Doc Sentenced to 15 Years for Health Care Fraud

November 16, 2013

Dr. Anthony Stevens Chase faces a 15 month sentence and must pay $360,293 in restitution after pleading guilty to two health care fraud counts.

On October 21, 2011, Jase pled guilty to two counts of health care fraud before Judge James J. Brady, for involvement in two nearly identical schemes to defraud Medicare.

The first conviction arose from Jase’s association Baton Rouge-based company Lobdale Medical Services, which was owned by Beatrice and Young Anyanwu. As part of the scheme to defraud, Sandra Parkman Thompson and others procured the names and personal information of Medicare beneficiaries in and around the New Orleans area and delivered these names to Jase, who then signed false and fraudulent prescriptions for power wheelchairs and other durable medical equipment for which the Medicare beneficiaries had no medical need. Thompson later delivered the fraudulent prescriptions to the Anyanwus, who submitted claims to Medicare through Lobdale Medical Services for the medically unnecessary equipment. The total billings to Medicare by Lobdale Medicare Services exceeded $1,000,000.

The second conviction arose from JASE’s involvement with a New Orleans-based durable medical equipment company known as Psalms 23-DME, which also paid Thompson to deliver prescriptions for wheelchairs and other durable medical equipment. Jase wrote prescriptions for beneficiaries whom he had never seen and who had no need for the equipment prescribed them. As a result, Psalms 23-DME billed Medicare for claims totaling $230,963 using JASE’s provider number.

Beatrice and Young Anyanwu pled guilty to the health care fraud scheme to defraud Medicare as well as the illegal remuneration conspiracy on August 14, 2012.  Theywere sentenced  February 1, 2013. Sandra Parkman Thompson was convicted after a jury trial on August 20, 2012.  She was sentenced on March 14, 2013.

The investigation of Jase was conducted by the Department of Health and Human Services, Office of Inspector General, the Federal Bureau of Investigation, and the Louisiana Department of Justice.  Announcing the sentence, acting U.S. Attorney Walt Green stated, “This case is a great example of how federal and state law enforcement work together on a daily basis to stamp out health care fraud by doctors and others who abuse our health care system in our state.”

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.

Board Certified in Labor & Employment Law, 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 23 years experience advising health industry clients about these and other matters.

Throughout her career, Ms. Stamer has advised and represented health care providers and other health industry clients to establish and administer compliance and risk management policies and to respond to health care, human resources, tax, privacy, safety, antitrust, civil rights, and other laws as well as with internal 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 including a number of programs and publications on OCR Civil Rights rules and enforcement actions. Her insights on these and other related matters 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.

Other Resources

If you found this update of interest, you also may be interested in reviewing some of the other updates and publications authored by Ms. Stamer available including:

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 available at www.solutionslawpress.com.

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.

©2011 Cynthia Marcotte Stamer, P.C.  Non-exclusive license to republish granted to Solutions Law Press. All other rights reserved.


[1] WHD’s announcement of the planned rule notes that this draft shared December 15 remains subject to change before formally published in the Federal Register


DOL Extends Minimum Wage, Overtime Protections To Home Care Workers

September 18, 2013

Health care and other parties employing or otherwise engaging the services of home care workers should review and update their policies and  practices for scheduling, tracking hours worked and paying these workers to ensure that they comply by January 1, 2015 with a new final rule announced by the U.S. Department of Labor’s Wage and Hour Division today (September 18, 2013).  Today’s announcement of the regulatory changes means employers of home care workers can expect to see costs rise and also will join most other U.S. businesses that must worry about getting caught in minimum wage and overtime enforcement traps.

Under the new final rule, the Labor Department extends the Fair Labor Standards Act’s minimum wage and overtime protections to most of the nation’s direct care workers who provide essential home care assistance to elderly people and people with illnesses, injuries, or disabilities beginning January 1, 2015.

The new final rule generally will require that the approximately two million home care workers such as home health aides, personal care aides, and certified nursing assistants will qualify for minimum wage and overtime.  Employers engaging these services also generally will need to keep records and comply with other FLSA requirements with respect to these workers as well.

In anticipation of the rollout of these new protections, the Labor Department is kicking off a public outreach campaign to educate home care workers and their employers about the rule change. The Department will be hosting five public webinars during the month of October and has created a new, dedicated web portal here with fact sheets, FAQs, interactive web tools, and other materials.

The Labor Department’s focus on home workers is an extension of its expanded regulation and enforcement efforts targeting a broad range of health care industry employers. Home care and other health industry employers should act to manage their rising exposures to minimum wage, overtime and other federal and state wage and hour law risks.

New Home Care Worker Rules Effective January 2015

Under the new final rule, the Labor Department extends the Fair Labor Standards Act’s minimum wage and overtime protections to most of the nation’s direct care workers who provide essential home care assistance to elderly people and people with illnesses, injuries, or disabilities beginning January 1, 2015.

The new final rule generally will require that the approximately two million home care workers such as home health aides, personal care aides, and certified nursing assistants will qualify for minimum wage and overtime.  Employers engaging these services also generally will need to keep records and comply with other FLSA requirements with respect to these workers as well.

In anticipation of the rollout of these new protections, the Labor Department is kicking off a public outreach campaign to educate home care workers and their employers about the rule change. The Department will be hosting five public webinars during the month of October and has created a new, dedicated web portal here with fact sheets, FAQs, interactive web tools, and other materials.

The Labor Department’s focus on home workers is an extension of its expanded regulation and enforcement efforts targeting a broad range of health care industry employers. Home care and other health industry employers should act to manage their rising exposures to minimum wage, overtime and other federal and state wage and hour law risks.

The impending change in the treatment of home care workers is part of a larger commitment by the Obama Administration to both expansion and enforcement of the FLSA’s minimum wage and overtime provisions, and a specific program targeting employers in health care and related services industries.

The Obama Administration since taking office has conducted an aggressive campaign seeking to significantly increase the minimum wage under the FLSA and expand other protections.  Along with this proactive regulatory agenda, the Obama Administration also specifically is aggressively targeting health care and other caregiver businesses in its enforcement and audit activities. See, e.g. Home health care company in Dallas agrees to pay 80 nurses more than $92,000 in back wages following US Labor Department investigation; US Department of Labor secures nearly $62,000 in back overtime wages for 21 health care employees in Pine Bluff, Ark.; US Department of Labor initiative targeted toward increasing FLSA compliance in New York’s health care industry; US Department of Labor initiative targeted toward residential health care industry in Connecticut and Rhode Island to increase FLSA compliance; Partners HealthCare Systems agrees to pay 700 employees more than $2.7 million in overtime back wages to resolve U.S. Labor Department lawsuit; US Labor Department sues Kentucky home health care provider to obtain more than $512,000 in back wages and damages for 22 employees; and Buffalo, Minn.-based home health care provider agrees to pay more than $150,000 in back wages following US Labor Department investigation.

Violation of wage and hour laws exposes health care and other employers to significant back pay awards, substantial civil penalties and, if the violation is found to be willful, even potential criminal liability.   Because states all have their own wage and hour laws, employers may face liability under either or both laws.   Coupled with these and other enforcement efforts against health and other caregiver businesses, today’s announcement reflects enforcement risks will continue to rise for employers of home care workers.

In light of the proposed regulatory changes and demonstrated willingness of the Labor Department and private plaintiffs to bring actions against employers violating these rules, health care and others employing home care workers should take well-documented steps to manage their risks.  These employers should both confirm the adequacy of their practices under existing rules, as well as evaluate and begin preparing to respond to the proposed changes to these rules.  In both cases, employers of home care or other health care workers are encouraged to critically evaluate their classification or workers, both with respect to their status as employees versus contractor or leased employees, as well as their characterization as exempt versus non-exempt for wage and hour law purposes.  In addition, given the nature of the scheduled often worked by home care givers, their employers also generally should pay particular attention to the adequacy of practices for recordkeeping.

Enforcement Against Other Industries Shows Risks

Of course, the home care and health care industry are not the only industries that need to worry about FLSA enforcement.   The Obama Administration is very aggressive in its enforcement of wage and hour and overtime laws generally.  For instance, First Republic Bank recently paid $1,009,643.93 in overtime back wages for 392 First Republic Bank employees in California, Connecticut, Massachusetts, New York and Oregon after the Labor Department found the San Francisco-based bank wrongly classified the employees as exempt from the FLSA’s overtime and recordkeeping requirements, resulting in violations of the Fair Labor Standards Act’s overtime and record-keeping provisions.  The Labor Department announced the settlement resulting in the payment on November 27, 2012.  The  settlement resulted from an investigation by the Labor Department that found the San Francisco-based bank wrongly classified the employees as exempt from overtime, resulting in violations of the FLSA’s overtime and record-keeping provisions.

The FLSA requires that covered, nonexempt employees be paid at least the federal minimum wage of $7.25 for all hours worked, plus time and one-half their regular rates, including commissions, bonuses and incentive pay, for hours worked beyond 40 per week. Employers also are required to maintain accurate time and payroll records.

While the FLSA provides an exemption from both minimum wage and overtime pay requirements for individuals employed in bona fide executive, administrative, professional and outside sales positions, as well as certain computer employees, job titles do not determine the applicability of this or other FLSA exemptions. In order for an exemption to apply, an employee’s specific job duties and salary must meet all the requirements of the department’s regulations. To qualify for exemption, employees generally must meet certain tests regarding their job duties and be paid on a salary basis at not less than $455 per week.

Investigators found that First Republic Bank failed to consider the FLSA’s criteria that allow certain administrative and professional employees to be exempt from receiving overtime pay. In fact, the employees were entitled to overtime compensation at one and one-half times their regular rates for hours worked over 40 in a week. Additionally, the bank failed to include bonus payments in nonexempt employees’ regular rates of pay when computing overtime compensation, in violation of the act. Record-keeping violations resulted from the employer’s failure to record the number of hours worked by the misclassified employees.

“It is essential that employers take the time to carefully assess the FLSA classification of their workforce,” said Secretary of Labor Hilda L. Solis in the Labor Department’s announcement of the settlement. “As this investigation demonstrates, improper classification results in improper wages and causes workers real economic harm.”

FLSA Violations Generally Costly;  Enforcement Rising

The enforcement record of the Labor Department confirms that employers that improperly treat workers as exempt from the FLSA’s overtime, minimum wage and recordkeeping requirements run a big risk.  The Labor Department and private plaintiffs alike regularly target employers that use aggressive worker classification or other pay practices to avoid paying minimum wage or overtime to workers.  Under the Obama Administration, DOL officials have made it a priority to enforce overtime, record keeping, worker classification and other wage and hour law requirements.  See e.g.,  Boston Furs Sued For $1M For Violations Of Fair Labor Standards Act; Record $2.3 Million+ Backpay Order; Minimum Wage, Overtime Risks Highlighted By Labor Department Strike Force Targeting Residential Care & Group Homes; Review & Strengthen Defensibility of Existing Worker Classification Practices In Light of Rising Congressional & Regulatory Scrutiny; 250 New Investigators, Renewed DOL Enforcement Emphasis Signal Rising Wage & Hour Risks For EmployersQuest Diagnostics, Inc. To Pay $688,000 In Overtime Backpay In an effort to further promote compliance and enforcement of these rules,  the Labor Department is using  smart phone applications, social media and a host of other new tools to educate and recruit workers in its effort to find and prosecute violators. See, e.g. New Employee Smart Phone App New Tool In Labor Department’s Aggressive Wage & Hour Law Enforcement Campaign Against Restaurant & Other Employers.    As a result of these effort, employers violating the FLSA now face heightened risk of enforcement from both the  Labor Department and private litigation.

Employers Should Strengthen Practices For Defensibility

 To minimize exposure under the FLSA, employers should review and document the defensibility of their existing practices for classifying and compensating workers under existing Federal and state wage and hour laws and take other actions to minimize their potential liability under applicable wages and hour laws.  Steps advisable as part of this process include, but are not necessarily limited to:

  • Audit of each position current classified as exempt to assess its continued sustainability and to develop documentation justifying that characterization;
  • Audit characterization of workers obtained from staffing, employee leasing, independent contractor and other arrangements and implement contractual and other oversight arrangements to minimize risks that these relationships could create if workers are recharacterized as employed by the employer receiving these services;
  • Review the characterization of on-call and other time demands placed on employees to confirm that all compensable time is properly identified, tracked, documented, compensated and reported;
  • Review of existing practices for tracking compensable hours and paying non-exempt employees for compliance with applicable regulations and to identify opportunities to minimize costs and liabilities arising out of the regulatory mandates;
  • If the audit raises questions about the appropriateness of the classification of an employee as exempt, self-initiation of proper corrective action after consultation with qualified legal counsel;
  • Review of existing documentation and record keeping practices for hourly employees;
  • Exploration of available options and alternatives for calculating required wage payments to non-exempt employees; and
  • Re-engineering of work rules and other practices to minimize costs and liabilities as appropriate in light of the regulations and enforcement exposures.

