Medical Professionals, Medical Businesses Owners and Others Criminally Charged In $490 Million Plus COVID-19 Related False Billings Takedown

April 20, 2023

Eighteen defendants in nine federal districts across the United States face criminal charges for their alleged participation in various fraud schemes involving health care services that the Justice Department alleges exploited the COVID-19 pandemic to falsely bill more than $490 million to federal programs and theft from federally funded pandemic programs.

In connection with the enforcement action, announced by the Justice Department today, the Justice Department reports seizing more than $16 million in cash and other fraud proceeds.

Meanwhile, the Center for Program Integrity of the Centers for Medicare & Medicaid Services (CPI/CMS) separately announced today that it took adverse administrative actions in the last year against 28 medical providers for their alleged involvement in COVID-19 schemes.

Comments from Justice Department and other agency leaders made in connection with their announcement of the charges warn other health industry organizations and other COVID-19 program participants to assess and redress their own potential exposures for COVID-19-related billing abuses.

Variety Of Abuses & Charges

The allegations and resulting charges against the 18 defendants vary. One of the most significant types of COVID-19 health care fraud schemes announced today, multiple defendants were charged with defrauding the Health Resources and Services Administration (HRSA) COVID-19 Uninsured Program. The Uninsured Program was designed to prevent the further spread of the pandemic by providing access to uninsured patients for testing and treatment. The Uninsured Program was also designed to provide financial support to health care providers fighting the COVID-19 pandemic by reimbursing them for services provided to uninsured individuals. The Uninsured Program ultimately ceased operating due to the exhaustion of funding.

In the Central District of California, a lab owner was charged for allegedly submitting over $358 million in false and fraudulent claims to Medicare, HRSA, and a private insurance company for laboratory testing. The indictment alleges that the defendant’s lab performed COVID-19 screening testing for nursing homes and other facilities with vulnerable elderly populations, as well as primary and secondary schools. But to increase its reimbursements, the defendant allegedly fraudulently added claims for respiratory pathogen panel tests even though ordering providers and facility administrators did not want or need them.

Also in the Central District of California, a medical doctor was charged for allegedly orchestrating an approximately $230 million fraud on the Uninsured Program. The doctor was the second highest biller in the country to the Uninsured Program, and he allegedly submitted fraudulent claims for the treatment of patients who were insured, billed for services that were not rendered, and billed for services that were not medically necessary. He allegedly used over $100 million in fraud proceeds for high-risk options trading. The doctor is also charged with two other individuals for allegedly submitting over 70 fraudulent loan applications through the Paycheck Protection Program (PPP) and Economic Injury Disaster Loan (EIDL) Program and fraudulently obtaining over $3 million in loan funds.

Charges also were brought under the Health Care Fraud Unit’s Provider Relief Fund (PRF) Initiative. The PRF is part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, a federal law enacted in March 2020 that provided financial assistance to medical providers to deliver needed medical care to Americans suffering from COVID-19. In the Eastern District of Louisiana, the operator of a primary care clinic and purported spa was charged with allegedly submitting fraudulent loan agreements, attestations, and other documentation from which she received over $1.1 million in PRF and EIDL funds that were used to purchase real estate, luxury vehicles, a boat, a trailer, a timeshare, and luxury vacations, among other expenditures. In total, 12 defendants have been charged with crimes related to misappropriating funds intended for frontline medical providers, and seven have pleaded guilty.

The law enforcement action also includes charges against manufacturers and distributors of fake COVID-19 vaccination record cards, who intentionally sought to obstruct the Department of Health and Human Services (HHS) and Centers for Disease Control and Prevention (CDC) in their efforts to administer the nationwide vaccination program and provide Americans with accurate proof of vaccination.

In the Eastern District of New York, three medical professionals who worked at a small midwife practice were charged for allegedly distributing nearly 2,700 forged COVID-19 vaccination record cards to individuals who were not vaccinated. Instead of administering the COVID-19 vaccine, the defendants allegedly destroyed vials of COVID-19 vaccines that were intended to be used to inoculate patients. Despite being a small midwife practice, it was one of the busiest vaccination sites in New York State, outpacing large, state-run vaccination sites.

In the District of Utah, two individuals were charged for allegedly manufacturing and selling online approximately 120,000 counterfeit COVID-19 vaccination record cards across the country, especially in areas that were subject to more stringent COVID-19 vaccine restrictions.

The announcement also includes first-of-their-kind charges against suppliers of COVID-19 over-the-counter tests, which Medicare began to cover in April 2022 for beneficiaries who requested them. These kits were provided to the public to slow the spread of the deadly disease, but wrongdoers allegedly sought to exploit the program by repeatedly supplying patients or, in some instances, deceased patients, with dozens of COVID-19 tests that they did not want or need. In the Middle District of Florida, a doctor and a marketer were charged for allegedly unlawfully purchasing Medicare beneficiary identification numbers and shipping over-the-counter tests to beneficiaries throughout the country who did not request the tests, causing over $8.4 million in fraudulent claims to Medicare.

Task Force Targets COVID-19-Related Fraud

The enforcement actions build on the successes of the April 2022 COVID-19 Enforcement Action and the May 2021 COVID-19 Enforcement Action and mark the largest-ever coordinated law enforcement action in the United States targeting health care fraud schemes that exploit the COVID-19 pandemic.

On May 17, 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Department of Justice in partnership with agencies across the government to enhance efforts to combat and prevent pandemic-related fraud. The Task Force bolsters efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies tasked with administering relief programs to prevent fraud by, among other methods, augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes, and sharing and harnessing information and insights gained from prior enforcement efforts.

In the past three years, the Health Care Fraud Strike Force reports having charged 53 defendants in nationwide COVID-19 Health Care Fraud Enforcement Actions for causing over $784 million in loss associated with the pandemic, and 20 defendants have been convicted.

The charges brought today resulted from coordinated investigations by a host of agencies including the Justice Department, FBI, HHS-OIG, Small Business Administration, Office of Inspector General, Defense Criminal Investigative Service, Internal Revenue Service Criminal Investigation, Treasury Inspector General for Tax Administration, Homeland Security Investigations, Department of Homeland Security Office of Inspector General; Department of Defense Office of Inspector General, AMTRAK Office of Inspector General, California Department of Health Care Services, and other federal and state law enforcement agencies participated in the law enforcement action.

More enforcement is likely. Attorney General Merrick B. Garland warned, “This unprecedented enforcement action against defendants across the country makes clear that the Department is using every available resource to combat and prevent COVID-19 related fraud and safeguard the integrity of taxpayer-funded programs.”

“Exploiting the COVID-19 pandemic and viewing the public health emergency as an opportunity to steal money and resources from federal health care programs shows a clear disregard for the well-being and safety of those who rely on government-funded health care services,” said Inspector General Christi A. Grimm of the Department of Health and Human Services Office of Inspector General (HHS-OIG). “As today’s enforcement action demonstrates, HHS-OIG and our partners remain steadfast in our commitment to protecting critical public health measures from fraud.”

