A civil lawsuit seeking millions of dollars of damages  from a Chicago-area psychiatrist provides a clear warning to physicians and other health care providers of the significant potential legal risks that can arise if they improperly receive compensation or other perks for participating in conferences, prescribing treatments or engage in other arrangements that violate federal or state anti-kickback or other health care fraud laws.On November 15, 2012, the Justice Department sued Chicago-area psychiatrist Dr. Michael J. Reinstein in the Northern District of Illinois with receiving illegal kickbacks on at least 50,000 claims and filing at least 140,000 false Medicare and Medicare Claims for antipsychotic medications he prescribed for thousands of mentally ill patients in area nursing homes.  The suit against Dr. Michael J. Reinstein seeking triple damages under the False Claims Act, plus a civil penalty of $5,500 to $11,000 for each alleged false claim. See here.

The lawsuit involves Reinstein’s use of clozapine, a rarely-used medication that has serious potential side effects and is generally considered a drug of last resort, particularly for elderly patients. While clozapine has been shown to be effective for treatment-resistant forms of schizophrenia, it is also known to cause numerous side effects, including a potentially deadly decrease in white blood cells, seizures, inflamation of the heart muscle, and increased mortality in elderly patients.

According to the suit, 69-year old Reinstein has provided psychiatric medical services in the Chicago area since 1973. According to the lawsuit, Reinstein routinely prescribed antipsychotic and other psychiatric medications knowing that, because most of his patients are indigent nursing home residents, pharmacies dispensing the medications submitted claims to Medicaid, and beginning in 2006, to Medicare Part D. Reinstein also submitted Medicare and Medicaid claims for pharmacologic management of his patients, knowing that he did not engage in substantive evaluations of his patients’ medical and psychiatric conditions to properly manage their medications. Instead, he allegedly prescribed medications to his patients based on his receipt of kickbacks from pharmaceutical companies.

Prior to August 2003, Reinstein prescribed Clozaril, the trade name for clozapine manufactured by Novartis, and he often had more than 1,000 patients using the medication at any given time. For many years, Novartis paid Reinstein to promote Clozaril, the complaint alleges. After Novartis’ patent for Clozaril expired in 1998, Reinstein resisted pharmacy and drug company efforts to switch his patients to generic clozapine and he continued to be the largest prescriber of Clozaril to Medicaid recipients in the United States. In July 2003, Novartis notified Reinstein that was withdrawing its support for Clozaril, and ended the regular payments that it had been making to Reinstein. 

In August 2003, Reinstein finally agreed to switch his patients to generic clozapine manufactured by Miami-based IVAX Pharmaceuticals, Inc., the suit alleges, if IVAX agreed to pay Reinstein $50,000 under a one-year “consulting agreement;” pay his nurse to speak on behalf of clozapine; and fund a clozapine research study by a Reinstein-affiliated entity known as Uptown Research Institute. IVAX agreed and Reinstein immediately began switching his patients from Clozaril to IVAX’s clozapine. He quickly became the largest prescriber of generic clozapine in the country.

“Reinstein’s inordinate prescribing of clozapine stands in stark contrast to its extremely limited use by other physicians,” the lawsuit states. While generally only four percent of schizophrenia patients who were prescribed antipsychotics received clozapine, during the time Reinstein was alegedly accepting kickbacks from IVAX, more than 50 percent of his patients were prescribed IVAX’s clozapine. At one nursing home, Reinstein had 75 percent of the 400 residents on IVAX’s clozapine.

Between 2003 and 2006, the lawsuit charges Reinstein requested, and IVAX provided, additional direct and indirect benefits to Reinstein and his associates, including paying airfare, lodging, meals, and entertainment expenses for a pharmacy owner and spouse, Reinstein’s nurse, his accountant and spouse, his administrative assistant and spouse, and Reinstein and his wife to travel to IVAX’s headquarters in Miami. IVAX also paid for Reinstein and his entourage to go on a fishing trip, a boat cruise, and a golf outing; annual renewal of Reinstein’s $50,000 “consulting agreement;” and tickets to sporting events and free IVAX-manufactured medication for Reinstein’s personal use.