Because of the potentially significant liability exposure, employers generally will want to consult with qualified legal counsel before starting their risk assessment and assess risks and claims within the scope of attorney-client privilege to help protect the ability to claim attorney-client privilege or other evidentiary protections to help shelter conversations or certain other sensitive risk activities from discovery under the rules of evidence.

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.

Board Certified in Labor & Employment Law, 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 23 years experience advising health industry clients about these and other matters.

Throughout her career, Ms. Stamer has advised and represented health care providers and other health industry clients to establish and administer compliance and risk management policies and to respond to health care, human resources, tax, privacy, safety, antitrust, civil rights, and other laws as well as with internal 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 including a number of programs and publications on OCR Civil Rights rules and enforcement actions. Her insights on these and other related matters 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.

Other Resources

If you found this update of interest, you also may be interested in reviewing some of the other updates and publications authored by Ms. Stamer available including:

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 available at www.solutionslawpress.com.

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.

©2013 Cynthia Marcotte Stamer, P.C.  Non-exclusive license to republish granted to Solutions Law Press. All other rights reserved.


[1] WHD’s announcement of the planned rule notes that this draft shared December 15 remains subject to change before formally published in the Federal Register


CMS To Host Provider Webinar To Celebrate National Health IT Week

September 13, 2013

In celebration of the third annual National Health IT Week is September 16-20, the Centers for Medicare & Medicaid Services (CMS) will host several webinars and launching new eHealth tools and resources that it intends to help providers participate in eHealth programs.  These programs may be of interest to providers as well as payers who are interested in what providers are doing to use eHealth tools.

Details of Webinar

The eHealth Provider Webinar will be held on Thursday, September 19th from 12:00 p.m. to 1:30 p.m. ET.  CMS plans to present an overview of the eHealth programs and its eHealth initiative—an initiative that aligns health IT and electronic standards programs on:

  • Administrative Simplification
  • eRx Incentive Program
  • ICD-10
  • Quality Measurement

A portion of the webinar will also be dedicated to Q&A.

Registration Information

Space is limited.  Register now to secure your spot for the eHealth Provider WebinarOnce registration is complete, you will receive a follow-up email with step-by-step instructions on how to log-in to the webinar.  Listserv messages are sent prior to each webinar session with registration information.

If you’d like to view past webinars, the PowerPoint presentations and recordings can now be accessed on the Resources page of the eHealth website.  For more information about CMS’ eHealth Initiatives, visit the CMS eHealth website for the latest news and updates on CMS’ eHealth initiatives.

For More Information Or Assistance

If you need assistance responding to this invitation or with other health industry regulatory, enforcement or other developments, reviewing or tightening your policies and procedures, conducting training or audits, responding to or defending an investigation or other enforcement action or with other health care related risk management, compliance, training, 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 25 years experience advising health industry clients about these and other matters. Her experience includes extensive work advising, representing and training health industry and other clients on HIPAA and other privacy, data protection and breach and other related matters.  She also advises 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. Scribe for the ABA JCEB annual Technical Sessions meeting with OCR for the past three years, Ms. Stamer also is recognized for her extensive publications and programs including numerous highly regarding publications and programs on HIPAA and other privacy and data security concerns as well as a wide range of other workshops, programs and publications on other compliance, operational and risk management, and other health industry matters. Ms. Stamer also has extensive other public policy and regulatory experience with HHS and other U.S. federal and state agencies as well as internationally. Her insights on these and other related matters 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 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:

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 or updating your profile here. For important information about this communication click here.  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.  

©2013 Cynthia Marcotte Stamer, P.C.  Non-exclusive license to republish granted to Solutions Law Press.  All other rights reserved.


Tell HHS What You Think-Comment On HHS Strategic Plan Now!

September 9, 2013

Health care providers, health plans, employers and others concerned about the regulatory and enforcement activities of the Department of Health & Human Services (HHS) can make their concerns known by speaking up now.  Share your input on the draft HHS strategic plan that will guide HHS’ regulatory and enforcement agenda for the next 4 years.

Every 4 years, HHS updates its strategic plan, which describes its work to address complex, multifaceted, and ever-evolving health and human service issues, including:

  • Health Care
  • Research and Innovation
  • Prevention and Wellness

HHS is inviting public input on the draft HHS Strategic Plan for FY 2014-2018. The comment period is open until October 15, 2013.  Individuals or organizations wishing to respond to this invitation can read the HHS Strategic Plan FY 2014-2018 (Draft) and submit your comments several ways including:

For More Information Or Assistance

If you need assistance responding to this invitation for comment or other health industry regulatory, enforcement or other developments, reviewing or tightening your policies and procedures, conducting training or audits, responding to or defending an investigation or other enforcement action or with other health care related risk management, compliance, training, 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 25 years experience advising health industry clients about these and other matters. Her experience includes extensive work advising, representing and training health industry and other clients on HIPAA and other privacy, data protection and breach and other related matters.  She also advises 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. Scribe for the ABA JCEB annual Technical Sessions meeting with OCR for the past three years, Ms. Stamer also is recognized for her extensive publications and programs including numerous highly regarding publications and programs on HIPAA and other privacy and data security concerns as well as a wide range of other workshops, programs and publications on other compliance, operational and risk management, and other health industry matters. Ms. Stamer also has extensive other public policy and regulatory experience with HHS and other U.S. federal and state agencies as well as internationally. Her insights on these and other related matters 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 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:

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 or updating your profile here. For important information about this communication click here.  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.  

©2013 Cynthia Marcotte Stamer, P.C.  Non-exclusive license to republish granted to Solutions Law Press.  All other rights reserved.


OCR To Covered Entities: Learn From WellPoint $1.7 Settlement

July 12, 2013

WellPoint $1.7 M HIPAA Settlement Expensive Lesson On HIPAA Risks Of Leaving PHI Too Accessible In Web-Based Applications

With health care providers, health care organizations and others increasingly using Web-based applications and portals in operations and patient communications, managed care company WellPoint Inc. (WellPoint) is learning a $1.7 million lesson about the importance of ensuring Web-based applications and portals that allow access to members or other consumers protected health information (PHI) incorporate the administrative, technical and other security safeguards required by the Health Insurance Portability & Accountability Act (HIPAA) Privacy and Security rules.

The U.S. Department of Health and Human Services (HHS) Office of Civil Rights (OCR) announced late yesterday (July 11, 2013) that WellPoint has agreed to pay $1.7 million to settle OCR charges that WellPoint violated the HIPAA Security Rule and left the electronic protected health information (ePHI) of 612,402 individuals accessible to unauthorized individuals over the Internet by failing to implement appropriate administrative and technical safeguards in its Web-based applications. See WellPoint HIPAA Settlement Press Release.

Web-based application use is increasingly popular among health care providers, health plans, employers and others.   Health care providers use them for health care operations, as well as patient engagement and communication tools.  Employers and health plans use them both in plan administration and as member tools.

The WellPoint settlement shows that managed care and other health insurers, health plans and their employer or other sponsors, health care providers, health care clearinghouses (Covered Entities) and their business associates can’t let their enthusiasm for the ease of use of these products to compromise the security of PHI.

Rather, health care providers and other Covered Entities, employer and other  health plan sponsors, their business associates, and the Web and other technology developers, providers and consultants marketing products, services or other solutions to these organizations should learn from WellPoint’s hard lesson to ensure that current and future Web-based applications, portals and other information system components that are or could be used to provide access to PHI incorporate the Security Rule safeguards both when originally implemented and with each subsequent upgrade.

HIPAA Privacy, Security & Breach Notification Rules Require PHI Safeguards & Other Protections

The Breach Notification Rule added to HIPAA under the Health Information Technology for Economic and Clinical Health, or HITECH Act requires HIPAA-covered entities to notify OCR, affected individuals and the media promptly of a breach of “unsecured protected health information” (UPHI) impacting more than 500 individuals.  For smaller breaches, the Breach Notification Rule still requires prompt notice to impacted individuals, but allows Covered Entities to disclose the breach to OCR as part of an annual breach report and to forego notification to the media. UPHI generally includes any PHI, whether or not ePHI that is not either secured or destroyed in the manner described by the Breach Notification Rules.

In addition to the Breach Notification Rule, most Covered Entities and their business associates also are subject to state laws or regulations that impose similar or additional breach notification and other standards and responsibilities on the protection of personal health or other data including required notification and other responses following a breach of the security of UPHI or other PHI.

WellPoint’s $1.7 HIPAA Security Mistake

WellPoint’s $1.7 million settlement lesson resulted from an OCR investigation started in response to a breach report WellPoint submitted to comply with the Breach Notification Rules.

According to OCR, the Breach Report indicated that security weaknesses in an online application database left the electronic protected health information (ePHI) of 612,402 individuals accessible to unauthorized individuals over the Internet.

OCR says its investigation indicated that WellPoint did not implement appropriate administrative and technical safeguards as required under the HIPAA Security Rule.  According to OCR, WellPoint did not:

  • Adequately implement policies and procedures for authorizing access to the on-line application database;
  • Perform an appropriate  technical evaluation in response to a software upgrade to its information systems; or
  • Have technical safeguards in place to verify the person or entity seeking access to electronic protected health information maintained in its application database.

As a result, OCR concluded that from October 23, 2009 until March 7, 2010, WellPoint impermissibly disclosed the ePHI of 612,402 individuals by allowing access to their ePHI maintained in the application database. This data included names, dates of birth, addresses, Social Security numbers, telephone numbers and health information.

Under the resulting WellPoint HIPAA Resolution Agreement, WellPoint must pay OCR a $1.7 million settlement payment as well as take a series of corrective actions to correct the deficiencies in its policies and practices that resulted in the reported breach to minimize future risks of breaches resulting from these deficient.

OCR Warns Learn From WellPoint’s Experience

All Covered Entities and their business associates and leaders should heed the lesson sent to them by OCR in announcing the WellPoint settlement and take appropriate steps other to ensure that appropriate policies and safeguards are adopted and applied in selecting and implementing future application or system upgrades, as well as review existing systems to ensure that the security of existing systems and applications have incorporated and apply the requisite safeguards.

OCR made clear that the WellPoint settlement is intended to send a message to Covered Entities and their business associates to ensure that these steps are appropriately taken.  The settlement announcement states:

This case sends an important message to HIPAA-covered entities to take caution when implementing changes to their information systems, especially when those changes involve updates to Web-based applications or portals that are used to provide access to consumers’ health data using the Internet. Whether systems upgrades are conducted by covered entities or their business associates, HHS expects organizations to have in place reasonable and appropriate technical, administrative and physical safeguards to protect the confidentiality, integrity and availability of electronic protected health information – especially information that is accessible over the Internet.

The settlement announcement also reminds business associates that OCR will begin holding them directly accountable along with their Covered Entity clients for complying with many HIPAA requirements beginning in September, stating:

Beginning Sept. 23, 2013, liability for many of HIPAA’s requirements will extend directly to business associates that receive or store protected health information, such as contractors and subcontractors.

Take Documented Steps To Show You Hear OCR’s Messages

Covered entities and their business associates and leaders, and vendors and consultants offering services or products to them should take care to conduct careful and well-documented reviews and implement corrective actions necessary to show their applications and systems, policies and practices reflect their strong commitment and action to appropriately protect PHI in accordance with the expectations shown by the WellPoint HIPAA Resolution Agreement and other OCR settlements, OCR’s updated HIPAA regulations, and other OCR and industry information.

In addition to the guidance set forth in OCR’s Resolution Agreements with WellPoint and other Covered Entities, revisions to OCR’s Privacy and Security Rules in OCR’s 2013 restatement of its regulations here cause all Covered Entities and their business associates conduct a well-documented reassessment of the adequacy of their existing policies, systems and practices and steps taken to redress any uncovered gaps.

