false claims act |

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

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

For More Information Or Assistance

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

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

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

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Posted by Cynthia Marcotte Stamer

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.

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

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

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 proper 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 Legal Representation or More Information

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

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

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

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 proper 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 Legal Representation or More Information

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

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

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 proper 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 Legal Representation or More Information

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

Orthofix Medical Device Exec Awaits Sentencing After Pleading Guilty To Violating Anti-Kickback Law

April 10, 2012

The conviction today of a former vice president of sales of the medical device company Orthofix shows the risks that health care providers, medical device, Pharma, and other health care suppliers, and their leaders risk when engaging in consulting arrangements or other dealings that could raise scrutiny as aggressive under federal or state anti-kickback or other health care laws. The prosecution and conviction shows the advisability for health care suppliers, providers and their leaders to carefully evaluate proposed consulting and other arrangements between health care providers and health care providers for potential exposures to prosecution under Federal and State Anti-Kickback, STARK and other health care fraud and referral laws.

Thomas P. Guerrieri, former vice president of sales of medical device company Orthofix, now faces sentencing on July 11 after pleading guilty earlier today (April 10, 2012) to violating the Anti-Kickback statute. At sentencing, Guerrieri faces up to five years in prison, to be followed by three years of supervised release, a $250,000 fine and forfeiture.

Federal prosecutors charged that while serving as vice-president of sales at Orthofix, a manufacturer and provider of bone growth stimulator devices, 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. According to federal officials, the company paid the surgeon tens of thousands of dollars when he provided little or no consulting services in return. Federal officials charged that although the surgeon was supposed to document his services in time sheets provided to the company, the company paid him monthly consulting fees for years even though Guerrieri did not fill out these forms or provide any legitimate consulting services.

Federal officials charged that after the surgeon became concerned about increased government scrutiny of consulting arrangements such as his in 2007, 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. Federal officials had charged that Guerrieri did these things to induce the surgeon to continue to order bone growth stimulators from the company.

Federal officials also charged that 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 worried 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. Cobb’s plea hearing is set for April 19, 2012. The continuing success of these and other federal health care fraud investigation and enforcement efforts continue to show 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

While media attention has focused most heavily on federal fraudulent claims enforcement, the conviction of Guerrieri and the prosecution of Cobb show that federal officials also remain committed to enforcement of the Anti-Kickback and STARK laws.

In light of the heightened enforcement risks, health care providers and others conducting business that may be affected by these laws should exercise care to adopt and administer effective policies to keep up compliance with these and other requirements. Health care providers and suppliers should consider auditing the adequacy of existing practices, tightening training, oversight and controls on marketing, consulting, referral and other business transactions, billing and other regulated conduct. In addition to constantly reviewing and enforcing policies designed to maintain compliance with these requirements, health care providers and suppliers also should consistently recommunicate and reaffirm their commitment to compliance to workforce members and constituents and take other appropriate steps to help prevent, detect and timely redress anti-kickback and other prohibited referrals and 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.

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Posted by Cynthia Marcotte Stamer

Health Care Providers Also Should Guard Against Rising Exposures To State Health Care Fraud & Other Enforcement Risks

April 9, 2012

With all the media hype over federal health care fraud enforcement and prosecution, the growing emphasis and success of state regulators in finding and prosecuting health care fraud often goes relatively unnoticed. Health care providers concerned with managing their risks should exercise care to properly recognize and manage these state law exposures to promote an effective fraud compliance and risk management program.

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.

Highlights of some of the more significant state health care fraud enforcement activities over the past month include:

