Health Care Fraud |

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 Safeguards. In 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.

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.

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Solutions Law Press™ provides business risk management, legal compliance, management effectiveness and other resources, training and education on human resources, employee benefits, compensation, data security and privacy, health care, insurance, and other key compliance, risk management, internal controls and other key operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press resources including:

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Posted by Cynthia Marcotte Stamer

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 Conviction; Euless 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 Charges. Indeed, 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 Million; Owner 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 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

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Posted by Cynthia Marcotte Stamer

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.

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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.

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Leave a Comment » | Academic medicine, Affordable Care Act, Anti-KickBack, ASC, Childrens Health Insurance Program, Conditions of Participation, Corporate Compliance, DME, Doctor, Durable Medical Equipment, Electronic Health Records, Electronic Medical Records, false claims act, Federal Health Center, Federal Sentencing Guidelines, Health Care, Health Care Finance, Health Care Fraud, Health Care Provider, Health Care Quality, Health Care Reform, Health IT, Health Plan, Health Plans, HIPAA, Hospital, Laws, Medicaid, Medicare, Medicare Advantage, Medicare Fee Schedule, Medicare Prescription Drug Program, Mental Heatlh, Money Laundering, OIG, Outpatient, Patient Protection and Affordable Care Act, Pharmacy, Physician, Prescription Drugs, Public Policy, Reimbursement, Rural Health Care, Stark, Substance Abuse | Tagged: false claims act, HEAT, Hospitals, Medicaid Fraud, Medicare Fraud, Overbillng, Physicians, qui tam, Upcoding | Permalink
Posted by Cynthia Marcotte Stamer

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

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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.

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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

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.

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Leave a Comment » | Academic medicine, Affordable Care Act, Anti-KickBack, ASC, Childrens Health Insurance Program, Corporate Compliance, DME, Doctor, Durable Medical Equipment, Electronic Health Records, Electronic Medical Records, Federal Health Center, Federal Sentencing Guidelines, Health Care, Health Care Finance, Health Care Fraud, Health Care Provider, Health Care Quality, Health Care Reform, Health IT, Health Plan, Health Plans, HIPAA, Hospital, Laws, Medicaid, Medicare, Medicare Advantage, Medicare Fee Schedule, Medicare Prescription Drug Program, Mental Heatlh, Money Laundering, OIG, Outpatient, Patient Protection and Affordable Care Act, Pharmacy, Physician, Prescription Drugs, Public Policy, Reimbursement, Rural Health Care, Stark, Substance Abuse | Tagged: Acute Care, CMS, Hospital, Medicare, PPS, Prospective Payment, Skilled Nursing, SNF | Permalink
Posted by Cynthia Marcotte Stamer

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.

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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.

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

May 3, 2013

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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.

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Posted by Cynthia Marcotte Stamer

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.

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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.

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CMS Proposes Changes To Accute Care Hospital & Skilled Nursing Facility Propective Payment Rules

May 1, 2013

Acute care hospitals and skilled nursing facilities participating in Medicare should review proposed changes to key Medicare reimbursement rules and act quickly to share feedback on any provisions of significant concern.

The Centers For Medicare & Medicaid Services (CMS) is proposing changes to its Prospective Payment Systems and other reimbursement key reimbursement rules for Hospitals and Skilled Nursing Facilities for Fiscal Year (FY) 2014. Advance copies of the proposed rules were made available May 1.

CMS’ proposed rules on Prospective Payment System and Consolidated Billing for Skilled Nursing Facilities for FY 2014 are scheduled for official publication on May 1, 2013.

CMS’ proposed rules on Hospital Inpatient Prospective Payment Systems for Acute Care Hospitals and Long Term Care Hospital Prospective Payment System, etc. are scheduled for official publication on May 10, 2013.

Acute care hospitals and skilled nursing facilities should evaluate the implications of the proposed changes and provide relevant feedback as necessary to CMS.

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OCR Shares New Tools to Educate Consumers and Providers about HIPAA Privacy and Security

April 30, 2013

The U.S. Department of Health and Human Services (HHS) Office for Civil Rights (OCR) has developed an array of new tools to educate consumers and health care providers about the Health Insurance Portability and Accountability Act (HIPAA) Privacy and Security Rules.

Many consumers are unfamiliar with their rights under the HIPAA Privacy Rule. With that in mind, OCR has posted a series of factsheets, also available in eight languages, to inform consumers about their rights under the HIPAA Privacy Rule. These materials are available on OCR’s website here.

The fact sheets compliment a set of seven consumer-facing videos released earlier this year on OCR’s YouTube channel. An additional video, The HIPAA Security Rule, has been designed for providers in small practices and offers an overview of how to establish basic safeguards to protect patient information and comply with the Security Rule’s requirements. The videos are available on the HHS OCR YouTube Channel at here.

OCR has also launched three modules for health care providers on compliance with various aspects of the HIPAA Privacy and Security Rules, available at Medscape.org:

Patient Privacy: A Guide for Providers at here;
HIPAA and You: Building a Culture of Compliance here; and
Examining Compliance with the HIPAA Privacy Rule here.

The Medscape modules offer free Continuing Medical Education (CME) credits for physicians and Continuing Education (CE) credits for health care professionals.

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Amgen Settlement Highlights Anti-Kickback Exposures From Whistleblowers, Need For Effective Compliance & Risk Management

April 22, 2013

California-based biotechnology giant Amgen, Inc. has agreed to pay $24,9 Million to resolve Justice Department False Claims Act charges that the biotechnology giant violated the False Claims Act by paying illegal kickbacks to long-term care pharmacy providers to promote the sale of its Aranesp and other products. The settlement announced by the Justice Department on April 16, 2013 is the latest in a series of settlements resulting from efforts by Federal officials to target pharmaceutical and other providers for violating federal anti-kickback and other health care fraud laws brought by the Justice Department. See Amgen to Pay U.S. $24.9 Million to Resolve False Claims Act Allegations. It highlights the growing risk of civil prosecution that pharmaceutical companies face for offering or providing prohibited kickbacks, as well as the growing role of whistleblowers in civil prosecutions under the anti-kickback law.

Amgen Settlement Highlights

The Amgen Settlement Agreement resolves Federal allegations that Amgen paid illegal kickbacks to long-term care pharmacy providers Omnicare Inc., PharMerica Corporation and Kindred Healthcare Inc. in return for implementing “therapeutic interchange” programs designed to switch Medicare and Medicaid beneficiaries from a competitor drug to Aranesp, which Amgen manufactures.

The government alleged that the kickbacks took the form of performance-based rebates tied to market-share or volume thresholds. The government also charged that, as part of the therapeutic interchange program, Amgen distributed materials to consultant pharmacists and nursing home staff encouraging the use of Aranesp for patients who did not have anemia associated with chronic renal failure.

The Amgen Settlement Agreement resolves a civil lawsuit filed under the qui tam, or whistleblower, provision of the False Claims Act, which allows private citizens with knowledge of false claims to bring civil actions on behalf of the United States and share in any recovery. The False Claims Act suit in the U.S. District Court for the District of South Carolina is captioned United States ex rel. Kurnik v. Amgen Inc., et al.

When announcing the settlement, Justice Department officials emphasized federal officials’ commitment to pursuing pharmaceutical companies for paying illegal kickbacks to secure drug sales. “We will continue to pursue pharmaceutical companies that pay kickbacks to long-term care pharmacy providers to influence drug prescribing decisions,” said Stuart F. Delery, Acting Assistant Attorney General for the Justice Department’s Civil Division. “Patients in skilled nursing facilities deserve care that is free of improper financial influences.”

The Settlement Agreement and lawsuit that it resolves also show the key role that whistleblowers can play in these types of prosecutions. Qui tam and other fraud reports made by employees or other business partners have become a significant tool in the Federal government’s war against health care fraud. The Amgen Settlement and other recent prosecutions and settlement show that Federal officials are acting on this promise and that whistleblowers increasingly are helping them to do so.

As this trend continues, pharmaceutical companies and other health care providers subject to the anti-kickback and other health care fraud laws will need to review their existing and former practices to identify pre-existing and ongoing exposures, and decide what steps to take, if any, to mitigate these risks. In addition to considering what corrective actions, if any are needed generally, these organizations also should consider the workforce management and other internal controls that will help promote compliance with these policies and manage potential whistleblower and other liabilities.

In addition to working to promote compliance with the False Claims Act and other health care laws, pharmaceutical companies and health care providers need to implement strong internal investigation, audit, and employee and contractor management procedures to help self-discover and address potential compliance or other liability concerns. These processes and policies should involve but not be limited to hotlines and other processes for reporting suspected fraud or other misconduct. Most companies also should consider adopting and enforcing strong policies that require employees, contractors and other business partners to timely report and coöperate in the investigation and redress of potential health care fraud or other legal violations, should promptly investigate and redress as needed alleged noncompliance, and should retaliation against individuals making these reports in good faith.

For More Information Or Assistance

For help reviewing and updating your Stark Law, Anti-Kickback Statute, or other health care compliance, workforce, internal controls and risk management policies, practices or programs; assessing the strength of your organizations existing risk management and compliance controls under these laws or other healthcare laws and regulations; or in addressing other compliance or health care concerns, please contact Cynthia Marcotte Stamer via e-mail here or via telephone at 469.767.8872. To review and register to receive other helpful updates or for more information about Ms. Stamer and her experience, see here.

A popular lecturer and widely published author on health industry concerns, Ms. Stamer continuously advises health industry clients about compliance and internal controls, workforce and medical staff performance, quality, governance, reimbursement, and other risk management and operational matters. Ms. Stamer also publishes and speaks extensively on health and managed care industry regulatory, staffing and human resources, compensation and benefits, technology, public policy, reimbursement and other operations and risk management concerns. Her insights on these and other related matters appear in the Health Care Compliance Association, Atlantic Information Service, Bureau of National Affairs, The Wall Street Journal, Business Insurance, the Dallas Morning News, Modern Health Care, Managed Healthcare, Health Leaders, and a many other national and local publications. You can get more information about her health industry experience here. If you need help responding to concerns about the matters discussed in this publication or other health care concerns, wish to get 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.

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HHS Publishes Medicaid Expansion Final Regs, Invites Public Comment

April 1, 2013

The Department of Health & Human Services (HHS) has published its final rule with a request for comments that provides, effective January 1, 2014, the federal government will pay 100 percent of the cost of certain newly eligible adult Medicaid beneficiaries. These payments will be in effect through 2016, phasing down to a permanent 90 percent matching rate by 2020. The Affordable Care Act authorizes states to expand Medicaid to adult Americans under age 65 with income of up to 133 percent of the federal poverty level (approximately $15,000 for a single adult in 2012) and provides unprecedented federal funding for these states.

Under the Affordable Care Act, states that cover the new adult group in Medicaid will have 100 percent of the costs of newly eligible Americans paid for by the federal government in 2014, 2015, and 2016. The federal government’s contribution is then phased-down gradually to 90 percent by 2020, and remains there permanently. For states that had coverage expansions in effect prior to enactment of the Affordable Care Act, the rule also provides information about the availability of an increased FMAP for certain adults who are not newly eligible.

For the full text of the final rule, see http://www.ofr.gov/inspection.aspx.

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Hospitals with 2012 CMS Adverse Complaint Inspection Reports in AHCJ Data Bank Should Prepare Response

March 27, 2013

Acute-care and critical access hospitals that had adverse complaint inspections in 2012 by the Centers for Medicare & Medicaid Services (CMS) may want to prepare to respond to press and public inquiries. The Association of Health Care Journalists (AHCJ) updated its website, healthcareinspectionreports.com, to include details about deficiencies cited during complaint inspections at acute-care and critical access hospitals throughout the United States since January 1, 2011 obtained from CMS.

Although AHCJ cautions in its website that the posted data should not be used to rank hospitals because of omissions and limitations in the data, hospitals with posted reports in the data bank should expect that the reports on their hospital may draw the attention of the media, patients, health plans and others.

AHCJ publishes the reports, which historically have not been easily accessible to the general public. AHCJ cautions that the data is not necessarily complete and should not be used to rank hospitals within a state. AHCJ says data on acute-care and critical hospital access hospitals is incomplete because CMS has just begun gathering this data and releasing it in electronic format. AHCJ also says some reports are missing narrative details. Beyond that, CMS acknowledges that other reports that should appear may not. It does not include results of routine inspections or those of psychiatric hospitals or long-term care hospitals. It also does not include hospital responses to deficiencies cited during inspections. Those can be obtained by filing a request with a hospital or the U.S. Centers for Medicare and Medicaid Services (CMS).AHCJ to make future iterations of this data more complete. At this time, this data should not be used to rank hospitals within a state or between states. It can be used to review issues identified at hospitals during recent inspections.

Subject to these limitations, an individual wishing to review the available data can click on a state on the map will retrieve a list of all hospitals with their violations grouped together.

In anticipation of potential media or public review and reaction to the AHCJ website posting, hospitals with adverse reports posted on the website should consider acting proactively. Hospitals should consult with counsel and their public relations team to plan and prepare a factually accurate response to the shared reports and other suitable mitigation activities.

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OCR Invites Comments On Plans to Survey HIPAA Covered Entities Audited Under 2012 HIPAA Audit Program

March 25, 2013

The Department of Health & Human Services (HHS) Office of Civil Rights (OCR) wants to ask the 115 health plans, health care clearinghouses, and health care providers (covered entities) that OCR audited in 2012 for compliance with Privacy and Security Rules of the Health Insurance Portability & Accountability Act (HIPAA) under its HIPAA Audit Program to share feedback about their experience. The planned survey announcement follows OCR’s recent released of restated HIPAA Privacy & Security Rules scheduled to take effect in September, 2013 and as OCR continues and expanding its HIPAA Audit Program in 2013. All together, the signs are clear that covered entities should update and strengthen their HIPAA compliance and risk management practices to withstand the tightened rules and enforcement.

OCR initiated the HIPAA Audit Program in 2012 to comply with Section 13411 of the Health Information Technology for Economic and Clinical Health Act’s requirement that it audit covered entity and business associate compliance with the HIPAA privacy, security, and breach notification rules. While it continues its HIPAA Audit Program in 2013, OCR also is evaluating the effectiveness of the HIPAA Audit Program audits in 2012.

To this end, OCR currently is conducting a review of the HIPAA Audit program to determine its efficacy in assessing the HIPAA compliance efforts of covered entities. As part of that review, OCR plans to ask covered entities audited under the HIPAA Audit Program in 2012 to complete an online survey about their experience. In anticipation of its conduct of the proposed surveys, OCR is inviting public comment on the burden to Covered Entities to complete the planned online survey, which OCR estimates will take two hours to complete through May 20, 2013. According to OCR, the survey will gather information on the effect of the audits on the audited entities and the entities’ opinions about the audit process. The online survey will be used to:

Measure the effect of the HIPAA Audit program on covered entities;
Gauge their attitudes towards the audit overall and in regards to major audit program features, such as the document request, communications received, the on-site visit, the audit report findings and recommendations;
Obtain estimates of costs incurred by covered entities, in time and money, spent responding to audit-related requests;
Seek feedback on the effect of the HIPAA Audit program on the day-to-day business operations; and
Assess whether improvements in HIPAA compliance were achieved as a result of the Audit program.

OCR says it will use the information, opinions, and comments collected using the online survey to produce recommendations for improving the HIPAA Audit program.

For instructions to comment or more details, see here.

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Posted by Cynthia Marcotte Stamer

On Health Reform Law’s 3rd Anniversary, Test Your Reform Knowledge

March 21, 2013

March 21, 2013 is the 3rd Anniversary of the Affordable Care Act. With the 2014 rollout of the next round of reforms approaching, the Kaiser Family Foundation invites you to take its latest interactive quiz to test your knowledge about what’s in – and what’s not in – the health reform law and encourage your friends and family to do the same. You can compare your knowledge with others and share your results on Facebook and Twitter. The quiz also includes links to more information about specific provisions of the law.

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.

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Posted by Cynthia Marcotte Stamer

Maintaining Patient Problem List Under Meaningful Use Core Measure 3 To Support Patient Care

March 16, 2013

ONC is sharing resources to help health care providers see the value of and effectively incorporate and use active patient problem lists as part of the electronic health records systems (EHRs).

Meaningful Use Core Measure 3 calls for physicians and other eligible professionals to design their electronic health record systems to incorporate and maintain an up-to-date problem list of current and active diagnoses of patients.

The requirement reflects ONC’s determination that accurate active problem lists and the fast overview of patient history’s they provide are a “mainstay” of efficient and effective primary care. Effective active patient problem lists in EHRs make this information available to all clinic staff and the on-call team improves the efficiency and effectiveness of the care team.

To support this goal, the requirement that Meaningful Use Core Measure 3 calls for more than 80 percent of all unique patients seen by the eligible professional have at least one entry or an sign that no problems are known for the patient recorded as structured data.

Review the requirements of Core Measure 3 and access other tips and resources for developing and using effective patient problem lists in EHRs here.

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Posted by Cynthia Marcotte Stamer

CMS 2nd Recalculation Medicare Readmission Penalties In 6 Months Cuts Overall Penalties By $10M

March 15, 2013

The Centers for Medicare & Medicaid Services (CMS)for the second time in six months has corrected errors in its calculation of Medicare readmission penalties imposed against more than 1,000 hospitals imposed under the Medicare Hospital Readmission Reduction Program.

Under the Medicare Readmission Reduction Program, CMS is penalizing hospitals whose readmissions within 30 days following their discharge of heart attack, heart failure and pneumonia patients exceed the rate CMS expects based on their patient risks with the loss of up to 1 percent of their regular payments. This maximum penalty ramps is slated to rise to up to 2 percent in October and 3 percent in 2014.

While some hospital’s penalties went up and most went down, the net effect of the recalculation back to the program’s origination last October is a $10 million reduction in the overall penalties resulting in an adjusted total of $280 million for 2013.

An updated chart of the corrected readmission penalties prepared by Kaiser Health News is available here.

Part of new CMS “quality” provisions, the readmission penalties have prompted widespread concern by many hospital and other health care leaders as penalizing hospitals for readmissions beyond their control. Supports of the penalties say that the penalties can encourage hospitals to provide better quality and reduce costs by emphasizing appropriate discharge planning.

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Posted by Cynthia Marcotte Stamer

Par Pharmaceutical Pays $45 Million For Illegal Off-Label Marketing Of Megace ES

March 11, 2013

New Jersey-based Par Pharmaceutical Companies Inc. (Par) must pay more than will pay $45 million to resolve their criminal and civil liability under its March 5, 2013 guilty plea to illegally promoting off-label uses of the prescription drug Megace ES in violation of Food and Drug Administration (FDA) rules and wrongfully promoting and billing Medicare for its use. The Par guilty plea followed a guilty plea by Par’s Chief Executive Officer Paul V. Campanelli earlier in the day in a New Jersey federal court.

Par also entered into a civil settlement that resolved three lawsuits filed under the whistleblower provisions of the False Claims Act, which let private parties to file suit on behalf of the United States and obtain part of the government’s recovery. The civil lawsuits filed in New Jersey are U.S. ex rel. McKeen and Combs v. Par Pharma ceutical, et al., U.S. ex rel. Thompson v. Par Pharmaceutical, et al., and U.S. ex rel. Elliott & Lundstrom v. Bristol-M yers Squibb, Par Pharma ceutical, et al. As part of today’s resolution, relators McKeen and Combs will receive $4.4 million. The actions provide another example of the growing role of whistleblowers to the success of federal health care fraud detection and enforcement efforts.

Par Criminal & Charges

The Federal Food, Drug and Cosmetic Act (FDCA) requires companies such as Par to specify the intended uses of a product in its new drug application to the FDA. Once approved, a drug may not be distributed in interstate commerce for unapproved or “off-label” uses until the company receives FDA approval for the new intended uses.

Par pleaded guilty to a federal a criminal misdemeanor violation of these rules by misbranding Megace ES in violation of the FDCA. Megace ES, a megestrol acetate drug product was approved by the FDA to treat anorexia, cachexia, or other significant weight loss suffered by patients with AIDS. Federal prosecutors charged that Megace ES distributed nationwide by Par was criminally misbranded because its FDA-approved labeling lacked adequate directions for use in the treatment of non-AIDS-related geriatric wasting, a use that was intended by Par but never approved by the FDA.