Among other things, the 2013 Regulations:

  • Revise OCR’s HIPAA regulations to reflect the HITECH Act’s amendment of HIPAA to add the contractors and subcontractors of health plans, health care providers and health care clearinghouses that qualify as business associates to the parties directly responsible for complying with and subject to HIPAA’s civil and criminal penalties for violating HIPAA’s Privacy, Security, and Breach Notification rules;
  • Update previous interim regulations implementing HITECH Act breach notification rules that require Covered Entities including business associates to give specific notifications to individuals whose PHI is breached, HHS and in some cases, the media when a breach of unsecured information happens;
  • Update interim enforcement guidance OCR previously published to implement increased penalties and other changes to HIPAA’s civil and criminal sanctions enacted by the HITECH Act;
  • Implement HITECH Act amendments to HIPAA that tighten the conditions under which Covered Entities are allowed to use or disclose PHI for marketing and fundraising purposes and prohibit Covered Entities from selling an individual’s health information without getting the individual’s authorization in the manner required by the 2013 Regulations;
  • Update OCR’s rules about the individual rights that HIPAA requires that Covered Entities to afford to individuals who are the subject of PHI used or possessed by a Covered Entity to reflect tightened requirements enacted by the HITECH Act  that allow individuals to order their health care provider not to share information about their treatment with health plans when the individual pays cash for the care and to clarify that individuals can require Covered Entities to provide electronic PHI in electronic form;
  • Revise the regulations to reflect amendments to HIPAA made as part of the Genetic Information Nondiscrimination Act of 2008 (GINA) which added genetic information to the definition of PHI protected under the HIPAA Privacy Rule and prohibits health plans from using or disclosing genetic information for underwriting purposes; and
  • Clarifies and revises other provisions to reflect other interpretations and information guidance that OCR has issued since HIPAA was passed and to make certain other changes that OCR found appropriate based on its experience administering and enforcing the rules.

Covered Entities were required to begin complying with most of these rule changes earlier this year.  However, delayed compliance dates in the 2013 Regulations allowed Covered Entities and Business Associates to delay updates to pre-existing business associate agreements and the date that OCR would begin enforcing many of the HIPAA Rules directly against business associates to September 23, 2013.

Even without the necessity Settlements like that involving WellPoint, these 2013 Regulations make it imperative that Covered Entities to take the necessary steps to conduct an appropriate and well-documented review  and update as needed their systems, policies and practices,  business associate agreements, training and documentation.

With self-disclosures of breaches mandated by the Breach Notification Rules and OCR audits and enforcement rising, careful documentation of these activities and its analysis is necessary so that Covered Entities can be in a position to show OCR that the risk assessments required by the Security Rules was conducted as well as the efforts and commitment of the Covered Entity or business associate in the event of a breach investigation or audit. Yesterday’s WellPoint HIPAA announcement is just the latest in an ever-growing list of examples of the expensive consequences that can result if a Covered Entity or business associate cannot produce this documentation in response to an OCR audit or investigation. See, e.g.  OCR Hits Alaska Medicaid For $1.7M+ For HIPAA Security Breach; OCR Audit Program Kickoff Further Heats HIPAA Privacy Risks$1.5 Million HIPAA Settlement Reached To Resolve 1st OCR Enforcement Action Prompted By HITECH Act Breach Report; HIPAA Heats Up: HITECH Act Changes Take Effect & OCR Begins Posting Names, Other Details Of Unsecured PHI Breach Reports On Website; Providence To Pay $100000 & Implement Other SafeguardsIn contrast, the OCR website also provides a multitude of examples showing how the ability to produce documentation and other evidence showing diligent efforts to comply has helped other covered entities that fall under OCR investigation to avoid or mitigate serious sanctions.

Coupled with statements by OCR about its intolerance, the WellPoint and other settlements provide a strong warning to covered entities of the need to carefully and appropriately manage their HIPAA encryption and other Privacy and Security responsibilities. Covered entities are urged to heed these warning by strengthening their HIPAA compliance and adopting other suitable safeguards to minimize HIPAA exposures.

In response to the 2013 Regulations and these expanding exposures, all Covered Entities should review critically and carefully the adequacy of their current HIPAA Privacy and Security compliance policies, monitoring, training, breach notification and other practices taking into consideration OCR’s investigation and enforcement actions against WellPoint and others, emerging litigation and other enforcement data; their own and reports of other security and privacy breaches and near misses; and other developments to decide if additional steps are necessary or advisable.  Covered Entities and business associates should document this review in a manner that both reflects the scope and diligence of their activities including relevant considerations and decision-making about identified potential susceptibilities and reasoning about the adequacy of safeguards and other solutions.

Because this review is likely to uncover existing or past deficiencies or breaches, most covered entities and business associates will want to discuss with qualified legal counsel the planned assessment within the scope of attorney-client privilege to understand when and how to conduct the assessment to preserve options to claim attorney-client privilege to protect sensitive work product or discussions that may result in the course of the investigation within the attorney-client communication, work product or other evidentiary privileges, evaluation of the adequacy and appropriateness of the audit and resulting investigations and its documentation, and other assistance in strengthening the defensibility of compliance and risk management activities.

For Help With Compliance, Risk Management, Investigations, Policy Updates Or Other Needs

If you need help with HIPAA and other health and health plan related regulatory policy or enforcement developments, or to review or respond to these or other human resources, employee benefit, or other compliance, risk management, enforcement or management concerns, the author of this update, attorney Cynthia Marcotte Stamer may be able to help.

Nationally recognized for her extensive work, publications and leadership on HIPAA and other privacy and data security concerns, Ms. Stamer has extensive experience representing, advising and assisting health care providers, health plans, their business associates and other health industry clients to establish and administer medical and other privacy and data security, employment, employee benefits, and to handle other compliance and risk management policies and practices; to investigate and respond to OCR and other enforcement and other compliance, public policy, regulatory, staffing, and other operations and risk management concerns. She regularly designs and presents HIPAA and other risk management, compliance and other training for health care providers, health plans and their sponsors, their workforces, professional associations and others.

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 presentations and programs include a wide range of compliance, risk management and other workshops, programs and publications.

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:

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 or updating your profile here. For important information concerning this communication click here. 

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.

©2013 Cynthia Marcotte Stamer, P.C.  Non-exclusive license to republish granted to Solutions Law Press.  All other rights reserved.


Hollywood Pavillion & Other Fraud Convictions Show Individuals Risk Prison Time For Health Care Fraud Involvement

July 6, 2013

Convictions Show Growing Fraud Enforcement Risks Reach Broadly To Broad Range Of Actors

Do you love your health care organization enough to go to jail?  With federal and state prosecutors stepping up health care fraud investigation and enforcement, this is a question that individuals leading, working or investing in health care organizations increasingly need to seriously consider.

As federal and state officials continue to ramp up their war on health care fraud, the ever-growing list of criminal convictions of individuals found to have participate in or tolerated prohibited billing, referral or other activities prohibited under federal or state health care fraud laws are intended to both punish the guilty and send a strong message to others throughout the industry: Don’t Do The Crime If You Don’t Want To Serve The Time!

Hollywood Pavilion Convictions

The July 28 federal jury conviction of four individuals for their involvement in nearly $70 million of fraudulent Medicare billings by Hollywood Pavilion (HP), a Miami-area mental health care hospital is the latest case in point.  The successful prosecutions shows again the readiness of the Justice Department to prosecute individuals at all levels of organizations for their participation in health care fraud activities even after obtaining criminal convictions, civil settlements, and program disqualification or other administrative consequences against the health care organizations, their leaders, employees and others that participate illegal schemes that defraud federal health care programs like Medicare, private health insurance plans or both.

In the verdicts announced July 28 stemmed from the Justice Department’s prosecution of the  former Chief Executive Officer, the former in-patient clinical director, former head of  intensive outpatient care and former director of physical therapy for various health care fraud, wire fraud and other charges for their participation in a massive scheme that attempted to defraud the United States of approximately $70 million by taking advantage of Medicare beneficiaries.

Federal officials originally announced charges against the four defendants as part of high-profile sting and takedown by the Medicare Fraud Strike Force of 91 individuals across the nation for their alleged involvement in submitting approximately $430 million in false billings to federal health care programs. See Indictment of 91 Shows Growing Heath Care Fraud Enforcement Risk.

The convictions resulted after the Justice Department tried the defendants with illegally paying bribes to a network of patient recruiters, falsifying documents and other criminal conduct in violation of federal health care fraud, wire fraud and other laws.  Based on evidence presented at trial, the federal jury found:

  • Karen Kallen-Zury, 59, and Daisy Miller, 44, each guilty of one count of conspiracy to commit wire fraud and health care fraud, five substantive counts of wire fraud and two substantive counts of health care fraud;
  • Michele Petrie, 64, guilty of one count of conspiracy to commit wire fraud and health care fraud and three substantive counts of wire fraud;
  • Kallen-Zury, Miller, Petrie and a fourth defendant, Christian Coloma, 49, of one count of conspiracy to pay bribes in connection with Medicare; and
  • Kallen-Zury and Coloma also each guilty of five substantive counts of paying bribes.

The convictions resulted after Federal prosecutors charged the four defendants and one other individual with participating and aiding HP to illegally bill Medicare for nearly $70 million for services that were not properly rendered, for patients that did not qualify for the services being billed and for claims for patients procured through bribes and kickbacks from at least 2003 through at least August 2012.

At trial, Federal prosecutors claimed that the defendants and their co-conspirators caused the submission of false and fraudulent claims to Medicare through HP, a state-licensed psychiatric hospital located in Hollywood that purportedly provided, among other things, inpatient psychiatric care and intensive outpatient psychiatric care.  Prosecutors claimed the defendants paid illegal bribes and kickbacks to patient brokers in order to obtain Medicare beneficiaries as patients at HP who did not qualify for psychiatric treatment, then illegally submitted claims to Medicare for those patients who were procured through bribes and kickbacks.

Among other things, Federal prosecutors charged and introduced evidence that:

  • Karen Kallen-Zury, the CEO and registered agent of HP, attempted to conceal the payment of bribes and kickbacks by creating false documents to make it appear as if legitimate services were being rendered;
  • Miller, the clinical director of HP’s inpatient facility, and Petrie, the head of HP’s intensive outpatient program, facilitated the payment of bribes to patient recruiters and oversaw the fraudulent admissions and treatment of unqualified patients;
  • Coloma, the director of physical therapy for an entity associated with HP, facilitated the payment of bribes and kickbacks, and he supervised the creation of false documents to conceal the bribery scheme.

All four defendants now are awaiting sentencing.

Zealous Investigation & Prosecution Part of National Anti-Health Care Fraud Campaign

These and other convictions provide tangible proof of the growing success of the efforts to zealously investigate and prosecute health fraud by the Justice Department, HHS and other federal officials under their joint the Health Care Fraud Prevention & Enforcement Action Team (HEAT), Medicare Fraud Strike Force and other anti-fraud efforts.   The joint Department of Justice-HHS Medicare Fraud Strike Force that lead to these charges and convictions is a multi-agency team of federal, state and local investigators designed to combat Medicare fraud through the use of Medicare data analysis techniques and an increased focus on community policing.  Since its announcement, the Strike Force has used the combined resources of agents from the FBI, HHS-Office of Inspector General (HHS-OIG), multiple Medicaid Fraud Control Units, and other state and local law enforcement agencies to investigate and prosecute a rising number of organizations and individuals throughout the industry for alleged violations of Federal health care fraud prohibitions.

In recent years, Congress has amended the False Claims Act and enacted other reforms that give the Justice Department and other federal officials working in these anti-fraud efforts new tools that they are using to strengthen the effectiveness of their anti-fraud investigation and prosecution efforts.  See Health Care Fraud Enforcement Packs New Heat.