On April 4, a Gwinnett County Georgia Grand Jury indicted the former owner of a company known as Diversified Family Solutions and three employees for unlawfully obtaining approximately $980,000.00 in Medicaid payments through a fraudulent billing scheme. See Owner and Employees of Metro Atlanta Mental Health Services Company Indicted for Stealing Nearly $1 Million from Medicaid
In a series of announcements made on April 4-5, 2012, 9 states and the federal government announced a massive settlement with WellCare Health Plans, Inc., which resolves Medicare Fraud allegations against Wellcare by the states and federal regulators. See e.g., Indiana Medicaid to receive $922K in WellCare settlement; Connecticut Benefits From Settlement With WellCare on Medicaid Fraud Charges; Florida Recovers More Than $54 Million From WellCare in Medicaid Fraud Settlement
On April 5, 2012, the Oklahoma Attorney General announced that an Oklahoma City counselor has been named in a multicounty grand jury indictment unsealed in Oklahoma County District Court. Vickie Rhea Yearwood, 53, a licensed professional counselor through Beacon Pointe LLC and Specialized Alternatives for Families and Youth, was indicted on two counts of Medicaid fraud. See, OKC Counselor Indicted for Medicaid Fraud
On April 4, 2012, Attorney General Eric T. Schneiderman announced the arrests and indictment of four ringleaders of a massive scheme to distribute black market prescription HIV drugs and defraud the Medicaid Program of $155 million. After an investigation code-named “Operation Black Market Meds,” the Attorney General’s Medicaid Fraud Control Unit shut down an illegal operation that was distributing HIV prescription drugs obtained on the black market through MOMS pharmacy, a high-volume pharmacy with satellites in Suffolk County and Brooklyn. MOMS, and its parent company Allion Healthcare, then dispensed the illegally obtained drugs to Medicaid recipients, and billed the New York State Medicaid program for these un-sellable drugs. See, A.G. Schneiderman Announces Arrests in $274 Million Black Market Prescription Drug Operation
On April 3, 2012, Tennessee officials announced charges against a Montgomery County woman for TennCare fraud in a case involving prescription drugs. See, Montgomery County Woman Charged With Tenncare Drug Fraud
On March 30, 2012, Massachusetts officials announced that a medical testing company will pay $20 million in restitution to resolve allegations of an elaborate kickback scheme that cost the Massachusetts Medicaid program (MassHealth) millions of dollars for unnecessary urine drug screens. See, Calloway Laboratories Pays $20 Million to Resolve Allegations of Kickbacks and Fraud on State Medicaid Program
On March 27, 2012, Texas Attorney General announced a Texas court’s approval of “The largest recovery of taxpayer funds in a Texas civil Medicaid fraud case.”Under an agreed final judgment entered this morning, Johnson & Johnson and its subsidiaries must pay $158 million to resolve the State’s enforcement action charging Janssen Pharmaceutica with defrauding the taxpayer-funded Texas Medicaid program. See, Statement Regarding Final Agreed Judgment in State’s Medicaid Fraud Case Against Johnson & Johnson