Federal Judge Judge Arleo fined Par $18 million and ordered $4.5 million in criminal forfeiture. Par also entered into a civil settlement agreement to settle associated civil liability.

The civil settlement agreement requires Par to pay $22.5 million to the federal government and various states to resolve claims arising from its off-label marketing. The civil settlement resolves allegations that Par, by promoting the sale and use of Megace ES for uses that were not FDA-approved and not covered by Federal health care programs, caused false claims to be submitted to these programs. The United States further alleged that Par deliberately and improperly targeted sales to elderly nursing home residents with weight loss, whether or not such patients suffered from AIDS, and launched a long-term care sales force to market to this population. During this marketing campaign, the government charged Par was aware of adverse side effects associated with the use of megestrol acetate in elderly patients, including an increased risk of deep vein thrombosis, toxic reactions in elderly patients with impaired renal function, and mortality. The United States alleged that Par made unsubstantiated and misleading representations about the superiority of Megace ES over generic megestrol acetate for elderly patients to encourage providers to switch patients from generic megestrol acetate to MegaceES, despite having conducted no well-controlled studies to support a claim of greater efficacy for Megace ES.

As part of plea agreement and corporate integrity agreements reached to resolve its civil and criminal charges, Par committed to the Department of Justice, the Department of Health & Human Services (HHS) and its Office of Inspector General. Par to implement several compliance measures and annually provide the U.S. Attorney’s Office and other agencies with certain reports.

The plea agreement and corporate integrity agreement include provisions that require Par to implement changes to the way it does business. The plea agreement and agreement prohibit Par from providing compensation to sales representatives or their managers based on the volume of sale of Megace ES, and in the corporate integrity agreement, based on the volume of Megace ES and any branded successor megestrol acetate drug.

The agreements also dictate individual accountability of Par’s board and executives. Under the agreement, Par is also required to change its executive compensation program to permit the company to recoup annual bonuses from covered executives if they, or their subordinates, engage in significant misconduct. Company executives may have to forfeit annual bonuses if they or their subordinates engage in significant misconduct, and sales representatives may not be paid incentive compensation for the drug involved in the case, or successor branded versions of that drug. For instance, the plea agreement requires Par give the Justice Department a sworn certification from its chief executive officer that the company has not unlawfully marketed any of its pharmaceutical products.

Par Prosecutions Part Of Larger Aggressive Health Care Fraud Enforcement

The Par civil and criminal charges were brought as part of the ongoing war against health care fraud conducted by federal and state officials. Its announcement is just one of high-profile health care fraud charges, settlements and convictions announced by the Justice Department in the first seven days of March. See, e.g., Health Care Clinic Director Pleads Guilty in Miami for Role in $63 Million Health Care Fraud Scheme; Orange County Doctor Convicted of Six Counts of Health Care Fraud in Multi-Million Dollar Scam involving Durable Medical Equipment; Manhattan U.S. Attorney Sues Park Avenue Medical Associates for Medicare Billing Fraud; Par Pharmaceuticals Pleads Guilty and Agrees to Pay $45 Million to Resolve Civil and Criminal Allegations Related to Off-Label Marketing; Doctor gets 50 Month Sentence for Health Care Fraud & Tax Evasion; and Nelson County, Kentucky Drug Store Owner Charged With Health Care Fraud and Wire Fraud.

Already a lead federal enforcement priority for more than a decade, the Health Care Fraud and Abuse Control Program Annual Report for Fiscal Year 2012 (FY2012 Report) documents that DOJ and HHS health care fraud enforcement activities scored big in 2012, and that qui tam whistleblowers played a big part and shared big in the profits. See Federal Health Care Fraud & Abuse Recovery of $4.2 Billion In FY 2012 Shows Enforcement Risks Growing.

Act To Manage Risks

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

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Posted by Cynthia Marcotte Stamer

Corpus Christi Radiology Group & Clinic $2.3 Million To Settle Health Care Fraud Charges

March 11, 2013

Children’s Physician Services of South Texas (CPSST) and Radiology Associates jointly will pay $2.3 million to settle claims they violated the False Claims Act and the Texas Medicaid Fraud Prevention Act between 2002 and 2007.

The CPSST & Radiology Associates Settlement as part of another busy week of health care fraud enforcement by the Justice Department. See, Health Care Clinic Director Pleads Guilty in Miami for Role in $63 Million Health Care Fraud Scheme; Orange County Doctor Convicted of Six Counts of Health Care Fraud in Multi-Million Dollar Scam involving Durable Medical Equipment; Manhattan U.S. Attorney Sues Park Avenue Medical Associates for Medicare Billing Fraud; Par Pharmaceuticals Pleads Guilty and Agrees to Pay $45 Million to Resolve Civil and Criminal Allegations Related to Off-Label Marketing; Doctor gets 50 Month Sentence for Health Care Fraud & Tax Evasion; and Nelson County, Kentucky Drug Store Owner Charged With Health Care Fraud and Wire Fraud. These and other growing health care fraud charges, settlements and convictions show the zealous enforcement by federal prosecutors is continuing. To guard against getting caught in the health care fraud hopper, health care providers must constantly look at current and past practices against emerging regulations and enforcement and take prompt steps to maintain compliance and minimize risks as they become clear.

CPSST & Radiology Associates Settlement Highlights

According to the March 5, 2013 announcement of United States Attorney Kenneth Magidson, the charges settled involved allegations that CPSST billed and received payment for Radiology Associates’ professional services and, without disclosing the payments, directed Radiology Associates to bill and receive payment for the same professional services. Magidson says that CPSST, a part of the Driscoll Health System, agreed to pay $1.5 million, while Radiology Associates, an independent physician group serving the Driscoll Health System, agreed to pay $800,000 to settle claims they billed and received payment twice for the professional reading and interpretation of genetic ultrasounds.

Medicare billing rules recognize two components for each ultrasound, a technical component and a professional component. The technical component refers to the actual taking of the ultrasound by a technician and the professional component refers to the reading and interpretation of the ultrasound images by a physician, usually a radiologist.

According to federal prosecutors, CPSST made arrangements to have Radiology Associates read and interpret the ultrasounds taken at CPSST. From Jan. 1, 2002, to June 1, 2007, Radiology Associates read and interpreted several thousand ultrasounds for CPSST. The understanding between the two providers was that CPSST would bill and receive payment solely for the technical component and Radiology Associates would bill and receive payment solely for the professional component. In reality, CPSST billed and received payment for both the technical and professional components without informing or disclosing this fact to Radiology Associates. Upon discovery of this fact, Radiology Associates informed CPSST about the double billing for the professional component, but CPSST denied billing for the professional component except for a few accidental and isolated occasions. Instead, CPSST instructed and directed Radiology Associates to continue to bill for the professional component and reaffirmed that CPSST would only bill for the technical component. Despite additional evidence of double billing, Radiology Associates ignored the evidence, accepted CPSST’s misrepresentations without question and continued to bill and receive payment for the professional component.

Government funded health care programs such as Medicare, Medicaid, TRICARE and the Federal Employees Health Benefits program agree to pay enrolled health care providers once for the technical and professional components of each ultrasound performed on a patient covered by theses health care programs. Health care providers enrolled and servicing patients covered by these government-funded health care programs are prohibited from billing and receiving payment twice for the ultrasound’s technical or professional component.

The settlement resolves allegations made against Radiology Associates, Children’s Physician Services of South Texas, Center for Genetic Services, and Raymond C. Lewandowski Jr. M.D. in a qui tam or whistleblower lawsuit filed in 2008 by a former revenue manager and coding compliance officer with Radiology Associates. Under the False Claims Act, private citizens can bring suit on behalf of the government and share in any amounts that are obtained through that legal action. In this case, the share will be between 15 – 25% of the proceeds of the overall settlement.

The investigation was conducted by the United States Department of Health and Human Services – Office of Inspector General and the Texas Attorney General’s Medicaid Fraud Control Unit and Civil Medicaid Fraud Division.

Strike Force & Other Zealous Health Care Fraud Enforcement Continues

The settlement and other fraud enforcement actions provide clear evidence of the risks health care providers and their management face if they are found to have participated in activities that federal or state health care fraud prosecutors view as violating health care fraud rules.

The FY2012 Report says DOJ opened 1,131 new criminal health care fraud investigations involving 2,148 potential defendants. Federal prosecutors had 2,032 health care fraud criminal investigations pending, involving 3,410 potential defendants, and filed criminal charges in 452 cases involving 892 defendants. A total of 826 defendants were convicted of health care fraud-related crimes during the year. Also in FY 2012, DOJ opened 885 new civil health care fraud investigations and had 1,023 civil health care fraud matters pending at the end of the fiscal year. In FY 2012, Federal Bureau of Investigation (FBI) health care fraud investigations resulted in the operational disruption of 329 criminal fraud organizations, and the dismantlement of the criminal hierarchy of more than 83 criminal enterprises engaged in health care fraud.

Meanwhile, HHS’ Office of Inspector General (HHS/OIG) excluded 3,131 individuals and entities in FY 2012. Among these were exclusions based on criminal convictions for crimes related to Medicare and Medicaid (912) or to other health care programs (287); for patient abuse or neglect (212); and as a result of licensure revocations (1,463). In addition, HHS/OIG imposed civil monetary penalties against, among others, providers and suppliers who knowingly submitted false claims to the Federal government. HHS/OIG also issued many audits and evaluations with recommendations that, when implemented, would correct program vulnerabilities and save program funds.

The enforcement actions announced by the Justice Department the first week of March, 2013 make clear federal prosecutors are gunning for even greater health care fraud enforcement success in 2013. See Health Care Clinic Director Pleads Guilty in Miami for Role in $63 Million Health Care Fraud Scheme; Orange County Doctor Convicted of Six Counts of Health Care Fraud in Multi-Million Dollar Scam involving Durable Medical Equipment; Manhattan U.S. Attorney Sues Park Avenue Medical Associates for Medicare Billing Fraud; Par Pharmaceuticals Pleads Guilty and Agrees to Pay $45 Million to Resolve Civil and Criminal Allegations Related to Off-Label Marketing; Doctor gets 50 Month Sentence for Health Care Fraud & Tax Evasion; and Nelson County, Kentucky Drug Store Owner Charged With Health Care Fraud and Wire Fraud.

Act To Manage Risks

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Posted by Cynthia Marcotte Stamer

Houston Ambulance Service Owner Convicted Of Health Care Fraud Faces Up To 70 Years

March 11, 2013

A Houston, Texas Federal jury on March 4, 2013 convicted the owner and operator of a Houston-area ambulance company, Olusola Elliott, of one count of conspiracy to commit health care fraud and six counts of health care fraud for submitting false and fraudulent claims to Medicare for ambulance services.

Elliott owned and operated Double Daniels LLC, a Texas entity that purportedly provided non-emergency ambulance services to Medicare beneficiaries in the Houston area. During the course of the scheme, the Justice Department charged that Elliott submitted and caused the submission of approximately $1,713,716 in fraudulent ambulance service claims to Medicare.

According to evidence presented at trial, Elliott and others conspired from April 2010 through December 2011 to unlawfully enrich themselves by submitting false and fraudulent claims to Medicare for ambulance services that were medically unnecessary and not provided. Evidence showed that Elliott falsified patient records in order to fraudulently bill Medicare for beneficiaries who were not in need of ambulance services. According to court documents, Elliot transferred the proceeds of the fraud to himself and others after Medicare payments were sent to Double Daniels.

Elliot is scheduled for sentencing on May 31, 2013, in Houston. The six health care fraud counts and the conspiracy count each carry a maximum potential penalty of 10 years in prison and a $250,000 fine

Federal prosecutors brought the charges as part of the Medicare Fraud Strike Force, supervised by the U.S. Attorney’s Office for the Southern District of Texas and the Criminal Division’s Fraud Section.

Strike Force & Other Zealous Health Care Fraud Enforcement Continues

The conviction is another reminder to health care providers, leaders and organizations of the advisability of tightening compliance practices and taking other steps to guard against ever-expanding health care fraud exposures. Even as the jury convicted Elliott, federal prosecutors finalizing a health care fraud settlement with another group of Texas providers. On March 5, 2013, the Justice Department announced that Children’s Physician Services of South Texas (CPSST) and Radiology Associates had agreed to pay more than $2 million collectively to settle claims they violated the False Claims Act and the Texas Medicaid Fraud Prevention Act between 2002 and 2007. Under the settlement, CPSST, a part of the Driscoll Health System, agreed to pay $1.5 million, while Radiology Associates, an independent physician group serving the Driscoll Health System, will pay $800,000 to settle claims they billed and received payment twice for the professional reading and interpretation of genetic ultrasounds. See, Corpus Christi Radiologist Group and Children’s Genetic Services Clinic Settle False Claims Act Allegations.

Act To Manage Risks

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 23 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.

About Solutions Law Press

Leave a Comment » | Academic medicine, Affordable Care Act, Anti-KickBack, ASC, Childrens Health Insurance Program, Corporate Compliance, Durable Medical Equipment, Federal Health Center, Federal Sentencing Guidelines, Health Care, Health Care Finance, Health Care Fraud, Health Care Provider, Health Care Quality, Health Care Reform, Health Plans, Hospital, Laws, Medicaid, Medicare, Medicare Advantage, Medicare Fee Schedule, Medicare Prescription Drug Program, Mental Heatlh, Money Laundering, OIG, Outpatient, Patient Protection and Affordable Care Act, Pharmacy, Physician, Prescription Drugs, Public Policy, Reimbursement, Rural Health Care, Stark, Substance Abuse | Tagged: Health Care Fraud, HEAT, Medicaid Fraud, Medicare, Medicare Fraud, Medicare Fraud Task Force | Permalink
Posted by Cynthia Marcotte Stamer

OSHA Safety Violations At Veterans’ Medical Center Reminder To Manage OSHA Compliance

March 1, 2013

The U.S. Department of Labor’s Occupational Safety and Health Administration (OSHA) has issued seven notices of unsafe or unhealthful working conditions found at the Battle Creek Veterans Administration Medical Center, following a safety inspection conducted in July as part of OSHA’s Federal Agency Targeting Inspection Program. OSHA’s announcement of the citations highlights the need for all health care and other employers to manage safety compliance. The citations highlight the high enforcement and penalty risks that public and private health care providers risk by failing to comply with OSHA’s safety, recordkeeping and reporting requirements.

Health Industry Employers High Priority OSHA Enforcement Target

Under these OSHA requirements, all employers, including federal and private health industry employers, are responsible for knowing what hazards exist in their facilities and taking appropriate precautions by following OSHA standards so workers are not exposed to such hazards. Physician practices, hospitals and other health care providers in both the public and private sectors generally are subject to these federal requirements, as well as various state and federal environmental and patient safety requirements. Enforcement of compliance in the health care industry is a high priority for OSHA because of the high rates of occupational accident and injury among health industry workers. Federal agencies generally must comply with the same safety standards as private-sector employers.

OSHA prioritizes monitoring and enforcing occupational safety standards throughout the health care industry because of the high incidence of occupational accidents and illnesses among health care workers. According to OSHA, more workers are injured in the healthcare and social assistance industry sector than any other. This industry has one of the highest rates of work related injuries and illnesses and it continues to rise. In 2020, the healthcare and social assistance industry reported a 40% increase in injury and illness cases which continues to be higher than any other private industry sector – 806,200 cases (2020 Survey of Occupational Injuries and Illnesses, BLS). Over half of these cases (447,890) resulted in at least one day away from work. The total incidence rate for this sector was 5.5 cases per 100 FTE workers in 2020, compared to 3.8 per 100 FTE workers in 2019. Nursing assistants were amongst the occupations with the highest rates of musculoskeletal disorders of all occupations in 2020, with 15,360 cases. Musculoskeletal disorders made up 52% of all days away from work cases for nursing assistants. See here. In addition to the medical staff, large healthcare facilities employ a wide variety of trades that have health and safety hazards associated with them. These include mechanical maintenance, medical equipment maintenance, housekeeping, food service, building and grounds maintenance, laundry, and administrative staff. Because of these risks, OSHA has extensive occupational health and safety requirements for physician practices, hospitals, nursing homes, home health and other health industry employers and targeted audit and enforcement programs to enforce and promote compliance with these requirements. See here.

Violations are common and frequently result in citations, particularly in certain key areas. The most frequently cited areas affecting health industry employers include violations of the following standards:

Section 1910.132, General requirements.
Section1910.133, Eye and face protection.
Section 1910.134, Respiratory protection.
Section 1910 Subpart Z – Toxic and Hazardous Substances
Section 1910.1030, Bloodborne pathogens.
Section 1910.1047, Ethylene oxide.
Section 1910.1048, Formaldehyde.
Section 1910.1096, Ionizing radiation.
Section 1910.1200, Hazard Communication.
Section 1910.1450, Occupational exposure to hazardous chemicals in laboratories.

Battle Creek VA OSHA Safety Violations

In the case of the Battle Creek Veterans Administration Medical Center, OSHA says an inspection uncovered several repeat safety violations, as well as certain other serious safety violations. OSHA reports that three repeat safety violations involved failing to evaluate the workplace to identify if permit-required confined spaces were present and label such spaces with danger signs; failing to adequately guard automated laundry equipment to prevent employees from entering the work area, and failing to fully guard the belt and pulley of an air compressor. To issue notices for repeat violations, OSHA must have issued at least one other notice for the same violation at one of the agency’s establishments within the same standard industrial classification code, commonly known as the SIC code. OSHA previously has cited U.S. Department of Veterans Affairs facilities in Danville and North Chicago, Illinois, and Minneapolis, Minnesota for the same safety and health violations.

The serious safety violations found included three serious safety violations for unguarded floor openings in the general repair shop; failing to inspect powered industrial trucks prior to placing them in service, and failing to remove trucks from service in need of repair. Additionally, OSHA found a circuit breaker panel was not mounted correctly. OSHA issues a serious notice when it finds a substantial probability that death or serious physical harm could result from a hazard about which the employer knew or should have known.

Beyond the repeat and serious violations, OSHA reports it also found one other-than-serious violation for failing to close unused openings on electrical cabinets and junction boxes. An other-than-serious violation is one that has a direct relationship to job safety and health, but probably would not cause death or serious physical harm.

While the medical center and other federal agencies are required to comply with the same OSHA rules as private sector employers, the VA and other federal agencies don’t face the same liabilities when cited. OSHA cannot propose monetary penalties against another federal agency for failure to comply with OSHA standards.

Since private sector employers that don’t enjoy the VA’s immunity liability run much greater risks for failing to maintain workplace safety, including significant civil and in the case of a workplace death, potentially even criminal penalties, private sector hospitals and other organizations should exercise special care to ensure appropriate safety in their workplaces.

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 nearly 35 years of 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.

About Solutions Law Press

Leave a Comment » | Academic medicine, Affordable Care Act, Anti-KickBack, ASC, Childrens Health Insurance Program, Corporate Compliance, Employer, Federal Health Center, Federal Sentencing Guidelines, Health Care, Health Care Finance, Health Care Fraud, Health Care Provider, Health Care Quality, Health Care Reform, Health Plans, Hospital, Laws, Medicaid, Medicare, Medicare Advantage, Medicare Fee Schedule, Medicare Prescription Drug Program, Mental Heatlh, Money Laundering, OIG, Outpatient, Patient Protection and Affordable Care Act, Pharmacy, Physician, Prescription Drugs, Public Policy, Reimbursement, Rural Health Care, Stark, Substance Abuse | Tagged: Health Care, Health Care Fraud, hospita, Hospital, Medicaid Fraud, Medicare Fraud Task Force, OSHA, Safety | Permalink
Posted by Cynthia Marcotte Stamer

Federal Health Care Fraud & Abuse Recovery of $4.2 Billion In FY 2012 Shows Enforcement Risks Growing

March 1, 2013

A new report from the Department of Health & Human Services (HHS) and the U.S. Department of Justice (DOJ) joint Health Care Fraud and Abuse Control Program (HCFC) documents the growing exposures of health care providers to federal health care fraud enforcement actions.

The charges are provide yet another powerful reminder to health care providers, leaders and organizations of the advisability of tightening compliance practices and taking other steps to guard against ever-expanding health care fraud exposures. Already a lead federal enforcement priority for more than a decade, the Health Care Fraud and Abuse Control Program Annual Report for Fiscal Year 2012 (FY2012 Report) documents that DOJ and HHS health care fraud enforcement activities scored big in 2012, and that qui tam whistleblowers played a big part and shared big in the profits.