In January 2006, IVAX became a subsidiary of Teva Pharmaceuticals Industries, Ltd., an Israeli company. About seven months before the merger, Reinstein began moving large numbers of his patients to a form of clozapine manufactured by a competitor of IVAX/Teva. In April 2006, Teva paid all expenses for Reinstein and his entourage to travel to Miami, including a $2,300 boat cruise, and at least two dinners costing more than $1,700 each. During this trip Teva employees asked Reinstein what the company could do to induce Reinstein to prescribe more clozapine, and Reinstein suggested that Teva hire an associate of his from Chicago, the lawsuit alleges. Teva agreed and in the months after the hiring Reinstein put several hundred patients back on Teva’s clozapine. From 2007 to 2009, the suit alleges, Teva and Reinstein entered into annual “speaker agreements” that resulted in Teva paying Reinstein more than $100,000.

Based on this alleged conduct, the suit charges Medicaid received and paid more than 100,000 false claims from various pharmacies for IVAX/Teva clozapine prescriptions written by Reinstein between August 2003 and July 2011 as a result of illegal kickbacks he solicited and received from IVAX and Teva. Between 2006 and July 2011, Medicare Part D received and paid more than 40,000 false claims involving similar kickback-induced prescriptions. Likewise, between August 2003 and July 2011, Reinstein allegedly submitted more than 40,000 false claims and received payment from Medicaid for purported pharmacologic management, as well as more than 10,000 similar false claims to Medicare.

This lawsuit is one a growing list of civil and criminal investigations and enforcement actions by federal and state prosecutors targeting health care providers using expanded health care fraud laws and investigatory and prosecutorial powers granted under the Affordable Care Act and other legislation to help bring down health care costs. 

Through these and other flashy prosecutions, as well as a continuous campaign of audits and other activities, federal officials are trying to reduce Medicare and other health care expenditures, both by prosecuting health care providers for intentionally submitting false claims, as well as using the treat of audits, program, disqualification or civil or criminal prosecution to scare health care providers to reduce legitimate billings that could trigger a federal audit or other federal scrutiny. 

Federal officials are aided in these efforts by an arsenal of new health care fraud statistical profiling and other health care fraud detection and enforcement tools granted by Congress in recent years that make it easier for federal officials to target and successfully prosecute or bring other sanctions against health care providers whose billing or other business practices come under scrutiny. 

Coupled with the ever-lengthening list of civil settlements and civil monetary penalties, program disqualifications, and audits, Federal officials use high profile criminal sweeps like those announced today both to send a message to health care providers generally, and as a tool to pressure and encourage health care providers to accept settlements proposed by federal auditors and prosecutors to avoid the potential threat of more serious criminal, civil or administrative prosecutions. 

These activities are intended to send a strong message to health care providers that bill Medicare, Medicaid, or other public or private health care programs that they must be prepared to defend any charges billed to these or other federal health care programs and to defend their other business practices. 

In response to these threats, health care providers should take steps to strengthen their billing, referral, audit, medical and other recordkeeping and other compliance and risk management practices to enhance their ability to defend or prevent these exposures.  While most providers already are moving to tighten these practices, the move to electronic health records, changing rules and other pressures are undermining the sufficiency of these efforts.  This investigation shows that beyond mere aggressive billing practices, federal officials also are targeting for enforcement physicians and other health care providers that participate in financial or other referral incentive or reward practices prohibited by the anti-kickback, STARK or other relevant law as well as the filing of Medicare, Medicaid or other health claims for undelivered, unnecessary or otherwise uncovered care or  services. 

Amid these and other enforcement actions, all health industry players should exercise care to steer clear of activities that might violate federal health care fraud rules as well as consider whether corrective or other action might be necessary to address risks of prior activities that with the benefit of hindsight taking into account the current enforcement climate reflect potential exposures. 