Empowered by these and other new tools, the Justice Department and other participants in the HEAT and Medicare Fraud Strike Force increasingly are successful in prosecuting and convicting health care providers and others for participating in activities and schemes that violate federal or state health care fraud, referral, anti-kickback or other federal or state laws.  See, e.g., North Texas Medical Supply Company Owner Indicted For Health Care Fraud Now Also Charged With Immigration Fraud; Former Houston Texas Physician Gets 70 Month Prison Sentence For Fraud ConvictionEuless Healthcare Corporation Owner, Associates Face Conspiracy And Health Care Fraud Charges For Alleged Submission Of $700,000+ In Fraudulent Health Care Claims; Former Manager 9th Employee Sentenced For Involvement In Maxim Medicare False Claims Action; Detroit-Area Foot Doctor Pleads Guilty to Medicare Fraud Scheme; Merck To Pay $950 Million To Settle Vioxx® Off-Label Marketing ChargesIndeed, since the jury rendered its July 28 verdict, Justice Department officials already have announced several other prosecutorial successes.  See, e.g.,Los Angeles Medical Supply Company Owner Sentenced to Five Years in Prison for $8.4 Million Medicare Fraud Scheme; Los Angeles-Area Doctor and Patient Recruiter Plead Guilty to Participating in a Power Wheelchair Scheme That Defrauded Medicare of Over $10.1 MillionOwner of Rehabilitation Facility Pleads Guilty to Mail Fraud Charge; Local Oncology Practice Sentenced To Pay Millions for Medicare Fraud

In addition to criminal prosecutions, the HHS Centers for Medicare and Medicaid Services, working with the HHS-OIG, are using a wide range of new and old tools in their campaign against what they perceive as fraudulent providers and to deter other perceived aggressiveness by health care providers and organizations.  See e.g., U.S. to use software to crack down on Medicare, Medicaid, CHIP fraud;   Health Care Fraud Enforcement Packs New Heat; OIG Shares Key Insights On When Owners, Officers & Managers Face OIG Program Exclusion Based On Health Care Entity Misconduct; OIG Launch of Health Care Fraud “Most Wanted” List Sign of Enforcement Risks; CMS Delegated Lead Responsibility For Development of New Affordable Care Act-Required Medicare Self-Referral Disclosure Protocol; HHS announces Rules Implementing Tools Added By Affordable Care Act to Prevent Federal Health Program Fraud.

The effectiveness of these Federal efforts to deter, find and prosecute false claims and other perceived abuses of Federal health care law has been significantly strengthened since Congress passed the Patient Protection & Affordable Care Act (Affordable Care Act).  Among other things, ACA empowered HHS to:

  • Suspend payments to providers and suppliers based on credible allegations of fraud in Medicare and Medicaid;
  • Impose a temporary moratorium on Medicare, Medicaid, and CHIP enrollment on providers and suppliers when necessary to help prevent or fight fraud, waste, and abuse without impeding beneficiaries’ access to care.
  • Strengthen and build on current provider enrollment and screening procedures to more accurately assure that fraudulent providers are not gaming the system and that only qualified  health care providers and suppliers are allowed to enroll in and bill Medicare, Medicaid and CHIP;
  • Terminate providers from Medicaid and CHIP when they have been terminated by Medicare or by another state Medicaid program or CHIP;
  • Require provider compliance programs, now required under the Affordable Care Act, that will ensure providers are aware of and comply with CMS program requirements.

See HHS announces Rules Implementing Tools Added By Affordable Care Act to Prevent Federal Health Program Fraud.

Act To Manage Risks

In response to the growing emphasis and effectiveness of Federal officials in wielding these and other tools 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 presentations and programs include a wide range of compliance, risk management and other workshops, programs and publications.

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:

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 or updating your profile here. For important information concerning this communication click here. 

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.

©2013 Cynthia Marcotte Stamer, P.C.  Non-exclusive license to republish granted to Solutions Law Press.  All other rights reserved.


55 Hospitals To Pay $35M+ To Settle FCA Claims Charges On Kyphoplasty Procedures

July 6, 2013

Whistleblowers Played A Big Role, Collectively Will Receive $5.5 Million From Settlement Proceeds

Fifty-five hospitals in 21 states will pay a total of more than $34 million to settle Justice Department allegations that the health care facilities submitted false claims to Medicare for a minimally-invasive procedure used to treat certain spinal fractures that often are due to osteoporosis known as “kyphoplasty.”

The settlement stems from charges by the Justice Department and Department of Health & Human Services (HHS) Office of Inspector General (OIG) that the settling hospitals frequently billed Medicare for performing kyphoplasty procedures on the more costly inpatient basis, rather than an outpatient basis, in order to increase their Medicare billings  when the kyphoplasty could have been performed safely and effectively as an outpatient procedure without any need for a more costly hospital admission.

With the settlements announced July 1,  the Justice Department says it has now reached settlements with more than 100 hospitals totaling approximately $75 million to resolve allegations that they mischarged Medicare for kyphoplasty procedures.   Justice Department officials credited whistleblowers with helping it to identify the charged misconduct in virtually all of the cases.  They collectively will receive an estimated $5.5 million of the total of $34 million to be paid under the settlements.

 55 Settlements Impact Systems & Providers Across The Nation

According to the Justice Department’s July 1 announcement of the settlements, the settling facilities, and the amounts they have agreed to pay, include 23 hospitals affiliated with HCA Inc., Nashville, TN, who have agreed to pay a total of $7,145,842.72.  These include:

  •  Aventura Hospital & Medical Center, Aventura, FL
  • Capital Regional Medical Center, Tallahassee, FL
  • Coliseum Medical Center,  Macon, GA
  • Coliseum Northside Hospital, Macon, GA
  • Conroe Regional Medical Center, Conroe, TX
  • Denton Regional Medical Center, Denton, TX
  • Doctors Hospital of Sarasota,  Sarasota, FL
  • Edmond Regional Medical Center, Edmond, OK
  • Fawcett Memorial Hospital, Port Charlotte, FL
  • Fort Walton Beach Medical Center, Fort Walton Beach, FL
  • Garden Park Medical Center, Gulf Port, MS
  • JFK Medical Center, Atlantis, FL
  • Los Robles Regional Medical Center, Thousand Oaks, CA
  • North Florida Regional Medical Center,  Gainesville, FL
  • Northlake Medical Center,  Tucker, GA
  • Oklahoma University Medical Center,  Oklahoma City, OK
  • Palmyra Medical Center,  Albany, GA
  • Redmond Regional Medical Center,  Rome, GA
  • Southwest Florida Regional Medical Center,  Fort Myers, FL
  • St. Lucie Medical Center,  Port Saint Lucie, FL
  • Summit Medical Center,  Hermitage, TN
  • Sunrise Hospital & Medical Center,  Las Vegas, NV
  • Wesley Medical Center, Wichita, KS

Also 6 hospitals affiliated with Lifepoint Hospitals, Inc., Brentwood, TN, have agreed to pay a total of $2,522,502.69.  These include:

  • Andalusia Regional Hospital, Andalusia, AL
  • Jackson Purchase Medical Center, Mayfield, KY
  • Lake Cumberland Regional Hospital,  Somerset, KY
  • Minden Medical Center,  Minden, LA
  • Russellville Hospital, Russellville, AL
  • Western Plains Medical Complex,  Dodge City, KS

Also, 5  hospitals affiliated with Trinity Health, Livonia, MI, have agreed to pay a total of $3,910,017.53.  These include:

  • Mercy Medical Center, – Dubuque,  Dubuque, IA
  • Mercy Medical Center – Sioux City,  Sioux City, IA
  • St. Joseph Mercy Hospital,  Pontiac, MI
  • Mercy Health Partners,  Muskegon, MI
  • Mount Carmel New Albany Surgical Hospital,  New Albany, OH

Justice Department officials also report that 4hospitals affiliated with Morton Plant Mease BayCare Health System, Clearwater, FL, have agreed to pay a total of $2,378,325.45.  These include:

  • Morton Plant Hospital,  Clearwater, FL
  • Morton Plant North Bay Hospital,  New Port Richey, FL
  • Mease Dunedin Hospital, Dunedin, FL
  • Mease Countryside Hospital, Safety Harbor, FL

Justice Department officials also say 3  hospitals affiliated with Baptist Memorial Health Care Corporation, Memphis, TN, have agreed to pay a total of $691,168.  These are:

  • Baptist Memorial Hospital-Golden Triangle, North Columbus, MS
  • Baptist Memorial Hospital-Collierville,  Collierville, TN
  • Baptist Memorial Hospital-Memphis,  Memphis, TN

In addition, Justice Department officials say 2 hospitals affiliated with Covenant Health, Knoxville, TN, have agreed to pay a total of $1,845,641.74.  These are  Parkwest Medical Center in  Knoxville, TN  and Methodist Medical Center of Oak Ridge in Oak Ridge, TN.

Meanwhile, 2 hospitals affiliated with Bayhealth Medical Center, Newark, DE, also reportedly have agreed to pay a total of $1,115,306.37.  These are Bayhealth Kent General Hospital,  Dover, DE  and Bayhealth Milford Memorial Hospital,  Milford, DE.

In addition to these hospitals, the following facilities have agreed to pay the following settlements:

  • Atrium Medical Center, Middletown, OH, has agreed to pay $4,232,992.50
  • Altru Health System, Grand Forks, ND, has agreed to pay $1,492,690
  • Cedars Sinai Medical Center, Los Angeles, CA, has agreed to pay $1,485,846
  • Des Peres Hospital, St. Louis, MO, has agreed to pay $900,000
  • Mount Sinai Medical Center, Miami, FL, has agreed to pay $1,846,194.00
  • New England Baptist Hospital, Boston, MA, has agreed to pay $374,814.48
  • St. Anne’s Hospital, Fall River, MA, has agreed to pay $552,745
  • The Queen’s Medical Center, Honolulu, HI, has agreed to pay $1,055,249.57
  • Trover Health System, Madisonville, KY, has agreed to pay $1,162,837
  • Wayne Memorial Hospital, Goldsboro, NC, has agreed to pay $1,250,000.

In addition to today’s settlement, the government previously settled with Medtronic Spine LLC, the corporate successor to Kyphon Inc., for $75 million to settle allegations that the company defrauded Medicare by counseling hospital providers to perform kyphoplasty procedures as inpatient rather than outpatient procedures.

According to Tom O’Donnell, Special Agent in Charge of the Office of Investigations of the HHS-OIG New York Regional Office,  “The settlements related to kyphoplasty billing that have been reached with over 100 hospitals represent one of the largest and most successful multi-party health care investigations in the nation.”

While these settlements relate specifically to kyphoplasty procedures, they send a message impacting all procedures and practice areas that they risk OIG and/or Justice Department prosecution if procedures are performed in a most costly manner to increase reimbursement which is not medically necessary.  Justice Department officials warned health care providers  that Justice and OIG will act “Whenever hospitals knowingly overcharge Medicare, critically needed resources are wasted and health costs are driven up.”

Whistleblower Involvement Played Big Role

As in other recently announced settlement agreements, see e.g., Whistleblower Collects $2.7 M of $14.5M Sound Inpatient Physicians Overbilling Settlement, whistleblower involvement played a key role in helping OIG and Justice to identify and prosecute the alleged misconduct.

According to the Justice Department, all but four of the settling facilities announced today were named as defendants in a qui tam, or whistleblower, lawsuit brought under the False Claims Act, which permits private citizens to bring lawsuits on behalf of the United States and receive a portion of the proceeds of any settlement or judgment awarded against a defendant.  The lawsuit was filed in federal district court in Buffalo, N.Y., by Craig Patrick and Charles Bates.  Mr. Patrick is a former reimbursement manager for Kyphon, and Mr. Bates was formerly a regional sales manager for Kyphon in Birmingham, Ala.  The whistleblowers will receive a total of approximately $5.5 million from the settlements.

 Mitigate Risks With Effective Oversight of Both Documentation & Operations

As Acting Assistant Attorney General for the Civil Division Stuart F. Delery noted in the settlement announcement. “Physicians who participate in Medicare and other federal health care programs must document and bill for their services accurately and honestly.” With qui tam and other whistleblower participation, the Justice Department, HHS and other federal and state fraud investigators go beyond merely challenging whether the medical record documentation supports the charges billed to question whether the medical record itself accurately reflects the care in fact delivered by relying upon testimony of employees or other “insiders” often with an axe to grind against the provider.

To mitigate these exposures, health care providers clearly should work diligently both to ensure that their billing and other compliance programs accurately, honestly and completely document the care provided and code and bill for those services in accordance with the currently applicable federal program rules.  While these compliance and risk management programs are indispensable components of any effective health care fraud compliance program, health care providers also should recognize that the effectiveness of their health care fraud and other compliance program also may depend on the effectiveness of their operational and workforce oversight and management.  Along with effective billing and other fraud detection and compliance programs, providers also need effective medical quality and records documentation, provider and workforce performance and management, investigations and other management programs.

As a key element of these activities, providers should constantly be on watch for evidence of gaps between the medical and billing documentation and the factual realities looking at broad range of sources. Providers should target these activities to cover both specific medical documentation, coding and care, and other operational indicators that could show a problem.  With qui tam and other whistleblower claims rising, however, providers should keep in mind that mere auditing of records and billing patterns alone often fails to uncover key evidence of potential concerns.

