Wichita Kansas Physician, Practice To Pay $1.5 Million To Settle False Claims Act

Federal officials earlier this week charged a Boston-area man with illegally concealing material information from Medicare.  Blessing Sydney Iwuala, 53, was indicted on charges of knowingly and willfully falsifying, concealing, or covering up by trick, scheme or device a material fact from Medicare.

The Indictment alleges that Iwuala was the owner of Above All Home Care and Supply, Inc. (Above All), a supplier of durable medical equipment (DME) in Braintree. In 2008, he submitted an application to Medicare to supply Medicare beneficiaries with DME. In the application, Medicare required that Iwuala identify any individual who had an ownership interest, was a managing employee, or had a partnership interest in Above All. Iwuala only identified himself and his wife in this section. Iwuala certified that the information in the application was true, correct, and complete, and he certified that he would notify Medicare if he became aware that any information in the application was not true, correct, or complete.

It is alleged that at some point, but by no later than Jan. 19, 2009, Iwuala entered into an arrangement with another individual, identified in the indictment as JN, with respect to Above All. JN had a medical supply company as well, but in or around June 2008, Medicare had suspended JN’s privileges to supply DME to Medicare patients. Iwuala and JN allegedly entered into an agreement whereby JN obtained orders for the overwhelming majority of patients who received medical equipment from Above All. It is alleged that JN handled numerous aspects of these orders, including billing Medicare for the orders using Above All’s names, and that Iwuala sent to JN a substantial portion of the Medicare payments to Above All.

On May 6, 2009, a Medicare representative performed a site visit at Above All. By this point, all of the Medicare beneficiaries handled by JN had received their equipment, Above All had begun billing Medicare for claims, and Iwuala had begun to send money to JN and JN’s associates. During the site visit, Iwuala filled out a questionnaire. In one of the items, Iwuala was required to list “all management and owners” of Above All. Iwuala listed himself as the “sole owner” of the company, concealing from Medicare JN’s involvement with the company. If Medicare had been aware of JN’s involvement with Above All, it would not have paid for any Above All orders. Thus, it is alleged that Iwuala knowingly and willfully falsified, concealed, and covered up by trick, scheme, and device from Medicare JN’s true involvement with Above All. In 2009, Above All billed Medicare for more than $1 million of DME, and Medicare paid more than $400,000 for these claims.
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If convicted, Iwuala faces up to five years in prison, to be followed by three years of supervised release, a $250,000 fine and restitution to Medicare.

United States Attorney Carmen M. Ortiz and Susan J. Waddell, Special Agent in Charge of the Department of Health and Human Services made the announcement today. The case is being prosecuted by Assistant U.S. Attorney David S. Schumacher of Ortiz’s Health Care Fraud Unit.

As part of a broader effort to control Medicare and other federal health care program costs, Federal and state officials are conducting an ever-growing war on health care fraud.  To help this effort, legal reforms and new resources granted under the Patient Protection & Affordable Care Act (Affordable Care Act) and various other legal changes have beefed up the fraud detection and fighting powers of Federal health care fraud investigators and prosecutors.  

To target resources to highly suspect behaviors, CMS has implemented the new Fraud Prevention System, which uses advanced predictive modeling technology to fight fraud.  The system has been screening all Medicare fee-for-service claims before payment is made since June 30, 2011.  Much like the predictive technologies used in the credit card industry, the Fraud Prevention System uses advanced technology to identify “suspicious behavior and billing irregularities.” By streaming claims on a prepayment basis, CMS and its investigative partners are able to more efficiently identify fraudulent claims and respond quickly to emerging trends.

Using these data mining an a host of other new fraud fighting resources created under the Patient Protection & Affordable Care Act (Affordable Care Act) and other recently enacted laws, the HEAT Task Force and other federal health care fraud investigators are enjoying record successes in deploying these tools to achieve successful health care fraud prosecutions.  Government’s health care fraud prevention and enforcement efforts recovered nearly $4.1 billion in taxpayer dollars in Fiscal Year (FY) 2011 according to the FY 2011 Health Care Fraud and Abuse Control Program Report  jointly released by HHS and the Justice Department on February 14, 2012.