Between March 22 and March 27, 2012, the Tennessee Department of Finance & Administration filed charges against a variety of individuals for TennCare fraud arising out of alleged misrepresentations and billings for prescription drugs to get healthcare benefits. See, Williamson County Woman Charged With TennCare Fraud ; Two Mid-State Residents Charged With TennCare Fraud Involving Prescription Drugs Two Women Plead Guilty To TennCare Drug Fraud
On March 22, 2012, Louisiana Attorney General Buddy Caldwell announced the trial setting in the state’s lawsuit against more than 100 drug manufacturers beginning on n March 4, 2013, June 17, 2013, and October 7, 2013. See Trial Dates Set in Cases Against Drug Manufacturers
On March 22, 2012, the Georgia Attorney General announced the sentencing of Leetra Dometric Langston to five years of probation and restitution for following his plea to one count of Medicaid Fraud for his role in a scheme involving a businesses that purported to be a residential treatment program for homeless teenage girls. Langston was the last of three defendants to plead guilty to the scheme. See Final Defendant Pleads Guilty to Medicaid Fraud in Scheme Involving Homeless and Pregnant Teenagers
On March 22, 2012, Louisiana announced that a Delhi woman has been arrested and charged with three-counts of Exploitation of the Infirmed. Delhi Woman Arrested for Exploitation of the Infirmed
On March 21, 2012, Oklahoma Attorney General Scott Pruitt’s Medicaid Fraud Control Unit announced it filed charges against the owner of a Midwest City youth counseling agency for billing services to children that parents say didn’t happen. See, AG Pruitt Charges MWC Counselor with Medicaid Fraud
On March 20, 2012, Alabama Attorney General Luther Strange announced that a former bookkeeper employed by a Wetumpka nursing home was sentenced to prison for the theft of $115,734 of residents’ funds from the facility. See, AG Announces Prison Sentence Of Former Bookkeeper For Theft Of $115,734 From Wetumpka Nursing Home
On March 19, 2012, the Tennessee Department of Finance & Administration brought charges against a Davidson County woman is charged with TennCare fraud involving “doctor shopping,” or using TennCare to go to multiple doctors in a short time period to obtain controlled substances. See, Davidson Co. Woman Charged With TennCare “Doctor Shopping”
On March 19, 2012, Tennessee Department of Finance & Administration charged an Anderson County woman is charged with TennCare fraud for using TennCare benefits to pay for what officials say was a fraudulent prescription. See, Anderson County Woman Charged With TennCare Fraud
On March 19, 2012, Wisconsin Attorney General J.B. Van Hollen announced that Wisconsin has joined other states and the federal government and reached an agreement in principle with KV Pharmaceutical Company to settle allegations that the company failed to tell the Centers for Medicare and Medicaid Services that two unapproved products did not qualify for coverage under federal and state health care programs. See, St. Louis-based KV Pharmaceutical to Settle Medicaid False Claims Allegations
On March 16, 2012, Attorney General Jeffrey S. Chiesa announced that the owner of a now-defunct Newark mental health and substance abuse counseling center was sentenced to state prison after being convicted of defrauding Medicaid. See, Former Owner of Counseling Center Sentenced to State Prison for Defrauding Medicaid
On March 15, 2012, Ohio Attorney General Mike DeWine said that Alicia K. Mahone, of Cleveland, was convicted of billing for home health care not provided for $20,000. Mahone regularly submitted bills, from April to December 2010, to the Ohio Department of Job and Family Services claiming to have provided 35 hours of patient care to a Medicaid recipient, while only having provided 15 hours. See, Attorney General DeWine Announces Conviction in Medicaid Billing Fraud
Also on March 15, 2012, New Jersey Attorney General Jeffrey S. Chiesa announced that a certified nursing assistant who worked at a Livingston nursing home was charged with allegedly conspiring to take a photograph of an elderly resident’s genitalia and have the photograph posted on Facebook. Her friend, and co-defendant, was charged on March 14 in the alleged scheme. See, Certified Nursing Assistant Among Two Charged with Invasion of Privacy After Photo of a Nursing Home Resident’s Genitalia Posted on Facebook
On March 13, 2012, Arizona Attorney General Tom Horne announced that a Glendale man has been sentenced to prison and probation for prescription drug fraud. See, Horne Announces Prison Sentence For Glendale Man Convicted Of Prescription Drug Fraud
Also on March 13, 2012, New Jersey Attorney General Jeffrey S. Chiesa announced that a former Matawan doctor pleaded guilty to dispensing controlled dangerous substances by writing prescriptions for medically unnecessary pharmaceutical narcotics in return for cash payments. See, Former Matawan Doctor Pleads Guilty to Dispensing Pharmaceutical Narcotics for Cash
On March 13, 2012, Arizona Attorney General Tom Horne announced that a guilty verdict in the health care fraud trial of Julianne Mari Lane, a home health worker in Tucson. See, Home Health Care Worker Convicted For Fraud Of Vulnerable Adult
On March 13, 2012, New Jersey Attorney General Jeffrey S. Chiesa announced that a Newark pharmacist has pleaded guilty for his role in a scheme in which pharmacy owners and employees purchased prescriptions including HIV/AIDS drugs from indigent patients so Medicaid could be billed for medications that were never actually dispensed. See, Essex County Pharmacist Pleads Guilty to Medicaid Fraud in False Billing Scheme
On March 7, 2012, Michigan Attorney General Bill Schuette, Michigan Department of Human Services Director Maura D. Corrigan and U.S. Department of Health and Human Services, Office of Inspector General announced that the Attorney General’s Public Integrity Unit charged a former City of Detroit employee with one felony count of fraud. See, Schuette, Corrigan Announce Fraud Charge against Ex-City of Detroit DHS Social Worker
On March 7, 2012, Ohio Attorney General Mike DeWine announced that Janet Root, 35, was sentenced for theft of patient funds at the Arcadia Nursing Center in Coolville, Ohio. Root was sentenced to five years of community control and ordered to pay $31,471 in restitution. She also received a nine-year suspended sentence after she pled guilty last November to four counts of Theft from the Elderly, fourth-degree felonies, and two counts of Forgery, fourth-degree felonies. See, Attorney General DeWine Announces Sentencing in Theft from Nursing Center Residents
On March 7, 2012, Maryland Attorney General Douglas F. Gansler today announced that Maryland, along with multiple states and the federal government, has reached agreements with K-V Pharmaceutical Company to settle allegations that the company caused false claims to be submitted to the Medicaid program. Under the K-V agreement, K-V will pay the states and the federal government a total of $17 million to compensate Medicaid and various federal health care programs for the violations. The federal share of the settlement is $10,158,695, and the states’ share of the settlement is $6,841,305. Maryland will receive $36,377. See, AG Gansler Secures Settlement with K-V Pharmaceutical
Also on March 7, 2012, Maryland Attorney General Douglas F. Gansler announced Dava Pharmaceuticals, Inc. agreement, (“Dava”) had agreed to a settlement of the State’s allegations that Dava failed to pay required rebates to the Medicaid program. Dava will pay $11 million to Medicaid and other government health care programs. Maryland will receive $7,054 from the settlement. See, AG Gansler Secures Recovery from Dava Pharmaceuticals, Inc.