To help identify potential areas of scrutiny, providers should carefully monitor and examine the adequacy of their compliance and risk management agreements against corporate integrity agreements with other providers who have reached settlements with the Department of Justice, HHS Office of Inspector General or other agencies like the TranS1 Inc. Corporate Integrity Agreement .

Health care providers also should take into account a plethora of other potential indicators including but not limited to peer review and quality assurance data, deficient as well as inexplicably exceptional medical record or other record keeping documentation, hotline, exist interview and other workforce feedback, disagreements among providers in patterns of care, political and interpersonal differences, and a host of other indicators that could show a valid compliance concern or a developing hostility that could become the incentive for a whistleblower or other complaint. Providers should document these and other efforts to investigate, monitor and redress potential concerns  In addition, providers also should guard against qui tam, retaliation and other claims by ensuring that their human resources, peer review, credentialing, background and other investigations, privacy and other operational activities are designed, documented to be both legally compliant and defensible.

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 25 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 compliance and risk management policies and to respond to DEA 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 including a number of programs and publications on OCR Civil Rights rules and enforcement actions. Her insights on these and other related matters 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 ask 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.

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 or updating your profile here. For important information about this communication click 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:

 

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 or updating your profile here. For important information about this communication click here. 

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.   ©2013 Cynthia Marcotte Stamer, P.C.  Non-exclusive license to republish granted to Solutions Law Press, Inc..  All other rights reserved.


Whistleblower Collects $2.7 M of $14.5M Sound Inpatient Physicians Overbilling Settlement

July 6, 2013

Former employee-turned Whistleblower Craig Thomas will collect $2.7 million out of the $14.5 million settlement that Sound Inpatient Physicians Inc. (SIP) will pay $14.5 million to settle allegations that it overbilled Medicare and other federal health care programs under a settlement announced by the Justice Department on July 3, 2013.  The SIP announcement comes the same day the Justice Department announced medical device manufacturer TranS1 Inc., now known as Baxano Surgical Inc., will pay $6 million to resolve whistleblower-prompted FCA allegations that TranS1 Inc. caused health care providers to submit false claims to Medicare and other federal health care programs for minimally-invasive spine surgeries.

Both the SIP and TranS1 Inc. charges and settlement clearly show the ever-growing risk of Justice Department prosecution that providers face when billing Medicare or other government programs for care beyond the level delivered and documented in the medical record. The litigation and resulting settlement also show the too-often underappreciated rule that employees, vendors and other whistleblowing insiders increasingly play in the initiation and success of these prosecutions and how they impact the ability of providers charged with fraud to prove they have billed Medicare or other federal health plans accurately and honestly for services actually delivered in the manner documented in the record and in accordance with applicable Federal program rules.

To mitigate these exposures, health care providers both should strengthen their health care medical record documentation, billing and other fraud and compliance programs and their employee, vendor and other workforce relations and management processes.

Former SIP Employee’s Qui Tam Claim Prompted Suit

The settlement resolves charges that SIP fraudulently inflated billings to government programs brought in U.S. ex rel. Craig Thomas v. Sound Inpatient Physicians, Inc. and Robert A. Bessler, Civil Action No. C09-5301RBL (W.D. Wash.) that initially came to the government’s attention through a lawsuit filed by former SIP employee, Craig Thomas, under the qui tam, or whistleblower, provisions of the False Claims Act  (FCA).  The FCA allows private citizens to bring civil actions on behalf of the government and share in any recovery.  Thomas will receive $2.7 million of the $14.5 million settlement for exposing Sound Physicians’ inflated claims.

In the lawsuit, the Justice Department alleged that SIP, a Tacoma, Washington-based employer of more than 700 hospitalists and post-acute physicians at 70 hospitals and a growing network of post-acute facilities in 22 states, between 2004 and 2012, knowingly submitted inflated claims to federal health benefits programs for its hospitalist employees for higher and more expensive levels of service than documented by hospitalists in patient medical records.

The SIP civil settlement illustrates the growing reliance on whistleblowers and other FCA tools by the Federal government in its rising campaign against false claims and other health care fraud by physicians, hospitals and other health care providers under the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative announced in May 2009 by Attorney General Eric Holder and Health and Human Services (HHS) Secretary Kathleen Sebelius.   Since January 2009, the Justice Department claims to have recovered a total of more than $14.7 billion through FCA cases, with more than $10.7 billion of that amount recovered in cases involving fraud against federal health care programs.

TranS1 Inc.  Whistleblower Gets $1M+ Out of $6M Settlement

Whistleblower claims also prompted the charges and settlement announced against medical device manufacturer TranS1 Inc. The Justice Department announced July 3 that TranS1 Inc. has agreed to pay the United States $6 million to resolve allegations under the FCA.  Whistleblower Kevin Ryan, whose qui tam claim prompted the investigation that lead to the settlement will collect $1,020,000 from the settlement.

The settlement resolves Justice Department charges developed out of the qui tam action of a former employee that TranS1 knowingly caused health care providers to submit claims with incorrect diagnosis or procedure codes for minimally-invasive spine fusion surgeries using Trans1’s AxiaLIF System.  That device was developed as alternative to invasive spine fusion surgeries.  The United States alleges that TranS1 improperly counseled physicians and hospitals to bill for the AxiaLIF System by using incorrect and inaccurate codes intended for more invasive spine fusion surgeries.  The Justice Department alleged that, as a result, health care providers received greater reimbursement than they were entitled to for performing the minimally-invasive AxiaLIF procedures.

The Justice Department also claimed TranS1 knowingly paid illegal remuneration to certain physicians for participating in speaker programs and consultant meetings intended to induce them to use TranS1 products, in violation of the Federal Anti-Kickback Statute, 42 U.S.C.  § 1320a-7b(b), and thereby caused false claims to be submitted to federal health care programs.  The Anti-Kickback Statute prohibits offering or paying remuneration to induce referrals of items or services covered by federally-funded programs and is intended to ensure that a physician’s medical judgments are not compromised by improper financial incentives and are based solely on the best interests of the patient.

In addition, the Justice Department alleged that TranS1 promoted the sale and use of its AxiaLIF System for uses that were not approved or cleared by the U.S. Food and Drug Administration, including use in certain procedures to treat complex spine deformity, and which were thus not covered by federal health care programs.

“A medical device manufacturer violates the law when it advises physicians and hospitals to report the wrong codes to federal health insurance programs in order to increase reimbursement rates,” said Rod J. Rosenstein, U.S. Attorney for the District of Maryland.  “Health care providers are required to bill federal health care programs truthfully for the work they perform.”

As part of the settlement, TranS1 has agreed to enter into a corporate integrity agreement with the Office of Inspector General of the Department of Health and Human Services.  That agreement provides for procedures and reviews to be put in place to avoid and promptly detect conduct similar to that which gave rise to this matter.

Mitigate Risks With Effective Oversight of Both Documentation & Operations

As Acting Assistant Attorney General for the Civil Division Stuart F. Delery noted in the settlement announcement. “Physicians who participate in Medicare and other federal health care programs must document and bill for their services accurately and honestly.” With qui tam and other whistleblower participation, the Justice Department, HHS and other federal and state fraud investigators go beyond merely challenging whether the medical record documentation supports the charges billed to question whether the medical record itself accurately reflects the care in fact delivered by relying upon testimony of employees or other “insiders” often with an axe to grind against the provider.

To mitigate these exposures, health care providers clearly should work diligently both to ensure that their billing and other compliance programs accurately, honestly and completely document the care provided and code and bill for those services in accordance with the currently applicable federal program rules.  While these compliance and risk management programs are indispensable components of any effective health care fraud compliance program, health care providers also should recognize that the effectiveness of their health care fraud and other compliance program also may depend on the effectiveness of their operational and workforce oversight and management.  Along with effective billing and other fraud detection and compliance programs, providers also need effective medical quality and records documentation, provider and workforce performance and management, investigations and other management programs.

As a key element of these activities, providers should constantly be on watch for evidence of gaps between the medical and billing documentation and the factual realities looking at broad range of sources. Providers should target these activities to cover both specific medical documentation, coding and care, and other operational indicators that could show a problem.  With qui tam and other whistleblower claims rising, however, providers should keep in mind that mere auditing of records and billing patterns alone often fails to uncover key evidence of potential concerns.

To help identify potential areas of scrutiny, providers should carefully monitor and examine the adequacy of their compliance and risk management agreements against corporate integrity agreements with other providers who have reached settlements with the Department of Justice, HHS Office of Inspector General or other agencies like the TranS1 Inc. Corporate Integrity Agreement .

Health care providers also should take into account a plethora of other potential indicators including but not limited to peer review and quality assurance data, deficient as well as inexplicably exceptional medical record or other record keeping documentation, hotline, exist interview and other workforce feedback, disagreements among providers in patterns of care, political and interpersonal differences, and a host of other indicators that could show a valid compliance concern or a developing hostility that could become the incentive for a whistleblower or other complaint. Providers should document these and other efforts to investigate, monitor and redress potential concerns  In addition, providers also should guard against qui tam, retaliation and other claims by ensuring that their human resources, peer review, credentialing, background and other investigations, privacy and other operational activities are designed, documented to be both legally compliant and defensible.

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 25 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 compliance and risk management policies and to respond to DEA 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 including a number of programs and publications on OCR Civil Rights rules and enforcement actions. Her insights on these and other related matters 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 ask 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.

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 or updating your profile here. For important information about this communication click 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:

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 or updating your profile here. For important information about this communication click here. 

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.   ©2013 Cynthia Marcotte Stamer, P.C.  Non-exclusive license to republish granted to Solutions Law Press, Inc..  All other rights reserved.


OIG Urges CMS To Step Up Efforts To Recover “Overpayments”

July 2, 2013

The Department of Health & Human Services (HHS) Office of Inspector General (OIG) is recommending that the Centers for Medicare & Medicaid Services (CMS) step-up efforts to collect Medicare overpayments to providers currently considered uncollectable because the provider has failed to repay overpayments identified and demanded by CMS six or more months after CMS demands repayment.  The recommendations made in OIG’s Medicare’s Currently Not Collectible Overpayments Report (Report) reflect the ever-growing emphasis of HHS on reducing Medicare and other federal program costs by aggressive enforcement of Medicare and other federal regulations against providers.  While CMS has not concurred with all of OIG’s recommendations in the Report, providers can expect CMS to further tighten its overpayment processes in response to these and other OIG recommendations.

According to the Report, CMS identifies billions of dollars in alleged Medicare overpayments to health care providers each year. In fiscal year (FY) 2010, overpayments totaled $9.6 billion. While CMS identifies these amounts, the Report notes that CMS does not recover all overpayments. Under CMS current accounting policies, CMS classifies overpayments for which the provider has not repaid at least 6 months after the due date on the Medicare demand letter as “currently not collectible” (CNC).  CMS does not report these CNC amounts in CMS’s annual financial statements because it considers these amounts unlikely to be recovered.

The Report summaries the results of an OIG study of these CNC amounts.   In the study, OIG requested details from CMS about CNC overpayments in FY 2010 and summary financial data for FYs 2007 to 2010. CMS provided most of the data from its Healthcare Integrated General Ledger Accounting System (HIGLAS). OIG also surveyed CMS and all its claims processing contractors to identify (1) hindrances to debt collection and (2) strategies to reduce the number and dollar amount of overpayments that become CNC.

According to the Report, CMS reported $543 million in new CNC overpayments across all contractors in FY 2010. However, CMS provided detailed information on $69 million in CNC overpayments for only seven contractors. Citing contractor transitions, CMS did not provide detailed data for the remaining 32 contractors. For 54 percent of CNC overpayments associated with the seven contractors, the provider type was missing in HIGLAS. For the seven contractors, 97 percent of FY 2010 CNC overpayments were not recovered. According to contractors, inaccurate provider contact information delays or prevents some overpayment demand letters from reaching providers. In addition, CMS and contractors reported that expanding the types of provider identifiers used to recover payments could improve debt collection efforts.

Based on these findings, OIG recommended that CMS should:

  • Ensure the HIGLAS variable for provider type is populated for all overpayments,
  • Ensure that demand letters are mailed to the contacts and addresses identified by the provider, and
  • Use tax identification numbers and provider transaction access numbers in addition to national provider numbers for the collection of overpayments.

According to OIG, CMS partially concurred with the first recommendation, did not agree with our second recommendation, and concurred with our third recommendation.  Accordingly, at minimum, providers should expect that CMS will step up use of tax identification and provider transaction access numbers in tracking down and collecting overpayments demanded by OIG.