In the case of physicians and certain other professionals, these plans need to include both efforts to manage potential government investigation risks and management of their practices to mitigate peer review or other disciplinary or practice regulatory oversight that often arises when the practices and hospitals start tightening oversight and controls on practices as part of their own efforts to protect their organizations from fraud or other audits. 

While almost all health care providers can find room to improve their documentation and tighten other compliance, it also is important that providers also plan for how they will finance the cost of defending an audit or other investigation.  Often, the financial cost of defending these and other charges prevents physicians or other health care providers from lodging effective defenses of legitimate practices.  To help avoid this quagmire, providers generally will want to explore getting special liability coverage, indemnification or other protection as part of their planning arrangements.

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, audit, administer and defend billing, referral, privacy, staffing and recruitment 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

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:

• Recent OIG Audit Reports Provide Insights Where Fraud Audits Likely To Look Next
• Hospital Chain HCA Inc. Pays $16.5 Million to Settle False Claims Act Allegations That Hospital
• Detroit-Area Doctor Charged for Role in Alleged $40 Million Medicare Fraud Scheme
• Five More Individuals Charged in Detroit for Alleged Roles in $24.7 Million Medicare Fraud Scheme
• Massachusetts Ear Group To Pay $1.5 Million To Resolve HIPAA Charges
• Personal Consumer Information Protection In Health Care Operations Topic of Stamer’s 11/1 Speech
• ONC Releases First Wave of EHR Test Procedures; More To Come
• OCR Releases HIPAA Compliance Training Tool As Enforcement Risks Rise
• Health Care Orgs Disability Exposure High As $475K Paid To Settle Justice Department Charges Medical Fitness Screenings of EMTs, Others Violated ADA
• HIPAA & Texas Require HIPAA Training! Register for 8/14 HIPAA Update Workshop Now
• HHS/DOJ Partner With Private Health Plans To Further Ramp Up Health Care Fraud Heat!
• AHRQ Issues New Guide for Use of Interactive Preventive Care Record
• Nextcare Inc. $10 Million False Claims Act Settlement Shows Qui Tam Role In False Claims Act Prosecutions
• Pharmas Face New Pressure To Put Patients Before Profits After GlaxoSmithKline Record $3 Billion Health Care Fraud, FDCA Conviction & Settlement
• Baton Rouge Area Women Heading To Prison For DME Health Care Fraud Participation
• Houston Man Gets 24 Month Prison Sentence For Anti-Kickback & Other Health Care Fraud Convictions
• Oklahoma’s Harmon Memorial Hospital, Physician Pay $1.5M Qui Tam Health Care Fraud Settlement
• OCR’s Shares HIPAA Audit Program Protocols As Announces $1.7M Resolution Agreement Against Alaska Medicaid

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

THE FOLLOWING DISCLAIMER IS INCLUDED TO COMPLY WITH AND IN RESPONSE TO U.S. TREASURY DEPARTMENT CIRCULAR 230 REGULATIONS.  ANY STATEMENTS CONTAINED HEREIN ARE NOT INTENDED OR WRITTEN BY THE WRITER TO BE USED, AND NOTHING CONTAINED HEREIN CAN BE USED BY YOU OR ANY OTHER PERSON, FOR THE PURPOSE OF (1) AVOIDING PENALTIES THAT MAY BE IMPOSED UNDER FEDERAL TAX LAW, OR (2) PROMOTING, MARKETING OR RECOMMENDING TO ANOTHER PARTY ANY TAX-RELATED TRANSACTION OR MATTER ADDRESSED HEREIN.

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

Health Care Providers Warned To Raise Defenses As Feds Charge 91 Individuals Bilked Medicare For Approximately $430 Million

A total of 91 doctors, nurses and other licensed medical professionals in Dallas, Houston, Los Angeles, Miami, Brooklyn, Baton Rouge and Chicago are facing health care fraud charges for their alleged participation in false Medicare billings totaling approximately $429.2 million to Medicare fraud schemes under federal indictments unsealed in a joint Department of Justice and HHS Medicare Fraud Strike Force nationwide takedown jointly announced by Attorney General Eric Holder, Health & Human Services (HHS) Secretary Kathleen Sebelius, and other agencies today (October 4, 2012). Coming on the heels of President Obama’s touting of the health care fraud fighting success of his Administration during his debate with Presidential Candidate Mitt Romney, the indictments are the latest warning to health care providers of the advisability of tightening their Medicare and other health care billing and other compliance practices.