Among other things, the FY2012 Report credits HCFC with producing $4.2 Billion in health care fraud judgments and settlements in Fiscal Year 2012 of which more than $284 million of the recovered monies were paid to relators under the qui tam provisions of the False Claims Act (FCA).

The FY2012 Report says the Medicare Trust Fund received more than $2.4 billion, including civil recoveries of $935 million, $1.4 billion in criminal fines, and $89.7 million in HHS Medicare program audit disallowances.

On the enforcement front, the FY2012 Report says DOJ opened 1,131 new criminal health care fraud investigations involving 2,148 potential defendants. Federal prosecutors had 2,032 health care fraud criminal investigations pending, involving 3,410 potential defendants, and filed criminal charges in 452 cases involving 892 defendants. A total of 826 defendants were convicted of health care fraud-related crimes during the year. Also in FY 2012, DOJ opened 885 new civil health care fraud investigations and had 1,023 civil health care fraud matters pending at the end of the fiscal year. In FY 2012, Federal Bureau of Investigation (FBI) health care fraud investigations resulted in the operational disruption of 329 criminal fraud organizations, and the dismantlement of the criminal hierarchy of more than 83 criminal enterprises engaged in health care fraud.

Act To Manage Risks

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 23 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.

About Solutions Law Press

Leave a Comment » | Academic medicine, Affordable Care Act, Anti-KickBack, ASC, Childrens Health Insurance Program, Corporate Compliance, Durable Medical Equipment, Federal Health Center, Federal Sentencing Guidelines, Health Care, Health Care Finance, Health Care Fraud, Health Care Provider, Health Care Quality, Health Care Reform, Health Plans, Hospital, Laws, Medicaid, Medicare, Medicare Advantage, Medicare Fee Schedule, Medicare Prescription Drug Program, Mental Heatlh, Money Laundering, OIG, Outpatient, Patient Protection and Affordable Care Act, Pharmacy, Physician, Prescription Drugs, Public Policy, Reimbursement, Rural Health Care, Stark, Substance Abuse | Tagged: Health Care Fraud, HEAT, Medicaid Fraud, Medicare, Medicare Fraud, Medicare Fraud Task Force | Permalink
Posted by Cynthia Marcotte Stamer

“CHNAs, 501(r), Governance & Other Tax Challenges Facing Exempt Organizations” Topic of 2/19 NTHCPA Study Group

February 7, 2013

Solutions Law Press, Inc. is happy to share information on the following program of interest to health care compliance professionals.

NORTH TEXAS HEALTHCARE COMPLIANCE PROFESSIONALS ASSOCIATION

Invites Members and Guests to Our Next Group Luncheon

“CHNAs, 501(r), Governance & Other Tax Challenges Facing Exempt Organizations”

Featuring

Nancy Evetts

Mid-America Healthcare Provider Sector & Tax-Exempt Tax Practice Leader

Brooke Kitchen

Tax Manager, Health Care Provider & Tax Exempt Organizations Practice

Tuesday, February 19, 2013
11:30 a.m. to 1:30 p.m.

Dallas Ft. Worth Hospital Council Offices

250 Decker Drive, Irving, TX 75062-2706

RSVP here by Noon on February 8, 2012

Complimentary Luncheon Underwritten By Cynthia Marcotte Stamer, P.C.

Register Early As Space Is Limited

Stay In Touch. Check Out Our New Newsletter, the NTHCPA News, here

The North Texas Healthcare Compliance Professionals Association (NTHCPA) invites members and other interested health care compliance professionals to join us on Tuesday, February 19, 2013 from 11:30 a.m. to 1:30 p.m. for our February Study Group Luncheon featuring Deloitte’s Mid-America Healthcare Provider Sector & Tax-Exempt Tax Practice Leader Nancy Evetts and Tax Manager, Health Care Provider & Tax Exempt Organizations Practice Regional Resource Brooke Kitchen, speaking on “CHNAs, 501(r), Governance & Other Tax Challenges Facing Exempt Organizations.”

About the Program

The financial and operational impacts of regulation and legislative oversight in the health care industry are pervasive and constantly changing. No less intrusive are the challenges organizations face every day from a tax perspective. This program will focus on some of these challenges as a result of recent legislation, including health care reform and fiscal cliff agreement, and current Internal Revenue Service (“IRS”) activity. Included in the discussion will be the additional requirements for certain hospitals under Internal Revenue Code Section 501(r) – CHNAs, financial assistance policies, charges, and billing and collections – effects of the fiscal cliff agreement on employers, and relevant areas of Internal Revenue Service activity, including audit focus, regulations, announcements and PLRs. Woven throughout the discussion will be the IRS’ focus on governance.

Registration & Meeting Details

The meeting scheduled from 11:30 a.m. to 1:30 p.m. on February 19, 2013 at the offices of the Dallas Ft Worth Hospital Council, 250 Decker Drive, Irving, TX 75062-2706 will feature a complimentary luncheon underwritten by Cynthia Marcotte Stamer, P.C. for those who timely R.S.V.P. Networking and lunch service will begin at 11:30. Our program will begin at Noon.

There is no charge to participate in the meeting. However space is limited and available only on a first come, first serve basis. To ensure your spot and help us to arrange for adequate space and refreshments for this meeting, R.S.V.P. here as soon as possible and no later than Noon on February 8, 2012 to reserve your spot. Walk in guests will be accommodated on a space-available basis only.

About The Speakers

With over 34 years of experience in public accounting, Nancy Evetts is Deloitte Tax LLP’s Mid-America regional tax leader for the healthcare provider sector and tax exempt tax practice. She has worked with large, integrated for-profit and not-for-profit health systems, as well as universities and related research facilities and joint ventures. Her work with exempt organizations has included issues on governance, private inurement, tax compliance reporting, unrelated business income, and alternative investments.

Nancy is a frequent speaker, both internally and externally, on topics of interest to tax exempt organizations. She earned her M.S. in Accountancy from the University of Houston in 1978 and her B.A. in German from the University of Houston in 1974. She is a member of the AICPA, TSCPA, HFMA, TEGE Gulf Coast Council and has served on not-for-profits boards. She is currently on the board of Catholic Charities of the Archdiocese of Galveston Houston.

Joining Nancy is Brooke Kitchen, a tax manager with Deloitte Tax LLP and a regional tax technical resource in the health care provider sector and tax exempt organizations practice. Over the course of her six years with Deloitte Tax LLP, Brooke has served many health care and other tax-exempt organizations, taxable corporations, flow-through entities, and individual clients. Brooke has been an internal and external speaker on health care and tax exempt topics including a recent presentation at the University of Houston and also at the local Houston chapter annual tax update for the AWSCPA where she discussed effects of the Patient Protection and Affordable Care Act. Brooke is an instructor for Deloitte’s national training on health care provider and not-for-profit tax issues, and is a Form 990 technology development leader in our national health care industry practice. She earned her B.A. in Accountancy from the University of Houston and is a member of the AICPA and TSCPA.

Mark Your Calendars & Save The Date

The NTHCPA has an exciting series of future programs planned for upcoming months. Mark your calendars and save the date to participate in these upcoming NTHCPA Meetings and programs:

March 19, 2013

Best Practices for Conflict of Interest Management Programs

Robert Michalski, Baylor Healthcare System Chief Compliance Officer

Bonnie Ann Sexton, Baylor Health Care System Director of Compliance, Ethics and Operations

Thanks to Cynthia Marcotte Stamer, P.C.!

The NTHCPA thanks the law firm of Cynthia Marcotte Stamer, P.C. for its generous underwriting support of the February 19, 2013 luncheon. The law firm of Cynthia Marcotte Stamer, P.C. provides risk management, compliance, regulatory and public policy advocacy, operations, privacy, peer review and other staffing, employee benefits, and a broad range of other general and special counsel services for a broad range of public and private hospitals, physician organizations, skilled nursing facilities, managed care and quality organizations, health IT, health industry suppliers consulting and other service providers, and other health industry clients. Founder and Managing Shareholder Cynthia Marcotte Stamer has more than 25 years experience helping health industry clients manage the legal and operational challenges of operating under federal and state health care, tax, managed care and insurance, health care fraud and reimbursement, employment, credentialing and peer review, HIPAA and other information privacy, and other regulatory and public policy concerns. A Fellow in the Texas & American Bar Association, former National Kidney Foundation of North Texas Board Compliance Chair, former Board President of the Richardson Development Center (now Warren Center), Vice-President of the NTHCPA, past-Chair of the ABA Health Law Section Managed Care & Insurance IG, former Gulf States IRS TEGE Council Exempt Organizations Coordinator, and Executive Director of Project COPE: The Coalition on Patient Empowerment, Ms. Stamer also is widely recognized for her extensive health industry publications, training, speaking and service in the leadership in a broad range of health industry, professional, civic and other non-profit organizations For more information, see www.cynthiastamer.com or contact Cynthia at 469.767.8872.

About the NTHCPA

NTHCPA exists to champion ethical practice and compliance standards and to provide the necessary resources for ethics and compliance Professionals and others in North Texas who share these principles. The vision of NTHCPA is to be a pre-eminent compliance and ethics group promoting lasting success and integrity of organizations within North Texas.

Would you or someone you know like to join the NTHCPA, get notice of upcoming meetings or events and network on relevant professional developments with other health care professionals? Stay on top of information about upcoming meetings and share and dialogue with other NTHCPA members about health care compliance challenges and developments by participating in our meetings and events, joining our Linked In Group here and checking out the NTHCPA News here. To be added to our invitation list, we also encourage interested persons to make sure we have your current contact information by registering for the meeting or sending your current contact information including name, title, company, preferred mailing address, e-mail, and telephone number to Vice-President Cynthia Marcotte Stamer here.

Sponsorship and Other Involvement Opportunities

Would you like to show your support for the NTHCPA by sponsoring the luncheon or hosting a social hour? Want to help plan upcoming meetings? Suggest a speaker or topic? Help with the newsletter or website? Serve on the steering committee or get more involved in other ways? Get more information about membership or involvement with the NTHCPA? Send your inquiry by e-mail here.

This communication may be considered a marketing communication for certain purposes. If you wish to update your e-mail for purposes of or would prefer not to receive future e-mail concerning meetings or other activities of the North Texas Healthcare Compliance Professionals Association or other marketing and promotional mailings from it, please send an email with the word “unsubscribe” in its subject heading here.

NTHCPA invites you to share this invitation with others who might be interested in this topic or other NTHCPA.

About Solutions Law Press, Inc.™

Solutions Law Press, Inc.™ provides business and management information, tools and solutions, training and education, services and support to help organizations and their leaders promote effective management of legal and operational performance, regulatory compliance and risk management, data and information protection and risk management and other key management objectives. Solutions Law Press, Inc.™ also conducts and help businesses and associations to design, present and conduct customized programs and training targeted to their specific audiences and needs. For additional information about upcoming programs, to explore becoming a presenting sponsor for an upcoming event, e-mail your request to info@Solutionslawpress.com These programs, publications and other resources are provided only for general informational and educational purposes. Neither the distribution or presentation of these programs and materials to any party nor any statement or information provided in or in connection with this communication, the program or associated materials are intended to or shall be construed as establishing an attorney-client relationship, to constitute legal advice or provide any assurance or expectation from Solutions Law Press, Inc., the presenter or any related parties. If you or someone else you know would like to receive future Alerts or other information about developments, publications or programs or other updates, send your request to info@solutionslawpress.com. CIRCULAR 230 NOTICE: 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 Solutions Law Press. All rights reserved.

Leave a Comment » | Academic medicine, Doctor, Health Care, Health Care Finance, Health Care Fraud, Health Care Provider, Health Care Reform | Permalink
Posted by Cynthia Marcotte Stamer

7 Arrested, Charged In Detroit-Area Home Health Care Fraud Takedown

January 18, 2013

January 17, 2013; U.S. Department of Justice

Seven Arrested, Charged with $22 Million Detroit-area Home Health Care Fraud Scheme

Six Detroit-area residents and one Chicago-area resident were arrested on January 17, 2012 by federal agents on charges arising from the ongoing investigation into an alleged $22 million home health care fraud scheme that the indictment charges operated out of four Oakland County, Michigan home health agencies claiming to provide in-home health service, Royal Home Health Care Inc., Prestige Home Health Services Inc., Platinum Home Health Services Inc. and Empirical Home Health Care Inc. (the “Agencies”). The defendants arrested are Detroit-area residents Muhammad Aamir, Usman Butt, Hemal Bhagat, Syed Shah, Tariq Tahir, and Raquel Ellington, and Chicago-area resident Tayyab Aziz (the “Defendants”).

According to the Justice Department, the arrests and Medicare payment suspensions stem from charges brought in an 18-count indictment returned January 15, 2013, which alleges that the Defendants participated in a Medicare fraud scheme operating out of the Agencies. The indictment alleges Medicare paid the agencies approximately $22 million for fraudulently reported services since August 2008. See Aamir, Muhammed et al. (Prestige) Indictment. In addition to the arrests, law enforcement agents suspended Medicare payments to the Agencies associated with the alleged scheme.

According to the indictment, Aamir and Butt owned and operated Prestige; Butt, Bhagat and Shah owned and operated Royal; and Aamir owned and operated Platinum and Empirical. The indictment alleges that of the Agencies allegedly claimed to provide home health therapy services to Medicare beneficiaries that were unnecessary and/or were never performed. The indictment also alleges that Tahir and Ellington recruited Medicare beneficiaries, paying them kickbacks for their Medicare information and signatures on documents that detailed physical therapy and/or skilled nursing services that were either never rendered or not medically necessary. The indictment also charges Aamir, Butt, Bhagat, Shah, Tahir and Ellington with conspiring to pay kickbacks to Tahir and Ellington for their recruiting work and Butt, Bhagat, Shah and Aziz with allegedly conspiring to launder the proceeds of the scheme.

Based on the alleged conduct, the indictment charges each of the Defendants with conspiracy to commit health care fraud. All but Aziz are also charged with health care fraud and with conspiracy to violate the Anti-Kickback Statute. Butt, Bhagat, Shah and Aziz are additionally charged with conspiracy to commit money laundering.

A conviction on the charges is likely to carry heavy penalities. The charges of health care fraud conspiracy and health care fraud each carry a maximum potential penalty of 10 years in prison and a $250,000 fine. The charge of conspiracy to violate the Anti-Kickback Statute carries a maximum potential penalty of five years in prison and a $25,000 fine. The charge of conspiracy to commit money laundering carries a maximum potential penalty of 20 years in prison and a $500,000 fine.

The arrests and indictments reflect the continuing and growing government commitment to, coordination and sophistication in the investigation and prosecution of health care crimes by health care providers in the federal war on what officials view as health care fraud. The Obama Administration has made investigation and prosecution of health care fraud laws a key element of its strategy to manage U.S. health care program costs. Recently enacted changes in the False Claims Act and other laws are making it easier for federal prosecutors to successfully prosecute these and other health care fraud cases.

Since their inception in March 2007, the the HEAT health care fraud task force operations in nine locations have lead to charges against more than 1,480 defendants who Federal officals claim collectively have falsely billed the Medicare program for more than $4.8 billion. In addition, the HHS Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to exclude and impose other remedies against health care providers that it perceives engage in fraud or other aggressive billing or other practices.These and other stepped up oversight and enforcement activities make it critical that all health industry organizations strengthen their internal controls, compliance and audit activities as well as be prepared to defend their actions against the rising tide of federal and state oversight and enforcement.

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

If you need help with HIPAA or other health industry, regulatory policy or enforcement developments, or to review or respond to these or other health care or health IT 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, health plans, their business associates 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. She regularly designs and presents HIPAA and other risk management, compliance and other training for health plans, employers, health care providers, professional associations and others.

Scheduled to serve as the scribe for the ABA Joint Committee on Employee Benefits agency meeting with OCR, Ms. Stamer also regularly works with OCR and other agencies, publishes and speaks extensively on medical and other privacy and data security, 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 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. For instance, Ms. Stamer for the second year will serve as the appointed scribe for the ABA Joint Committee on Employee Benefits Agency meeting with OCR. Her insights on HIPAA risk management and compliance often appear in medical privacy related publications of a broad range of health care, health plan and other industry publications Among others, she has conducted privacy training for the Association of State & Territorial Health Plans (ASTHO), the Los Angeles Health Department, the American Bar Association, the Health Care Compliance Association, a multitude of health industry, health plan, insurance and financial services, education, employer employee benefit and other clients, trade and professional associations and others. You can get more information about her HIPAA and other experience here.

If you need help 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.

You can review other recent publications and resources and additional information about the other experience of Ms. Stamer here. Examples of some recent publications that may be of interest include:

If you need help investigating or responding to a known or suspected compliance, litigation or enforcement or other risk management concern, assistance with reviewing, updating, administering or defending a current or proposed employment, employee benefit, compensation or other management practice, wish to inquire about federal or state regulatory compliance audits, risk management or training, or need legal representation on other matters please contact Ms Stamer here or at (469) 767-8872.

About Solutions Law Press, Inc.™

Solutions Law Press, Inc.™ provides business and management information, tools and solutions, training and education, services and support to help organizations and their leaders promote effective management of legal and operational performance, regulatory compliance and risk management, data and information protection and risk management and other key management objectives. Solutions Law Press, Inc.™ also conducts and assist businesses and associations to design, present and conduct customized programs and training targeted to their specific audiences and needs. For additional information about upcoming programs, to explore becoming a presenting sponsor for an upcoming event, e-mail your request to info@Solutionslawpress.com These programs, publications and other resources are provided only for general informational and educational purposes. Neither the distribution or presentation of these programs and materials to any party nor any statement or information provided in or in connection with this communication, the program or associated materials are intended to or shall be construed as establishing an attorney-client relationship, to constitute legal advice or provide any assurance or expectation from Solutions Law Press, Inc., the presenter or any related parties. If you or someone else you know would like to receive future Alerts or other information about developments, publications or programs or other updates, send your request to info@solutionslawpress.com. CIRCULAR 230 NOTICE: 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. If you are an individual with a disability who requires accommodation to participate, please let us know at the time of your registration so that we may consider your request.

Leave a Comment » | Corporate Compliance, Doctor, false claims act, FDA, Federal Sentencing Guidelines, Health Care, Health Care Fraud, Health Care Provider, Hospital, Medicare, OIG, Physician, Reimbursement | Tagged: Corporate Compliance, Doctor, false claims act, FDA, Federal Sentencing Guidelines, Fraud, Health Care, Health Care Provider, Health Care Reimbursement, HHS, Hospital, Off-label marketing, Pharma, Pharmaceudical, Prescription Drugs | Permalink
Posted by Cynthia Marcotte Stamer

Detroit-Area Doctor Charged for Role in Alleged $40 Million Medicare Fraud Scheme

September 23, 2012

A Detroit-area doctor was charged and arrested on September 20, 2012 in the Eastern District of Michigan for his alleged leading role in a $40 million Medicare fraud scheme involving physician home visits and home health services. The Department of Justice (DOJ), the Department of Health and Human Services (HHS), the Federal Bureau of Investigations (FBI) and the HHS-Office of Inspector General (OIG) jointly announced the charges. In addition to the arrest, law enforcement agents executed search warrants at three locations and seizure warrants for three bank accounts related to the scheme.

According to a criminal complaint unsealed today in U.S. District Court in Detroit, Dr. Hicham Elhorr, 45, masterminded a $40 million scheme involving the submission of fraudulent claims submitted to Medicare for services that were medically unnecessary and/or never provided through House Calls Physicians (HCP), a physician home visiting service he owned and operated. Elhorr allegedly submitted claims through HCP for physician home visits for patients who were never seen and for visits conducted by doctors who were not licensed. The complaint alleges Elhorr submitted claims to Medicare for physician home visits purportedly rendered when he was out of the country, when beneficiaries were hospitalized or when the beneficiary was dead.

Elhorr is also alleged to have referred Medicare beneficiaries for medically unnecessary home health services, as well as accepted kickbacks from home health agencies in exchange for writing these referrals. According to court documents, since January 2008, HCP has billed Medicare for approximately $9.2 million. In the same time period, HCP has allegedly referred Medicare beneficiaries for home health services that have resulted in approximately $30.8 million of reimbursements from Medicare.

The case is being prosecuted by Trial Attorney Catherine K. Dick of the Criminal Division’s Fraud Section. The investigations were conducted jointly by the FBI and HHS-OIG, as part of the Medicare Fraud Strike Force, supervised by the U.S. Attorney’s Office for the Eastern District of Michigan and the Criminal Division’s Fraud Section.