The Report is just one of a plethora of activities that OIG, CMS and other HHS agencies, alone or in conjunction with the Department of Justice and other federal and state agencies are conducting in their campaign to control Medicare and other federal program costs by targeting provider reimbursements.With health care fraud and other billing audits and enforcement rising, hospitals and other health care providers should heed these reports as continuing reminders to tighten their billing practices to ensure defensibility in the event of an audit or other enforcement action.

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 25 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 compliance and risk management policies and to respond to DEA 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 including a number of programs and publications on OCR Civil Rights rules and enforcement actions. Her insights on these and other related matters 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 ask 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.

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 or updating your profile here. For important information about this communication click 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:

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 or updating your profile here. For important information concerning this communication click here. 

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.   ©2013 Cynthia Marcotte Stamer, P.C.  Non-exclusive license to republish granted to Solutions Law Press.  All other rights reserved.


OCR Makes Technical Corrections To HIPAA Omnibus Final Rule; September 2013 Enforcement Deadline Looming

June 7, 2013

The Department of Health & Human Services Office of Civil Rights (OCR) is publishing Technical Corrections  (Technical Corrections) to the Modifications to the HIPAA Privacy, Security, Enforcement, and Breach Notifications Rules Under the Health Information Technology for Economic and Clinical Health Act and the Genetic Information Nondiscrimination Act; Other Modifications to the HIPAA Rules; Final Rule (Omnibus Rule) previously published on January 25, 2013.  The Technical Corrections will appear in the June 7, 2013 Federal Register. Physicians, hospitals, clinics and other health care providers, health plans, health care clearinghouses (Covered Entities) and their business associates should take into account the Technical Corrections as they rush to update business associate agreements, policies, practices, training and other HIPAA compliance to comply with the Omnibus Rule changes by the September 2013 deadline.

Technical Corrections To Omnibus Rule Released

OCR published the Omnibus Rule to implement changes to the HIPAA Privacy, Security, Enforcement, and Breach Notification Rules (“the HIPAA Rules”) enacted by the Health Information Technology for Economic and Clinical Health Act (“the HITECH Act”) and section 105 of Title I of the Genetic Information Nondiscrimination Act of 2008, as well as to address public comment received on the interim final Breach Notification Rule and to other changes to the HIPAA Rules.  The Technical Corrections are scheduled for publication in the Federal Register on June 7, 2013.

The Technical Corrections correct various typographical errors and other oversights in the Omnibus Regulations as originally published.   While many of these corrections have limited material impact, certain corrections do have substantive implications.  For instance, by correcting errors in references to other provisions of the Omnibus Regulations, the Technical Corrections clarify that the authority of OCR to extend the time pursuant to § 160.508(c)(5) for violations before February 18, 2009 also applies to violations occurring on or after February 18, 2009, as there is for violations occurring prior to February 18, 2009.

Covered Entities and their business associates will need to review and take into account the Technical Corrections as they work to review and update their  policies and practices for handling and disclosing personally identifiable health care information (“PHI”) in response to the Omnibus Rule.

Get Moving To Update HIPAA Compliance For New Omnibus Rule Requirements As Amended By Technical Corrections

Covered Entities and their business associates have a lot to accomplish between now and September to update their business associates and comply with other changes made by the Omnibus Rule by its September 2013 deadline. Among other things, the Omnibus Regulations:

  • Revise OCR’s HIPAA regulations to reflect the HITECH Act’s amendment of HIPAA to add the contractors and subcontractors of health plans, health care providers and health care clearinghouses that qualify as business associates to the parties directly responsible for complying with and subject to HIPAA’s civil and criminal penalties for violating HIPAA’s Privacy, Security, and Breach Notification rules;
  • Update previous interim regulations implementing HITECH Act breach notification rules that require Covered Entities including business associates to give specific notifications to individuals whose PHI is breached, HHS and in some cases, the media when a breach of unsecured information happens;
  • Update interim enforcement guidance OCR previously published to implement increased penalties and other changes to HIPAA’s civil and criminal sanctions enacted by the HITECH Act;
  •  Implement HITECH Act amendments to HIPAA that tighten the conditions under which Covered Entities are allowed to use or disclose PHI for marketing and fundraising purposes and prohibit Covered Entities from selling an individual’s health information without getting the individual’s authorization in the way required by the Omnibus Regulations;
  • Update OCR’s rules about the individual rights that HIPAA requires that Covered Entities to afford to individuals who are the subject of PHI used or possessed by a Covered Entity to reflect tightened requirements enacted by the HITECH Act  that allow individuals to order their health care provider not to share information about their treatment with health plans when the individual pays cash for the care and to clarify that individuals can require Covered Entities to provide electronic PHI in electronic form;
  • Revise the regulations to reflect amendments to HIPAA made as part of the Genetic Information Nondiscrimination Act of 2008 (GINA) which added genetic information to the definition of PHI protected under the HIPAA Privacy Rule and prohibits health plans from using or disclosing genetic information for underwriting purposes; and
  • Clarifies and revises other provisions to reflect other interpretations and information guidance that OCR has issued since HIPAA was passed and to make certain other changes that OCR found appropriate based on its experience administering and enforcing the rules.

Liability & Enforcement Risks Heighten Need To Act To Review & Update Policies & Practices

The restated rules in the Omnibus Rule make it imperative that Covered Entities review the revised rules carefully and updated their policies, practices, business associate agreements, training and documentation to comply with the updated requirements and other enforcement and liability risks.  OCR even prior to the regulations has aggressively investigated and enforced the HIPAA requirements.  See, e.g.,  OCR Hits Alaska Medicaid For $1.7M+ For HIPAA Security Breach; OCR Audit Program Kickoff Further Heats HIPAA Privacy Risks$1.5 Million HIPAA Settlement Reached To Resolve 1st OCR Enforcement Action Prompted By HITECH Act Breach Report; HIPAA Heats Up: HITECH Act Changes Take Effect & OCR Begins Posting Names, Other Details Of Unsecured PHI Breach Reports On Website; Providence To Pay $100000 & Implement Other Safeguards.

Coupled with statements by OCR about its intolerance, the HONI and other settlements provide a strong warning to covered entities of the need to carefully and appropriately manage their HIPAA encryption and other Privacy and Security responsibilities. Covered entities are urged to heed these warning by strengthening their HIPAA compliance and adopting other suitable safeguards to minimize HIPAA exposures.

All Covered Entities should review critically and carefully the adequacy of their current HIPAA Privacy and Security compliance policies, monitoring, training, breach notification and other practices taking into consideration OCR’s investigation and enforcement actions, emerging litigation and other enforcement data; their own and reports of other security and privacy breaches and near misses; and other developments to decide if additional steps are necessary or advisable.   In response to these expanding exposures, all covered entities and their business associates should review critically and carefully the adequacy of their current HIPAA Privacy and Security compliance policies, monitoring, training, breach notification and other practices taking into consideration OCR’s investigation and enforcement actions, emerging litigation and other enforcement data; their own and reports of other security and privacy breaches and near misses, and other developments to decide if tightening their policies, practices, documentation or training is necessary or advisable.

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 25 years experience advising health industry clients about these and other matters.

A board certified labor and employment attorney widely known for her extensive and creative knowledge and experience with health plan privacy and data security matters, Ms. Stamer serves as the scribe for the ABA JCEB Annual Technical Session meeting with OCR each May and has worked, spoken and published extensively on these and other privacy and data security concerns and controls.  Extensively published and a popular speaker on HIPAA and other data security matters, Ms. Stamer works extensively with health care providers, health plans, employers, insurance and financial services, technology and other clients on privacy, data seurity and other privacy and cybercrime concerns.  She also serves as the Scribe for the ABA JCEB Agency Techical Sessions Meetings with the Office of Civil Rights which occur each May in Washington, D.C.

Ms. Stamer has extensive experience advising and assisting health care providers and other health industry clients to establish and administer compliance and risk management policies and to respond to DEA 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 including a number of programs and publications on OCR Civil Rights rules and enforcement actions. Her insights on these and other related matters 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 ask 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.

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 or updating your profile here. For important information about this communication click 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:

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 or updating your profile here. For important information concerning this communication click here. 

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.   ©2013 Cynthia Marcotte Stamer, P.C.  Non-exclusive license to republish granted to Solutions Law Press.  All other rights reserved.


National Provider Calls: Medicare Shared Savings Program Application Process — Register Now

May 24, 2013

Medicare Fee For Service (FFS) providers and others interested in participating in Accountable Care Organizations (ACOs) should consider participating in the two National Provider Calls that the Centers for Medicare & Medicaid Services (CMS) plans to host on the Medicare Shared Savings Program (Shared Savings Program) outlined in final regulations published October 20, 2011 of the Affordable Care Act.

  • On Thursday, June 20, CMS subject matter experts will provide an overview and updates to the Shared Savings Program application process for the January 1, 2014 start date. A question and answer session will follow the presentations.
  • On Thursday, July 18, CMS subject matter experts will be available to answer questions about the Shared Savings Program and application process for the January 1, 2014 start date.

 The Shared Savings Program Application web page has important information, dates, and materials on the application process. CMS encourages call participants  to review the application and materials before the call.

To receive call-in information, interested participants must register for the call on the CMS Upcoming National Provider Calls registration website. Registration will close at 12pm on the day of the call or when available space has been filled.  Since CMS says it will make no exceptions, interested persons should plan to register as soon as possible.

Following the conference calls, CMS plans to post the presentation on the FFS National Provider Calls web page. In addition, a link to the slide presentation will be emailed to all registrants on the day of the call. 

CMS says certain continuing education credit may be awarded for participation in certain CMS National Provider Calls. Visit the Continuing Education Credit Information web page to learn more.

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 25 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 compliance and risk management policies and to respond to DEA 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 including a number of programs and publications on OCR Civil Rights rules and enforcement actions. Her insights on these and other related matters 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 ask 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

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 or updating your profile here. For important information about this communication click 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:

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 or updating your profile here. For important information concerning this communication click here. 

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.   ©2013 Cynthia Marcotte Stamer, P.C.  Non-exclusive license to republish granted to Solutions Law Press.  All other rights reserved.


Feds Arrest 36 More California & Florida Providers On Defrauding Medicare Of More than $66 Million

May 16, 2013

The Federal Medicare Fraud Strike Force’s arrest of 36 providers in California and Florida highlights again the continuing and growing zeal of federal health care fraud investigation and enforcement efforts.  On May 14, 2013 the Justice Department announced it arrested and charged with Medicare fraud 12 defendants in Los Angeles here and 24 South Florida residents here in fraud enforcement actions on opposite coasts.  The charges show the continuing commitment by Federal officials to find an prosecute health care fraud.

Florida Arrests

In South Florida, Federal officials announced charges against 24 South Florida residents for their alleged participation in various schemes to defraud Medicare out of more than $45,299,935 million. The charges in South Florida are part of a nationwide takedown by Medicare Fraud Strike Force operations in eight cities that resulted in charges against 89 individuals, including doctors, nurses and other licensed professionals, for their alleged participation in Medicare fraud schemes involving approximately $223 million in false billings.

