42,000 in fraudulent claims.

Welcome to the discussion.


  • anonymous posted at 9:51 pm on Thu, Oct 6, 2011.

    anonymous Posts: 0

    He deserves a second chance! I love dr.shrum! He brought my boys in this world and every visit was very informative and respectful! He's so coPassionate about his work and cares so deaply for his patients...he would never intentionally put his patients in harms way! There's much more worse things in this world than this petty little ordeal!!

  • anonymous posted at 6:21 am on Thu, Oct 6, 2011.

    anonymous Posts: 0

    BillieFan101 see my above quote...I think this same person keeps changing their screen name because their comments sure do sound similiar. I'm sure you know the background on this case, and if these others would read about it also, then they would understand where some of us are coming from. When he did this, he did not know he was breaking the law. He was saving money for his patients by purchasing these IUDs from Canada (keep in mind all of these are made in Finland and are just labeled differently when sent to different countries). Do you know how much these things were selling for in America a few years ago compared to our neighboring country? Go read the articles and find out for yourself and then Maybe you will understand what he was trying to do. He did absolutely no harm to any of his patients. Yes he broke the law, and he is being punished for it. Fortunately YOU did not get to decide that punishment. The Judge did. Go look up what the guidelines for his punishment should have been and you will see that even the Judge knew he did not intentionally do any of these actions on purpose. Like I said before, go do your research before you keep preaching to the choir.

  • anonymous posted at 4:50 am on Thu, Oct 6, 2011.

    anonymous Posts: 0

    Right or wrong- No one said anything about being unhappy, they just meant that if YOU are so unhappy with the way Dr. Shrum works then leave this town...also meaning GET OVER IT! The people iin this town know what you're going to do before you even do it. It amazes me how big one small subject can be blown up. It's not like he sold crack to a teen. People make mistakes. I'm sure you have too.

  • anonymous posted at 10:41 pm on Wed, Oct 5, 2011.

    anonymous Posts: 0

    I love my dogs. Who said he couldn't walk on water? Plain and simple....... he broke the law. Who said anything about being unhappy and what does being unhappy have to do with the fact HE BROKE THE LAW. Plain and simple..... just 4 little words.

  • anonymous posted at 9:44 am on Wed, Oct 5, 2011.

    anonymous Posts: 0

    I think Dr. Shrum is a great doctor and everybody makes mistakes. If you are so unhappy with this town, then MOVE!!!!!!!!

  • anonymous posted at 2:28 pm on Tue, Oct 4, 2011.

    anonymous Posts: 0

    Right from Wrong - that's called greed, he knows right from wrong, just that money looked better. As they say "Do the crime, Do the time"

  • anonymous posted at 2:09 pm on Tue, Oct 4, 2011.

    anonymous Posts: 0

    The only question that has to be answered is: Did he know right from wrong. Being a good, decent person does not excuse his (or anyone else's)actions. The Dr. brought the "bad things" on himself. He made the decision to do what he did. Therefore, the Grand Jury and Judge held him accountable for his decision. It's just that simple regardless of how you try to spin it.Honey, he broke the law! Period.

  • anonymous posted at 7:23 am on Tue, Oct 4, 2011.

    anonymous Posts: 0

    He will not be serving time in jail or prison. He did sell his equipment, but please keep in mind that he has been letting the hospital use all of it for free for months now, and he sold it at a very small fraction of what he should have sold it for. I pray he doesn't go anywhere. Do you know how difficult it is to get a decent OB/GYN in Southeast Arkansas? It has been a long time since Monticello has had one. By the way, he has continued to see all of his medicaid patients WITHOUT being compensated in his own practice. And he will continue to do this to fulfill his community service while he is on probation. If you have ever had the privilege of being one of his patients, you probably wouldn't feel so harshly. If you ever do need an OB/GYN in the future, I highly recommend him. If you have lingering questions about all of this legal mess that has gone on, he will even sit down and explain what he did in detail and answer any of your questions about it. Bad things happen to good people everyday. This was definitely one of them.

  • anonymous posted at 3:13 am on Tue, Oct 4, 2011.

    anonymous Posts: 0

    Gemini, I do believe the great state of Maine did indict a ham sandwich sometime in the 70's or 80's using a Grand Jury.

  • anonymous posted at 1:45 am on Tue, Oct 4, 2011.

    anonymous Posts: 0

    He was guilty and he needs to serve time just like any other crimnal. Now we know why he is selling everything, Wonder what your (DMH) is going to do now, I know I wouldn't go there with that kind of person working there. Being dishonest no matter who you are is wrong. I do hope he wont be here much longer, it's just another black mark against DMH. not that it needs any help.

  • anonymous posted at 12:24 am on Tue, Oct 4, 2011.

    anonymous Posts: 0

    Gemini: Just how many Grand Juries have you served on? With your attitude I would say "El Zippo." You would not be selected to serve with an "already made up mind." Your vote is based on the evidence presented. If you had ever served, you would know this. Spend some time on self-evaluation and ask yourself, "what characteristics do I possess that would measure up to being asked to serve on a Grand Jury." Think about it .... spend some time on it.

  • anonymous posted at 4:32 pm on Mon, Oct 3, 2011.

    anonymous Posts: 0

    A Grand Jury would indict a ham sandwich for being a ham sandwich.Think about it!