Act To Manage Health Care Fraud Exposures

High profile criminal charges like this one tell only part of the story. While important and growing, the OIG and other civil audit and enforcement are targeting both health care providers that engage in overly aggressive billing and treatment practices while scaring legitimate providers into avoiding legitimate care and its billing in treatment areas subject to high audit and underbilling for fear of the costs and risks associated with drawing government scruitiny. Amid this quagmire, legitimate health care providers must carefully document their care and the underlying justification and manage their billing practices to mitigate fraud exposures while also ensuring that their care meets the requisite standards of care to meet professional standards of care. It’s a tough but critical task for which reimbursement is declining.

As health care fraud enforcement remains a lead Federal priority, health care providers face ever-heightening exposures to HEAT task force scrutiny and prosecution.

Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,330 defendants who have collectively billed the Medicare program for more than $4 billion.

Along with these criminal investigation and enforcement activities, health care providers also face civil monetary penalty, federal program disqualification and other civil and administrative remedies from billing, reimbursement and other health care fraud, billing audits and other enforcement and audit activities.

HHS’s Centers for Medicare and Medicaid Services, working in conjunction with HHS-OIG, is stepping up audits, tightening pre-payment review, stepping up program disqualifications, and taking other steps to increase accountability and decrease the presence of fraudulent providers.

In response to these and other investigation and oversight activities, health care providers should strengthen their compliance practices and oversight and take other special care to position themselves and their billings to defend against possible challenge.

For Help With Compliance, Investigations Or Other Needs

If you need help 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. Contact Ms. Stamer at (469) 767-8872 or via e-mail here.

About Solutions Law Press

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Posted by Cynthia Marcotte Stamer

Five More Individuals Charged in Detroit for Alleged Roles in $24.7 Million Medicare Fraud Scheme

September 23, 2012

New Charges Bring To A Total of 9 Charged for Their Roles in the Scheme

Charges against five more individuals for their alleged participation in a $24.7 million Medicare fraud scheme involving purported home health and psychotherapy services were unsealed and made public in the Eastern District of Michigan on September 20, 2012 bring to a total of nine individuals now charged in the scheme.

The Department of Justice (DOJ), the Federal Bureau of Investigation (FBI) and the Department of Health and Human Services (HHS) jointly announced the charges.

DOJ charges in court documents that the scheme allegedly involved a total of more than $24.7 million in fraudulent claims submitted to Medicare for purported home health care and psychotherapy services that were medically unnecessary and/or never provided. Court documents allege that the defendants are operators, employees and marketers associated with home health care and psychotherapy clinics operating in and around Detroit. Defendants charged in the unsealed court documents unsealed today include: Mohammed Sadiq; Jamella Al-Jumail; Firas Alky; Clarence Cooper and Beverly Cooper.

Four defendants charged in the superseding indictment were previously charged and arrested in May 2012 for their roles in the scheme. Defendants previously charged include: Sachin Sharma, Dana Sharma, Abdul Malik Al-Jumail, and Felicar Williams.

The superseding indictment charges all defendants with one count of conspiracy to commit health care fraud; Sachin Sharma with five counts of health care fraud; Sachin Sharma, Abdul Malik Al-Jumail, Williams, Sadiq, Alky and Clarence Cooper with one count of conspiracy to pay and receive health care kickbacks; and Jamella Al-Jumail with one count of destruction of records in a federal investigation. The superseding indictment also seeks forfeiture from all defendants.

According to the superseding indictment, from January 2007 through April 2012, the defendants operated a large network of purported home health care and psychotherapy companies in the Detroit area through which they conspired to defraud Medicare.

According to court documents, Sachin Sharma, Dana Sharma, Abdul Malik Al-Jumail, Williams, Jamella Al-Jumail, Sadiq, Alky and other alleged co-conspirators incorporated home health care, psychotherapy and other medical service companies to carry out the scheme, including Reliance Home Care, LLC; First Choice Home Health Care Services Inc.; Associates in Home Care Inc.; Haven Adult Day Care Center LLC; Swift Home Care LLC; ABC Home Care Inc.; Accessible Home Care Inc.; and Be Well Home Care LLC. The defendants, along with co-conspirators, allegedly submitted Medicare enrollment applications to let these companies to bill Medicare. Sachin Sharma, Abdul Malik-Al-Jumail, Sadiq, Alky and others allegedly paid kickbacks and bribes to recruiters, including Williams and Clarence Cooper, to get Medicare beneficiaries’ information, which could be used to fraudulently bill Medicare for purported services provided by the companies they operated and controlled. The defendants then allegedly caused these companies to bill Medicare for home health and psychotherapy services, even though these services were not medically necessary and were often not provided.

According to the superseding indictment, the defendants caused Reliance, First Choice, Associates, Haven, Swift, ABC, Accessible and other home health, psychotherapy and medical services companies to bill approximately $24.7 million in claims to Medicare for services that were medically unnecessary and/or not provided. In addition, Jamella Al-Jumail is charged with destroying records relating to Accessible’s Medicare billings upon learning of the May 2012 arrest of Abdul Malik Al-Jumail, her co-conspirator and father.

Clarence and Beverly Cooper, Sadiq and Jamella Al-Jumail were arrested on September 21.

The case is being prosecuted by Fraud Section Assistant Chief Gejaa T. Gobena and Trial Attorney William G. Kanellis. The investigations were conducted jointly by the FBI and HHS-OIG, as part of the Medicare Fraud Strike Force, supervised by the U.S. Attorney’s Office for the Eastern District of Michigan and the Criminal Division’s Fraud Section.

Act To Manage Health Care Fraud Exposures

As health care fraud enforcement remains a lead Federal priority, health care providers face ever-heightening exposures to HEAT task force scrutiny and prosecution. Along with these criminal investigation and enforcement activities, health care providers also face civil monetary penalty, federal program disqualification and other civil and administrative remedies from billing, reimbursement and other health care fraud, billing audits and other enforcement and audit activities.

For Help With Compliance, Investigations Or Other Needs

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Posted by Cynthia Marcotte Stamer

HHS/DOJ Partner With Private Health Plans To Further Ramp Up Health Care Fraud Heat!

July 30, 2012

Health care providers and payers should ensure that practices for billing private payers can withstand the scrutiny of federal and state health care fraud enforcers after the July 26, 2012 announcement of a ground-breaking new public-private antifraud initiative between federal and state health care fraud fighters and a private insurers under which private insurers will share an unprecedented amount of private health claims data, fraud detection practices, and other coöperation with federal and state official fraud prevention and prosecution efforts.

Government Health Care Fraud Fighters Partner With Private Insurers

The Federal health care fraud fighting departmental duo of the Departments of Health and Human Services (HHS) Justice (DOJ) last week expanded their network of fraud fighting resources by launching a “ground-breaking” partnership among the federal government, State officials, several leading private health insurance organizations, and other health care anti-fraud groups to prevent health care fraud. HHS and DOJ say the following organizations and government agencies are among the first to join this partnership:

America’s Health Insurance Plans
Amerigroup Corporation
Blue Cross and Blue Shield Association
Blue Cross and Blue Shield of Louisiana
Centers for Medicare & Medicaid Services
Coalition Against Insurance Fraud
Federal Bureau of Investigations
Health and Human Services Office of Inspector General
Humana Inc.
Independence Blue Cross
National Association of Insurance Commissioners
National Association of Medicaid Fraud Control Units
National Health Care Anti-Fraud Association
National Insurance Crime Bureau
New York Office of Medicaid Inspector General
Travelers
Tufts Health Plan
UnitedHealth Group
U.S. Department of Health and Human Services
U.S. Department of Justice
WellPoint, Inc.

HHS & DOJ Say Partnering With Private Insurers Will Give Ongoing Anti-Fraud Efforts Even More Punch

In announcing the new partnership on July 26, 2012, HHS Secretary Kathleen Sebelius and Attorney General Eric Holder touted this new voluntary, collaborative public-private arrangement as the “next step” in the Obama administration’s efforts to combat health care fraud.

“This partnership is a critical step forward in strengthening our nation’s fight against health care fraud,” said Attorney General Holder. “This Administration has established a record of success in combating devastating fraud crimes, but there is more we can and must do to protect patients, consumers, essential health care programs, and precious taxpayer dollars. Bringing additional health care industry leaders and experts into this work will allow us to act more quickly and effectively in identifying and stopping fraud schemes, seeking justice for victims, and safeguarding our health care system.”

“This partnership puts criminals on notice that we will find them and stop them before they steal health care dollars,” Secretary Sebelius said. “Thanks to this initiative today and the anti-fraud tools that were made available by the health care law, we are working to stamp out these crimes and abuse in our health care system.”

Partnership Allows Feds To Use Private Payer Claims Data, Knowledge & Other Fraud Detection Resources

According to HHS and DOJ, the new partnership is designed to share information and best practices in order to improve detection and prevent payment of fraudulent health care billings. Its goal is to reveal and halt scams that cut across a number of public and private payers. HHS and DOJ say the partnership will private insurers to share their anti-fraud insights more easily with investigators, prosecutors, policymakers and other stakeholders and law enforcement officials more effectively to identify and prevent suspicious activities, better protect patients’ confidential information and use the full range of tools and authorities provided by the Patient Protection & Affordable Care Act (Affordable Care Act) and other statutes to combat and prosecute illegal actions.

One unprecedented element of this partnership will involve the sharing of information on specific schemes, utilized billing codes and geographical fraud hotspots between the public and private partners. The partners say the planned sharing of claims data and other information will help partners prevent, detect and respond to potential health care billing fraud by:

Helping partners to take action, to prevent losses to both government and private health plans before they occur;
Improving their ability to spot and stop payments billed to different insurers for care delivered to the same patient on the same day in two different cities;
In the future to use sophisticated technology and analytics on industry-wide healthcare data to predict and detect health care fraud schemes.

Presumably, this will involve the extension of the use of state-of-the-art technology and data mining practices like those the Centers for Medicare & Medicaid Services (CMS) already uses to review claims, to track suspected fraud trends and flag suspected fraudulent activity.

Partnership Expands Use & Reach of New Affordable Care Act & Other Health Care Fraud Detection & Enforcement Tools & Collaboration

The partnership builds upon and extends the reach and use of expanded legal tools created by the Affordable Care Act and other laws that Federal and state officials are using in their highly publicized war against health care fraud, waste and abuse in Medicare, Medicaid, the Children’s Health Insurance Program (CHIP) and, increasingly, private insurance plans. Using these and other new tools, convictions under the Health Care Fraud and Abuse Control Program increased by over 27% (583 to 743) between 2009 and 2011, and the number of defendants facing criminal charges filed by federal prosecutors in 2011 increased by 74% compared with 2008 (1,430 vs. 821).

The Affordable Care Act and other legislative changes and related programs have significantly strengthened the powers of HHS, DOJ and other federal and state agencies to investigate and prosecute health care fraud. Among other things, these amendments and programs included :

Qui tam and other whistleblower incentives and programs that encourage employees, patients, competitors and others to report suspicious behavior;
Require providers, plans to self-identify, self-report and self-correct false claims and certain other non-compliance;
Increase the federal sentencing guidelines for health care fraud offenses by 20-50% for crimes that involve more than $1 million in losses;
Create penalties for obstructing a fraud investigation or audit;
Make it easier for the government to recapture any funds acquired through fraudulent practices;
Make it easier for the Department of Justice (DOJ) to investigate potential fraud or wrongdoing at facilities like nursing homes;
Under the risk-based provider enrollment rules, providers and suppliers wishing to take part in Medicare, Medicaid, and CHIP who federal officials view as posing a higher risk of fraud or abuse now must undergo licensure checks, site visits and other heightened scrutiny including ongoing monitoring as part of the new Automated Provider Screening (APS) system CMS implemented in December 2011. The APS uses existing information from public and private sources to automatically and continuously verify information submitted on a provider’s Medicare enrollment application including licensure status Secretary to impose a temporary moratorium on newly enrolling providers or suppliers of a particular type or in certain geographic areas if necessary to prevent or combat fraud, waste, and abuse.
Increased information sharing and coördination of investigations and enforcement among states, CMS, and its law enforcement partners at the Office of the Inspector General (OIG) and DOJ including the highly publicized activities of the Health Care Fraud Prevention and Enforcement Action Team (HEAT), a joint effort between HHS and DOJ to fight health care fraud.
The power of CMS, in consultation with OIG, to suspend Medicare payments and require States to suspend Medicaid and SCHIP payments to providers or suppliers during the investigation of a credible allegation of fraud;
The deployment and use of the sophisticated data collection and mining technologies of CMS’ new Fraud Prevention System, which since June 30, 2011 has used advanced predictive modeling technology to screen all Medicare fee-for-service claims before payment and target investigative resources on areas that this profile identifies as reflecting heightened risks of health care fraud vulnerability to allow regulators and prosecutors to more efficiently identify and respond to suspected fraudulent claims and emerging trends;
Focused fraud prevention, detection and enforcement activities on Home Health agencies, Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) suppliers and certain other categories of providers and suppliers that federal officials view as historically presenting heightened concerns;
Expansion of the overpayment detection and recovery activities ofthe Recovery Audit Contractor (RAC) program to Medicaid, Medicare Advantage, and Medicare Part D programs; and
Various other tools.

Health Plan Partnership Latest Wrinkle In Fed’s Efforts To Use Private Whistleblower & Other Resources To Find Fraud

The partnership with the health plans is the latest wrinkle in a growing network of private relationships and outreach that HHS and DOJ use to discover health care fraud. By partnering with health plans, HHS and DOJ have recruited the health plans to help federal officials find and redress potential fraud in public and private health plans.

HHS and DOJ already know the value of getting private citizens to watch for and report suspected illegal behavior. Indeed, expended qui tam and other whistleblower activities already are paying off big for federal officials. For example, a former executive’s qui tam claim helped bring about the settlement announced in June, 2012 under which Christus Spohn Health System Corporation recently paid more than $5 million to settle Justice Departmentclaims that it profited from violations of the False Claims Act by inappropriately admitted patients to inpatient status for outpatient procedures. The investigation leading to the settlement began in March 2008 after Christus – Shoreline’s former director of case management filed a lawsuit under seal under the qui tam provisions of the False Claims Act alleging the six hospitals were submitting false claims to the Medicare program by billing for services that should have been performed on an outpatient basis as if they were more expensive inpatient services. The allegations stated that these hospitals were routinely billing outpatient surgical procedures as if they required an inpatient level of care even though the patients often were discharged from the hospital in less than 24 hours. The federal False Claims Act empowers private citizens with knowledge of fraud against the United States to present those allegations to the United States by bringing a lawsuit on behalf of the United States under seal. If the government’s investigation substantiates those allegations, then the private citizen is entitled to share in any recovery. In this case, that person will receive 20% of the $5,100,481.74 recovery.

With qui tam and other reports of suspected fraud an increasingly frequent and valuable tool in the federal and state wars on health care fraud, officials have added a wide range of programs encouraging and in some cases financially rewarding individuals and businesses that report circumstances leading to fraud convictions. The partnership with health plans reflects the latest wrinkle in these efforts.

Health Care Providers & Health Plans Must Act To Manage Risks

In response to the growing emphasis and effectiveness of Federal officials in investigating and taking action against health care providers and organizations, health care providers covered by federal false claims, referral, kickback and other health care fraud laws should consider auditing the adequacy of existing practices, tightening training, oversight and controls on billing and other regulated conduct, reaffirming their commitment to compliance to workforce members and constituents and taking other appropriate steps to help prevent, detect and timely redress health care fraud exposures within their organization and to position their organization to respond and defend against potential investigations or charges. In light of the growing qui tam risks, health care providers also should tighten internal investigation, exit interview and other human resources and business partner oversight, reporting and investigation policies and practices to help find and redress potential fraud or other qui tam, retaliation and similar exposures early and more effectively.

For More Information Or Assistance

If you need help reviewing or responding to these or other health care related risk management, compliance, enforcement or management concerns, the author of this update, attorney Cynthia Marcotte Stamer, may be able to help. Vice President of the North Texas Health Care Compliance Professionals Association, Past Chair of the ABA Health Law Section Managed Care & Insurance Section and the former Board Compliance Chair of the National Kidney Foundation of North Texas, Ms. Stamer has more than 24 years experience advising health industry clients about these and other matters. Her experience includes advising hospitals, nursing home, home health, rehabilitation and other health care providers and health industry clients to establish and administer compliance and risk management policies; prevent, conduct and investigate, and respond to peer review and other quality concerns; and to respond to Board of Medicine, Department of Aging & Disability, Drug Enforcement Agency, OCR Privacy and Civil Rights, HHS, DOD and other health care industry investigation, enforcement and other compliance, public policy, regulatory, staffing, and other operations and risk management concerns.

A popular lecturer and widely published author on health industry concerns, Ms. Stamer continuously advises health industry clients about compliance and internal controls, workforce and medical staff performance, quality, governance, reimbursement, and other risk management and operational matters. Ms. Stamer also publishes and speaks extensively on health and managed care industry regulatory, staffing and human resources, compensation and benefits, technology, public policy, reimbursement and other operations and risk management concerns. Her insights on these and other related matters appear in the Health Care Compliance Association, Atlantic Information Service, Bureau of National Affairs, The Wall Street Journal, Business Insurance, the Dallas Morning News, Modern Health Care, Managed Healthcare, Health Leaders, and a many other national and local publications. You can get more information about her health industry experience here. If you need help 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.

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Posted by Cynthia Marcotte Stamer

AHRQ Issues New Guide for Use of Interactive Preventive Care Record

July 19, 2012

A new guide from the Agency for Healthcare Research and Quality (AHRQ) titled An Interactive Preventive Care Record (IPHR): A Handbook for Using Patient-Centered Personal Health Records to Promote Prevention provides practical steps for healthcare professionals to follow when deploying IPHRs as components of electronic health records. AHRQ and other government and private health care technology advocates hope that the IPHR will help boost and promote care delivery practices that promote health and wellness among patient populations.

AHRQ touts the resource as a guidebook of targeted advice for practice leaders, informatics staff, and practice personnel on selection, implementation and maintenance of electronic health records and practices to help them work as a team to promote full utilization of IPHRs.

To get the handbook, see here.

For More Information Or Assistance

For help reviewing and updating your health care compliance, workforce, internal controls and risk management policies, technology, operations, practices or programs; assessing the strength of your organizations existing operations, risk management and compliance controls under these laws or other healthcare regulatory or operational issues or concerns, please contact Cynthia Marcotte Stamer via e-mail here or via telephone at 469.767.8872. To review and register to receive other helpful updates or for more information about Ms. Stamer and her experience, see 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

Leave a Comment » | Controlled Substances, Evidence Based Medicine, FDA, Health Care, Health Care Finance, Health Care Fraud, Health Care Provider, Pharmacy, Prescription Drugs, Reimbursement | Tagged: FDA, Federal Sentencing Guidelines, Food and Drug, GlaxoSmithKiine, Health Care, Health Care Fraud, Health Care Fraud Task Force, Pharma, Pharmaceudical | Permalink
Posted by Cynthia Marcotte Stamer

Nextcare Inc. $10 Million False Claims Act Settlement Shows Qui Tam Role In False Claims Act Prosecutions

July 11, 2012

A False Claims Act settlement announced last week with Arizona-based urgent care chain NextCare Inc. provides another illustration of the growing exposure that qui tam and other reports of illegal practices by employees, contractors and other business partners create for health care and other companies.

Last week, Justice Department officials announced that NextCare Inc agreed to pay $10 million to settle federal and state allegations that it submitted false claims initially raised in a lawsuit filed against NextCare Inc. by former NextCare employee Lorin Cohen.

The settlement resolves allegations that NextCare violated the False Claims Act by:

Submitting false claims to Medicare, TRICARE, the Federal Employees Health Benefits Program, and the Medicaid programs of Colorado, Virginia, Texas, North Carolina and Arizona, by billing for unnecessary allergy, H1N1 virus and respiratory panel testing and
Upcoding when billing for urgent care medical services.

As a condition of the settlement, NextCare Inc. will become subject to a five-year Corporate Integrity Agreement with HHS-OIG.