In the face of these enforcement activities, healthcare organizations, and others that billed for or received funds for COVID-19-related care or other programs are urged to carefully review and monitor the compliance of those activities in light of guidance and enforcement activities, and to take appropriate responsive action to mitigate any exposure from questionable activities.

When assessing risks, health care and other providers of COVID-19-related care or other services should be cognizant that guidance and interpretations regarding the appropriate utilization and billing for these programs has and continues to evolve.

To mitigate risk, many organizations will want to capture and retain not only the documentation regarding their original basis for understanding as well as their efforts to monitor, evolving, developments, and respond accordingly.

Program participants also should keep in mind that alleged violations can carry substantial, civil and criminal charges. In light of the potential risks, most organizations will want to conduct their assessments with the assistance of qualified legal counsel and use appropriate processes to conduct and protect sensitive work and discussions with attorney-client privilege where possible.

More Information

We hope this update is helpful. For more information about these or other health or other legal, management or public policy developments, please contact the author Cynthia Marcotte Stamer via e-mail or via telephone at (214) 452 -8297.  

Solutions Law Press, Inc. invites you to receive future updates by registering on our Solutions Law Press, Inc. Website and participating and contributing to the discussions in our Solutions Law Press, Inc. LinkedIn SLP Health Care Risk Management & Operations Group, HR & Benefits Update Compliance Group, and/or Coalition for Responsible Health Care Policy. 

About the Author

Recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” with special recognition LexisNexis® Martindale-Hubbell® as “LEGAL LEADER™ Texas Top Rated Lawyer” in Health Care Law and Labor and Employment Law; as among the “Best Lawyers In Dallas” for her work in the fields of “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, Cynthia Marcotte Stamer is a practicing attorney board certified in labor and employment law by the Texas Board of Legal Specialization and management consultant, author, public policy advocate and lecturer widely known for 35 plus years of health industry and other management work, public policy leadership and advocacy, coaching, teachings, and publications.

A Fellow in the American College of Employee Benefit Counsel, Chair of the American Bar Association (“ABA”) International Section Life Sciences and Health Committee, Chair-Elect of the ABA TIPS Section Medicine & Law Committee, Past Chair of the ABA Managed Care & Insurance Interest Group, Scribe for the ABA JCEB Annual Agency Meeting with HHS-OCR, past chair of the ABA RPTE Employee Benefits & Other Compensation Group and current co-Chair of its Welfare Benefit Committee, Ms. Stamer is most widely recognized for her decades of pragmatic, leading-edge work, scholarship and thought leadership on health and managed care and employer benefits legal, public policy and operational concerns in the healthcare, employer benefits, and insurance and financial services industries. She speaks and publishes extensively on HIPAA and other related compliance issues.

Ms. Stamer’s work throughout her career has focused heavily on working with health care and managed care, health and other employee benefit plan, insurance and financial services and other public and private organizations and their technology, data, and other service providers and advisors domestically and internationally with legal and operational compliance and risk management, performance and workforce management, regulatory and public policy and other legal and operational concerns.

For more information about Ms. Stamer or her health industry and other experience and involvements, see www.cynthiastamer.com or contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here. 

About Solutions Law Press, Inc.™

Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested in reviewing some of our other Solutions Law Press, Inc.™ resources available here such as:

IMPORTANT NOTICE ABOUT THIS COMMUNICATION

If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information including your preferred e-mail by creating your profile here.

NOTICE: These statements and materials are for general informational and educational purposes only. They do not establish an attorney-client relationship, are not legal advice or an offer or commitment to provide legal advice, and do not serve as a substitute for legal advice. Readers are urged to engage competent legal counsel for consultation and representation in light of the specific facts and circumstances presented in their unique circumstances at any particular time. No comment or statement in this publication is to be construed as legal advice or an admission. The author and Solutions Law Press, Inc.™ reserve the right to qualify or retract any of these statements at any time. Likewise, the content is not tailored to any particular situation and does not necessarily address all relevant issues. Because the law is rapidly evolving and rapidly evolving rules make it highly likely that subsequent developments could impact the currency and completeness of this discussion. The author and Solutions Law Press, Inc.™ disclaim, and have no responsibility to provide any update or otherwise notify anyone of any such change, limitation, or other condition that might affect the suitability of reliance upon these materials or information otherwise conveyed in connection with this program. Readers may not rely upon, are solely responsible for, and assume the risk and all liabilities resulting from their use of this publication. Readers acknowledge and agree to the conditions of this Notice as a condition of their access to this publication. 

Circular 230 Compliance. The following disclaimer is included to ensure that we comply with U.S. Treasury Department 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.

©2023 Cynthia Marcotte Stamer. Limited non-exclusive right to republish granted to Solutions Law Press, Inc.™

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Posted by Cynthia Marcotte Stamer

Sibley Hospital & Johns Hopkins Health System Pay $5 Million To Settle Stark Violations

April 19, 2023

Sibley Hospital (“Sibley”) and its parent company, Johns Hopkins Health System (“Johns Hopkins”) will pay the United States $5 million to resolve Physician Self-Referral Law, (commonly known as the “Stark Law”) allegations arising from claims that Sibley submitted to the Medicare Program, the Justice Department announced today.

The Stark Law prohibits a hospital from billing Medicare for certain services referred by physicians with whom the hospital has a financial relationship, unless that relationship satisfies one of the law’s statutory or regulatory exceptions. It is intended to ensure that medical decision-making is not influenced by improper financial incentives and instead is based on the best interests of the patient.

The new settlement resolves allegations that, from 2008 through 2011, Sibley violated the Stark Law by billing Medicare for services referred by ten cardiologists to whom Sibley was paying compensation that exceeded the fair market value of the services provided. These allegations arose out of conduct that Sibley and Johns Hopkins self-disclosed to the United States.

“Improper financial arrangements between hospitals and physicians can influence the type and amount of health care that is provided,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “The department is committed to holding accountable those who violate prohibitions designed to protect the integrity of physician decision-making.”

The high dollar settlement reminds other health care providers to ensure their own relationships with other health care providers comply with Stark, anti-kickback and other federal and state health care fraud laws.

More Information

We hope this update is helpful. For more information about these or other health or other legal, management or public policy developments, please contact the author Cynthia Marcotte Stamer via e-mail or via telephone at (214) 452 -8297.  

Solutions Law Press, Inc. invites you to receive future updates by registering on our Solutions Law Press, Inc. Website and participating and contributing to the discussions in our Solutions Law Press, Inc. LinkedIn SLP Health Care Risk Management & Operations Group, HR & Benefits Update Compliance Group, and/or Coalition for Responsible Health Care Policy. 

About the Author

Recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” with special recognition LexisNexis® Martindale-Hubbell® as “LEGAL LEADER™ Texas Top Rated Lawyer” in Health Care Law and Labor and Employment Law; as among the “Best Lawyers In Dallas” for her work in the fields of “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, Cynthia Marcotte Stamer is a practicing attorney board certified in labor and employment law by the Texas Board of Legal Specialization and management consultant, author, public policy advocate and lecturer widely-known for 35 plus years of health industry and other management work, public policy leadership and advocacy, coaching, teachings, and publications.