Highlights of The Latest Strike Force Action

Together, dozens of charged individuals were arrested or surrendered as federal officials unsealed indictments charging more than $230 million in home health care fraud; more than $100 million in mental health care fraud and more than $49 million in ambulance transportation fraud; and millions more in other frauds.

The defendants charged are accused of various health care fraud-related crimes, including conspiracy to commit health care fraud, health care fraud, violations of the anti-kickback statutes and money laundering.  The charges are based on a variety of alleged fraud schemes involving various medical treatments and services such as home health care, mental health services, psychotherapy, physical and occupational therapy, durable medical equipment (DME) and ambulance services.

According to court documents, the defendants allegedly participated in schemes to submit claims to Medicare for treatments that were medically unnecessary and oftentimes never provided.  In many cases, court documents allege that patient recruiters, Medicare beneficiaries and other co-conspirators were paid cash kickbacks in return for supplying beneficiary information to providers, so that the providers could submit fraudulent billing to Medicare for services that were medically unnecessary or never provided.  Collectively, the doctors, nurses, licensed medical professionals, health care company owners and others charged are accused of conspiring to submit a total of approximately $429.2 million in fraudulent billing.

“Today’s coordinated actions represent one of the largest Medicare fraud takedowns in Department of Justice history, as measured by the amount of alleged fraudulent billings,” said Assistant Attorney General Breuer.  “We have made it one of the Department’s missions to hold accountable those who abuse the Medicare program for personal profit.  And there are Medicare fraudsters in prisons across the country – some who will be there for decades – who can attest to our determination, and our effectiveness.”

In Miami, a total of 33 defendants are charged for their alleged participation in various fraud schemes involving a total of $204.5 million in false billings for home health care, mental health services, occupational and physical therapy, and DME.  In one case, three defendants are charged for participating in a fraud scheme at LTC Professional Consultants and Professional Home Care Solutions Inc. which led to approximately $74 million in fraudulent billing for home health care.  In another case, five defendants are charged for participating in a fraud scheme at Hollywood Pavilion which led to $67 million in fraudulent billing for mental health services. 

Sixteen individuals, including three doctors and one licensed physical therapist, are charged in Los Angeles with participating in various fraud schemes involving a total of $53.8 million in false billings.  In one case, four defendants are charged for allegedly participating in a fraud scheme at Alpha Ambulance Inc., which led to approximately $49.2 million in fraudulent billing for ambulance transportation.  The case represents the largest ambulance fraud scheme ever prosecuted by the Medicare Fraud Strike Force.  According to court documents, the defendants provided beneficiaries ambulance rides that were medically unnecessary.

In Dallas, 14 individuals – including two doctors and two registered nurses – are charged for their alleged participation in various fraud schemes involving a total of $103.3 million in false billings.  In one case, three defendants – a medical doctor and two registered nurses – are charged with participating in a fraud scheme at Raphem Medical Practice and PTM Healthcare Services which led to approximately $100 million in fraudulent billing for home health care services.  According to court documents, Dr. Joseph Megwa signed approximately 33,000 prescriptions for more than 2,000 unique Medicare beneficiaries from 2006 to 2011.  Many of these Medicare beneficiaries had primary care physicians who never certified home healthcare services for them.  In order to handle the volume of prescriptions, Megwa allegedly signed stacks of documents without reviewing them.