Investigated and prosecuted as part of the Federal government’s highly touted HEAT initiative, the Nextcare Inc. settlement emphasize both the strong commitment by the Department of Justice and HHS to find a prosecute Medicare and Medicaid financial fraud and the growing importance of qui tam actions and other insider reports of legal violations to the success of these actions.

Qui tam and other fraud reports made by employees or other business partners have become a significant tool in the Federal government’s war against health care fraud. Under the False Claims Act, private citizens acting as relators can bring suit on behalf of the United States and share in the recovery. Ms. Cohen will receive $1.614 million as her share of the recovery.

Through the False Claims Act alone, the Justice Department has recovered more than $7.7 billion since January 2009 in cases involving fraud against federal health care programs. The Justice Department’s total recoveries in False Claims Act cases since January 2009 are over $11.3 billion.

In response to the Nextcare Inc. settlement and other enforcement actions, health care providers should strengthen both their health care compliance and employment management processes. In addition to working to promote compliance with the False Claims Act and other health care laws, health care providers need to implement strong internal investigation, audit, and employee and contractor management procedures to help self-discover and address potential compliance or other liability concerns.

As part of these efforts, health care providers generally should not only provide hotlines for reporting suspected fraud or other misconduct. Many health care providers also can benefit by adopting and enforcing strong policies that require employees, contractors and other business partners to timely report and cooperate in the investigation and redress of potential health care fraud or other legal violations, should promptly investigate and redress as needed alleged noncompliance, and should retaliation against individuals making these reports in good faith. GSK and other enforcement actions show that Federal officials are acting on this promise.

For More Information Or Assistance

For help designing, enforcing or defending your organization’s health care compliance, workforce and risk management policies, practices or programs; assessing the strength of your organizations existing risk management and compliance controls under these laws or other healthcare laws and regulations; or in addressing other compliance or health care concerns, please contact Cynthia Marcotte Stamer via e-mail here or via telephone at 469.767.8872. To review and register to receive other helpful updates or for more information about Ms. Stamer and her experience, see 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, Inc.™ 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:

Pharmas Face New Pressure To Put Patients Before Profits After GlaxoSmithKline Record $3 Billion Health Care Fraud, FDCA Conviction & Settlement

July 11, 2012

Pharmaceutical companies will need to carefully study and consider how to react to “groundbreaking” business practice reforms global health care giant GlaxoSmithKline LLC (“GSK”) has agreed to implement as part of the record $3 billion criminal and civil agreement resolving federal health care fraud and drug marketing charges following its July 2, 2012 guilty plea in U.S. v. GlaxoSmithKline PLC Complaint. Justice Department and Food & Drug Administration (FDA) officials have signaled they expect industry businesses to “follow suit” by adopting business practice reforms that GSK has agreed to implement in the five year Corporate Integrity Agreement it entered into as part of collection of criminal plea agreements and accompanying civil settlements that is resulting in the largest combined federal and state health care fraud recovery in a single global resolution against a pharmaceutical company in the history of the United States. Meeting this expectation will require most pharmaceutical companies to significantly change research and marketing, compensation and other workforce management, board governance and other fundamental business practices well-beyond the reforms already being implemented in response to the past decade’s enforcement war against the industry.

Snapshot of U.S. v. GlaxoSmithKline PLC Civil & Criminal Charges & Settlement

After GSK plead guilty on July 2, 2012 to criminal charges it illegally marketed three drugs, the Federal Court in Massachusetts on July 5, 2012 approved a Justice Department sentencing recommendation that incorporated the settlement agreement. In recommending approval of the settlement agreement, the Justice Department told the Court GSK’s commitment to ‘put patients before profits’ by make sweeping reforms to its marketing and other business practices justified approving the settlement agreement in lieu of imposition of probation or other sanctions.

To resolve the criminal charges, GSK agreed to pay a criminal fine of $956,814,400, and criminal forfeiture in the amount of $43,185,600, for a total amount of $1 billion. Along with its criminal guilty plea, GSK also agreed to pay amount additional $2 billion to the U.S as restitution to the federal health care programs and other civil payments and implement an unprecedented list of business practice changes that will revolutionize its sales, marketing and drug efficacy study practices.

GSK Misdemeanor Guilty Plea

On July 2, 2012, GSK plead guilty to three misdemeanor violations of the Food, Drug and Cosmetic Act (FDCA):

Regarding Paxil, GSK plead guilty to distribution of a misbranded drug due to false and misleading labeling, in violation of 21 U.S.C. §§ 331(a), 333(a)(1) & 352(a);
Regarding Wellbutrin, GSK plead guilty to distribution of a misbranded drug due to inadequate directions for use, in violation of 21 U.S.C. §§ 331(a), 333(a)(1) & 352(f)(1); and
Regarding Avandia, GSK will plead guilty to failure to report data to the FDA, in violation of 21 U.S.C. §§ 331(e), 333(a)(1) & 355(k)(1).

The misdemeanor guilty pleas resolved Justice Department criminal charges GSK engaged is a series of serious violations of federal law in the marketing of Paxil, Wellbutrin and Avandia.

GSK $2 Billion Civil Settlement Payments

The criminal sentence approved by the Court is part of a broader series of criminal, civil and administrative agreements reached between GSK and federal officials.

The civil and administrative agreements included in the package deal include three civil settlements that resolve health care fraud and qui tam claims arising from GSK’s marketing, sales and health program billings relating to various drugs.

Under the civil settlement agreement, GSK will make sweeping business practice reforms specified in a corporate integrity agreement as well as pay $2 billion in civil damages to federal and state health care programs, which is the largest civil recovery from a drug company in a single global resolution.

Under the settlement package negotiated to resolve these civil claims, GSK has agreed to pay $2 billion in civil damages. The $2 billion of civil damages include:

$1,043,000,000 in civil damages to resolve allegations relating to false claims arising from the off-label promotion and kickback allegations relating to Paxil, Wellbutrin, Advair, Lamictal, Zofran, Flovent, Imitrex, Lotronex and Valtrex;
$657,000,000 in civil damages to resolve allegations relating to misrepresentations about Avandia;
$300,000,000 in civil damages to resolve allegations relating to false reporting of best prices.

The settlement package actually includes three civil settlement agreements.

One civil settlement resolves allegations relating to false claims to federal health care programs resulting from marketing and promotion practices, including off-label marketing of Paxil, Wellbutrin, Advair, Lamictal and Zofran for uses that were not approved as safe and effective by the Food and Drug Administration and paid kickbacks to doctors to induce them to prescribe Advair, Flovent, Imitrex, Lotronex, Paxil, Wellbutrin, and Valtrex and other drugs, critically undermining the doctors’ independent clinical judgment.
A second civil settlement resolves allegations that GSK promoted Avandia to physicians and other health care providers with false and misleading representations, causing false claims to be submitted to federal health care programs in the marketing and sale of Avandia.
A third settlement resolves allegations that GSK reported false best prices to the Department of Health and Human Services and as a result underpaid quarterly rebates owed under the Medicaid Drug Rebate Program. Under federal law, pharmaceutical companies are required to give Medicaid the best price on medications that they offer to any customer. The Justice Department contends that GSK improperly “bundled sales” arrangements that included steep discounts known as “nominal prices” and yet failed to take such contingent arrangements into account when calculating and reporting its best prices to HHS.

Whistleblower Claims Played A Role, Resolved By Settlement

A review of the settlement emphasize both the strong commitment by the Department of Justice and HHS to find a prosecute Medicare and Medicaid financial fraud and the growing importance of qui tam actions and other insider reports of legal violations to the success of these actions.

Qui tam and other fraud reports made by employees or other business partners have become a significant tool in the Federal government’s war against health care fraud. Under the False Claims Act, private citizens acting as relators can bring suit on behalf of the United States and share in the recovery. Furthered in part by a series of qui tam claims, whistleblower suits clearly played a role in many of the GSK charges.

The off-label civil settlement also resolves allegations set forth in the following lawsuits filed against GSK under the qui tam, or whistleblower, provisions of the federal False Claims Act, 31 U.S.C. § 3730:

U.S. ex rel. Thorpe et al. v. Smith Kline Beecham Inc. and GlaxoSmithKline PLC d/b/a GlaxoSmithKline, Civil Action No. 11-10398 (D. Mass, transferred from D. Colo.) (filed 1/1/03);
U.S. ex rel. Gerahty et al. v. GlaxoSmithKline PLC and SmithKline Beecham Corp. d/b/a GlaxoSmithKline, (D. Mass.), Civil Action Number 03-10641 (D. Mass.) (filed 4/7/03);
U.S. ex rel. Graydon v. GlaxoSmithKline PLC, Civil Action No. 11-10741 (D. Mass.) (filed 6/5/09);
U.S. ex rel. LaFauci v. GlaxoSmithKline PLC, Civil Action No. 11-10921 (D. Mass.) (filed 8/7/09).

Get more details here.

Corporate Integrity Agreement Requires GSK To “Put Patients Before Profits” Thru “Groundbreaking” Business Practice Reforms

Pharmaceutical industry businesses should view with grave concern the statements made by Carmen Ortiz, U.S. Attorney for the District of Massachusetts in announcing agreement that with Federal officials “hope the rest of the pharmaceutical industry follows suit” in “putting patients before profits” by adopting the “groundbreaking” business practice reforms set forth in the a five-year Corporate Integrity Agreement with the Office of Inspector General of the Department of Health and Human Services. Given the ongoing aggressive investigation and enforcement of federal drug and health care fraud laws by the Justice Department and Food and Drug Administration and the Justice Department’s stated hope that the rest of the pharmaceutical industry will adopt similar reforms to those GSK has committed to implement in connection with its sentence, pharmaceutical companies will want to carefully examine the “groundbreaking” marketing and other business practice reforms that GSK has committed to implement for insights about what federal prosecutors and regulators expectation expect companies involved in the industry to do to reform their marketing, research and other practices.

In encouraging the Court to approve a total of $1 billion of criminal penalties as the sanction for the criminal charges, Justice Department officials argued GSK’s commitment under the related civil resolution agreement to make “groundbreaking” business practice reforms to ensure better behavior by its sales force, and to ensure full, fair and accurate reporting of scientific data from GSK studies justified the penalty in lieu of probation or other sanctions.

The Justice Department officials announcing the settlement enhanced accountability, increased transparency and wide- ranging monitoring activities conducted by both internal and independent external reviewers. Specifically, among other things, the agreement requires:

Abolishment of incentive sales compensation; instead, the sales force will be compensated based on business acumen, customer engagement, and scientific knowledge of GSK products;
Clawback of up to 3 years of annual performance pay (annual bonus and long term incentives) for executives discovered to be involved in significant misconduct;
Publication of all GSK human research studies, not just those with positive outcomes for GSK drugs;
Publication of final clinical trial protocols to allow outside researchers to meaningfully analyze the results of GSK studies;
Removal of commercial influence on the determination of which GSK studies will be conducted; instead, studies will be conducted on scientific merit;
Removal of commercial influence on the determination of which GSK studies will be published and when; instead, studies will be published when the study is complete, not to create a buzz around a drug;
Annual certifications by the GSK’s Board of Directors that the GSK compliance program is effective, and by GSK’s U.S. President that the compliance measures continue and reportable incidents have been properly reported.

GSK & Other Prosecutions Reflect Need To Tighten Compliance

Pharmaceutical companies take seriously the need to maintain compliance and tighten marketing and other procedures to promote their ability to defend against the growing risk of federal prosecution signaled by the GSK and other enforcement actions.

In announcing the GSK settlement, Justice Department officials touted the GSK case as demonstrating its “continuing commitment to ensuring that the messages provided by drug manufacturers to physicians and patients are true and accurate and that doctors’ decisions as to what drugs are prescribed to sick patients are based on best medical judgments, not false and misleading claims or bad science.”

The GSK and other enforcement actions show that Federal officials are acting on this promise. Even before announcing the $3 billion resolution with GSK, the Justice Department and other federal officials accumulated an impressive and growing record of successful investigation and prosecutions. The Justice Department health care fraud union in Boston that lead the GSK prosecution over the past three years already had recovered more than $5.5 billion in settlements, judgments, fines, restitution, and forfeiture in health care fraud cases under the False Claims Act and the Food, Drug and Cosmetic Act before it announced the GSK settlement. Coupled with the overall increase in fraud and FDCA enforcement against pharmaceutical industry providers specifically and health care providers generally nationwide, the GSK decision makes clear that pharmaceutical and other health industry clients need to prepare to withstand ever-tightening expectations and rising enforcement.

In response to the GSK settlement and guilty plea, pharmaceutical companies will need to review their existing and former practices to identify pre-existing and ongoing exposures, and decide what steps to take, if any, to mitigate these risks. In addition to considering what, if any, of the reforms outlined in the GSK Corporate Integrity Agreement to implement and how, these organizations also should consider the workforce management and other internal controls that will help promote compliance with these policies and manage potential whistleblower and other liabilities.

In addition to working to promote compliance with the False Claims Act and other health care laws, pharmaceutical companies and health care providers need to implement strong internal investigation, audit, and employee and contractor management procedures to help self-discover and address potential compliance or other liability concerns. These processes and policies should involve but not be limited to hotlines and other processes for reporting suspected fraud or other misconduct. Most companies also should consider adopting and enforcing strong policies that require employees, contractors and other business partners to timely report and cooperate in the investigation and redress of potential health care fraud or other legal violations, should promptly investigate and redress as needed alleged noncompliance, and should retaliation against individuals making these reports in good faith.

For More Information Or Assistance

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.

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Houston Man Gets 24 Month Prison Sentence For Anti-Kickback & Other Health Care Fraud Convictions

June 30, 2012

A Federal judge in Houston on June 25, 2012 gave Kelvin Washington a 24-month federal prison sentence for each of his six convictions of health care fraud, conspiracy conviction and three counts of violating the anti-kickback statute, all to be served concurrently. The court additionally ordered three years supervised release, of which the first 12 months of to be served as home confinement. The Court also ordered Washington to pay approximately $480,000 in restitution to Medicare and Medicaid.

During the December, 2011 trial, Washington was convicted Washington of his six convictions of health care fraud, conspiracy conviction and three counts of violating the anti-kickback statute. The Department of Justice charged that from 2003 to 2007, Washington received illegal payments for the referral of dialysis patients to a Houston ambulance transport service and conspired with others to have unsuspecting doctors sign transport prescriptions for dialysis patients never admitted to a Sugar Land nursing home where he worked. During the trial, witnesses testified Washington was paid for the referral of dialysis patients to an ambulance service that was under contract with the nursing home where he worked. Trial evidence also showed he would present prescriptions to doctors who worked at the nursing home. The doctors testified at trial that they would not have signed the prescriptions if they had known the various patients were never admitted to the nursing home.

The jury also heard evidence that the ambulance service paid the Washington in checks totaling $22,200 with many tied to specific patients. Washington did not report all the income he made to the Internal Revenue Service (IRS) from the ambulance service. At trial, an undercover video and audio tape showed one of the managers of the ambulance company bribing a patient to ride with the ambulance company. The ambulance company would later bill Medicare for this patient, a paid informant whose own doctors would not sign a prescription for him. The bill to Medicare was based upon a false script from Washington. In a search warrant executed on a co-conspirator’s home, “The List” was discovered which detailed payments made not only to Washington but also to patients who rode with the ambulance service. A computer file from that home also showed detailed records tracking payments for patients, the check numbers for those payments and the fact that payments were made to the defendant.

According to the Justice Department, the false scripts alone resulted in $1.2 million billed to Medicare and Medicaid and approximately $480,000 paid. For more details, see here.

Health Care Providers Must Act To Manage Risks

In response to the growing emphasis and effectiveness of Federal officials in investigating and taking action against health care providers and organizations, health care providers covered by federal false claims, referral, kickback and other health care fraud laws should consider auditing the adequacy of existing practices, tightening training, oversight and controls on billing and other regulated conduct, reaffirming their commitment to compliance to workforce members and constituents and taking other appropriate steps to help prevent, detect and timely redress health care fraud exposures within their organization and to position their organization to respond and defend against potential investigations or charges. In light of the growing qui tam risks, health care providers also should tighten internal investigation, exit interview and other human resources and business partner oversight, reporting and investigation policies and practices to help identify and redress potential fraud or other qui tam, retaliation and similar exposures early and more effectively.

For More Information Or Assistance

A popular lecturer and widely published author on health industry concerns, Ms. Stamer continuously advises health industry clients about compliance and internal controls, workforce and medical staff performance, quality, governance, reimbursement, and other risk management and operational matters. Ms. Stamer also publishes and speaks extensively on health and managed care industry regulatory, staffing and human resources, compensation and benefits, technology, public policy, reimbursement and other operations and risk management concerns. Her insights on these and other related matters appear in the Health Care Compliance Association, Atlantic Information Service, Bureau of National Affairs, The Wall Street Journal, Business Insurance, the Dallas Morning News, Modern Health Care, Managed Healthcare, Health Leaders, and a many other national and local publications. You can get more information about her health industry experience here. If you need assistance responding to concerns about the matters discussed in this publication or other health care concerns, wish to obtain information about arranging for training or presentations by Ms. Stamer, wish to suggest a topic for a future program or update, or wish to request other information or materials, please contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here.

If you or someone else you know would like to receive future updates about developments on these and other concerns from Ms. Stamer, see here.

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Posted by Cynthia Marcotte Stamer

Oklahoma’s Harmon Memorial Hospital, Physician Pay $1.5M Qui Tam Health Care Fraud Settlement

June 27, 2012

Harmon County Healthcare Authority (Harmon Memorial Hospital) and Dr. Akram R. Abraham, of Hollis, Oklahoma have agreed to pay $1,550,000 to settle claims of health care fraud of the Medicare and Medicaid programs. Like a $5 million settlement announced with Christus Spohn Health System Corporation earlier in June, the settlement highlights the growing exposures that hospitals and other health care providers face to qui tam actions initiated in response to reports of misconduct made by employers or other business partners. These and a slew of other prosecutions and settlements send a clear signal that health care providers face significant exposure from current or past aggressive practices raising risks of prosecution under Federal or state health care fraud and false claims laws.

Harmon Memorial Hospital Settlement

The settlement jointly announced June 20, 2012 by Sanford C. Coats, United States Attorney for the Western District of Oklahoma, and Scott E. Pruitt, Oklahoma Attorney General, resolves a lawsuit styled United States of America and State of Oklahoma ex rel. Randy L. Curry v. Harmon County Healthcare Authority, Akram R. Abraham, M.D., P.C., and Akram R. Abraham, M.D., Case No CIV-09-1321-D, filed in Oklahoma City federal court under the qui tam or whistleblower provisions of the federal False Claims Act (FCA) and the Oklahoma Medicaid False Claims Act (OMFCA).

Randy L. Curry is from Harmon County and served as the hospital Administrator of Harmon County Healthcare Authority (HCHA) from 2008 to 2009. HCHA operates the Harmon Memorial Hospital in Hollis, Oklahoma. Dr. Akram R. Abraham, M.D., is a medical doctor licensed to practice in the Oklahoma who has a medical practice and resides in Hollis, Oklahoma.

The United States and State of Oklahoma alleged that from July 1, 2001, through May 30, 2008, both HCHA and Dr. Abraham violated the FCA and the OMFCA by submitting claims, or causing claims to be submitted, to the Medicare and Medicaid programs that violated the federal “Stark” regulations and Anti-Kickback Statute.

Specifically, the government alleged that there was a prohibited contractual relationship between HCHA and Dr. Abraham resulting in excessive remuneration which was not commercially reasonable in the absence of health care referrals and that HCHA and Dr. Abraham made false certifications that the Medicare and Medicaid claims they submitted were in compliance with federal and state regulations.

The alleged improper remuneration included, but was not limited to, free rent of office space, free billing and staff personnel, reimbursement of uncollected accounts receivable, duplicative per encounter payments for emergency room services, and improper payment of locum tenens physician services. HCHA and Dr. Abraham have each denied liability.

In the settlement, HCHA agreed to pay $550,000 and Dr. Abraham agreed to pay $1,000,000 to resolve the claims. In addition, both HCHA and Dr. Abraham have entered into five year corporate integrity agreements with the United States Department of Health and Human Services Office of the Inspector General which requires additional regulatory compliance reporting and monitoring. Under the qui tam provisions of the FCA and OMFCA, Randy Curry will receive a share of the settlement proceeds.