A Fellow in the American College of Employee Benefit Counsel, Chair of the American Bar Association (“ABA”) International Section Life Sciences and Health Committee, Chair-Elect of the ABA TIPS Section Medicine & Law Committee, Past Chair of the ABA Managed Care & Insurance Interest Group, Scribe for the ABA JCEB Annual Agency Meeting with HHS-OCR, past chair of the ABA RPTE Employee Benefits & Other Compensation Group and current co-Chair of its Welfare Benefit Committee, Ms. Stamer is most widely recognized for her decades of pragmatic, leading-edge work, scholarship and thought leadership on health and managed care and employer benefits legal, public policy and operational concerns in the healthcare, employer benefits, and insurance and financial services industries. She speaks and publishes extensively on HIPAA and other related compliance issues.

Ms. Stamer’s work throughout her career has focused heavily on working with health care and managed care, health and other employee benefit plan, insurance and financial services and other public and private organizations and their technology, data, and other service providers and advisors domestically and internationally with legal and operational compliance and risk management, performance and workforce management, regulatory and public policy and other legal and operational concerns.

For more information about Ms. Stamer or her health industry and other experience and involvements, see www.cynthiastamer.com or contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here. 

About Solutions Law Press, Inc.™

Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested in reviewing some of our other Solutions Law Press, Inc.™ resources available here such as:

IMPORTANT NOTICE ABOUT THIS COMMUNICATION

If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information including your preferred e-mail by creating your profile here.

NOTICE: These statements and materials are for general informational and educational purposes only. They do not establish an attorney-client relationship, are not legal advice or an offer or commitment to provide legal advice, and do not serve as a substitute for legal advice. Readers are urged to engage competent legal counsel for consultation and representation in light of the specific facts and circumstances presented in their unique circumstances at any particular time. No comment or statement in this publication is to be construed as legal advice or an admission. The author and Solutions Law Press, Inc.™ reserve the right to qualify or retract any of these statements at any time. Likewise, the content is not tailored to any particular situation and does not necessarily address all relevant issues. Because the law is rapidly evolving and rapidly evolving rules make it highly likely that subsequent developments could impact the currency and completeness of this discussion. The author and Solutions Law Press, Inc.™ disclaim, and have no responsibility to provide any update or otherwise notify anyone of any such change, limitation, or other condition that might affect the suitability of reliance upon these materials or information otherwise conveyed in connection with this program. Readers may not rely upon, are solely responsible for, and assume the risk and all liabilities resulting from their use of this publication. Readers acknowledge and agree to the conditions of this Notice as a condition of their access to this publication. 

Circular 230 Compliance. The following disclaimer is included to ensure that we comply with U.S. Treasury Department 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.

©2023 Cynthia Marcotte Stamer. Limited non-exclusive right to republish granted to Solutions Law Press, Inc.™

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Posted by Cynthia Marcotte Stamer

HHS Inspector General Comments Confirm Feds Plan Continued Aggressive Health Care Fraud Investigation & Enforcement

April 19, 2023

Inspector General for the U.S. Department of Health and Human Services (“HHS”) Christi A. Grimm urged Congress to continue and expand funding for her agency’s fraud enforcement efforts in her testimony to the United States House Committee on Energy and Commerce, Subcommittee on Oversight and Investigations yesterday.

The comments affirm HHS’s plan to continue if not expand its already rigorous fraud detection efforts while celebrating HHS’success in identifying and acting on alleged fraud faster.

Read Ms. Grimm’s prepared testimony, Insights from the HHS Inspector General on Oversight of Unaccompanied Minors, Grant Management, and CMS,” and watch the video of her testimony to learn more.

More Information

We hope this update is helpful. For more information about these or other health or other legal, management or public policy developments, please contact the author Cynthia Marcotte Stamer via e-mail or via telephone at (214) 452 -8297. 

Solutions Law Press, Inc. invites you to receive future updates by registering on our Solutions Law Press, Inc. Website and participating and contributing to the discussions in our Solutions Law Press, Inc. LinkedIn SLP Health Care Risk Management & Operations Group, HR & Benefits Update Compliance Group, and/or Coalition for Responsible Health Care Policy.  

About the Author

Recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” with special recognition LexisNexis® Martindale-Hubbell® as “LEGAL LEADER™ Texas Top Rated Lawyer” in Health Care Law and Labor and Employment Law; as among the “Best Lawyers In Dallas” for her work in the fields of “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, Cynthia Marcotte Stamer is a practicing attorney board certified in labor and employment law by the Texas Board of Legal Specialization and management consultant, author, public policy advocate and lecturer widely-known for 30+ years of health industry and other management work, public policy leadership and advocacy, coaching, teachings, and publications.

A Fellow in the American College of Employee Benefit Counsel, Chair of the American Bar Association (“ABA”) International Section Life Sciences and Health Committee, Chair-Elect of the ABA TIPS Section Medicine & Law Committee, Past Chair of the ABA Managed Care & Insurance Interest Group, Scribe for the ABA JCEB Annual Agency Meeting with HHS-OCR, past chair of the ABA RPTE Employee Benefits & Other Compensation Group and current co-Chair of its Welfare Benefit Committee, Ms. Stamer is most widely recognized for her decades of pragmatic, leading-edge work, scholarship and thought leadership on health and managed care and employer benefits legal, public policy and operational concerns. 

Ms. Stamer’s work throughout her 35-plus year career has focused on working with health care and managed care, health and other employee benefit plan, insurance and financial services, and other public and private organizations and their technology, data, and other service providers and advisors domestically and internationally with legal and operational compliance and risk management, performance and workforce management, regulatory and public policy and other legal and operational concerns. She also speaks and publishes regularly on these and other topics.

For more information about Ms. Stamer or her health industry and other experience and involvements, see www.cynthiastamer.com or contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here. 

About Solutions Law Press, Inc.™

Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested in reviewing some of our other Solutions Law Press, Inc.™ resources available here.  

IMPORTANT NOTICE ABOUT THIS COMMUNICATION

If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information including your preferred e-mail by creating your profile here.

NOTICE: These statements and materials are for general informational and educational purposes only. They do not establish an attorney-client relationship, are not legal advice or an offer or commitment to provide legal advice, and do not serve as a substitute for legal advice. Readers are urged to engage competent legal counsel for consultation and representation in light of the specific facts and circumstances presented in their unique circumstances at any particular time. No comment or statement in this publication is to be construed as legal advice or an admission. The author and Solutions Law Press, Inc.™ reserve the right to qualify or retract any of these statements at any time. Likewise, the content is not tailored to any particular situation and does not necessarily address all relevant issues. Because the law is rapidly evolving and rapidly evolving rules make it highly likely that subsequent developments could impact the currency and completeness of this discussion. The author and Solutions Law Press, Inc.™ disclaim and have no responsibility to provide any update or otherwise notify anyone of any such change, limitation, or other condition that might affect the suitability of reliance upon these materials or information otherwise conveyed in connection with this program. Readers may not rely upon, are solely responsible for, and assume the risk and all liabilities resulting from their use of this publication. Readers acknowledge and agree to the conditions of this Notice as a condition of their access to this publication. 