This lengthy and growing list of state prosecution and other enforcement actions encompass both fraudulent billing activities of the nature commonly drawing the attention of federal health care fraud enforcement teams, as well as a wide range of other misconduct often not targeted by federal investigators.

Coupled with the growth and success of 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. When taking these efforts, the lengthy and growing list of successful state prosecutions show the need for health care providers and payers to make sure their compliance and risk management activities provide adequate protection of their organizations and people against both the highly publicized federal health care fraud war, and the much quieter, but equally active state health care fraud effort.

Health Care Providers Must Act To Manage Risks

In response to the growing emphasis and effectiveness of Federal and state officials in investigating and taking action against health care providers and organizations, health care providers should constantly work to keep up and strengthen their defensive shield against health care fraud.

Among other things, health care providers should consider auditing the adequacy of existing practices, tightening training, oversight and controls on billing and other regulated conduct, reaffirming their commitment to compliance to workforce members and constituents and taking other appropriate steps to help prevent, detect and timely redress health care fraud exposures within their organization and to position their organization to respond and defend against potential investigations or charges.

For More Information Or Assistance

If you need assistance reviewing or responding to these or other health care related risk management, compliance, enforcement or management concerns, the author of this update, attorney Cynthia Marcotte Stamer, may be able to help. Vice President of the North Texas Health Care Compliance Professionals Association, Past Chair of the ABA Health Law Section Managed Care & Insurance Section and the former Board Compliance Chair of the National Kidney Foundation of North Texas, Ms. Stamer has more than 24 years experience advising health industry clients about these and other matters. Her experience includes advising hospitals, nursing home, home health, rehabilitation and other health care providers and health industry clients to 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.

About Solutions Law Press

Halfway House Owner Gets 24 Months Imprisonment For Health Care Fraud & Kickback Conviction

March 14, 2012

Broward County, Florida halfway house owner and operator Barry Nash was sentenced to to 24 months in prison followed by three years of supervised relief for his role in a Medicare fraud kickback scheme that funneled patients through a fraudulent mental health company, the Department of Justice, the FBI and the Department of Health and Human Services (HHS) announced today (March 13, 2012).

Nash pleaded guilty on Jan. 9, 2012, to one count of conspiracy to commit health care fraud. In his guilty plea, Nash admitted that, in exchange for illegal health care kickbacks, he agreed to refer Medicare beneficiaries who resided at Starter House to American Therapeutic Corporation (ATC) and American Sleep Institute (ASI), a company related to ATC. Nash knew that ATC and ASI fraudulently billed Medicare for partial hospitalization program (PHP) services and sleep treatment purportedly provided to his referrals.

PHP is a form of intensive mental health treatment.

According to court documents, ATC’s principals paid kickbacks to owners and operators of assisted living facilities and halfway houses and to patient brokers in exchange for delivering ineligible patients to ATC and ASI. In some cases, the patients received a portion of those kickbacks. Throughout the course of the ATC conspiracy, millions of dollars in kickbacks were paid in exchange for Medicare beneficiaries who did not qualify for PHP services.

Ultimately, the Justice Department alledges ATC and ASI billed Medicare for more than $200 million in medically unnecessary services.