Christus & Other Qui Tam Settlements Rising Risk

The HCHA settlement follows the announcement earlier this month that Christus Spohn Health System Corporation has paid the United States more than $5 million to settle Justice Department and a former executive’s qui tam claims that it profited from violations of the False Claims Act by inappropriately admitted patients to inpatient status for outpatient procedures. HCHA and Christus are just two of a lengthy and growing list of qui tam cases and settlements that reflect the tide of liability arising from qui tam and other whistleblower activities.

Since January 2009, the Department of Justice has recovered over $11.1 billion under the False Claims Act. Of this amount, more than $7.4 billion was recovered in health care fraud matters. Last year, more than 630 qui tam matters were filed with the Department of Justice – more than in any other year in the history of the FCA and an increase of more than 47% since 2009. More than two-thirds of these qui tam cases alleged false claims to government health care programs.

Meanwhile, the OMFCA went into effect on November 1, 2007, and its focus is solely on fraud perpetrated against the Oklahoma Medicaid Program. Since its passage, over 351 qui tam cases have been filed on behalf of the State of Oklahoma. The State has received over $63.8 million in civil recoveries resulting from cases alleging fraud on the Oklahoma Medicaid system. The Oklahoma Attorney General’s MFCU is the only Oklahoma law enforcement agency dedicated to the investigation and prosecution of Medicaid fraud.

These and other statistics document the HCHA and Christus settlements and their underlying actions are reflective of a concerning rise in qui tam related exposures by health care providers. These and other qui tam actions as well as non-qui tam prosecutions of health care fraud and other compliance related cases, make clear that disgruntled current or former employees, contractors and business partners frequently are key players in qui tam or other prosecutions against health care providers. These “insiders” often know about the skeletons are in health care and other organization’s compliance closets. With many whistleblowers concerned about their own potential liability or axes to grind, the tight economy and job markets and reforms making it easier and more attractive for whistleblowers to bring and recover, qui tam and whistleblower claims are on the rise. Health care providers need to recognize and take steps to respond to these trends and incentives as part of their risk management and compliance efforts.

Health Care Providers Must Act To Manage Risks

In response to the growing emphasis and effectiveness of Federal officials in investigating and taking action against health care providers and organizations, health care providers covered by federal false claims, referral, kickback and other health care fraud laws should consider auditing the adequacy of existing practices, tightening training, oversight and controls on billing and other regulated conduct, reaffirming their commitment to compliance to workforce members and constituents and taking other appropriate steps to help prevent, detect and timely redress health care fraud exposures within their organization and to better place their organization in a position successfully to respond and defend against potential investigations or charges. In light of the growing qui tam risks, health care providers also should tighten internal investigation, exit interview and other human resources and business partner oversight, reporting and investigation policies and practices to help identify and redress potential fraud or other qui tam, retaliation and similar exposures early and more effectively.

For More Information Or Assistance

If you need help 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 set up 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.

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.

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Posted by Cynthia Marcotte Stamer

Supreme Court Now Expected To Release Ruling On Health Care Reform Law Thursday

June 25, 2012

The Supreme Court did not release its ruling on challenges to the constitutionality to the Patient Protection And Affordable Care Act (“ACA”) health care reform today. The Supreme Court now is expected to release its much-anticipated decision on a series of consolidated challenges to the ACA on Thursday. Thursday is the last day that the Court can issue rulings before the Justices end their term. They are not scheduled to return until the new 2012 Session begins in October.

Regardless of how the Supreme Court rules, it is clear that health care reform will remain a key point of debate for the upcoming election and in Congress. With opinions sharply divided about health care reform among members of the public and budget challenges looming, members of Congress from both parties have made clear that they expect to continue to wrangle over the reforms. Whether or not the Supreme Court rules any part of the law unconstitutional, Republicans and Democrats in Congress largely share support of the mandates and other reforms scheduled for implementation before 2014. To the extent that ACA survives its pending constitutional challenges, implementation of the law will progress. To the extent that the Supreme Court ruling would adversely impact these provisions, Republican and Democrat leaders alike have indicated an intention to act quickly to reenact many of these provisions. In the meanwhile, regardless of the status of the law, market and state law reforms implemented in anticipation of the law inevitably will prevent a reversion to pre-ACA status regardless of the Supreme Court’s rulings.

Project COPE: Coalition On Patient Empowerment & Coalition For Responsible Health Care Quality

Amid the continuing debate and uncertainty, Americans more then ever need to stay involved in the discussion. Project COPE: Coalition on Patient Empowerment & the Coalition for Responsible Health Care Quality are coalitions of individuals and organizations that share the belief that every American and American organization has a stake, and something to contribute to our ability to find and implement the best options for ensuring that the U.S. health care system provides quality, affordable health care.

Health care impacts every individual and every organization in America. Consequently, every American citizen and organization including but not limited to health care providers, employers, insurer, and community organizations should take part. The government, health care providers, insurers and community organizations can help by providing education and resources to make understanding and dealing with the realities of illness, disability or aging easier for a patient and their family, the affected employers and others. At the end of the day, however, caring for people requires the human touch. Americans can best improve health care by not waiting for someone else to step up or speak up.

Project COPE urges and invites each individual and organization speak up to help communicate and act to make health care work for themselves, their families and others when you can and share your input to help preserve and continue to develop real meaningful improvements to our health care system by joining Project COPE: Coalition for Patient Empowerment here by sharing ideas, tools and other solutions and other resources.

For More Information Or Assistance

A popular lecturer and widely published author on health industry concerns, Ms. Stamer continuously advises health industry clients about compliance and internal controls, workforce and medical staff performance, quality, governance, reimbursement, and other risk management and operational matters. Ms. Stamer also publishes and speaks extensively on health and managed care industry regulatory, staffing and human resources, compensation and benefits, technology, public policy, reimbursement and other operations and risk management concerns. Her insights on these and other related matters appear in the Health Care Compliance Association, Atlantic Information Service, Bureau of National Affairs, The Wall Street Journal, Business Insurance, the Dallas Morning News, Modern Health Care, Managed Healthcare, Health Leaders, and a many other national and local publications. You can get more information about her health industry experience here. If you need assistance responding to concerns about the matters discussed in this publication or other health care concerns, wish to obtain information about arranging for training or presentations by Ms. Stamer, wish to suggest a topic for a future program or update, or wish to request other information or materials, please contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here.

If you or someone else you know would like to receive future updates about developments on these and other concerns from Ms. Stamer, see here.

About Solutions Law Press

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Posted by Cynthia Marcotte Stamer

OIG Invitation To Comment On Possible Changes To Provider Self-Disclosure Protocol Invaluable Opportunity To Provide Feedback

June 20, 2012

Health care providers and other interested persons have until to submit recommendations and other input in response to the Solicitation of Information and Recommendations for Revising OIG’s Provider Self-Disclosure Protocol (“RFR”) published by the Department of Health & Human Services (HHS) Office of Inspector General (OIG) on June 20, 2012 here. Prompt response to this invitation by the August 17, 2012 deadline established by OIG provides a valuable opportunity for health care providers and others who have concerns or other perspectives about the current Protocol as used by the OIG in connection with its enforcement of federal health care fraud laws.

Protocol Intended To Be Tool To Resolve Civil Monetary Penalty & Other Health Care Fraud Exposures

While OIG touts the Protocol as a valuable tool to providers for resolving certain health care fraud exposures through self-disclosure, physicians, hospitals and other health care providers often are critical of the Protocol and its application by the OIG for deterring self-disclosure by providers by being unduly punitive to providers using the protocol to self-report and self-correct potential violations.

Originally published by OIG in 1998, the Protocol as later supplemented by a series of letters to providers currently defines the opportunity that OIG offers to health care providers to disclose potential fraud to resolve Civil Monetary Penalty and federal health care fraud exposures under Federal law through self-disclosure.

The potential liability exposures for health care providers accused of running afoul of these federal health care fraud laws are substantial and growing. Under the Civil Monetary Penalties Law (“CMPL”), 42 U.S.C. § 1320a-7a, and other provisions of the Social Security Act, health care providers face significant criminal and civil risk for violation of federal health care fraud laws. Among other things, risk the assessment of CMPs, exclusion from participation in all Federal health care programs or both if they knowingly and willfully:

Offer or pay remuneration to induce the referral of or solicit or receive remuneration in return for the referral of Federal health care program business in violation of the Anti-Kickback Statute (42 U.S.C. § 1320a-7b(b));
Present or cause to be presented a claim that the person knows or should know is for a service for which payment may not be made under 42 U.S.C. § 1395nn, the physician self-referral or “Stark” law. 42 U.S.C. § 1395nn(g)(3); or
Engage in certain other prohibited activities under federal healthcare fraud laws.

For an Anti-Kickback violation, the OIG may seek a penalty of up to $50,000 for each improper act and damages of up to three times the amount of remuneration at issue (regardless of whether some of the remuneration was for a lawful purpose). 42 U.S.C. § 1320a-7a(a). With the federal government expanding fraud enforcement and tightening federal anti-fraud laws as part of its broader effort to control federal health care spending, OIG and other federal regulators are stepping up enforcement of these and other federal health care laws. OIG touts the Protocol as offering a valuable opportunity for health care providers to resolve potential health care fraud liabilities by self-disclosing under the Protocol.

The Protocol provides guidance on how to investigate this conduct, quantify damages, and report the conduct to OIG to resolve the provider’s liability exposure under OIG’s civil money penalty (CMP) authorities. Since its original publication in 2009, OIG has supplemented its guidance by issuing three Open Letters to Health Care Providers to supplement and clarify the Protocol and its application, including:

In 2006 announcing an initiative to encourage disclosure of conduct creating liability under OIG’s ant kickback and physician self-referral law CMP authorities.
In 2008, issuing additional guidance and requirements for Protocol submissions to increase the efficiency of the Protocol, including new requirements for the initial submission and specific time commitments from the provider, as well as announcing he presumption of not requiring a compliance agreement as part of settling a cooperative and complete disclosure.
In 2009, announcing it would no longer accept disclosure of a matter into the Protocol that involved only liability under the physician self-referral law in the absence of a colorable anti-kickback violation and announcing a minimum $50,000 settlement amount for kickback-related submissions.

You can review this guidance governing the Protocol here and see examples of past settlements under the Protocol here.

Many Providers, Industry Leaders Express Concerns About Protocol

OIG characterizes the Protocol as offering health care providers “specific steps, including a detailed audit methodology, that may be undertaken if they wish to work openly and cooperatively with the OIG to efficiently quantify a particular problem and, ultimately promomote a higher level of ethical and lawful conduct throughout the health care industry. In the RFR, OIG credited the Protocol with allowing OIG to resolve over 800 disclosures resulting in recovering over $280 million to the Federal health care programs over the past 14 years. In the RFR, OIG reports that it believes this experience reflects the Protocol to be a highly valuable tool, which added and refined guidance would strengthen to the benefit of the provider community and the efficient resolution of Protocol matters. OIG now is announcing plans to further revise the Protocol to provide additional guidance. Accordingly, OIG is soliciting comments, recommendations, and other suggestions from concerned parties and organizations on how best to revise the Protocol to address relevant issues and to provide useful guidance to the health care industry.

For providers with concerns about the Protocol and its value to providers as a tool for resolving health care fraud, the invitation should provide a welcome opportunity for feedback. While OIG perceives the Protocol with these later refinements as a valuable tool to OIG and providers in identifying and resolving known or suspected health care fraud, stiff penalties and restrictions on the Protocol have engendered widespread criticism of the Protocol by many providers and health industry advisors. See, e.g. Voluntary Disclosure-Look before You Leap; HHS Office of Inspector General Sweetens Its Self-Disclosure Protocol. For these and other reasons, many health care providers and health industry advisors view the Protocol as now configured and applied as counterproductive to its stated goals. Critics often argue that the punishment of self-reporting providers discourages self-reporting and self-correction by providing too little reward and almost certain punishment to providers who chose the self-correction path.

Although OIG’s expectations about the Protocol and opportunities for improvement and those of many providers may be widely disparate, all parties with concerns or other opinions are urged to share their input in response to the RFR. The RFR invitation provides an invaluable opportunity both to share feedback with OIG, as well as to create a record of concerns that would be available to share with members of Congress and other leaders to the extent the OIG fails to adequately address these concerns.

For More Information Or Assistance

For help in responding to the RFR; reviewing and updating your Stark Law, Anti-Kickback Statute, or other health care compliance and risk management policies, practices or programs; assessing the strength of your organizations existing risk management and compliance controls under these laws or other healthcare laws and regulations; or in addressing other compliance or health care concerns, please contact Cynthia Marcotte Stamer via e-mail here or via telephone at 469.767.8872. To review and register to receive other helpful updates or for more information about Ms. Stamer and her experience, see 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

Leave a Comment » | Anti-KickBack, Health Care, Health Care Fraud, Health Care Provider, OIG, Physician, Stark | Tagged: Health Care Fraud, OIG, Provider Self-Disclosure | Permalink
Posted by Cynthia Marcotte Stamer

Nonprofit CEO Convicted Of Embezzling Medicaid Funds Intended For Mentally Disabled Care

June 18, 2012

Former Chief Executive Officer of Evelyn Douglin Center for Serving People in Need (EDC) Seibert Phillips faces sentencing to up to 15 years in prison after pleading guilty to stealing over $600,000 from the charity. The prosecution and conviction of Phillips by the New York Attorney General demonstrates that Medicaid and other health care fraud investigation and oversight by states is thriving along side the much more widely reported federal health care fraud inititives.

Evelyn Douglin Center is a Medicaid-funded corporation which provides care and services to mentally disabled New York City residents. Among other things, it operates supportive and supervised alternative housing and provides residential habilitation and day habilitation programs for those in need. EDC is reimbursed in part by the New York State Medicaid program. Over a five year period, while Chief Executive of EDC, which he founded in 1999, Phillips secretly diverted over $600,000 in Medicaid checks made payable to EDC into a fraudulent account he opened in the corporation’s name. Phillips thereafter used this account for himself, funding frequent personal travel, cars and even his dog trainers. EDC’s Board of Directors was unaware of the secret account and cooperated in the investigation leading to Phillips’s arrest and conviction.

Phillips’s arrest and conviction arises out of the Attorney General’s prior investigation of EDC which concluded last year with a $5 million settlement. Medicaid rules required EDC to draft and maintain daily reports detailing the specific services it provided to Medicaid recipients. The investigation uncovered that, for a five year period ending in 2009, EDC altogether failed to create many of the records. As part of its settlement agreement, EDC also agreed to reconstitute its Board of Directors and to retain a monitor for five years to ensure its compliance with all applicable Medicaid rules and regulations.

Phillips’s secret account came to light during an Attorney General investigation of EDC. Phillips pled guilty today to Grand Larceny in the Second Degree, a class C Felony which carries a maximum penalty of five to fifteen years in state prison. Under the terms of his plea agreement, Phillips will be sentenced to five years of probation, pay back restitution totaling $445,000 to EDC, and perform 500 hours of community service. He will be sentenced on August 7, 2012. Get more details here.

The Phillips conviction is one of a growing list state and federal prosecutions of health care and other organizations and individuals for violations of federal or state health care fraud or other laws. Driven both by federal program mandates and daunting state health care entitlement program budget expenditures, state regulators and law enforcement teams across the United States increasingly are active and vital participants in the expanding federal and state war against health care fraud and other health care provider misconduct. See e.g., Health Care Providers Also Should Guard Against Rising Exposures To State Health Care Fraud & Other Enforcement Risks.

Health Care Providers Must Act To Manage Risks

For More Information Or Assistance

A popular lecturer and widely published author on health industry concerns, Ms. Stamer continuously advises health industry clients about compliance and internal controls, workforce and medical staff performance, quality, governance, reimbursement, and other risk management and operational matters. Ms. Stamer also publishes and speaks extensively on health and managed care industry regulatory, staffing and human resources, compensation and benefits, technology, public policy, reimbursement and other operations and risk management concerns. Her insights on these and other related matters appear in the Health Care Compliance Association, Atlantic Information Service, Bureau of National Affairs, The Wall Street Journal, Business Insurance, the Dallas Morning News, Modern Health Care, Managed Healthcare, Health Leaders, and a many other national and local publications. You can get more information about her health industry experience here. If you need assistance responding to concerns about the matters discussed in this publication or other health care concerns, wish to obtain information about arranging for training or presentations by Ms. Stamer, wish to suggest a topic for a future program or update, or wish to request other information or materials, please contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here.

If you or someone else you know would like to receive future updates about developments on these and other concerns from Ms. Stamer, see here.

About Solutions Law Press

Health Companies Looking To Raise Funds Beware: Old Practices & Forms May Need Update For Securities Law Changes

June 7, 2012

Health care entrepreneurs and other businesses looking to raise investment from private investors without registration in accordance with applicable federal and state securities laws requirements for publicly traded investments need to exercise care that their practices meet all requirements, particularly in light of recent changes to the regulations.

For example, health care, health care IT and other businesses looking to raise capital in a private versus publicly registered context often plan to rely upon the restriction of offers and sales to individuals who qualify as “accredited investors” and other compliance with the accredited investor exemptions to registration requirements under federal and state securities laws.

When planning to raise capital, however, reliance on past experience and recycling old documents can be risky. Due to recent changes in the accredited investor regulations, however, businesses intending to rely upon the accredited investor exception may need to update their accredited investor questionnaires and other practices to avoid unintentionally running afoul of modified rules.

On December 21, 2011, the U.S. Securities and Exchange Commission adopted final rules that amended the “accredited investor” definition in the rules under the U.S. Securities Act of 1933, as amended.

The recent regulatory amendments respond to securities laws changes enacted by Section 413(a) of the U.S. Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”).

Among many other changes it enacted, Dodd-Frank requires the definition of “accredited investor” in the Securities Act rules to exclude the value of a person’s primary residence for purposes of determining whether the person qualifies as an “accredited investor” on the basis of having a net worth in excess of US $1,000,000.

Securities Act Rules 215 and 501, as amended, in response to Dodd-Frank now define “accredited investor” to include, among other things, any natural person whose individual net worth, or joint net worth with that person’s spouse, exceeds US$1,000,000, excluding the value of the investor’s primary residence. SEC regulations provide guidance about the application of this revised requirement.

Because of the change to the accredited investor requirements of federal securities laws, investor questionnaires may need to be updated to reflect the new definition. Investors relying on the net worth category of the accredited investor definition may also need to get valuations of their residences to determine their fair market value and may also need to disclose the value of any mortgages thereon and the timing of when such mortgages were incurred to confirm accredited investor status.

The changes to the accredited investor exemption rules is just one of many changes in securities registration exemption, reporting, and other requirements. Protect yourself and your business. Review your practices and documentation to confirm they are up to date and compliant before you get started and keep a careful eye on compliance and out for more changes coming down the pike on an ongoing basis.

Interested persons can see a copy of the SEC’s final rule here.

For More Information Or Assistance

A popular lecturer and widely published author on health industry concerns, Ms. Stamer continuously advises health industry clients about compliance and internal controls, workforce and medical staff performance, quality, governance, reimbursement, and other risk management and operational matters. Ms. Stamer also publishes and speaks extensively on health and managed care industry regulatory, staffing and human resources, compensation and benefits, technology, public policy, reimbursement and other operations and risk management concerns. Her insights on these and other related matters appear in the Health Care Compliance Association, Atlantic Information Service, Bureau of National Affairs, The Wall Street Journal, Business Insurance, the Dallas Morning News, Modern Health Care, Managed Healthcare, Health Leaders, and a many other national and local publications. You can get more information about her health industry experience here. If you need assistance responding to concerns about the matters discussed in this publication or other health care concerns, wish to obtain information about arranging for training or presentations by Ms. Stamer, wish to suggest a topic for a future program or update, or wish to request other information or materials, please contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here.

If you or someone else you know would like to receive future updates about developments on these and other concerns from Ms. Stamer, see here.

About Solutions Law Press

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

May 25, 2012

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

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

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

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

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

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

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

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

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

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

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

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

Health Care Providers Must Act To Manage Risks

For More Information Or Assistance

A popular lecturer and widely published author on health industry concerns, Ms. Stamer continuously advises health industry clients about compliance and internal controls, workforce and medical staff performance, quality, governance, reimbursement, and other risk management and operational matters. Ms. Stamer also publishes and speaks extensively on health and managed care industry regulatory, staffing and human resources, compensation and benefits, technology, public policy, reimbursement and other operations and risk management concerns. Her insights on these and other related matters appear in the Health Care Compliance Association, Atlantic Information Service, Bureau of National Affairs, The Wall Street Journal, Business Insurance, the Dallas Morning News, Modern Health Care, Managed Healthcare, Health Leaders, and a many other national and local publications. You can get more information about her health industry experience here. If you need assistance responding to concerns about the matters discussed in this publication or other health care concerns, wish to obtain information about arranging for training or presentations by Ms. Stamer, wish to suggest a topic for a future program or update, or wish to request other information or materials, please contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here.