Circular 230 Compliance. The following disclaimer is included to ensure that we comply with U.S. Treasury Department 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.

©2023 Cynthia Marcotte Stamer. Limited non-exclusive right to republish granted to Solutions Law Press, Inc.™

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Posted by Cynthia Marcotte Stamer

4/21 Deadline For Comments On Proposed HIPAA Administrative Simplification Adoption of Standards for Health Care Attachments Transactions and Electronic Signatures, and Modification To Referral Certification and Authorization Transaction Standard

April 19, 2023

April 21 is the deadline to comment on the Centers for Medicare & Medicaid Services (CMS) National Standards Group (NSG) proposed rule that, if finalized, would adopt standards for “health care attachments” transactions, a standard for electronic signatures to be used in conjunction with health care attachments transactions, and a modification to the standard for the referral certification and authorization transaction (X12 278) published last December.

The April 21, 2023 deadline reflects a 30-day extension from the original deadline date of March 21, 2023. Comments must be received no later than 5 p.m. on April 21.

More Information

We hope this update is helpful. For more information about these or other health or other legal, management or public policy developments, please contact the author Cynthia Marcotte Stamer via e-mail or via telephone at (214) 452 -8297.  

Solutions Law Press, Inc. invites you to receive future updates by registering on our Solutions Law Press, Inc. Website and participating and contributing to the discussions in our Solutions Law Press, Inc. LinkedIn SLP Health Care Risk Management & Operations Group, HR & Benefits Update Compliance Group, and/or Coalition for Responsible Health Care Policy. 

About the Author

Recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” with special recognition LexisNexis® Martindale-Hubbell® as “LEGAL LEADER™ Texas Top Rated Lawyer” in Health Care Law and Labor and Employment Law; as among the “Best Lawyers In Dallas” for her work in the fields of “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, Cynthia Marcotte Stamer is a practicing attorney board certified in labor and employment law by the Texas Board of Legal Specialization and management consultant, author, public policy advocate and lecturer widely-known for 35 plus years of health industry and other management work, public policy leadership and advocacy, coaching, teachings, and publications.

A Fellow in the American College of Employee Benefit Counsel, Chair of the American Bar Association (“ABA”) International Section Life Sciences and Health Committee, Chair-Elect of the ABA TIPS Section Medicine & Law Committee, Past Chair of the ABA Managed Care & Insurance Interest Group, Scribe for the ABA JCEB Annual Agency Meeting with HHS-OCR, past chair of the ABA RPTE Employee Benefits & Other Compensation Group and current co-Chair of its Welfare Benefit Committee, Ms. Stamer is most widely recognized for her decades of pragmatic, leading-edge work, scholarship and thought leadership on health and managed care and employer benefits legal, public policy and operational concerns in the healthcare, employer benefits, and insurance and financial services industries. She speaks and publishes extensively on HIPAA and other related compliance issues.

Ms. Stamer’s work throughout her career has focused heavily on working with health care and managed care, health and other employee benefit plan, insurance and financial services and other public and private organizations and their technology, data, and other service providers and advisors domestically and internationally with legal and operational compliance and risk management, performance and workforce management, regulatory and public policy and other legal and operational concerns.

For more information about Ms. Stamer or her health industry and other experience and involvements, see www.cynthiastamer.com or contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here. 

About Solutions Law Press, Inc.™

Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested in reviewing some of our other Solutions Law Press, Inc.™ resources available here such as:

IMPORTANT NOTICE ABOUT THIS COMMUNICATION

If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information including your preferred e-mail by creating your profile here.

NOTICE: These statements and materials are for general informational and educational purposes only. They do not establish an attorney-client relationship, are not legal advice or an offer or commitment to provide legal advice, and do not serve as a substitute for legal advice. Readers are urged to engage competent legal counsel for consultation and representation in light of the specific facts and circumstances presented in their unique circumstances at any particular time. No comment or statement in this publication is to be construed as legal advice or an admission. The author and Solutions Law Press, Inc.™ reserve the right to qualify or retract any of these statements at any time. Likewise, the content is not tailored to any particular situation and does not necessarily address all relevant issues. Because the law is rapidly evolving and rapidly evolving rules make it highly likely that subsequent developments could impact the currency and completeness of this discussion. The author and Solutions Law Press, Inc.™ disclaim, and have no responsibility to provide any update or otherwise notify anyone of any such change, limitation, or other condition that might affect the suitability of reliance upon these materials or information otherwise conveyed in connection with this program. Readers may not rely upon, are solely responsible for, and assume the risk and all liabilities resulting from their use of this publication. Readers acknowledge and agree to the conditions of this Notice as a condition of their access to this publication. 

Circular 230 Compliance. The following disclaimer is included to ensure that we comply with U.S. Treasury Department 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.

©2023 Cynthia Marcotte Stamer. Limited non-exclusive right to republish granted to Solutions Law Press, Inc.™

Leave a Comment » | Academic medicine, Anti-KickBack, ASC, billing, Child Care, Childcare, Childrens Health Insurance Program, Conditions of Participation, Corporate Compliance, DME, Doctor, E-Prescribing, false claims act, Grants, Health Care, Health Care Finance, Health Care Fraud, Health Care Provider, home health, Hospital, Laws, Life Sciences, Medicaid, Medicare, Medicare Advantage, OIG, pharmaceutical, Prescription Drugs | Permalink
Posted by Cynthia Marcotte Stamer

Pharmaceutical Distributor Danco’s $765,000 False Claims Act Settlement Shows Importance Of Managing Customs Marking and Duty Compliance

April 12, 2023

Danco Laboratories, LLC (“Danco”) will pay $765,000 to resolve Justice Department allegations that it violated the False Claims Act by failing to pay certain customs duties, known as marking duties, on imported pharmaceutical products that lacked markings to identify their country of origin. The Danco prosecution and settlement remind pharmaceutical and other product importers of the importance and ensuring their compliance with product marking, duty and other customs mandates.

The Tariff Act of 1930 requires companies that import foreign products into the United States to mark the country of origin on those products. Importers failing to mark their products are subject to a 10% ad valorem duty.

A settlement announced by the Justice Department on April 12 resolves allegations that Danco failed to mark its sole imported pharmaceutical product, Mifeprex, with the appropriate country of origin, and thereafter violated the False Claims Act by knowingly avoiding the marking duties owed from 2011 through 2019.

The civil settlement includes the resolution of claims brought by the Life Legal Defense Foundation under the qui tam or whistleblower provisions of the False Claims in U.S. ex rel. Life Legal Defense Foundation v. ASD Specialty Healthcare, LLC, et al., No. 21-cv-0088 (E.D. Tex.). The False Claims Act qui tam provisions allow a private party, known as a relator, to file an action on behalf of the United States and receive a portion of any recovery. As part of today’s resolution, the whistleblowers will receive approximately $115,000.

In announcing the settlement, Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division is quoted as saying, “This settlement demonstrates the department’s commitment to ensure that importers properly pay all amounts due under our customs laws.”