Specifically, the South Florida cases announced as part of the nationwide Medicare Fraud Strike Force takedown include the following:

  • U.S. v. Emilio Amador, Cristobal Gonzalez, Eduims Mora, Jose Contreras, and Elizabeth Monteagudo, where five defendants are charged with conspiracy to receive health care kickbacks and substantive counts of receiving kickbacks in connection with a federal health care program. According to the indictment, the defendants participated in a scheme involving Caring Nurse Home Health, Corp. and Good Quality Home Health, Inc. The defendants allegedly supplied patients to Caring Nurse and/or Good Quality in exchange for kickbacks and bribes. Caring Nurse and Good Quality, in turn, fraudulently billed Medicare for approximately $50 million for home health services that were not provided and/or were not medically necessary. If convicted, the defendants face up to five years for each count.
  • United States v. Rafael Meana and Janet Farigola, where Defendants Rafael Meana and Janet Farigola are charged with conspiracy to commit health care fraud and several substantive counts of health care fraud. According to the indictment, the defendants participated in a scheme involving Lord’s Medical & Rehab Center, Inc. (Lords), a medical clinic that purportedly provided Medicare Advantage beneficiaries with medical items and services. From February 2010 through July 2011, Meana and Farigola allegedly caused Lord’s to submit approximately $5,497,047 in Medicare claims falsely claiming that health care benefits and services were medically necessary and had been provided to Medicare beneficiaries. As a result of the submission of these claims, Medicare paid Lord’s approximately $2,240,134. If convicted, the defendants face up to ten years in prison for each count of health care fraud.
  • United States v. Jose Moran, Rafael Meana, and Armando Rubio Cordero, where the defendants are charged with conspiracy to commit health care fraud and several substantive counts of health care fraud. According to the indictment, the defendants participated in a scheme involving Lord Family Services, Inc., a medical clinic that purportedly provided Medicare Advantage beneficiaries with medical items and services. From January 2010 through September 2011, the defendants allegedly caused Lord Family Services, Inc. to submit approximately $1,919,751 in Medicare claims falsely claiming that health care benefits and services were medically necessary and had been provided to Medicare beneficiaries. As a result of the submission of these claims, Medicare paid Lord Family Services, Inc. approximately $976,476. If convicted, the defendants face up to ten years in prison for each count of health care fraud.
  • United States v. Karina Merino, where defendant Karina U. Merino is charged with a single count of health care fraud in connection with her role in a massive health care fraud scheme involving Ideal Home Health, Inc. (Ideal), which submitted more than $40 million in fraudulent claims to Medicare. The Information alleges that Merino, as a nurse for Ideal, falsified patient visitation logs to reflect that home health care nursing services had been provided to beneficiaries when such services had, in fact, not been provided. Ideal fraudulently billed the Medicare program for approximately $148,000. If convicted of the health care fraud charge, Merino faces up to ten years in prison.
  • United States v. Delia Y. Chaveco and Arturo Y. Chaveco,
    where Delia Y. Chaveco and Arturo Y. Chaveco (the Chavecos) were charged by Information with a single count of conspiracy to receive kickbacks in connection with a federal health care benefit program. This charge stems from the Chavecos’ role in a health care fraud scheme involving Ideal Home Health Inc. (Ideal), an agency that submitted more than $40 million in fraudulent claims to the Medicare program. The Information alleges that Ideal and other Miami-Dade area home health agencies paid the Chavecos kickbacks in exchange for recruiting Medicare beneficiaries that they later used to bill the Medicare program. If convicted, the defendants face up to five years in prison.
  • United States v. Roberto Marrero, Sandra Fernandez Viera and Enrique Rodriguez, where defendants are charged with conspiracy to commit health care fraud, conspiracy to receive and pay health care kickbacks, and substantive kickback charges. Defendants Roberto Marrero and Sandra Fernandez Viera were the owners and operators of Trust Care Health Services, Inc. (Trust Care), which allegedly paid kickbacks and bribes to patient recruiters and beneficiaries to obtain Medicare beneficiaries, and then submitted more than $20 million in false and fraudulent claims to Medicare, primarily for skilled nursing diabetic care and physical/occupational therapy. Defendant Enrique Rodriguez worked as a patient recruiter for Trust Care, supplying patients in exchange for kickbacks and bribes. A civil injunction is being filed under 18 U.S.C. § 1345 to restrain the defendants’ assets to satisfy restitution in the criminal matter. If convicted, the defendants face up to ten years for the health care fraud charges and five years for each count of the kickback charges.
  • United States v. Dora Moreira, Ivan Alejo, and Hugo Morales,
    where  the defendants are charged with conspiracy to commit health care fraud, conspiracy to receive and pay health care kickbacks, substantive kickback charges, conspiracy to commit money laundering, and substantive money laundering. Defendant Dora Moreira was the owner and operator of Anna Nursing Services Corp. (Anna Nursing), which paid kickbacks and bribes to patient recruiters and beneficiaries to obtain Medicare beneficiaries. Anna Nursing was paid more than $7 million for the false claims it submitted to Medicare, which claims were primarily for physical/occupational therapy. Defendant Ivan Alejo worked at Anna Nursing, and was responsible for, among other things, negotiating kickback rates and distributing kickback payments to patient recruiters on behalf of Anna Nursing. Defendant Hugo Morales worked as a physical therapist on behalf of Anna Nursing, and was responsible for, among other things, fabricating patient medical documentation. Defendant Dora Moreira laundered money for the purpose, among others, of concealing the proceeds of the fraud and the payment of kickbacks to recruiters. The Asset Forfeiture Section has obtained restraining orders on the corporate bank account and on real property that is traceable to the fraud. If convicted, the defendants face up to ten years for the health care fraud charges, five years for each count of the kickback charges, and twenty years for the money laundering charges.
  • United States v. Marina Sanchez Pajon and Miguel Jimenez,
    where Federal officials charge defendants with conspiracy to commit health care fraud, conspiracy to receive and pay health care kickbacks, and substantive kickback charges. Defendants Marina Sanchez Pajon and Miguel Jimenez were the owners and operators of Flores Home Health Care Inc. (Flores Home Health), which allegedly paid kickbacks and bribes to patient recruiters and beneficiaries to obtain Medicare beneficiaries. Flores Home Health was paid more than $8 million for the false claims it submitted to Medicare, which claims were primarily for physical/occupational therapy. The Asset Forfeiture Section has obtained seizure warrants and restraining orders on five vehicles and bank accounts containing $160,000. They have also filed lis pendens against four real properties that were purchased with proceeds of the fraud. If convicted, the defendants face up to ten years for the health care fraud charges and five years for each count of the kickback charges.
  •  United States v. Miguel A. Rodriguez, where defendant Miguel A. Rodriguez is charged with three counts of paying kickbacks in connection with a federal health care program. The defendant allegedly paid kickbacks and bribes to induce medical providers to refer Medicare beneficiaries to his medical company for services, including x-rays. If convicted, the defendant faces up to five years in prison for each count of the kickback charges.
  • United States v. Enrique Alberto Siret Rodriguez, where defendant Enrique Alberto Siret Rodriguez is charged with four counts of health care fraud and two counts of paying kickbacks in connection with a federal health care program. The defendant allegedly paid kickbacks and bribes to a doctor for fraudulent home health care prescriptions that could be used to fraudulently bill Medicare. If convicted, the defendant faces up to 10 years in prison for each health care fraud count and up to five years for each of the kickback counts.
  • United States v. Alberto Cosme Garcia,  where defendant Alberto Cosme Garcia is charged with one count of health care fraud and two counts of paying kickbacks in connection with a federal health care program. The defendant allegedly paid kickbacks and bribes to a doctor for fraudulent home health care prescriptions that could be used to fraudulently bill Medicare. If convicted, the defendant faces up to 10 years in prison for the health care fraud count and up to five years for each of the kickback counts.

Los Angeles Charges

In Los Angeles, the Health Care Fraud Task Force action resulted in 12 arrests including California’s second-largest biller for chiropractic services, a physician’s assistant, and owners of durable medical equipment and ambulance companies, in relation to seven criminal cases that the Justice Department alleges resulted in the cumulative submission of more than $22 million in false billings to Medicare.  The charges filed in Los Angeles are part of a nationwide “takedown” by Medicare Fraud Strike Force operations in eight cities that led to charges against 89 individuals for their alleged participation in schemes to collectively submit about $223 million in fraudulent claims to Medicare. See here.

The dozen defendants taken into custody are among 13 people charged in Los Angeles in cases that allege health care fraud.  A thirteenth defendant is a fugitive. 

Federal officials charge Dr. Houshang Pavehzadeh, of the Sylmar Physician Medical Group, allegedly billed Medicare more than $1.7 million for chiropractic treatments he never performed.  During the scheme, which ran from 2005 through 2012, Dr. Pavehzadeh, 40, of Agoura Hills, became the second-largest Medicare biller in California for chiropractic services – even though he was not in the United States when some of the alleged services were performed. In addition to being charged with health care fraud, Pavehzadeh is charged with aggravated identity theft related to Medicare beneficiaries whose information he used to bill Medicare as a part of the scheme. When investigators tried to conduct an audit of Pavehzadeh’s claims, he falsely reported to the Los Angeles Police Department that he had been carjacked and that patient files requested by the auditors had been stolen from his car. Pavehzadeh surrendered this morning, and he is scheduled to be arraigned with other Los Angeles-area defendants this afternoon in the Roybal Federal Building.

Nine defendants affiliated with DME companies were also charged in five separate indictments.

  • Olufunke Fadojutimi, 41, of Carson, a registered nurse; Ayodeji Temitayo Fatunmbi, 41, formerly of Carson, and now believed to be residing in Nigeria; and Maritza Velazquez, 40, of Las Vegas, were charged with health care fraud. The scheme allegedly revolved around Lutemi Medical Supplies, a DME company Fadojutimi owned and where Fatunmbi and Velazquez worked.  According to the indictment in this case, Lutemi billed Medicare more than $8.3 million in claims, primarily for medically unnecessary power wheelchairs. Fadojutimi and Fatunmbi allegedly laundered Medicare funds in order to purchase fraudulent prescriptions for those power wheelchairs and pay illegal kickbacks to recruit Medicare beneficiaries. Fadojutimi was arrested this morning in Los Angeles, while Velazquez was arrested in Las Vegas. Fatunmbi is currently a fugitive being sought by federal authorities.
  • Susanna Artsruni, 45, of North Hollywood, and Erasmus Kotey, 76, of Montebello, a licensed physician’s assistant, allegedly worked together to commit health care fraud out of a medical clinic on Vermont Avenue where they both worked.  Kotey allegedly prescribed medically unnecessary DME, including power wheelchairs, for Medicare beneficiaries. Many of those power wheelchair prescriptions were then used by Artsruni’s DME company, Midvalley Medical Supply, to support fraudulent claims to Medicare. In only four months, the clinic and Midvalley billed Medicare more than $525,000 for these fraudulent claims. Artsruni has previously been convicted of health care fraud and was on pretrial supervision at the time she allegedly laundered some of the proceeds of this fraud. Artsruni was arrested this morning, while Kotey self-surrendered.

Three other DME cases were also charged, alleging fraudulent Medicare billing for medically unnecessary power wheelchairs that were sometimes never even delivered.

  • In one case, Akinola Afolabi, 53, of Long Beach, the owner of Emmanuel Medical Supply, allegedly submitted more than $2.6 million in in false and fraudulent billing to Medicare.
  • In another case, Queen Anieze-Smith, 52, of Encino, and Abdul King-Garba, 47, of Westwood, the owners and operators of ITC Medical Supply, allegedly submitted more than $1.8 million in false and fraudulent billing to Medicare. 
  • In the third case, Clement Etim Aghedo, 53, of Fontana, the owner of Ace Medical Supply Company, allegedly submitted more than $1.8 in false and fraudulent claims to Medicare. Afolabi, Anieze-Smith, and King-Garba were all arrested this morning, while Aghedo self-surrendered.

In the seventh case brought as part of today’s takedown, three defendants affiliated with Gardena-based ProMed Medical Transportation, an ambulance company, were charged with submitting more than $5.9 million in false claims to Medicare between 2008 and 2011. ProMed’s owner, Yaroslav Proshak, 45, of Valley Village; general manager Sharetta Wallace, 35, of Inglewood; and office manager and biller Sergey Mumjian, 40, of West Hollywood, submitted claims for medically unnecessary transportation services and then created fake documentation purporting to support those claims. Proshak, Wallace, and Mumjian were arrested this morning.

The charge of health care fraud carries a statutory maximum penalty of 10 years in federal prison. Money laundering carries a potential penalty of 20 years in prison. Aggravated identity theft carries a mandatory two-year prison term.

Aggressive Medicare Health Care Fraud Task Force Enforcement Continues

The announcement of these arrests provides more evidence of the continuing zealousness of Federal health care fraud investment and enforcement efforts targeting heath care providers for health care fraud or other aggressive activities. 

The Medicare Fraud Strike Force operations that lead to todays’ charges are part of the continuing activities Health Care Fraud Prevention & Enforcement Action Team (HEAT), a joint initiative announced in May 2009 between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country.

Since March 2007, Federal officials credit Strike Force operations in nine locations with leading to charges against more than 1,500 defendants who collectively have falsely billed the Medicare program for more than $5 billion.

In addition, the HHS Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.

In announcing the Florida charges, HHS Secretary Sebelius commented on the effect of recent legal changes that have given Federal officials new tools in investigating and fighting health care fraud.  She said, “The Affordable Care Act has given us additional tools to preserve Medicare and protect the tens of millions of Americans who rely on it each day,” said Secretary Sebelius. “By expanding our authority to suspend Medicare payments and reimbursements when fraud is suspected, the law allows us to better preserve the system and save taxpayer dollars. Today we’re sending a strong, clear message to anyone seeking to defraud Medicare: You will get caught and you will pay the price. We will protect a sacred trust and an earned guarantee.”