If you or someone else you know would like to receive future updates about developments on these and other concerns from Ms. Stamer, see here.

About Solutions Law Press

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

May 25, 2012

Roger W. Evans, M.D. and his company, EECP Heart Center of Kansas, Inc. (EECP) will pay $1.5 million to settle allegations that Evans and EECP submitted false claims to the Medicare program. Evans is owner and president of EECP. The prosecution of and settlement and EEPC settlement of the Wichita, Kansas physician provides another demonstration of the breadth and scope of Federal health care fraud detection and enforcement.

Evans operated several clinics across Kansas and provided enhanced counterpulsation therapy, an in-patient service for the treatment of coronary artery disease. The United States contends that from July 2005, through June 2009, Evans submitted claims to Medicare for services when Evans was not actually present at the clinics and did not provide direct supervision of the procedures as required by Medicare.

During ECP treatment, a patient is placed on a treatment table and the patient’s lower trunk and lower extremities are wrapped in a series of compressive air cuffs which inflate and deflate in synchronization with the patient’s cardiac cycle. The cuffs compress blood vessels in the calves and thighs to increase blood flow and improve cardiac function. A full course of ECP therapy usually consists of 35 one-hour treatments which may be offered once or twice daily, usually five days per week.

According to the terms of the agreement, Evans and his company will pay $1.5 million to settle False Claims Act charges wuithout admitting any wrongdoing.

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

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

Health Care Providers Must Act To Manage Risks

For More Information Or Assistance

A popular lecturer and widely published author on health industry concerns, Ms. Stamer continuously advises health industry clients about compliance and internal controls, workforce and medical staff performance, quality, governance, reimbursement, and other risk management and operational matters. Ms. Stamer also publishes and speaks extensively on health and managed care industry regulatory, staffing and human resources, compensation and benefits, technology, public policy, reimbursement and other operations and risk management concerns. Her insights on these and other related matters appear in the Health Care Compliance Association, Atlantic Information Service, Bureau of National Affairs, The Wall Street Journal, Business Insurance, the Dallas Morning News, Modern Health Care, Managed Healthcare, Health Leaders, and a many other national and local publications. You can get more information about her health industry experience here. If you need assistance responding to concerns about the matters discussed in this publication or other health care concerns, wish to obtain information about arranging for training or presentations by Ms. Stamer, wish to suggest a topic for a future program or update, or wish to request other information or materials, please contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here.

If you or someone else you know would like to receive future updates about developments on these and other concerns from Ms. Stamer, see here.

About Solutions Law Press

Ambulance Worker Gets 46 Month Sentence For Defrauding Medicare By Running Company As Disqualified Person

May 18, 2012

On May, 15, 2012, ambulance worker Ivan Tkach, 30 was sentenced to 46 months in prison followed by three years of supervised release for his role in a scheme to defraud Medicare and the U.S. Government. Tkach pleaded guilty January 10, 2012 to giving false statements in his application for reinstatement to the Medicare program in 2009, and to paying illegal kickbacks to a secretary at Philadelphia College of Osteopathic Medicine, all in relation to a private ambulance company’s involvement in a health care fraud scheme. In addition to the prison term, Tkach must pay restitution in the amount of $1.26 million to Medicare.

Tkach was indicted along with his boss Ilya Sivchuk who was convicted by a jury in November 2011. Tkach was excluded by the U.S. Department of Health and Human Services in 2004 from providing services under the Medicare Program due to his prior criminal convictions, yet continued to operate Advantage Ambulance Company and drive patients in ambulances. Tkach ran Advantage with the knowledge of Ilya Sivchuk, who also made false statements regarding the nature of Tkach’s employment to federal agents. In addition, Tkach gave kickback payments in 2008 to a worker at a Philadelphia kidney dialysis center in exchange for patient referrals to Advantage. Advantage Ambulance has a new owner. Ilya Sivchuk is awaiting sentencing. See Ambulance Company Worker Sentenced To Prison Term for Fraud Scheme.

Health Care Providers Must Act To Manage Risks

As part of these efforts, health care providers should carefully credential workers and other service providers to avoid running afoul of these prohibitions. Federal law prohibits health care providers from billing Medicare or other federal programs for services provided by disqualified persons as well as from otherwise filing false claims with Medicare. The Tkach prosecution and conviction shows that Federal prosecutors are serious about enforcing these prohibitions.

For Legal Representation or More Information

If you need help 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 set up and administer compliance and risk management policies; prevent, conduct and investigate, and respond to peer review and other quality concerns; and to respond to Board of Medicine, Department of Aging & Disability, Drug Enforcement Agency, OCR Privacy and Civil Rights, HHS, DOD and other health care industry investigation, enforcement and other compliance, public policy, regulatory, staffing, and other operations and risk management concerns.

A popular lecturer and widely published author on health industry concerns, Ms. Stamer continuously advises health industry clients about compliance and internal controls, workforce and medical staff performance, quality, governance, reimbursement, and other risk management and operational matters. Ms. Stamer also publishes and speaks extensively on health and managed care industry regulatory, staffing and human resources, compensation and benefits, technology, public policy, reimbursement and other operations and risk management concerns. Her insights on these and other related matters appear in the Health Care Compliance Association, Atlantic Information Service, Bureau of National Affairs, The Wall Street Journal, Business Insurance, the Dallas Morning News, Modern Health Care, Managed Healthcare, Health Leaders, and a many other national and local publications. You can get more information about her health industry experience here. If you need assistance responding to concerns about the matters discussed in this publication or other health care concerns, wish to obtain information about arranging for training or presentations by Ms. Stamer, wish to suggest a topic for a future program or update, or wish to request other information or materials, please contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here.

If you or someone else you know would like to receive future updates about developments on these and other concerns from Ms. Stamer, see here.

About Solutions Law Press

Leave a Comment » | Controlled Substances, DEA, Doctor, E-Prescribing, FDA, Health Care, Health Care Fraud, Health Care Provider, Hospital, Licensing, Medical Licensure, Medical Malpractice, OIG, Physician, Physician Licensing, Prescription Drugs, Substance Abuse | Tagged: controlled substance, DEA, disqualified provider, Drug Testing, drugs, false claims act, Health Care, Health Care Compliance, Health Care Fraud, HEAT, licensure, Medicaid, Medical Board, Medicare, pain management, pharmacist, pharmacy, physical therapy, Physician | Permalink
Posted by Cynthia Marcotte Stamer

Temple To Pay $1,088,574.93 To Resolve Exposures From Voluntarily Disclosed Improper Health Care Billings

May 18, 2012

Dr. Joseph Kubacki and Temple University Of the Commonwealth System of Higher Education (“Temple”) have agreed to pay the United States a combined $1,088,574.93, resolving Temple’s voluntary disclosure that it improperly billed the United States for medical services provided by residents but that Temple billed as though they had been performed by attending physicians. The settlement resolves charges brought in response to the voluntary disclosure by Temple of the improper billing in question.

The False Claims Act makes it illegal for any person or entity to present a false or fraudulent claim to the United States for payment and/or to retain overpayments that were improperly received. Federal programs only reimburse hospitals for services which attending physicians performed or which attending physicians were present for the critical portions. Those physicians certify that they were present when the critical portion of the services were performed as part of the charting and billing process.

Dr. Kubacki, formerly the Chairman of Temple’s Ophthalmology Department, was convicted by a jury on August 22, 2011 of 73 counts of health care fraud, 73 counts of false statements in health care matters, and four counts of wire fraud. The evidence at his trial showed that he billed the United States for performing services that were performed by residents when he was not even physically present in the hospital. The settlement with Temple pertains both to this fraud and to other fraud discovered in Temple’s plastic surgery department, where attending physicians were present in the hospital at the time services were performed but were not actually present for the critical portions of the services for which they submitted claims.

Although Temple trained its physicians in charting and billing requirements, this training did not prevent the fraud from occurring.

In light of Temple’s voluntary disclosure and self-audit, and upon the evaluation of Temple’s compliance structure by the Office of the Inspector General of the Department of Health and Human Services, Temple will continue to implement its corporate compliance program without the need for a Corporate Integrity Agreement overseen by the Office of the Inspector General.

This resolution is part of the Eastern District of Pennsylvania’s Special Focus Team Health Care Initiative. The case was investigated civilly by the Department of Health and Human Services Office of the Inspector General and Assistant United States Attorneys Paul Kaufman and Susan Dein Bricklin. Dr. Kubacki was prosecuted criminally by Assistant United States Attorneys Anthony Kyriakakis and Matthew Hogan.

For more details, see United States Settled With Temple University and Dr. Joseph Kubacki Over Improper Billing.

Leave a Comment » | Academic medicine, Doctor, false claims act, Health Care, Health Care Finance, Health Care Fraud, Health Care Provider, Medicare | Tagged: Corporate Integrity Agreement, False Claims, false claims act, Health Care, Health Care Fraud, Medicare, Medicare Fraud, Reimbursement | Permalink
Posted by Cynthia Marcotte Stamer

Former Orthofix Executive Pleads Guilty To Anti-Kickback Law Violations

May 18, 2012

Thomas P. Guerrieri has pleaded guilty in federal court before U.S. District Judge Rya W. Zobel for violating the Anti-Kickback statute. Guerrieri was the former vice-president of sales at a medical device company, Orthofix, that sold bone growth simulators. His sentencing is scheduled for July 11, 2012 at 2:30 p.m. He faces up to five years in prison, to be followed by three years of supervised release, a $250,000 fine and forfeiture.

Had the case proceeded to trial, the Government would have proven that Guerrieri facilitated signing up a surgeon in New York to a “consulting” agreement with the company to induce the surgeon to prescribe the company’s bone growth stimulators. The surgeon was paid tens of thousands of dollars by the company, but provided little or no consulting services in return. The surgeon was supposed to document his services in time sheets provided to the company, but for years he did not fill out these forms or provide any legitimate consulting services, even though he was paid every month.

In or about Aug. 2007, the surgeon became concerned about increased government scrutiny of consulting arrangements such as his. The surgeon, Guerrieri, and a territory manager for the company decided to create and backdate time sheets going back to 2006 to make it seem as though the surgeon filled out these forms contemporaneously and performed legitimate consulting services. In addition, at the surgeon’s request, Guerrieri and the territory manager obtained a letter from the company’s general counsel indicating that the surgeon was compliant under his consulting agreement, which was not true. Guerrieri did these things to induce the surgeon to continue to order bone growth stimulators from the company.

In addition, Guerrieri and others executed a scheme to pay Michael Cobb, a RI physician’s assistant, for each bone growth stimulator ordered by Cobb. The surgeon had delegated to Cobb the choice of which stimulator his patients received. For years, the device company paid Cobb $50-$100 for each stimulator that his surgeon prescribed. In Sept. 2008, the device company issued a policy expressly prohibiting any payments to anyone who works for a surgeon that prescribes the company’s products. Guerrieri and others were concerned that if they could no longer pay Cobb under the new policy, the company might lose Cobb’s business. Thus, Guerrieri, and others, devised a scheme where Cobb continued to be paid for each order, but the payments were made by a vendor of the device company, making it more difficult to trace the paper trail back to the device company. Cobb is also charged with violating the Anti-Kickback law. His plea hearing is set for April 19, 2012 at 3:15 p.m. before Judge George A. O’Toole, Jr.

Federal regulators credit sophisticated statistical profiling and other new fraud investigation tools with playing a key role in the federal health care fraud investigation that lead to the arrest on health care fraud indictments today (February 28, 2012) of a Dallas-area physician, the office manager of his medical practice, and five home health agency owners. The Dallas-area defendants charged in the indictments unsealed today face health care fraud charges related to their alleged participation in a nearly $375 million health care fraud scheme involving fraudulent claims for home health services. In a related action, the Center for Medicare & Medicaid Services (CMS) suspended an additional 78 home health agencies (HHA) associated with defendant Roy based on what CMS views as credible allegations of fraud against them.

Federal officials say today’s arrests and CMS suspensions resulted from Medicare Fraud Strike Force operations conducted by the Health Care Fraud Prevention & Enforcement Action Team (HEAT). HEAT is 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 anti-fraud laws around the country. Justice Department officials say the conduct charged in this indictment represents the single largest fraud amount orchestrated by one doctor in the history of the HEAT initiative.

Legal reforms and new resources granted under the Patient Protection & Affordable Care Act (Affordable Care Act) and various other legal changes have beefed up the fraud detection and fighting powers of Federal health care fraud investigators and prosecutors. Examples of these new tools include:

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

Using these expanded tools, the HEAT Task Force and other federal health care fraud investigators are enjoying record successes in deploying these tools to achieve successful health care fraud prosecutions. Government’s health care fraud prevention and enforcement efforts recovered nearly $4.1 billion in taxpayer dollars in Fiscal Year (FY) 2011 according to the FY 2011 Health Care Fraud and Abuse Control Program Report jointly released by HHS and the Justice Department on February 14, 2012.

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

Health Care Providers Must Act To Manage Risks

For More Information Or Assistance

A popular lecturer and widely published author on health industry concerns, Ms. Stamer continuously advises health industry clients about compliance and internal controls, workforce and medical staff performance, quality, governance, reimbursement, and other risk management and operational matters. Ms. Stamer also publishes and speaks extensively on health and managed care industry regulatory, staffing and human resources, compensation and benefits, technology, public policy, reimbursement and other operations and risk management concerns. Her insights on these and other related matters appear in the Health Care Compliance Association, Atlantic Information Service, Bureau of National Affairs, The Wall Street Journal, Business Insurance, the Dallas Morning News, Modern Health Care, Managed Healthcare, Health Leaders, and a many other national and local publications. You can get more information about her health industry experience here. If you need assistance responding to concerns about the matters discussed in this publication or other health care concerns, wish to obtain information about arranging for training or presentations by Ms. Stamer, wish to suggest a topic for a future program or update, or wish to request other information or materials, please contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here.

If you or someone else you know would like to receive future updates about developments on these and other concerns from Ms. Stamer, see here.

About Solutions Law Press

Abbott Labs To Pay $1.5 Billion to Resolve Criminal & Civil Investigations Of Off-Label Promotion Of Depakote

May 18, 2012

Abbott Laboratories Inc.will pay $1.5 billion to resolve its criminal and civil liability after pleading guilty to federal charges it unlawfully promoted the prescription drug Depakote for uses not approved as safe and effective by the Food and Drug Administration.

According to a Justice Department announcement May 7, 2012 here, the resolution – the second largest payment by a drug company – includes a criminal fine and forfeiture totaling $700 million and civil settlements with the federal government and the states totaling $800 million. Abbott also will be subject to court-supervised probation and reporting obligations for Abbott’s CEO and Board of Directors.

Health Care Providers Must Act To Manage Risks

Over the past decade, Federal officials have stepped up enforcement of federal rules prohibiting off-label promotion of prescription drugs. Beyond the examples provided by the criminal and civil penalties assessed in these matters, the corporate integrity agreements that generally are imposed as part of the plea or other resolution agreements reached as part of these investigations provide insights about the types of mechanisms that Federal officials expect pharmacedical companies to implement and administer as part of their compliance efforts. Pharmaceudical companies and others involved in the marketing and promotion of medications should review and evaluate the adequacy of their existing compliance practices in light of these prosecutions and resulting corporate integrity and make appropriate adjustments to their practices, policies and management controls where warranted.

For Legal Representation or More Information

If you need help 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 set up and administer compliance and risk management policies; prevent, conduct and investigate, and respond to peer review and other quality concerns; and to respond to Board of Medicine, Department of Aging & Disability, Drug Enforcement Agency, OCR Privacy and Civil Rights, HHS, DOD and other health care industry investigation, enforcement and other compliance, public policy, regulatory, staffing, and other operations and risk management concerns.

A popular lecturer and widely published author on health industry concerns, Ms. Stamer continuously advises health industry clients about compliance and internal controls, workforce and medical staff performance, quality, governance, reimbursement, and other risk management and operational matters. Ms. Stamer also publishes and speaks extensively on health and managed care industry regulatory, staffing and human resources, compensation and benefits, technology, public policy, reimbursement and other operations and risk management concerns. Her insights on these and other related matters appear in the Health Care Compliance Association, Atlantic Information Service, Bureau of National Affairs, The Wall Street Journal, Business Insurance, the Dallas Morning News, Modern Health Care, Managed Healthcare, Health Leaders, and a many other national and local publications. You can get more information about her health industry experience here. If you need assistance responding to concerns about the matters discussed in this publication or other health care concerns, wish to obtain information about arranging for training or presentations by Ms. Stamer, wish to suggest a topic for a future program or update, or wish to request other information or materials, please contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here.

If you or someone else you know would like to receive future updates about developments on these and other concerns from Ms. Stamer, see here.

About Solutions Law Press

Leave a Comment » | Controlled Substances, DEA, Doctor, E-Prescribing, FDA, Health Care, Health Care Fraud, Health Care Provider, Hospital, Licensing, Medical Licensure, Medical Malpractice, OIG, Physician, Physician Licensing, Prescription Drugs, Substance Abuse | Tagged: controlled substance, DEA, Drug Testing, drugs, false claims act, FDA, Health Care, Health Care Compliance, Health Care Fraud, HEAT, licensure, Medicaid, Medical Board, pain management, pharmacist, pharmacy, physical therapy, Physician, Prescription Drugs | Permalink
Posted by Cynthia Marcotte Stamer

CMS Likely To Tighten Audits & Reimbursement After OIG Says “Extremely High” Retail Pharmacy Billings To Medicare Part D Warrant Close Scrutiny

May 18, 2012

The Office of Inspector General (OIG) of the Department of Health & Human Services (HHS) is recommending a “strong response” to improve Medicare Part D oversight of retail pharmacy prescriptions by the Centers for Medicare & Medicaid Services (CMS) based on findings of a recent study. See here. OIG says that “extremely high” prescription drug billings by many retail pharmacies merit scrutiny under medical necessity or other grounds.

Under the Medicare Part D program, CMS contracts with private insurance companies, known as sponsors, to provide prescription drug coverage to beneficiaries who choose to enroll. According to OIG, OIG has issued several reports that OIG has found that Part D had limited safeguards in place in the 6 years since Part D began.

In response to these concerns, OIG recently conducted a study based on an analysis of prescription drug event records. Sponsors send these records to CMS for each drug dispensed to beneficiaries enrolled in their plans. Each record has information about the pharmacy, prescriber, beneficiary, and drug. OIG analyzed all of the records for drugs billed by retail pharmacies in 2009 and developed eight measures to describe Part D billing and to identify pharmacies with questionable billing.

Based on this study, OIG reports that retail pharmacies each billed Part D an average of nearly $1 million for prescriptions in 2009. According to OIG, the study revealed “questionable billing” by more than 2,600 of these pharmacies. OIG reports that these pharmacies had ‘extremely high billing” for at least one of the eight measures developed and applied by OIG For example, many pharmacies billed what OIG characterized as “extremely high” dollar amounts or numbers of prescriptions per beneficiary or per prescriber. The Miami, Los Angeles, and Detroit areas were the most likely to have pharmacies with questionable billing.

Although OIG concedes that some of this billing may be legitimate, OIG believes that pharmacies that bill for extremely high amounts call for further scrutiny The OIG report expresses concern that these high dollar prescription drug billings could mean that a pharmacy is billing for drugs that are not medically necessary or were never provided to the beneficiary.

Accordingly, OIG is recommending that CMS: (1) strengthen the Medicare Drug Integrity Contractor’s monitoring of pharmacies and ability to identify pharmacies for further review, (2) provide additional guidance to sponsors on monitoring pharmacy billing, (3) require sponsors to refer potential fraud and abuse incidents that may warrant further investigation, (4) develop risk scores for pharmacies, (5) further strengthen its compliance plan audits, and (6) follow up on the pharmacies identified as having questionable billing. CMS concurred with four of the recommendations and partially concurred with the other two.

Private health plans and other payers are likely to review the study to determine whether it provides justification for closer scrutiny of prescription drug claims made to private payers.