According to the plea agreement, Nash’s participation in the fraud resulted in more than $959,901 in fraudulent billing to the Medicare program.

ATC, its management company Medlink Professional Management Group Inc., and various owners, managers, doctors, therapists, patient brokers and marketers of ATC, Medlink and ASI, were charged with various health care fraud, kickback, money laundering and other offenses in two indictments unsealed on Feb. 15, 2011. ATC, Medlink and nine of the individual defendants have pleaded guilty or have been convicted at trial. Other defendants are scheduled for trial April 9, 2012, before U.S. District Judge Patricia A. Seitz.

Feds Continue To Turn Up HEAT on Health Care Fraud

The prosecution of Nash and other defendants charged in connection with the Florida mental health investigation are one of a growing number of prosecutions and convictions resulting from the federal HEAT Task Force health care fraud enforcement efforts 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. Using these new 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.

Health Care Providers Must Act To Manage Risks

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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Comment Period Extended To 3/21 On Proposed Extension Of Minimum Wage, Overtime To In-Home Caregivers

March 9, 2012

The U.S. Department of Labor’s Wage and Hour Division (WHD) has extended until March 12 the comment period for its proposed rule to provide minimum wage and overtime protections for nearly 2 million workers who provide in-home care services. See here.

In December, 2011, the WHD published a proposed rule that would expand minimum wage and overtime protections to all home care workers employed by third parties, such as staffing agencies. It also would clarify that individuals performing skilled in-home care work are entitled to minimum wage and overtime pay. However, individuals engaged by families for true companionship or fellowship activities, such as visiting with friends or pursuing hobbies, still would be considered “companions” and not be required to meet the act’s labor standards provisions. See Notice of Proposed Rulemaking [1] (NPRM).

Among other things, the NPRM proposes to revise the companionship and live-in worker regulations under the Fair Labor Standards Act (FLSA):

To more clearly define the tasks that may be performed by an exempt companion;
To limit the companionship exemption to companions employed only by the family or household using the services; and
To provide that third party employers, such as in-home care staffing agencies, could not claim the companionship exemption or the overtime exemption for live-in domestic workers, even if the employee is jointly employed by the third party and the family or household.

When Congress expanded protections to “domestic service” workers in 1974, it exempted casual babysitters and companions for the aged and inform from both the minimum wage and overtime pay requirements of the FLSA and exempted live-in domestic workers from the overtime pay requirement only. While WHD has left regulations governing this exemption substantially unchanged since first issued in 1975, it now believes the in-home care service industry. workers employed by in-home care staffing agencies are not the workers that Congress envisioned in enacting the companionship exemption (i.e., neighbors performing elder sitting).

As a result of these determines, WHD is moving to modify its existing rules to broaden protections for professionally employed home care workers as well as outreaching to inform employers and workers about the requirements that it perceives employers of these workers must meet.

The proposed tightening of regulations for home health workers follows a general toughening by WHD of its regulation and enforcement of wage and hour laws in the health care industry. See, e.g. Home health care company in Dallas agrees to pay 80 nurses more than $92,000 in back wages following US Labor Department investigation; US Department of Labor secures nearly $62,000 in back overtime wages for 21 health care employees in Pine Bluff, Ark.; US Department of Labor initiative targeted toward increasing FLSA compliance in New York’s health care industry; US Department of Labor initiative targeted toward residential health care industry in Connecticut and Rhode Island to increase FLSA compliance; Partners HealthCare Systems agrees to pay 700 employees more than $2.7 million in overtime back wages to resolve U.S. Labor Department lawsuit; US Labor Department sues Kentucky home health care provider to obtain more than $512,000 in back wages and damages for 22 employees; and Buffalo, Minn.-based home health care provider agrees to pay more than $150,000 in back wages following US Labor Department investigation.

Many have expressed concerns about the potential added costs that changes proposed in the NPRM would trigger in providing in home health and companion care for aging and disabled family members. The extension of the comment deadline provides added time for members of the public concerned about these rules to share their input.