Seven individuals are charged in Houston for their participation in a fraud scheme at a hospital which led to $158 million in fraudulent billing for community mental health center services.  According to court documents, the defendants who served as administrators at the hospital paid kickbacks – in the form of cigarettes, food and coupons redeemable for items available at the hospital’s “country stores” – to Medicare beneficiaries in exchange for those beneficiaries’ attendance at the hospital’s partial hospitalization programs (PHP).  Allegedly, beneficiaries watched television, played games and engaged in other non-PHP activities rather than receiving the services for which the hospital billed Medicare.  Previously, on Feb. 22, 2012, the assistant administrator of the hospital, Mohammad Kahn, pleaded guilty to conspiracy to commit health care fraud and paying kickbacks related to $116 million worth of fraudulent claims submitted to Medicare.  After his guilty plea, an additional $42 million in fraudulent claims were discovered that are included in today’s totals.

In Brooklyn, 15 individuals, including one doctor and four chiropractors, are charged for their alleged participation in various fraud schemes involving a total of $23.2 million in false billings.  In one case, nine defendants, including a medical doctor, are charged with participating in a fraud scheme at Cropsey Medical Care PLLC which led to approximately $13.8 million in fraudulent billing for physical therapy and related services. According to court documents, the defendants paid cash kickbacks to Medicare beneficiaries in exchange for physical therapy that was not medically necessary and on some occasions never provided to beneficiaries.

In Baton Rouge, four defendants, including a licensed practical nurse, are charged for their roles in fraud schemes involving approximately $2.4 million in false claims for medically unnecessary durable medical equipment. 

In Chicago, two defendants, including a dermatologist and a psychologist, are charged for their roles in fraud schemes involving, according to court documents, millions of dollars in false claims for medically unnecessary laser treatments and psychotherapy services. 

In addition to the criminal indictments, HHS also used recently expanded health care fraud powers granted as part of the Affordable Care Act to suspend and took other administrative action against 30 health care providers following a data-driven analysis that HHS claims showed “credible allegations of fraud.”  Under the Affordable Care Act, HHS is able to suspend payments until the resolution of an investigation.

According to today’s announcement the charges and other actions announced today resulted from coordinated health care fraud investigations conducted by the Medicare Fraud Strike Force as part of the 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.

Federal officials now credit strike force operations in nine locations have charged more than 1,480 defendants who collectively have falsely billed the Medicare program for more than $4.8 billion since strike force operations began in March 2007.

Charges Part of Widening War Against Health Care Providers

The charges unsealed today are the latest and among the most sweeping of an ever-lengthening list of flashy prosecutions and federal program disqualification actions that federal officials are conducting against health care providers using expanded health care fraud laws and investigatory and prosecutorial powers granted under the Affordable Care Act and other legislation. 

Through these and other flashy prosecutions, as well as a continuous campaign of audits and other activities, federal officials are trying to reduce Medicare and other health care expenditures, both by prosecuting health care providers for intentionally submitting false claims, as well as using the treat of audits, program, disqualification or civil or criminal prosecution to scare health care providers to reduce legitimate billings that could trigger a federal audit or other federal scrutiny. 

Federal officials are aided in these efforts by an arsenal of new health care fraud statistical profiling and other health care fraud detection and enforcement tools granted by Congress in recent years that make it easier for federal officials to target and successfully prosecute or bring other sanctions against health care providers whose billing or other business practices come under scrutiny. 

Coupled with the ever-lengthening list of civil settlements and civil monetary penalties, program disqualifications, and audits, Federal officials use high profile criminal sweeps like those announced today both to send a message to health care providers generally, and as a tool to pressure and encourage health care providers to accept settlements proposed by federal auditors and prosecutors to avoid the potential threat of more serious criminal, civil or administrative prosecutions. 

These activities are intended to send a strong message to health care providers that bill Medicare, Medicaid, or other public or private health care programs that they must be prepared to defend any charges billed to these or other federal health care programs and to defend their other business practices. 

In response to these threats, health care providers should take steps to strengthen their billing, referral, audit, medical and other recordkeeping and other compliance and risk management practices to enhance their ability to defend or prevent these exposures.  While most providers already are moving to tighten these practices, the move to electronic health records, changing rules and other pressures are undermining the sufficiency of these efforts.