In addition to the data mining tools, other new tools helping to boost the success of federal health care fraud investigation and prosecution include:

  • Tough new rules and sentences for criminals
  • Enhanced screening and other enrollment requirements
  • Increased coördination of fraud prevention efforts
  • Health Care Fraud Prevention and Enforcement Action Team (HEAT)
  • New focus on compliance and prevention
  • Expanded overpayment recovery efforts
  • New durable medical equipment (DME) requirements
  • An additional $350 million over 10 years to ramp up anti-fraud efforts
  • Greater oversight of private insurance abuses
  • Senior Medicare Patrols

Wielding these and other tools, Federal and state health care fraud fighters are racking up a growing list of successful prosecutions and settlements against a broad range of health care providers that they say have defrauded the health care system.  See, e.g. Ambulance Worker Gets 46 Month Sentence For Defrauding Medicare By Running Company As Disqualified Person;Temple To Pay $1,088,574.93 To Resolve Exposures From Voluntarily Disclosed Improper Health Care Billings;Former Orthofix Executive Pleads Guilty To Anti-Kickback Law Violations;Houston-Area Nurse Gets 97 Month Sentence For Role In $5.2 Million Medicare Fraud Scheme; Health Care Providers Get Nailed For Using False Statements To Defraud Medicaid, Bankruptcy Court; Texas Medical Supply Medical Supply Company Owner Convicted Of Violating Anti-Kickback Statute Could Get 5 Years; Texas Healthcare Operator’s Guilty Plea To Bankruptcy Fraud Conspiracy Highlights Broad Prosecution Risks

The continuing success of these and other federal health care fraud investigation and enforcement efforts continue to prove the need for health care providers and payers to strengthen their compliance practices and documentation to avoid getting caught in the ever tightening health care fraud dragnet.

Health Care Providers Must Act To Manage Risks

In response to the growing emphasis and effectiveness of Federal officials in investigating and taking action against health care providers and organizations, health care providers covered by federal false claims, referral, kickback and other health care fraud laws should consider auditing the adequacy of existing practices, tightening training, oversight and controls on billing and other regulated conduct, reaffirming their commitment to compliance to workforce members and constituents and taking other appropriate steps to help prevent, detect and timely redress health care fraud exposures within their organization and to position their organization to respond and defend against potential investigations or charges.

For More Information Or Assistance

If you need assistance 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. Her experience includes advising hospitals, nursing home, home health, rehabilitation and other health care providers and health industry clients to establish and administer compliance and risk management policies; prevent, conduct and investigate, and respond to peer review and other quality concerns; and to respond to Board of Medicine, Department of Aging & Disability, Drug Enforcement Agency, OCR Privacy and Civil Rights, HHS, DOD and other 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. Her insights on these and other related matters appear in the Health Care Compliance Association, Atlantic Information Service, Bureau of National Affairs, 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 responding to concerns about the matters discussed in this publication or other health care concerns, wish to obtain information about arranging for training or presentations by Ms. Stamer, wish to suggest a topic for a future program or update, or wish to request other information or materials, please contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here.

If you or someone else you know would like to receive future updates about developments on these and other concerns from Ms. Stamer, see 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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THE FOLLOWING DISCLAIMER IS INCLUDED TO COMPLY WITH AND IN RESPONSE TO U.S. TREASURY DEPARTMENT CIRCULAR 230 REGULATIONS.  ANY STATEMENTS CONTAINED HEREIN ARE NOT INTENDED OR WRITTEN BY THE WRITER TO BE USED, AND NOTHING CONTAINED HEREIN CAN BE USED BY YOU OR ANY OTHER PERSON, FOR THE PURPOSE OF (1) AVOIDING PENALTIES THAT MAY BE IMPOSED UNDER FEDERAL TAX LAW, OR (2) PROMOTING, MARKETING OR RECOMMENDING TO ANOTHER PARTY ANY TAX-RELATED TRANSACTION OR MATTER ADDRESSED HEREIN.

©2012 Cynthia Marcotte Stamer, P.C. Non-exclusive license to republish granted to Solutions Law Press.  All other rights reserved.

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