“The United States has required imported goods to be marked with their country of origin for generations, so American consumers can use that information in their purchasing decisions,” said Director Frank Russo of the U.S. Customs and Broder Protection (CPB) New York Field Office. “CBP takes the marking laws very seriously, and is pleased to work with our partners to ensure importers adhere to all customs laws.”

Customs marking and duties are only a few of the multitude of additional issues pharmaceutical and other importers must handle in addition to the usual obligations of businesses operating in the U.S. Businesses engaging in these activities should engage and work with experienced legal counsel to avoid costly missteps like Danco’s.

More Information

We hope this update is helpful. For more information about these or other health or other legal, management or public policy developments, please contact the author Cynthia Marcotte Stamer via e-mail or via telephone at (214) 452 -8297.  

Solutions Law Press, Inc. invites you to receive future updates by registering on our Solutions Law Press, Inc. Website and participating and contributing to the discussions in our Solutions Law Press, Inc. LinkedIn SLP Health Care Risk Management & Operations Group, HR & Benefits Update Compliance Group, and/or Coalition for Responsible Health Care Policy. 

About the Author

Recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” with special recognition LexisNexis® Martindale-Hubbell® as “LEGAL LEADER™ Texas Top Rated Lawyer” in Health Care Law and Labor and Employment Law; as among the “Best Lawyers In Dallas” for her work in the fields of “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, Cynthia Marcotte Stamer is a practicing attorney board certified in labor and employment law by the Texas Board of Legal Specialization and management consultant, author, public policy advocate and lecturer widely-known for 35 plus years of health industry and other management work, public policy leadership and advocacy, coaching, teachings, and publications.

A Fellow in the American College of Employee Benefit Counsel, Chair of the American Bar Association (“ABA”) International Section Life Sciences and Health Committee, Chair-Elect of the ABA TIPS Section Medicine & Law Committee, Past Chair of the ABA Managed Care & Insurance Interest Group, Scribe for the ABA JCEB Annual Agency Meeting with HHS-OCR, past chair of the ABA RPTE Employee Benefits & Other Compensation Group and current co-Chair of its Welfare Benefit Committee, Ms. Stamer is most widely recognized for her decades of pragmatic, leading-edge work, scholarship and thought leadership on health and managed care and employer benefits legal, public policy and operational concerns in the healthcare, employer benefits, and insurance and financial services industries. She speaks and publishes extensively on HIPAA and other related compliance issues.

Ms. Stamer’s work throughout her career has focused heavily on working with health care and managed care, health and other employee benefit plan, insurance and financial services and other public and private organizations and their technology, data, and other service providers and advisors domestically and internationally with legal and operational compliance and risk management, performance and workforce management, regulatory and public policy and other legal and operational concerns.

For more information about Ms. Stamer or her health industry and other experience and involvements, see www.cynthiastamer.com or contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here. 

About Solutions Law Press, Inc.™

Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested in reviewing some of our other Solutions Law Press, Inc.™ resources available here such as:

IMPORTANT NOTICE ABOUT THIS COMMUNICATION

If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information including your preferred e-mail by creating your profile here.

NOTICE: These statements and materials are for general informational and educational purposes only. They do not establish an attorney-client relationship, are not legal advice or an offer or commitment to provide legal advice, and do not serve as a substitute for legal advice. Readers are urged to engage competent legal counsel for consultation and representation in light of the specific facts and circumstances presented in their unique circumstances at any particular time. No comment or statement in this publication is to be construed as legal advice or an admission. The author and Solutions Law Press, Inc.™ reserve the right to qualify or retract any of these statements at any time. Likewise, the content is not tailored to any particular situation and does not necessarily address all relevant issues. Because the law is rapidly evolving and rapidly evolving rules make it highly likely that subsequent developments could impact the currency and completeness of this discussion. The author and Solutions Law Press, Inc.™ disclaim, and have no responsibility to provide any update or otherwise notify anyone of any such change, limitation, or other condition that might affect the suitability of reliance upon these materials or information otherwise conveyed in connection with this program. Readers may not rely upon, are solely responsible for, and assume the risk and all liabilities resulting from their use of this publication. Readers acknowledge and agree to the conditions of this Notice as a condition of their access to this publication. 

Circular 230 Compliance. The following disclaimer is included to ensure that we comply with U.S. Treasury Department 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.

©2023 Cynthia Marcotte Stamer. Limited non-exclusive right to republish granted to Solutions Law Press, Inc.™

Leave a Comment » | customs, false claims act, Health Care, Laws, Life Sciences, pharmaceutical, Prescription Drugs | Permalink
Posted by Cynthia Marcotte Stamer

$400K EEOC Settlement Warns Health Care Organizations Against Pregnancy Discrimination

April 12, 2023

Nursing home and rehabilitation operator Symphony Deerbrook, LLC’s $400,000 payment and other relief to settle a pregnancy discrimination lawsuit brought by the U.S. Equal Employment Opportunity Commission (EEOC) warns other health industry and other employers about the risk of imposing special pregnancy notice, doctors, release and testing requirements on pregnant employees.

In its lawsuit, the EEOC charged that Symphony imple­mented a policy requiring employees to inform the company of any pregnancy and to obtain a note from their doctor releasing them to work without restrictions. The EEOC also alleged that Symphony denied employees with pregnancy-related restrictions reasonable accommodations and terminated them though other employees with similar restrictions were provided accommodations.

The EEOC charged these actions violatesd the Pregnancy Discrimination Act of Title VII, 42 U.S.C. 2000e(K) and 2000e-(2)(a)(1) and the Americans with Disabilities Act, 42 U.S.C. § 12112(d)(3)(C)(4)(a).

The Pregnancy Act prohibits employers from discrimination on the basis of pregnancy and requires that employers treat pregnant employees the same as other employees who are similar in their ability or inability to work.

The ADA which prohibits employee medical examinations that are not job related or consistent with business necessity.

The consent decree settling the suit requires Symphony to pay $400,000, which will be distributed among 11 affected employees. The two-and-a-half-year decree enjoins Symphony from discrimination on the basis of pregnancy in the future, including denying pregnant workers job modifications available to other similar employees and requiring pregnant employees to obtain doctor’s notes stating that they can work without restriction.

In 2021, Symphony sold the facility to Pearl of Joliet, who agreed for purposes of settlement to provide anti-discrimination training to all its employees at the facility, to post a notice about the resolution of the law lawsuit, and to report to EEOC certain types of information during the decree’s term. The EEOC has not alleged that Pearl engaged in any discrimination.

Suits and settlements like Symphony’s send a clear warning against discrimination based on pregnancy by health care providers and other employers. Healthcare and other organizations concerned about the safety of pregnant women working in particular positions should ask experienced legal counsel for assistance in managing the occupational health and safety risks, if any for pregnant or other employees without running afoul of discrimination prohibitions.

More Information

We hope this update is helpful. For more information about these or other health or other legal, management or public policy developments, please contact the author Cynthia Marcotte Stamer via e-mail or via telephone at (214) 452 -8297.  

Solutions Law Press, Inc. invites you to receive future updates by registering on our Solutions Law Press, Inc. Website and participating and contributing to the discussions in our Solutions Law Press, Inc. LinkedIn SLP Health Care Risk Management & Operations Group, HR & Benefits Update Compliance Group, and/or Coalition for Responsible Health Care Policy. 

