Employees Do Time For Involvement In False Claims Act Crimes
The sentencing of another former Maxim Healthcare Services, Inc. (“Maxim”) employee last week highlights the risks that health care management employees and consultants face when they participate in activities leading to false billing of Medicare or other federal programs by their employer health care provider organizations.
In his sentencing, Shipman became the eighth former Maximum employee sentenced for helping Maxim submit false charges to Medicare for health care services for services provided through an unlicensed facility. Maxim coughed up Shipman and other workers who helped to orchestrate and administer the billing scheme as part of a plea agreement reached with the Justice Department in September.
On November 21, 2011, a Federal judge sentenced former Maxim senior manager Brian Lee Shipman to five months in prison and five months of home confinement with electronic monitoring for his involvement in the unlicensed operation of Maxim office that billed nearly a million dollars to government health care programs. In addition to the prison term, Judge Thompson sentenced Shipman to two years of supervised release and ordered him to pay a $10,000 fine.
On Sept. 12, 2011, Maxim – one of the nation’s leading providers of home healthcare services – entered into a settlement agreement to resolve criminal and civil charges relating to a nationwide scheme to defraud Medicaid programs and the Veterans Affairs program of more than $61 million. Maxim was charged in a criminal Complaint with conspiracy to commit health care fraud, and entered into a Deferred Prosecution Agreement (“DPA”) with the Department of Justice. The agreement allows Maxim to avoid a health care fraud conviction on the charges if it complies with the DPA’s requirements. As required by the DPA, Maxim agreed to pay approximately $150 million – a criminal penalty of $20 million and approximately $130 million in civil settlements in the matter, including to settle federal False Claims Act claims.
Shipman is one of nine individuals – eight former Maxim employees, including three senior managers, and the parent of a former Maxim patient – to have pleaded guilty to and been sentenced on felony charges arising out of the submission of fraudulent billings to government health care programs, the creation of fraudulent documentation associated with government program billings, or false statements to government health care program officials regarding Maxim’s activities.
The sentencing of Shipman and the 8 other individual Maxim defendants criminally convicted in connection with the false billing shows that while health care organizations often pay significant fines to resolve health care fraud charges, the highest price tends to be paid by the individual employees and consultants convicted of orchestrating or participating in the activities underlying the fraud charges. Maxim shows that both health care organizations and their people need a clear understanding what activities expose them to prosecution under federal health care fraud laws and how to respond when and if asked to participate in, or confronted with ongoing practices within their organization, that may violate these laws. .
The Maxim charges against these defendants were investigated and prosecuted by the Department of Justice with the involvement of the Department of Health & Human Services and other agencies participating in the Medicare Fraud Strike Force. Since their inception in March 2007, the Medicare Fraud Strike Force operations in nine districts have charged thousands of individuals with falsely billing Medicare or more than $2.9 billion.
The rising emphasis of DOJ, HHS and other federal and state officials on health care fraud detection and enforcement requires that health care providers tighten their billing, medical recordkeeping, training and other compliance efforts to guard against false claims and other health care fraud charges. The Maxim prosecution and sentencing of senior employees who participated in the prohibited billings highlights that both health care organizations and their management employees face risks for participating in prohibited or other aggressive health care billing or other transactions.
Health care organizations, their management and other employees need to clearly understand the implications of federal rules prohibiting health care fraud and how to respond when confronted with practices or proposed practices that may expose them or their organizations to liability. With enforcement on the rise, both health care organizations and their people need to understand what actions are likely to violate health care fraud laws. Both organizations and their employees should participate in training and other activities to inform themselves about activities that create prosecution or other health care fraud exposures. Learn more here.
Management and other employees should engage in well-documented ongoing compliance efforts and learn what to do when presented with questionable situations. If a situation arises that may present health care fraud concerns, a health care organization or its employee also promptly should seek competent, experienced legal advice to discuss potential exposures and how to manage them within the scope of attorney-client privilege as soon as possible.
For Help With Compliance, Investigations Or Other Needs
If you need assistance providing compliance or other training, reviewing or responding to these or other health care related risk management, compliance, enforcement or management concerns, the author of this update, attorney Cynthia Marcotte Stamer, may be able to help. Vice President of the North Texas Health Care Compliance Professionals Association, Past Chair of the ABA Health Law Section Managed Care & Insurance Section and the former Board Compliance Chair of the National Kidney Foundation of North Texas, Ms. Stamer has more than 24 years experience advising health industry clients about these and other matters. Ms. Stamer has extensive experience advising and assisting health care providers and other health industry clients to establish and administer medical privacy and other compliance and risk management policies, to health care industry investigation, enforcement and other compliance, public policy, regulatory, staffing, and other operations and risk management concerns. A popular lecturer and widely published author on health industry concerns, Ms. Stamer continuously advises health industry clients about compliance and internal controls, workforce and medical staff performance, quality, governance, reimbursement, and other risk management and operational matters. Ms. Stamer also publishes and speaks extensively on health and managed care industry regulatory, staffing and human resources, compensation and benefits, technology, public policy, reimbursement and other operations and risk management concerns/ She also regularly designs and presents risk management, compliance and other training for health care providers, professional associations and others. Her publications and insights appear in the Health Care Compliance Association, Atlantic Information Service, Bureau of National Affairs, World At Work, The Wall Street Journal, Business Insurance, the Dallas Morning News, Modern Health Care, Managed Healthcare, Health Leaders, and a many other national and local publications. You can get more information about her health industry experience here. If you need assistance with these or other compliance concerns, wish to inquire about arranging for compliance audit or training, or need legal representation on other matters please contact Ms. Stamer at (469) 767-8872 or via e-mail here.
About Solutions Law Press
Solutions Law Press™ provides business risk management, legal compliance, management effectiveness and other resources, training and education on human resources, employee benefits, compensation, data security and privacy, health care, insurance, and other key compliance, risk management, internal controls and other key operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press resources including:
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©2011 Cynthia Marcotte Stamer, P.C. Non-exclusive license to republish granted to Solutions Law Press. All other rights reserved.