In the case of physicians and certain other professionals, these plans need to include both efforts to manage potential government investigation risks and management of their practices to mitigate peer review or other disciplinary or practice regulatory oversight that often arises when the practices and hospitals start tightening oversight and controls on practices as part of their own efforts to protect their organizations from fraud or other audits. 

While almost all health care providers can find room to improve their documentation and tighten other compliance, it also is important that providers also plan for how they will finance the cost of defending an audit or other investigation.  Often, the financial cost of defending these and other charges prevents physicians or other health care providers from lodging effective defenses of legitimate practices.  To help avoid this quagmire, providers generally will want to explore getting special liability coverage, indemnification or other protection as part of their planning arrangements.

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, audit, administer and defend billing, referral, privacy, staffing and recruitment 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

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:

• Recent OIG Audit Reports Provide Insights Where Fraud Audits Likely To Look Next
• Hospital Chain HCA Inc. Pays $16.5 Million to Settle False Claims Act Allegations That Hospital
• Detroit-Area Doctor Charged for Role in Alleged $40 Million Medicare Fraud Scheme
• Five More Individuals Charged in Detroit for Alleged Roles in $24.7 Million Medicare Fraud Scheme
• Massachusetts Ear Group To Pay $1.5 Million To Resolve HIPAA Charges
• Personal Consumer Information Protection In Health Care Operations Topic of Stamer’s 11/1 Speech
• ONC Releases First Wave of EHR Test Procedures; More To Come
• OCR Releases HIPAA Compliance Training Tool As Enforcement Risks Rise
• Health Care Orgs Disability Exposure High As $475K Paid To Settle Justice Department Charges Medical Fitness Screenings of EMTs, Others Violated ADA
• HIPAA & Texas Require HIPAA Training! Register for 8/14 HIPAA Update Workshop Now
• HHS/DOJ Partner With Private Health Plans To Further Ramp Up Health Care Fraud Heat!
• AHRQ Issues New Guide for Use of Interactive Preventive Care Record
• Nextcare Inc. $10 Million False Claims Act Settlement Shows Qui Tam Role In False Claims Act Prosecutions
• Pharmas Face New Pressure To Put Patients Before Profits After GlaxoSmithKline Record $3 Billion Health Care Fraud, FDCA Conviction & Settlement
• Baton Rouge Area Women Heading To Prison For DME Health Care Fraud Participation
• Houston Man Gets 24 Month Prison Sentence For Anti-Kickback & Other Health Care Fraud Convictions
• Oklahoma’s Harmon Memorial Hospital, Physician Pay $1.5M Qui Tam Health Care Fraud Settlement
• OCR’s Shares HIPAA Audit Program Protocols As Announces $1.7M Resolution Agreement Against Alaska Medicaid

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

THE FOLLOWING DISCLAIMER IS INCLUDED TO COMPLY WITH AND IN RESPONSE TO U.S. TREASURY DEPARTMENT CIRCULAR 230 REGULATIONS.  ANY STATEMENTS CONTAINED HEREIN ARE NOT INTENDED OR WRITTEN BY THE WRITER TO BE USED, AND NOTHING CONTAINED HEREIN CAN BE USED BY YOU OR ANY OTHER PERSON, FOR THE PURPOSE OF (1) AVOIDING PENALTIES THAT MAY BE IMPOSED UNDER FEDERAL TAX LAW, OR (2) PROMOTING, MARKETING OR RECOMMENDING TO ANOTHER PARTY ANY TAX-RELATED TRANSACTION OR MATTER ADDRESSED HEREIN.

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

Healthcare providers, Medicare, Medicaid, Children’s Health Insurance Program (CHIP) intermediaries, State Medicaid and CHIP fund recipients, Medicare and Medicaid Advantage Plan and others wanting to get a leg up on potential audit targets likely to draw the attention of the Department of Health & Human Services (HHS) Office of Inspector General (OIG) and their health care fraud auditors and investigators may get valuable insights by monitoring OIG audit reports of Medicare Intermediaries and others.  Reports of deficiencies uncovered in these audits and recommendations to tighten procedures and seek repayments often prompt demands for repayment and tighter payment and audit guidelines and procedures.