Meanwhile, U.S. Attorney General Holder said, “Today’s announcement marks the latest step forward in our comprehensive efforts to combat fraud and abuse in our health-care systems.”

In the face of these criminal efforts and expanding civil and administrative enforcement actions by Federal officials targeting heaelth care fraud and other aggressive billing and referral efforts, health care providers should exercising continuing care to maintain compliance with applicable rules and carefully document these and other compliance and risk management efforts.

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:

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 or updating your profile here. For important information concerning this communication see here. 

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.

©2011 Cynthia Marcotte Stamer, P.C.  Non-exclusive license to republish granted to Solutions Law Press.  All other rights reserved.


Former White House Cybersecurity Coordinator Schmidt, Stamer & Others Share Key HIPAA & Other Privacy & Data Security Insights 5/21 In LA

May 3, 2013

SLP Readers Get Discount: Go to
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Former White House Cybersecurity Coordinator Howard Schmidt and Solutions Law Press, Inc. editor attorney Cynthia Marcotte Stamer are two of an impressive lineup of leaders scheduled to share key HIPAA & other privacy and data security compliance and risk management strategies at the Healthcare HITECH Privacy and Security Summit at the Fifth Annual Information Security Summit on May 21 in Los Angeles.  The program offers essential insights for hospitals, physicians, and other health care providers, health plans and insurers, employers and other health plan sponsors, fiduciaries and administrators, their business associates and other business partners and others on what their organizations should do to cope with the rapidly changing and expanding privacy and data security obligations of HIPAA and other federal and state laws.

With  the rapidly approaching and privacy and data breach penalties and enforcement rising, health care providers, health plans, health care clearinghouses and their business associates must get moving to update business associate contracts, policies and notices and processes to meet changing HIPAA rules while managing ongoing compliance and risks.

Former Cybersecurity Coordinator Schmidt Keynotes

The Healthcare HITECH Privacy and Security Summit will bring together leaders in Privacy and Security within government and private industry for a day of collaboration, networking and presentations by leading Privacy and Security professionals sharing who HIPAA covered entities and business associates need to know to  comply with new HITECH rules and  OCR investigations.

Stamer Speaks On Latest HIPAA Rules & Developments

Solutions Law Press, Inc. editor attorney Cynthia Marcotte Stamer will help lay the foundation for the workshop by briefing participants on changes made to HIPAA rules by the new Omnibus HIPAA Rulemaking changes that the Office of Civil Rights (OCR) plans to start enforcing in September, 2013.

Armed with the latest insights from serving as the scribe for the ABA JCEB annual agency meeting with the Office of Civil Rights (OCR), Ms. Stamer, a practicing attorney and widely published author and speaker, will discuss required changes and other recommended steps and strategies that covered entities and their business associates should take to maintain HIPAA compliance and manage HIPAA and other related risks  in light of the Omnibus HIPAA Rulemaking changes, new OCR guidance for health care providers about disclosures to avert threats to health or safety, recent audit and enforcement activities and other changing risks and responsibilities including:

  • The latest on OCR’s regulatory guidance, audit and investigation and enforcement rules, actions and strategies and their implications on covered entities and business associates;
  • Changes to breach notification rules and their implications on covered entities and their business associates;
  • Practical implications of new rules on who is covered and their responsibilities;
  • Required and recommended updates to policies, business associate and other agreements, privacy notices and other HIPAA compliance arrangements;
  • Effective training and other risk management strategies;
  • Planning for, investigating and mitigating PHI privacy breaches and other compliance concerns under new rules other selected events; and
  • Other selected strategies for coordinating HIPAA and other privacy and data breach responsibilities and risk management; and
  • Participant questions.

For a complete agenda, to register, to get details on sponsorship or for other information, see here.

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 25 years experience advising health industry clients about these and other matters.

A board certified labor and employment attorney widely known for her extensive and creative knowledge and experience with health plan privacy and data security matters, Ms. Stamer serves as the scribe for the ABA JCEB Annual Technical Session meeting with OCR each May and has worked, spoken and published extensively on these and other privacy and data security concerns and controls.  Extensively published and a popular speaker on HIPAA and other data security matters, Ms. Stamer works extensively with health care providers, health plans, employers, insurance and financial services, technology and other clients on privacy, data seurity and other privacy and cybercrime concerns.  She also serves as the Scribe for the ABA JCEB Agency Techical Sessions Meetings with the Office of Civil Rights which occur each May in Washington, D.C.

Ms. Stamer has extensive experience advising and assisting health care providers and other health industry clients to establish and administer compliance and risk management policies and to respond to DEA 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 including a number of programs and publications on OCR Civil Rights rules and enforcement actions. Her insights on these and other related matters 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 ask 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.

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 or updating your profile here. For important information about this communication click 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:

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 or updating your profile here. For important information concerning this communication click here. 

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.   ©2013 Cynthia Marcotte Stamer, P.C.  Non-exclusive license to republish granted to Solutions Law Press.  All other rights reserved.


CMS Proposes To Further Tighten Medicare Provider Enrollment Rules

May 1, 2013

The proposed rule would also strengthen certain provider enrollment provisions including allowing HHS to deny enrollment of providers affiliated with an entity that has unpaid Medicare debt, deny or revoke billing privileges for individuals with felony convictions, and revoke privileges for providers and suppliers who are abusing their billing privileges.

Since provider enrollment is the gateway to Medicare, CMS routinely evaluates its provider enrollment policies, and has implemented new safeguards as a result of the Affordable Care Act. In the February 2011 final screening rule (72 FR 5862). CMS identified additional changes in enrollment policy that would increase the integrity of the Medicare program. Now, CMS is proposing include the following provisions:

  • Add the ability to deny the enrollment of providers, suppliers and owners affiliated with an entity that has unpaid Medicare debt. This proposal would prevent individuals and entities from being able to incur substantial debt to Medicare, leave the Medicare program and then re-enroll as a new business to avoid repayment of the outstanding Medicare debt. We are proposing that CMS would only enroll individuals or entities if they repay the debt or enter into a repayment plan, if they are otherwise eligible for the program.
  • Deny enrollment or revoke the billing privileges of a provider or supplier if a managing employee has been convicted of certain felony offenses. This provision ensures that CMS can block or remove bad actors from the Medicare program to protect beneficiaries and safeguard the Medicare Trust Fund.
  • Permit CMS to revoke billing privileges of providers and suppliers that have a pattern or practice of billing for services that do not meet Medicare requirements. This proposal is intended to address providers and suppliers that regularly submit inaccurate claims in such a way that it poses a risk to the Medicare program.
  • Make the effective date of billing privileges consistent across certain provider and supplier types. Most practitioners and practitioner groups may only submit bills as of the filing date of their enrollment application. CMS is proposing to eliminate ambulance suppliers’ current ability to bill for up to a year prior to enrollment in the Medicare program. CMS is also proposing to require that ambulance providers and other provider and supplier types submit any claims within 60 days of revocation of billing privileges, consistent with the requirements for practitioners and practitioner groups.

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 25 years experience advising health industry clients about these and other matters.

A board certified labor and employment attorney widely known for her extensive and creative knowledge and experience with health plan privacy and data security matters, Ms. Stamer serves as the scribe for the ABA JCEB Annual Technical Session meeting with OCR each May and has worked, spoken and published extensively on these and other privacy and data security concerns and controls.  Extensively published and a popular speaker on HIPAA and other data security matters, Ms. Stamer works extensively with health care providers, health plans, employers, insurance and financial services, technology and other clients on privacy, data seurity and other privacy and cybercrime concerns.  She also serves as the Scribe for the ABA JCEB Agency Techical Sessions Meetings with the Office of Civil Rights which occur each May in Washington, D.C.

Ms. Stamer has extensive experience advising and assisting health care providers and other health industry clients to establish and administer compliance and risk management policies and to respond to DEA 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 including a number of programs and publications on OCR Civil Rights rules and enforcement actions. Her insights on these and other related matters 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 ask 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

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 or updating your profile here. For important information about this communication click 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:

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 or updating your profile here. For important information concerning this communication click here. 

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.   ©2013 Cynthia Marcotte Stamer, P.C.  Non-exclusive license to republish granted to Solutions Law Press.  All other rights reserved.


HHS Proposes Increasing Health Care Fraud Reporting Rewards To Up To $9.9 Million

May 1, 2013

The Department of Health and Human Services (HHS) Centers for Medicare & Medicaid Services (CMS) plans to increase rewards paid to Medicare beneficiaries and others whose tips about suspected fraud lead to the successful recovery of funds to as high as $9.9 million. Secretary Kathleen Sebelius announced proposed regulations that would increase the penalties on April 24.  In addition, a new funding opportunity released this month supports the expansion of Senior Medicare Patrol (SMP) activities to educate Medicare beneficiaries on how to prevent, detect and report Medicare fraud, waste and abuse. 

The Obama Administration has made health care fraud prosecutions and settlement a key element of its health care cost containment plan.  Over the last three years, the administration claims its enforcement efforts have recovered over $14.9 billion in fraud, some of which resulted from fraud reporting by individuals. 

Summary Of The SMP Incentive Reward Program Proposals

The SMP is a national, volunteer-based program that empowers Medicare beneficiaries to prevent and report Medicare fraud, waste, and abuse. Since 1997, HHS reports more than 7,000 referrals have been made to CMS and the Office of the Inspector General (OIG) for investigation since 1998.

Under the proposed changes, CMS is proposing to increase the potential reward amount for information that leads to a recovery of Medicare funds from 10 percent to 15 percent of the final amount collected. HHS currently offers a reward of 10 percent up to $1,000 under the current incentive reward program. In changes are modeled on an IRS program that has returned $2 billion in fraud since 2003, HHS proposes to increase the portion of the recovery on which CMS will pay a reward up to the first $66 million recovered – this means an individual could receive a reward of $9.9 million if CMS recovers $66 million or more.

HHS began paying rewards to individuals who reported tips that led to the recovery of funds in 1998. According to HHS, to date, HHS has recovered approximately $3.5 million as a result of this program and paid just $16,000 for 18 rewards. The proposed changes are similar to the IRS whistleblower program that has resulted in recoveries of over $2 billion since 2003. 

To expand the SMP program’s capacity to reach more Medicare beneficiaries, the Administration for Community Living issued a new funding opportunity.  Each of the current 54 SMP projects is eligible for varying funding levels, up to a total of $7.3 million across the program.

HHS says thhese proposed changes will support the administration’s comprehensive approach to program integrity, including the work being done with the Health Care Fraud Prevention and Enforcement Action Team, a joint effort  between HHS and the Department of Justice to fight health care fraud.  The Obama Administration credits this joint effort with recovering a record $4.2 billion in taxpayer dollars in fiscal year 2012.

The proposed increase in the reward for blowing the whistle on health care fraud is intended to fuel further reports by beneficiaries, workers and others of suspected health care fraud.  Health care providers should share any concerns about the proposed increase in the rewards as well as review and tighten their health care fraud prevention and risk management to defend against rising exposures.

 For more details, read a fact sheet on the proposed rule available here for more details.

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 25 years experience advising health industry clients about these and other matters.

A board certified labor and employment attorney widely known for her extensive and creative knowledge and experience with health plan privacy and data security matters, Ms. Stamer serves as the scribe for the ABA JCEB Annual Technical Session meeting with OCR each May and has worked, spoken and published extensively on these and other privacy and data security concerns and controls.  Extensively published and a popular speaker on HIPAA and other data security matters, Ms. Stamer works extensively with health care providers, health plans, employers, insurance and financial services, technology and other clients on privacy, data seurity and other privacy and cybercrime concerns.  She also serves as the Scribe for the ABA JCEB Agency Techical Sessions Meetings with the Office of Civil Rights which occur each May in Washington, D.C.

Ms. Stamer has extensive experience advising and assisting health care providers and other health industry clients to establish and administer compliance and risk management policies and to respond to DEA 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 including a number of programs and publications on OCR Civil Rights rules and enforcement actions. Her insights on these and other related matters 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 ask 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

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 or updating your profile here. For important information about this communication click 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:

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 or updating your profile here. For important information concerning this communication click here. 

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.   ©2013 Cynthia Marcotte Stamer, P.C.  Non-exclusive license to republish granted to Solutions Law Press.  All other rights reserved.


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