About the Author

Recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” with special recognition LexisNexis® Martindale-Hubbell® as “LEGAL LEADER™ Texas Top Rated Lawyer” in Health Care Law and Labor and Employment Law; as among the “Best Lawyers In Dallas” for her work in the fields of “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, Cynthia Marcotte Stamer is a practicing attorney board certified in labor and employment law by the Texas Board of Legal Specialization and management consultant, author, public policy advocate and lecturer widely-known for 35 plus years of health industry and other management work, public policy leadership and advocacy, coaching, teachings, and publications.

A Fellow in the American College of Employee Benefit Counsel, Chair of the American Bar Association (“ABA”) International Section Life Sciences and Health Committee, Chair-Elect of the ABA TIPS Section Medicine & Law Committee, Past Chair of the ABA Managed Care & Insurance Interest Group, Scribe for the ABA JCEB Annual Agency Meeting with HHS-OCR, past chair of the ABA RPTE Employee Benefits & Other Compensation Group and current co-Chair of its Welfare Benefit Committee, Ms. Stamer is most widely recognized for her decades of pragmatic, leading-edge work, scholarship and thought leadership on health and managed care and employer benefits legal, public policy and operational concerns in the healthcare, employer benefits, and insurance and financial services industries. She speaks and publishes extensively on HIPAA and other related compliance issues.

Ms. Stamer’s work throughout her career has focused heavily on working with health care and managed care, health and other employee benefit plan, insurance and financial services and other public and private organizations and their technology, data, and other service providers and advisors domestically and internationally with legal and operational compliance and risk management, performance and workforce management, regulatory and public policy and other legal and operational concerns.

For more information about Ms. Stamer or her health industry and other experience and involvements, see www.cynthiastamer.com or contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here. 

About Solutions Law Press, Inc.™

Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested in reviewing some of our other Solutions Law Press, Inc.™ resources available here such as:

IMPORTANT NOTICE ABOUT THIS COMMUNICATION

If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information including your preferred e-mail by creating your profile here.

NOTICE: These statements and materials are for general informational and educational purposes only. They do not establish an attorney-client relationship, are not legal advice or an offer or commitment to provide legal advice, and do not serve as a substitute for legal advice. Readers are urged to engage competent legal counsel for consultation and representation in light of the specific facts and circumstances presented in their unique circumstances at any particular time. No comment or statement in this publication is to be construed as legal advice or an admission. The author and Solutions Law Press, Inc.™ reserve the right to qualify or retract any of these statements at any time. Likewise, the content is not tailored to any particular situation and does not necessarily address all relevant issues. Because the law is rapidly evolving and rapidly evolving rules make it highly likely that subsequent developments could impact the currency and completeness of this discussion. The author and Solutions Law Press, Inc.™ disclaim, and have no responsibility to provide any update or otherwise notify anyone of any such change, limitation, or other condition that might affect the suitability of reliance upon these materials or information otherwise conveyed in connection with this program. Readers may not rely upon, are solely responsible for, and assume the risk and all liabilities resulting from their use of this publication. Readers acknowledge and agree to the conditions of this Notice as a condition of their access to this publication. 

Circular 230 Compliance. The following disclaimer is included to ensure that we comply with U.S. Treasury Department 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.

©2023 Cynthia Marcotte Stamer. Limited non-exclusive right to republish granted to Solutions Law Press, Inc.™

Leave a Comment » | ADA, Civil Rights, Employer, Employment law, Health Care, Health Care Provider, Hospital, hospitals, Labor Law, Laws, nursing home | Permalink
Posted by Cynthia Marcotte Stamer

2 Pharmacy FCA Convictions Warn Against Billing For Undelivered Drugs Or Care

April 7, 2023

Two recent health care fraud prosecutions of pharmacists highlight the growing risk pharmacists and others face for billing Medicare or other federal programs for medications not delivered or other prohibited practices. Pharmacists, pharmacies and their related entities or businesses should take steps to ensure their practices and processes prevent aggressive billing or other prohibited practices to mitigate exposures for potential individual and organizational liability under Federal and state criminal and civil health care fraud laws.

California Pharmacist

California pharmacist Paul Mansour faces sentencing to up to 10 years in prison after pleading guilty on April 5 to submitting fraudulent claims to Medicare for prescription drugs that were never dispensed to patients.

According to court documents, Mansour was a pharmacist at a Sierra Madre-based pharmacy, Mansour Partners Inc., doing business as Best Buy Drugs, which he also co-owned. 

Mansour created fake patient profiles in the pharmacy’s digital filing system and added fraudulent prescription medication entries to these fictitious patient files that duplicated prescriptions for medications provided to real patients of the pharmacy. The Justice Department charged Mansour then submitted false and fraudulent claims for the drugs added in the fictitious patient files that had never been dispensed, billing Medicare for the fraudulent prescriptions in the names of real patients of the pharmacy. Between January 2017 and June 2022, the Justice Department claims Mansour caused Medicare to pay the pharmacy between approximately $600,000 and over $1 million as a result of the submission of false and fraudulent claims.

Mansour pleaded guilty on April 5 to one count of health care fraud. He is scheduled to be sentenced on June 28 and faces a maximum penalty of 10 years in prison.

Medicare Clinic & Pharmacy

On April 7, 2023, the Justice Department announced MedCare Clinic & Pharmacy, LLC (MedCare) will pay $213,677 to resolve allegations that it violated the False Claims Act by knowingly billing federal health care programs for medications never dispensed developed from whistleblowers’ claims in U.S. ex rel. Henry v. Pharmacy Holdings, et al., No. 3:20-cv-61 (W.D.N.C.).

The Justice Department alleged MedCare billed both Medicare Part D and North Carolina Medicaid for 200 prescription medications that MedCare never distributed to beneficiaries between January 1, 2016 and December 31, 2019. 

The MedCare prosecution provides insights on some of the factors the Justice Department used to catch the false bills. According to the government’s allegations, inventory records showed that MedCare did not buy enough of these medications to fill all of the prescriptions billed to these health care programs.

The civil settlement includes the resolution of claims brought under the qui tam or whistleblower provisions of the False Claims Act by former MedCare employees Brittanie Henry and Zilphia Adcock. Under those provisions, a private party may file an action on behalf of the United States and receive a portion of any recovery. Henry and Adcock will receive $53,419.43 as their share of the settlement.

Warning To Others

The investigation and resolution of both these matter illustrate the government’s emphasis on combating health care fraud, including those from whistleblowers against pharmacies and others wrongfully billing federal health care programs. Pharmacies and others billing these programs should tighten their defense and controls to avoid exposing themselves to similar prosecutions.

More Information

We hope this update is helpful. For more information about these or other health or other legal, management or public policy developments, please contact the author Cynthia Marcotte Stamer via e-mail or via telephone at (214) 452 -8297.  

Solutions Law Press, Inc. invites you to receive future updates by registering on our Solutions Law Press, Inc. Website and participating and contributing to the discussions in our Solutions Law Press, Inc. LinkedIn SLP Health Care Risk Management & Operations Group, HR & Benefits Update Compliance Group, and/or Coalition for Responsible Health Care Policy. 