The following are some of the most recently-issued OIG audit reports:

• New York Claimed Some Unallowable Costs for Services by New York City Providers under the State’s Developmental Disabilities Waiver Program (A-02-10-01027)

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

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:

• Five More Individuals Charged in Detroit for Alleged Roles in $24.7 Million Medicare Fraud Scheme
• Massachusetts Ear Group To Pay $1.5 Million To Resolve HIPAA Charges
• Personal Consumer Information Protection In Health Care Operations Topic of Stamer’s 11/1 Speech
• ONC Releases First Wave of EHR Test Procedures; More To Come
• OCR Releases HIPAA Compliance Training Tool As Enforcement Risks Rise
• Health Care Orgs Disability Exposure High As $475K Paid To Settle Justice Department Charges Medical Fitness Screenings of EMTs, Others Violated ADA
• HIPAA & Texas Require HIPAA Training! Register for 8/14 HIPAA Update Workshop Now
• HHS/DOJ Partner With Private Health Plans To Further Ramp Up Health Care Fraud Heat!
• AHRQ Issues New Guide for Use of Interactive Preventive Care Record
• Nextcare Inc. $10 Million False Claims Act Settlement Shows Qui Tam Role In False Claims Act Prosecutions
• Pharmas Face New Pressure To Put Patients Before Profits After GlaxoSmithKline Record $3 Billion Health Care Fraud, FDCA Conviction & Settlement
• Baton Rouge Area Women Heading To Prison For DME Health Care Fraud Participation
• Houston Man Gets 24 Month Prison Sentence For Anti-Kickback & Other Health Care Fraud Convictions
• Oklahoma’s Harmon Memorial Hospital, Physician Pay $1.5M Qui Tam Health Care Fraud Settlement
• OCR’s Shares HIPAA Audit Program Protocols As Announces $1.7M Resolution Agreement Against Alaska Medicaid

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

THE FOLLOWING DISCLAIMER IS INCLUDED TO COMPLY WITH AND IN RESPONSE TO U.S. TREASURY DEPARTMENT CIRCULAR 230 REGULATIONS.  ANY STATEMENTS CONTAINED HEREIN ARE NOT INTENDED OR WRITTEN BY THE WRITER TO BE USED, AND NOTHING CONTAINED HEREIN CAN BE USED BY YOU OR ANY OTHER PERSON, FOR THE PURPOSE OF (1) AVOIDING PENALTIES THAT MAY BE IMPOSED UNDER FEDERAL TAX LAW, OR (2) PROMOTING, MARKETING OR RECOMMENDING TO ANOTHER PARTY ANY TAX-RELATED TRANSACTION OR MATTER ADDRESSED HEREIN.

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

HCA Inc., one of the nation’s largest for-profit hospital chains, has agreed to pay the United States and the state of Tennessee $16.5 million to settle claims that it violated the False Claims Act and the Stark Statute, the Department of Justice announced September 19, 2012.   The settlement agreement and the litigation it resolves are a reminder to hospitals, physicians and other health care providers of the growing readiness of the Justice Department and other federal and state regulators and enforcement agencies to prosecute health care providers for STARK, anti-kickback back or other violations of federal or state health health care fraud laws.

HCA Settlement & Underlying Charges

As alleged in the settlement agreement, during 2007, HCA, through its subsidiaries Parkridge Medical Center, located in Chattanooga, Tenn., and HCA Physician Services (HCAPS), headquartered in Nashville, Tenn., entered into a series of financial transactions with a physician group, Diagnostic Associates of Chattanooga, through which it provided financial benefits intended to induce the physician members of Diagnostic to refer patients to HCA facilities.   These financial transactions included rental payments for office space leased from Diagnostic at a rate well in excess of fair market value in order to assist Diagnostic members to meet their mortgage obligations and a release of Diagnostic members from a separate lease obligation.  