Whether or not private health plans follow suit, retail pharmacies and other providers should anticipate that CMS will increase scrutiny and challenges of prescription drug charges submitted to Medicare Part D. Accordingly, retail pharmacies and the physician and other providers prescribing medications likely to be billed should tighten documentation and other procedures to defend against possible medical necessity and other challenges.

The continuing focus and success of federal health care fraud and related investigation and enforcement efforts continue to prove the need for health care providers and payers to strengthen their compliance practices and documentation to avoid getting caught in the ever tightening health care fraud dragnet. The prosecutions of Giventer and Shavabskaya highlight that health care providers and their leaders need to manage prosecution risks under a broad range of laws in addition to focusing on management of the widely recognized exposures to prosecution under federal health care fraud laws,

Health Care Providers Must Act To Manage Risks

For Legal Representation or More Information

If you need help 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 set up and administer compliance and risk management policies; prevent, conduct and investigate, and respond to peer review and other quality concerns; and to respond to Board of Medicine, Department of Aging & Disability, Drug Enforcement Agency, OCR Privacy and Civil Rights, HHS, DOD and other health care industry investigation, enforcement and other compliance, public policy, regulatory, staffing, and other operations and risk management concerns.

A popular lecturer and widely published author on health industry concerns, Ms. Stamer continuously advises health industry clients about compliance and internal controls, workforce and medical staff performance, quality, governance, reimbursement, and other risk management and operational matters. Ms. Stamer also publishes and speaks extensively on health and managed care industry regulatory, staffing and human resources, compensation and benefits, technology, public policy, reimbursement and other operations and risk management concerns. Her insights on these and other related matters appear in the Health Care Compliance Association, Atlantic Information Service, Bureau of National Affairs, The Wall Street Journal, Business Insurance, the Dallas Morning News, Modern Health Care, Managed Healthcare, Health Leaders, and a many other national and local publications. You can get more information about her health industry experience here. If you need assistance responding to concerns about the matters discussed in this publication or other health care concerns, wish to obtain information about arranging for training or presentations by Ms. Stamer, wish to suggest a topic for a future program or update, or wish to request other information or materials, please contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here.

If you or someone else you know would like to receive future updates about developments on these and other concerns from Ms. Stamer, see here.

About Solutions Law Press

Leave a Comment » | Controlled Substances, DEA, Doctor, E-Prescribing, FDA, Health Care, Health Care Fraud, Health Care Provider, Hospital, Licensing, Medical Licensure, Medical Malpractice, OIG, Physician, Physician Licensing, Prescription Drugs, Substance Abuse | Tagged: controlled substance, DEA, Drug Testing, drugs, false claims act, Health Care, Health Care Compliance, Health Care Fraud, HEAT, licensure, Medicaid, Medical Board, Medicare, Medicare Part D, pain management, pharmacist, pharmacy, physical therapy, Physician, prescription drug, retail pharmacy | Permalink
Posted by Cynthia Marcotte Stamer

Houston-Area Nurse Gets 97 Month Sentence For Role In $5.2 Million Medicare Fraud Scheme

May 18, 2012

A Houston-area home health nurse will serve a 97 month prison sentence for her participation in a $5.2 million Medicare fraud scheme according to a May 16, 2012 announcement by the Department of Justice, the Federal Bureau of Investigation and Department of Health and Human Service (HHS). The sentence is the latest in a growing series of reminders to health care providers and others of the growing risk of imprisonment and other consequences that can result from the submission of inappropriate Medicare or other health program claims.

Ezinne Ubani, the former director of nursing at Family Healthcare Group, a Houston home health care company, was sentenced by U.S. District Judge Nancy Atlas in the Southern District of Texas to 97 months in prison, followed by three years supervised release. Ubani also was ordered to pay $2.5 million in restitution jointly and severally with her codefendants. Ubani was convicted of one count of conspiracy to commit health care fraud and two counts of making false statements following a May 2011 trial.

According to the evidence presented at trial and in court documents, Family Healthcare Group purported to provide skilled nursing to Medicare beneficiaries. Family Healthcare Group paid co-conspirators to recruit Medicare beneficiaries for the purpose of filing claims with Medicare for skilled nursing that was medically unnecessary and/or not provided. The evidence showed that Ezinne Ubani falsified documents to support the fraudulent payments. After the Medicare beneficiaries were recruited, other co-conspirators fraudulently signed plans of care stating that the beneficiaries needed home health care when in fact they knew the beneficiaries were not home-bound and not in need of skilled nursing.

Ubani is the seventh defendant sentenced in connection with this scheme. Three other defendants, Clifford Ubani, Princewill Njoku and Cynthia Garza Williams, await sentencing in the Southern District of Texas.

Feds Continue To Turn Up HEAT on Health Care Fraud

The investigation and prosecution that lead to Ubani’s sentence are part of a growing number of prosecutions and convictions resulting from the federal HEAT Task Force. Empowered with new data mining, statistical profiling and other new fraud fighting resources created under the Patient Protection & Affordable Care Act (Affordable Care Act) and other recently enacted laws, the HEAT Task Force and other federal health care fraud investigators are enjoying record successes in deploying these tools to achieve successful health care fraud prosecutions.

according to Justice Department officials, since their inception in March 2007, Medicare Fraud Strike Force operations in nine locations have charged more than 1,330 defendants who collectively have falsely billed the Medicare program for more than $4 billion. Government’s health care fraud prevention and enforcement efforts recovered nearly $4.1 billion in taxpayer dollars in Fiscal Year (FY) 2011 according to the FY 2011 Health Care Fraud and Abuse Control Program Report jointly released by HHS and the Justice Department on February 14, 2012. Furthermore, this trend is likely to continue. Federal officials say 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 along side the ongoing investigatory and enforcement activities of the HEAT Task Force and other federal and state agencies.

Health Care Providers Must Act To Manage Risks

For More Information Or Assistance

If you need help 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 set up and administer compliance and risk management policies; prevent, conduct and investigate, and respond to peer review and other quality concerns; and to respond to Board of Medicine, Department of Aging & Disability, Drug Enforcement Agency, OCR Privacy and Civil Rights, HHS, DOD and other health care industry investigation, enforcement and other compliance, public policy, regulatory, staffing, and other operations and risk management concerns.

A popular lecturer and widely published author on health industry concerns, Ms. Stamer continuously advises health industry clients about compliance and internal controls, workforce and medical staff performance, quality, governance, reimbursement, and other risk management and operational matters. Ms. Stamer also publishes and speaks extensively on health and managed care industry regulatory, staffing and human resources, compensation and benefits, technology, public policy, reimbursement and other operations and risk management concerns. Her insights on these and other related matters appear in the Health Care Compliance Association, Atlantic Information Service, Bureau of National Affairs, The Wall Street Journal, Business Insurance, the Dallas Morning News, Modern Health Care, Managed Healthcare, Health Leaders, and a many other national and local publications. You can get more information about her health industry experience here. If you need help 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

Health Care Providers Get Nailed For Using False Statements To Defraud Medicaid, Bankruptcy Court

May 18, 2012

Two unrelated Federal felony prosecutions and convictions of Texas-based health care providers announced this week illustrate the risks that health care and other businesses and their leaders run for coloring the truth in health care billings, court filings or other dealings. The convictions highlight the advisability for health industry and other business leaders both to exercise care to avoid engaging in potentially actionable misrepresentations when signing billing, court pleadings or other official documents, as well as implement appropriate documentation and review procedures to minimize liability risks to their organizations and themselves that may arise from reliance upon represenations of staff or others which turn out to be untrue.

On May 16, 2012, Laredo, Texas dentist Dr. Carlos Armin Morales-Ryan and his wife orthodontist Dr. Nelia Patricia Garcia-Morales pleaded guilty to a criminal information admitting they made false statements on bills to Texas Medicaid. These guilty pleas follow the May 14, 2012 guilty plea entered by Michael Giventer to conspiracy to commit bankruptcy fraud by misrepresenting his ownership and control in health care businesses.

Texas Dentist/Orthodontist Couple Convicted of Making False Statements on Bills to Texas Medicaid

On May 16, 2012, dentist Morales-Ryan and his orthodontist wife Garcia-Morales pleaded guilty to a criminal information admitting they made false statements on bills to Texas Medicaid.

Morales-Ryan and Garcia-Morales owned and operated Orthogenesis International Centre, a Laredo dentistry and orthodontics business. A substantial portion of their business was targeted to rendering services to Medicaid-eligible children. Applicable Texas law and Medicaid regulations required the doctors to be present in their offices when services were rendered on Medicaid patients as a prerequisite to receiving payment for the services from Medicaid. Similar consumer protection laws and regulations are applicable to most types of physicians for many of the services they render in Texas, regardless of whether the patient is or is not a Medicaid beneficiary.

Morales-Ryan’s signed plea agreement states that though he and Garcia-Morales were in Hawaii on October 12, 2007, he falsely represented to Medicaid that he performed an evaluation and management of a new patient on that date claiming entitlement to payment. However, at the time he made this false representation to Medicaid, he and Garcia-Morales knew the statement was false and that neither of them performed that service on or about that date. Similarly, Garcia-Morales admitted that though she and Morales-Ryan were en route to the U.S. Virgin Islands on March 23, 2007, she falsely represented to Medicaid that she performed an orthodontic retention on that date claiming entitlement to payment. However, at the time she made this false representation to Medicaid, she and Morales-Ryan knew the statement was false and that neither of them performed an orthodontic retention on or about that date.

As a result of their plea agreements, they will be sentenced to five years probation and will pay restitution in the amount of $686,545 to the State of Texas Health and Human Services Commission – Office of Inspector General.

Court records reflect that this is not the first time Morales-Ryan has been in legal trouble. Morales-Ryan previously was convicted of 13 counts of practing medicine without a license for performing non-dentistry and non-non-oral and maxillofacial surgeriescosmetic surgery procedures including including: tummy tucks, liposuction, and breast augmentation. See here.

The Texas State Board of Dental Examiners previously suspended the license to practice dentistry of Morales-Ryanin Texas. See here.

Giventer Conspiracy To Commit Bankruptcy Plea

On May 14, 2012, Michael Giventer pleaded guilty to conspiracy to commit bankruptcy fraud. Giventer’s wife, Julia Shavabskaya, previously pleaded guilty to the same charge on April 30, 2012.

Justice Department officials charged that from on August, 2002 to July 2010, Giventer caused the incorporation of two business entities, Ambucare Inc. and Open Diagnostic Imaging Inc., as holding companies to receive income from clinics providing various forms of health care services to individuals who were covered by Workers’ Compensation insurance.

Ownership of both Ambucare and Open Diagnostic Imaging was placed solely in the name of Shvabskaya. Through these two companies, Giventer received income from a number of these clinics, such as Valley Center for Pain and Stress Management, Functional Pain Center, Palladium for Surgery and Valley Comprehensive Pain Management. Unrelated court records reflect that at least one of these organizations, Valley Center for Pain and Stress Management during the period was accused by insurer TML Intergovernmental Risk Pool of seeking worker’s compensation benefits for medically unnecessary services. Valley Comprehensive Pain Management v. TML Intergovernmental Risk Pool (May 19, 2004).

On November 4, 2005, Giventer filed for bankruptcy under chapter 7 in the Southern District of Texas. During the bankruptcy, Giventer was required to file under penalty of perjury various Schedules consisting of assets, debts, liabilities and a Statement of Financial Affairs in which he was required to disclose among other things, his income, debts, property and transfers of property. In some of the documents, Giventer indicated he did not own an interest in Ambucare, Open Diagnostic Imaging and other properties and assets. In truth, however Giventer controlled, managed and received income from these entities and made all decisions about how their income would be distributed. Shavabskaya falsely testified that she owned the companies and that Giventer did not own or operate them. Additionally, both Giventer and Shavabskaya knew and falsely denied under oath any ownership interest in these entities in order to deceive, frustrate and prevent creditors and the bankruptcy Trustee from identifying and collecting assets as part of the bankruptcy estate to be distributed for the benefit of creditors.

Sentencing of both Giventer and Shavabskaya on the bankruptcy fraud conspiracy guilty pleas is scheduled on September 24, 2012. Each faces a maximum sentence of up to five years in federal prison and a fine up to $250,000.

Health Care Providers Must Act To Manage Risks

For Legal Representation or More Information

If you need help 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 set up and administer compliance and risk management policies; prevent, conduct and investigate, and respond to peer review and other quality concerns; and to respond to Board of Medicine, Department of Aging & Disability, Drug Enforcement Agency, OCR Privacy and Civil Rights, HHS, DOD and other health care industry investigation, enforcement and other compliance, public policy, regulatory, staffing, and other operations and risk management concerns.

A popular lecturer and widely published author on health industry concerns, Ms. Stamer continuously advises health industry clients about compliance and internal controls, workforce and medical staff performance, quality, governance, reimbursement, and other risk management and operational matters. Ms. Stamer also publishes and speaks extensively on health and managed care industry regulatory, staffing and human resources, compensation and benefits, technology, public policy, reimbursement and other operations and risk management concerns. Her insights on these and other related matters appear in the Health Care Compliance Association, Atlantic Information Service, Bureau of National Affairs, The Wall Street Journal, Business Insurance, the Dallas Morning News, Modern Health Care, Managed Healthcare, Health Leaders, and a many other national and local publications. You can get more information about her health industry experience here. If you need assistance responding to concerns about the matters discussed in this publication or other health care concerns, wish to obtain information about arranging for training or presentations by Ms. Stamer, wish to suggest a topic for a future program or update, or wish to request other information or materials, please contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here.

If you or someone else you know would like to receive future updates about developments on these and other concerns from Ms. Stamer, see here.

About Solutions Law Press

Texas Medical Supply Medical Supply Company Owner Convicted Of Violating Anti-Kickback Statute Could Get 5 Years

May 16, 2012

The owner of a Weslaco, Texas-area medical supply and diagnostic testing company faces sentencing on July 25, 2012 to five years in federal prison without parole and a $250,000 fine after pleading guilty to one count of conspiracy to violate the federal anti-kickback statute. The successful prosecution of Jose “Joe” Trevino is the latest in a growing list of criminal prosecutions and convictions by Federal officials under the Federal Anti-Kickback Statute.

The Anti-Kickback Statute

The Federal Anti-Kickback Statute prohibits individuals and entities from knowingly and willfully paying or offering to pay, as well as soliciting or receiving, remuneration (money or other things of value) in return for the referral of patients for medical services or items which are benefits under a federal health care program, such as Medicare or Medicaid. Violation of the Statute is a felony offense.

Trevino Conviction

Trevino pleaded guilty on April 24, 2012 to a one-count criminal information charging conspiracy to violate the anti-kickback statute. According to information presented by the United States at the April 24th hearing, Trevino is the owner of Med-Quick Diagnostics, a medical supply and diagnostic testing facility in Weslaco, Texas. From approximately September 2009 through April 2011, Federal officials charged that Trevino authorized thousands of dollars in illegal kickback payments to an area marketer, Alicia Vasquez, in exchange for Vasquez’s referrals of many Medicare and Medicaid patients to Med-Quick. Trevino paid the kickbacks to Vasquez through a third-party – referred to in the criminal information as “Person A.” The kickbacks were deposited into Person A’s bank account, from where the money was later diverted to Vasquez. Med-Quick subsequently billed Medicare and Medicaid hundreds of thousands of dollars for patients that were illegally referred by Vasquez.

Vasquez previously pleaded guilty to conspiracy and is awaiting sentencing.

Other Federal Anti-Kickback Statute Enforcement

The Trevino conviction is the latest in a growing list of Anti-Kickback Statute prosecutions. Federal enforcement of the Anti-Kickback Statute has increased. On April 19, 2012, for example, Federal prosecutors in Houston charged Floyd Leslie Brooks and Gwendolyn Kay Frank with conspiracy to violation the Anti-Kickback Statute in relation to the massive health care fraud conspiracy that allegedly billed the Medicare and Medicaid programs for more than $45 million.

That action followed the April 9, 2012 guilty plea of former Orthofix vice president of sales Thomas P. Guerrieri to violating the Anti-Kickback Statute in connection with the sale of bone growth stimulators. His sentencing is scheduled for July 11, 2012. He faces up to five years in prison, to be followed by three years of supervised release, a $250,000 fine and forfeiture. See also, Nine Health Care Professionals, Including Five Doctors, Charged In Kickback Scheme.

Health Care Providers Must Act To Manage Risks

For More Information Or Assistance

A popular lecturer and widely published author on health industry concerns, Ms. Stamer continuously advises health industry clients about compliance and internal controls, workforce and medical staff performance, quality, governance, reimbursement, and other risk management and operational matters. Ms. Stamer also publishes and speaks extensively on health and managed care industry regulatory, staffing and human resources, compensation and benefits, technology, public policy, reimbursement and other operations and risk management concerns. Her insights on these and other related matters appear in the Health Care Compliance Association, Atlantic Information Service, Bureau of National Affairs, The Wall Street Journal, Business Insurance, the Dallas Morning News, Modern Health Care, Managed Healthcare, Health Leaders, and a many other national and local publications. You can get more information about her health industry experience here. If you need assistance responding to concerns about the matters discussed in this publication or other health care concerns, wish to obtain information about arranging for training or presentations by Ms. Stamer, wish to suggest a topic for a future program or update, or wish to request other information or materials, please contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here.

If you or someone else you know would like to receive future updates about developments on these and other concerns from Ms. Stamer, see here.

About Solutions Law Press

Leave a Comment » | Anti-KickBack, Doctor, E-Prescribing, false claims act, Health Care, Health Care Fraud, Health Care Provider, Hospital, OIG, Physician, Physician Licensing, Prescription Drugs, Reimbursement, Substance Abuse | Tagged: Anti-Kickback, controlled substance, DEA, Drug Testing, drugs, false claims act, Health Care, Health Care Compliance, Health Care Fraud, HEAT, licensure, Medicaid, Medical Board, Medicare, pain management, pharmacist, pharmacy, physical therapy, Physician | Permalink
Posted by Cynthia Marcotte Stamer

Texas Healthcare Operator’s Guilty Plea To Bankruptcy Fraud Conspiracy Highlights Broad Prosecution Risks

May 16, 2012

The recent guilty pleas of the former operator of Texas-based ambulance and imaging companies and his wife to conspiring to commit bankruptcy fraud shows the risks of misrepresentation in official documents, as well as the diverse range of tools and options that federal officials wield as part of their crusade against what they perceive as wrongdoers in the health care system.

Conspiracy To Commit Bankruptcy Plea

On May 14, 2012, Michael Giventer pleaded guilty to conspiracy to commit bankruptcy fraud. Giventer’s wife, Julia Shavabskaya, previously pleaded guilty to the same charge on April 30, 2012.

Health Care Providers Must Act To Manage Risks

For Legal Representation or More Information

If you need help 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 set up and administer compliance and risk management policies; prevent, conduct and investigate, and respond to peer review and other quality concerns; and to respond to Board of Medicine, Department of Aging & Disability, Drug Enforcement Agency, OCR Privacy and Civil Rights, HHS, DOD and other health care industry investigation, enforcement and other compliance, public policy, regulatory, staffing, and other operations and risk management concerns.

A popular lecturer and widely published author on health industry concerns, Ms. Stamer continuously advises health industry clients about compliance and internal controls, workforce and medical staff performance, quality, governance, reimbursement, and other risk management and operational matters. Ms. Stamer also publishes and speaks extensively on health and managed care industry regulatory, staffing and human resources, compensation and benefits, technology, public policy, reimbursement and other operations and risk management concerns. Her insights on these and other related matters appear in the Health Care Compliance Association, Atlantic Information Service, Bureau of National Affairs, The Wall Street Journal, Business Insurance, the Dallas Morning News, Modern Health Care, Managed Healthcare, Health Leaders, and a many other national and local publications. You can get more information about her health industry experience here. If you need assistance responding to concerns about the matters discussed in this publication or other health care concerns, wish to obtain information about arranging for training or presentations by Ms. Stamer, wish to suggest a topic for a future program or update, or wish to request other information or materials, please contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here.

If you or someone else you know would like to receive future updates about developments on these and other concerns from Ms. Stamer, see here.

About Solutions Law Press

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Battle Creek VA OSHA Safety Violations

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Partnership Expands Use & Reach of New Affordable Care Act & Other Health Care Fraud Detection & Enforcement Tools & Collaboration

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