About the Author

Recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” with special recognition LexisNexis® Martindale-Hubbell® as “LEGAL LEADER™ Texas Top Rated Lawyer” in Health Care Law and Labor and Employment Law; as among the “Best Lawyers In Dallas” for her work in the fields of “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, Cynthia Marcotte Stamer is a practicing attorney board certified in labor and employment law by the Texas Board of Legal Specialization and management consultant, author, public policy advocate and lecturer widely-known for 35 plus years of health industry and other management work, public policy leadership and advocacy, coaching, teachings, and publications.

A Fellow in the American College of Employee Benefit Counsel, Chair of the American Bar Association (“ABA”) International Section Life Sciences and Health Committee, Chair-Elect of the ABA TIPS Section Medicine & Law Committee, Past Chair of the ABA Managed Care & Insurance Interest Group, Scribe for the ABA JCEB Annual Agency Meeting with HHS-OCR, past chair of the ABA RPTE Employee Benefits & Other Compensation Group and current co-Chair of its Welfare Benefit Committee, Ms. Stamer is most widely recognized for her decades of pragmatic, leading-edge work, scholarship and thought leadership on health and managed care and employer benefits legal, public policy and operational concerns in the healthcare, employer benefits, and insurance and financial services industries. She speaks and publishes extensively on HIPAA and other related compliance issues.

Ms. Stamer’s work throughout her career has focused heavily on working with health care and managed care, health and other employee benefit plan, insurance and financial services and other public and private organizations and their technology, data, and other service providers and advisors domestically and internationally with legal and operational compliance and risk management, performance and workforce management, regulatory and public policy and other legal and operational concerns.

For more information about Ms. Stamer or her health industry and other experience and involvements, see www.cynthiastamer.com or contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here. 

About Solutions Law Press, Inc.™

Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested in reviewing some of our other Solutions Law Press, Inc.™ resources available here such as:

IMPORTANT NOTICE ABOUT THIS COMMUNICATION

If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information including your preferred e-mail by creating your profile here.

NOTICE: These statements and materials are for general informational and educational purposes only. They do not establish an attorney-client relationship, are not legal advice or an offer or commitment to provide legal advice, and do not serve as a substitute for legal advice. Readers are urged to engage competent legal counsel for consultation and representation in light of the specific facts and circumstances presented in their unique circumstances at any particular time. No comment or statement in this publication is to be construed as legal advice or an admission. The author and Solutions Law Press, Inc.™ reserve the right to qualify or retract any of these statements at any time. Likewise, the content is not tailored to any particular situation and does not necessarily address all relevant issues. Because the law is rapidly evolving and rapidly evolving rules make it highly likely that subsequent developments could impact the currency and completeness of this discussion. The author and Solutions Law Press, Inc.™ disclaim, and have no responsibility to provide any update or otherwise notify anyone of any such change, limitation, or other condition that might affect the suitability of reliance upon these materials or information otherwise conveyed in connection with this program. Readers may not rely upon, are solely responsible for, and assume the risk and all liabilities resulting from their use of this publication. Readers acknowledge and agree to the conditions of this Notice as a condition of their access to this publication. 

Circular 230 Compliance. The following disclaimer is included to ensure that we comply with U.S. Treasury Department 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.

©2023 Cynthia Marcotte Stamer. Limited non-exclusive right to republish granted to Solutions Law Press, Inc.™

Leave a Comment » | Health Care | Permalink
Posted by Cynthia Marcotte Stamer

“Rock Doc” Opioid Conviction Reaffirms DOJ Prioritization & Frequent Success of Illegal Opioid Distribution Enforcement

April 4, 2023

A Jackson, Tennessee nurse practitioner known in his community as the “Rock Doc” faces potentially decades of imprisonment following his federal conviction of for illegally prescribing oxycodone, fentanyl and other opioids in a “party-like atmosphere” from his medical practice by a federal jury last week. The conviction highlights the success the Justice Department continues to achieve in its efforts to investigate and prosecute health care and other individuals involved in the illegal distribution of opioids and other controlled substances.

Rock Doc Conviction

The prosecution and conviction of “Rock Doc” Jeffrery Young arose from an investigation conducted by the Department of Justice lead Appalachian Regional Prescription Opioid (ARPO) Strike Force. Based on evidence developed from the joint investigation, the Justice Department charged nurse practitioner Jeffrey Young with using his medical practice, Preventagenix, to illegally prescribe more than one million medically unnecessary controlled substance pills to hundreds of patients, including a pregnant woman and women with whom he was having inappropriate physical relationships. According to court documents, Young maintained a party-like atmosphere at his clinic, and prescribed these drugs at least in part to boost his popularity on social media and promote a self-produced reality TV show pilot based on his self-identified persona, the “Rock Doc.”

After hearing the evidence presented at trial, the federal jury convicted Young of conspiracy to unlawfully distribute controlled substances, maintaining a drug-involved premises, and 13 counts of distributing controlled substances, six of which involved distribution to a pregnant woman.

Scheduled to be sentenced in federal district court on August 3, 2023, Young faces a maximum penalty of 40 years in prison for each count involving distribution to a pregnant woman and 20 years in prison for each of the other counts of conviction. A federal district court judge will decide his actual sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

While Rock Doc’s self-promotional activities may have helped draw attention to his activities, the Justice Department’s opioid enforcement priorities extend beyond media-seeking promoters. In fact, Young’s prosecution and conviction are only one of a multitude of federal prosecutions and convictions achieved by the ARPO since its inception in late 2018 as part of a nationwide fraud and opioid enforcement initiative sponsored by the Justice Department, ARPO has partnered with federal and state law enforcement agencies and U.S. Attorneys’ Offices throughout Alabama, Kentucky, Ohio, Virginia, Tennessee, and West Virginia to prosecute medical professionals and others involved in the illegal prescription and distribution of opioids. Over the past four years, ARPO has charged over 115 defendants, collectively responsible for issuing prescriptions for over 115 million controlled substance dosage units. To date, more than 70 ARPO defendants have been convicted.

DOJ’s Zealous Opioid Enforcement Priorities

Based on the success of the ARPO efforts, the Justice Department Criminal Division announced the formation of the New England Prescription Opioid (NEPO) Strike Force, a joint law enforcement effort to identify and investigate health care fraud schemes in the New England region and to effectively and efficiently prosecute individuals involved in the illegal distribution of prescription opioids and other prescribed controlled substances by partnering with federal and state law enforcement agencies in that region along the lines achieved in the ARPO.  The Justice Department’s aggressive efforts to investigate and prosecute the illegal distribution of opioids and other controlled substances in these regions and across the country have produced a multitude of other federal and state indictments, prosecutions and convictions for illegal distribution of controlled substances and health care fraud. Justice Department enforcement reports confirm it is continuing to make the illegal prescription and distribution of opioids and other controlled substances a priority in 2023. See, e.g., Pharmacist Convicted for $1M Prescription Drug Fraud (February 9, 2023); Nine Arrested for Illegally Distributing 1.5 Million Opioid Pills (February 2, 2023); Doctor Sentenced for Role in Illegally Distributing 6.6 Million Opioid Pills and Submitting $250 Million in False Billings (January 30, 2023); Former Doctor Convicted of Illegal Distribution of Controlled Substances (January 11, 2023).