The Stark Statute restricts financial relationships that hospitals may enter into with physicians who potentially may refer patients to them.   Federal law prohibits the payment of medical claims that result from such prohibited relationships.

The civil settlement resolves a lawsuit, United States ex rel. Bingham v. HCA, No. 1:08-CV-71 (E.D. Tenn.), pending in federal court in the Eastern District of Tennessee under the qui tam, or whistleblower, provisions of the False Claims Act, which allow private citizens to bring civil actions on behalf of the United States and share in any recovery.   As part of the civil settlement, HCA has agreed to pay $16.5 million to the United States and the state of Tennessee, with the federal portion representing $15,693,000 of the settlement amount.   The whistleblower will receive an 18.5 percent share.  

Also as part of the settlement, Parkridge Medical Center has entered into a comprehensive five-year Corporate Integrity Agreement with the Office of Inspector General of the U.S. Department of Health and Human Services to ensure its continued compliance with federal health care benefit program requirements.

Settlement Part of Expanding Health Care Fraud Prosecution Efforts

This resolution is part of the government’s emphasis on combating health care fraud and another step for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced by Attorney General Eric Holder and Kathleen Sebelius, Secretary of the Department of Health and Human Services in May 2009. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in that effort is the False Claims Act, which the Justice Department has used to recover more than $9.4 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 $13.1 billion.

In announcing the resolution agreement, federal officials emphasized their readiness to prosecute STARK, anti-kickback and other health care fraud statutes. 

“The Department of Justice continues to pursue cases involving improper financial relationships between health care providers and their referral sources, because such relationships can corrupt a physician’s judgment about the patient’s true healthcare needs,” said Stuart F. Delery, the Acting Assistant Attorney General for the Department of Justice’s Civil Division.   

 “Physicians should make decisions regarding referrals to health care facilities based on what is in the best interest of patients without being induced by payments from hospitals competing for their business,” said Bill Killian, U.S. Attorney for the Eastern District of Tennessee.  

“ Improper business deals between hospitals and physicians jeopardize both patient care and federal program dollars,” said Daniel R. Levinson, Inspector General of the Department of Health and Human Services.   “Our investigators continue to work shoulder to shoulder with other law enforcement authorities to stop schemes that imperil scarce health care resources.”

Coupled with the ever-lengthening list of civil settlements like the HCA settlement, and civil monetary penalties, program disqualifications, and criminal prosecutions, these announcements send a strong message to health care providers to review their transactions, referral and other relationships, and billing practices and address potential exposures.

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

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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• Pharmas Face New Pressure To Put Patients Before Profits After GlaxoSmithKline Record $3 Billion Health Care Fraud, FDCA Conviction & Settlement
• Baton Rouge Area Women Heading To Prison For DME Health Care Fraud Participation
• Houston Man Gets 24 Month Prison Sentence For Anti-Kickback & Other Health Care Fraud Convictions
• Oklahoma’s Harmon Memorial Hospital, Physician Pay $1.5M Qui Tam Health Care Fraud Settlement
• OCR’s Shares HIPAA Audit Program Protocols As Announces $1.7M Resolution Agreement Against Alaska Medicaid

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

THE FOLLOWING DISCLAIMER IS INCLUDED TO COMPLY WITH AND IN RESPONSE TO U.S. TREASURY DEPARTMENT CIRCULAR 230 REGULATIONS.  ANY STATEMENTS CONTAINED HEREIN ARE NOT INTENDED OR WRITTEN BY THE WRITER TO BE USED, AND NOTHING CONTAINED HEREIN CAN BE USED BY YOU OR ANY OTHER PERSON, FOR THE PURPOSE OF (1) AVOIDING PENALTIES THAT MAY BE IMPOSED UNDER FEDERAL TAX LAW, OR (2) PROMOTING, MARKETING OR RECOMMENDING TO ANOTHER PARTY ANY TAX-RELATED TRANSACTION OR MATTER ADDRESSED HEREIN.

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