  • anonymous posted at 2:58 pm on Mon, Oct 3, 2011.

    anonymous Posts: 0

    He BROKE THE LAW AS DETERMINED BY THE GRAND JURY AND THE JUDGE.That is not an OPINION ----- It is a FACT.FLASH ----- Laws apply to everyone, even you.

  • anonymous posted at 11:21 am on Mon, Oct 3, 2011.

    anonymous Posts: 0

    "Never argue with a fool, onlookers may not be able to tell the difference." Still don't understand why we keep ending up in the water.....Geez you hit the jackpot. All Bayer was worried about was that their precious revenue dissappeared. When people take the time to look at this case AS A WHOLE, they will understand how ridiculous it really and truly was.

  • anonymous posted at 6:59 am on Mon, Oct 3, 2011.

    anonymous Posts: 0

    Really.......All you have to look at in this case is what the Grand Jury handed down. The Grand Jury determined that the information submitted was sufficient that the law had been broken. That's all you have to look at in this case. Go no further. That's it period! The Dr. in this case is not a buddy of mine; don't know him personally. You might want to devote some time to changing the laws to the effect that when a person is of "good character" the laws do not apply to them. I would not want to be in the water with you because one cannot count on you.

  • anonymous posted at 6:36 am on Mon, Oct 3, 2011.

    anonymous Posts: 0

    American medical schools should offer at least one mandatory business class and one legal class. They spend so much time educating potential doctors on medical training they neglect giving potential doctors the basic guidelines on how their craft interacts with the real world. And don't forget, US Attorney's offices get their marching orders directly from the White House. If the Prez or the Atty General say don't prosecute they won't and vice versa. I am reminded of a woman a few years ago arrested for selling fake designer bags. She was a house wife with no criminal history and was selling these bags to supplement their family's income. She happened to be selling these bags in a kiosk outside a conference for US attorneys. The attorneys literally tore her kiosk down and confiscated all her merchandise and she was convicted of a federal felony. The only reason the DOJ is pursuing these types cases is because money was given to Obama's campaign.

  • anonymous posted at 2:09 am on Mon, Oct 3, 2011.

    anonymous Posts: 0

    Break the Law, obviously you have NOT done your research on this case. Until you know all of the details and circumstances surrounding it you will continue just to ramble about probably the only thing you have read, which is the above article. You keep using the word "rationalizing", and I am just stating the facts. Once again, go look up information about this case and see what you find. The Judge could have EASILY sentenced this man to prison, but he didn't because he openly agreed that this Dr. did not do this out of greed. Apparently his character far outweighs his mistakes he made. BTW, I am glad you feel the need to evaluate a complete stranger by means of a ship going down. FYI, grab your life jacket and swim.

  • anonymous posted at 1:26 am on Mon, Oct 3, 2011.

    anonymous Posts: 0

    Really. Everyone is all wrong except the doctor. The Grand Jury was wrong, the laws are wrong, etc. etc.Having served on many, many Grand Juries, I can speak from experience, they do not act without proof (beyond a reasonable doubt.)Laws are laws. The jails are full of those who cannot obey the law. That's how the system works.You are certainly rationalizing your statements when you say, "There are Doctors all over the United Stattes that have done this trying to save their patients money." In other words, since others are breaking the law, that makes it o.k.Without standards (which many want to destroy) where would this country be?I certainly would not want to be in the water with you in event the ship was going down. (My criteria for evaluating people.) I could not depend on you.

  • anonymous posted at 12:43 pm on Sun, Oct 2, 2011.

    anonymous Posts: 0

    Boy it good he didn't have any pot or he would be doing HARD TIME.

  • anonymous posted at 9:09 am on Sun, Oct 2, 2011.

    anonymous Posts: 0

    Break The Law you will never find a more honest physician. He had no idea he was doing wrong, and God forbid they issue a warning first before trying to ruin his name. He went before the Arkansas Medical Board, and they ALL told him to go back to work. There are Doctors all over the United States that have done this trying to save THEIR PATIENTS money. You obviously do not know the background on this case nor do you know ALL of the Doctors that are backing him across the country. So why don't you go rationalize that.

  • anonymous posted at 11:11 am on Sat, Oct 1, 2011.

    anonymous Posts: 0

    Break the Law-check your facts! And all of the products are made by Bayer in Finland!

  • anonymous posted at 1:28 am on Sat, Oct 1, 2011.

    anonymous Posts: 0

    Geez and Really......... The guy broke the law. You are busy rationalizing his actions. He is accountable for his actions. I see no mention of his Medical Licenses being revoked. They should have been revoked. This guy gives the honest physicians a bad name. Duh! Check out Bayer product! Union made in the U.S? In this case, the glass was half full.

  • anonymous posted at 1:21 pm on Fri, Sep 30, 2011.

    anonymous Posts: 0

    Way to line another pharmaceutical company's pocket Mr. US Attorney. You think you did taxpayers a favor by prosecuting a Dr. who was trying to be "economical" like everyone else in America is trying to be right now? Well you my friend are wrong. Bayer should be the one being prosecuted for charging an outrageously more amount for these devices than what they do in a neighboring country. THINK PEOPLE THINK!

  • anonymous posted at 8:11 am on Fri, Sep 30, 2011.

    anonymous Posts: 0

    That's the silliest thing I've ever seen.