An example of these additional enforcement actions is the February 2023 arrest of nine individuals in Houston, Texas on charges relating to their alleged involvement in the unlawful distribution of 1.5 million opioid pills and other controlled substances by operating pill mill pharmacies as fronts to obtain opioids in their highest-strength and immediate-release pill form, then allegedly selling the drugs on the black market without the involvement of patients, prescriptions, or doctors to drug traffickers. The Justice Department also charges Lyons and Turner allegedly concealed the drug proceeds using numerous bank accounts and real estate transactions and that Lyons used some of the proceeds to purchase luxury items, including a Rolls Royce, a Ford F-250, and a Mercedes Maybach.

Meanwhile, court documents also claim that starting around December 2020, Dwain Ross and Delores Mackey-Ross, along with licensed pharmacist Ann Nguyen allegedly used pharmacies to illegally distribute and dispense nearly half a million pills of oxycodone and hydrocodone. The Justice Department alleges Dwain Ross and Mackey-Ross, along with David Ross, Kevin Peterson, and Eleanor Marsh also allegedly illegally ordered the opioid potentiators alprazolam, carisoprodol, promethazine with codeine – which are reported to enhance the high from opioids – from a pharmaceutical wholesaler and a pharmaceutical sales representative then allegedly illegally distributed the opioid potentiators in bulk. The Justice Department alleges Dwain Ross and Mackey-Ross also used numerous bank accounts and real estate transactions to conceal their ill-gotten gains and that Dwain Ross used some of the drug proceeds to purchase a Lamborghini.

The pharmacies alleged in the indictments to have been controlled by the defendants’ drug trafficking organizations are K Med Pharmacy, Nex Gen Pharmacy, TX United Pharmacy, Power Center Pharmacy #2, DR Pharmacy, and Nu Care Pharmacy. Several other pharmacies, including P&A Pharmacy and Pearland Holistic Pharmacy, voluntarily surrendered their DEA Registration numbers, which a pharmacy needs to legally purchase pharmaceutical opioids and other controlled substances.

Lyons, Turner, Alfred, Dwain Ross, Mackey-Ross, and Nguyen are each charged with illegal distribution of Schedule II opioids. Dwain Ross, Mackey-Ross, David Ross, Peterson, and Marsh are each charged with the illegal distribution of Schedule IV drugs. Lyons, Turner, Dwain Ross, and Mackey-Ross are also charged with money laundering crimes.  If convicted, Lyons, Turner, Alfred, Dwain Ross, Mackey-Ross, and Nguyen face up to 20 years on the top counts. David Ross and Peterson each face up to five years. Marsh faces up to 10 years if convicted. Court documents allege that over 15 bank accounts, four real properties, and several luxury vehicles – including a Rolls Royce, a Bentley, and a Lamborghini – were involved in, or acquired with proceeds from, the scheme, and are subject to forfeiture if the defendants are convicted. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

Together, the Young prosecution and conviction and other Justice Department enforcement actions send a clear warning against engaging in the illegal distribution of opioids and other controlled substances. Given these priorities and their success, all pharmacies and health care organizations should use care to maintain and administer carefully appropriate controlled substance controls to mitigate their risk of liability for potential abuses within their organization that could trigger Federal Sentencing Guideline or other organizational or individual liability.

More Information

We hope this update is helpful. For more information about these or other health or other legal, management or public policy developments, please contact the author Cynthia Marcotte Stamer via e-mail or via telephone at (214) 452 -8297.  

Solutions Law Press, Inc. invites you to receive future updates by registering on our Solutions Law Press, Inc. Website and participating and contributing to the discussions in our Solutions Law Press, Inc. LinkedIn SLP Health Care Risk Management & Operations Group, HR & Benefits Update Compliance Group, and/or Coalition for Responsible Health Care Policy. 

About the Author

Recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” with special recognition LexisNexis® Martindale-Hubbell® as “LEGAL LEADER™ Texas Top Rated Lawyer” in Health Care Law and Labor and Employment Law; as among the “Best Lawyers In Dallas” for her work in the fields of “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, Cynthia Marcotte Stamer is a practicing attorney board certified in labor and employment law by the Texas Board of Legal Specialization and management consultant, author, public policy advocate and lecturer widely-known for 35 plus years of health industry and other management work, public policy leadership and advocacy, coaching, teachings, and publications.

A Fellow in the American College of Employee Benefit Counsel, Chair of the American Bar Association (“ABA”) International Section Life Sciences and Health Committee, Chair-Elect of the ABA TIPS Section Medicine & Law Committee, Past Chair of the ABA Managed Care & Insurance Interest Group, Scribe for the ABA JCEB Annual Agency Meeting with HHS-OCR, past chair of the ABA RPTE Employee Benefits & Other Compensation Group and current co-Chair of its Welfare Benefit Committee, Ms. Stamer is most widely recognized for her decades of pragmatic, leading-edge work, scholarship and thought leadership on health and managed care and employer benefits legal, public policy and operational concerns in the healthcare, employer benefits, and insurance and financial services industries. She speaks and publishes extensively on HIPAA and other related compliance issues.

Ms. Stamer’s work throughout her career has focused heavily on working with health care and managed care, health and other employee benefit plan, insurance and financial services and other public and private organizations and their technology, data, and other service providers and advisors domestically and internationally with legal and operational compliance and risk management, performance and workforce management, regulatory and public policy and other legal and operational concerns.

For more information about Ms. Stamer or her health industry and other experience and involvements, see www.cynthiastamer.com or contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here. 

About Solutions Law Press, Inc.™

Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested in reviewing some of our other Solutions Law Press, Inc.™ resources available here such as:

IMPORTANT NOTICE ABOUT THIS COMMUNICATION

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NOTICE: These statements and materials are for general informational and educational purposes only. They do not establish an attorney-client relationship, are not legal advice or an offer or commitment to provide legal advice, and do not serve as a substitute for legal advice. Readers are urged to engage competent legal counsel for consultation and representation in light of the specific facts and circumstances presented in their unique circumstances at any particular time. No comment or statement in this publication is to be construed as legal advice or an admission. The author and Solutions Law Press, Inc.™ reserve the right to qualify or retract any of these statements at any time. Likewise, the content is not tailored to any particular situation and does not necessarily address all relevant issues. Because the law is rapidly evolving and rapidly evolving rules make it highly likely that subsequent developments could impact the currency and completeness of this discussion. The author and Solutions Law Press, Inc.™ disclaim, and have no responsibility to provide any update or otherwise notify anyone of any such change, limitation, or other condition that might affect the suitability of reliance upon these materials or information otherwise conveyed in connection with this program. Readers may not rely upon, are solely responsible for, and assume the risk and all liabilities resulting from their use of this publication. Readers acknowledge and agree to the conditions of this Notice as a condition of their access to this publication. 

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