Whether or not the proposed rule is adopted, the growing aggressiveness of the WHD and private plaintiffs to bring actions against employers violating minimum wage and overtime rules means health care and others employing home care workers should take well-documented steps to manage their risks. These employers should both confirm the adequacy of their practices under existing rules, as well as evaluate and begin preparing to respond to the proposed modifications to these rules. In both cases, employers of home care or other health care workers are encouraged to critically evaluate their classification or workers, both with respect to their status as employees versus contractor or leased employees, as well as their characterization as exempt versus non-exempt for wage and hour law purposes. In addition, given the nature of the scheduled frequently worked by home care givers, their employers also generally should pay particular attention to the adequacy of practices for recordkeeping.

For More Information Or Assistance

If you need assistance reviewing or responding to these or other health care related workforce, 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.

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, FLSA, Health Care, Health Care Compliance, Health Care Fraud, HEAT, Home Care, home health, licensure, Medicaid, Medical Board, pain management, pharmacist, pharmacy, physical therapy, Physician | Permalink
Posted by Cynthia Marcotte Stamer

2 Doctors, 4 Nurses Join 11 Defendants Charged in $20M Home Health Fraud, Kickback, Money Laundering & Tax Evasion Sting

March 8, 2012

Federal officials continued their battle against health care fraud in the home health care industry, federal prosecutors added two physicians and four registered nurses to the growing list of defendants indicted for their participation in what federal prosecutors claim was a Chicago area home health care fraud scam that allegedly swindled Medicare of at least $20 million over five years. The Justice Department’s announcement of the new Chicago indictments follows their February 28, 2012 announcement of indictments against a Dallas-area physician, his medical practice office manager and five home health agency owners on charges of submitting more than $375 million in fraudulent Medicare claims for home health services.

Chicago Home Health Fraud Sting

With the new indictments announced in Chicago today, a total of 12 defendants are now face federal criminal charges in connection with a health care fraud investigation into the operations of two suburban Chicago home health care businesses operated by the initial defendant, Jacinto “John” Gabriel, Jr. Federal officials charge that 9 of the 11 new defendants allegedly conspired with Gabriel to bill millions of dollars in false claims for reimbursement of home health care services purportedly provided to Medicare beneficiaries, which federal official allege never were provided or were not medically necessary. Prosecutors claim Gabriel and his co-schemers allegedly used the proceeds for various purposes, including: using cash to gamble at casinos in the Chicago area and Las Vegas, and to buy automobiles, jewelry and real estate in the United States and the Philippines; to perpetuate the businesses by paying his employees and providing them with gifts, and to bribe physicians and pay kickbacks to others in exchange for patient referrals.

Gabriel, who has no formal medical training, medical degrees, or licenses to practice as a health care professional, initially was arrested and charged alone in a 15-count indictment last summer. Following the issuance of a superseding indictment on March 7, he now is charged with one count of health care fraud conspiracy, 43 counts of health care fraud, 11 counts of money laundering, and four counts of federal income tax evasion.

According to the indictment, Gabriel did not identify himself as an owner, but in fact exercised ownership and control over Perpetual Home Health, Inc., based in Oak Forest, and Legacy Home Healthcare Services, which was located on the city’s north side. Both firms now have ceased operating and no longer receive Medicare payments. Between May 2006 and January 2011, federal prosecutors allege Perpetual submitted more than 14,000 Medicare claims seeking reimbursement for services allegedly provided to beneficiaries. As a result of those claims, Perpetual received more than $38 million in Medicare payments. Between 2008 and January 2011, Legacy submitted more than 2,000 claims for Medicare reimbursement and received more than $6 million. Neither Perpetual nor Legacy had any sources of revenue other than Medicare funds, the indictment states.

In addition to the charges against Gabriel, the 69-count superseding indictment returned March 7, 2012 by a federal grand jury charges:

Jassy Gabriel, Gabriel’s brother, the nominal majority owner of Perpetual and its president, as well as a registered nurse faces one count of health care fraud conspiracy and one count of filing a false federal income tax return;
Stella Lubaton, a registered nurse who was minority owner, officer and administrator of Perpetual with one count of health care fraud conspiracy, 16 counts of health care fraud, one count of filing a false federal income tax return, and one count of violating the medical anti-kickback statute;
Nessli Reyes, a registered nurse who was President and a part-owner of Legacy with one count of health care fraud conspiracy and nine counts of health care fraud;
Charito Dela Torre, a physician charged with one count of health care fraud conspiracy, 12 counts of health care fraud, and three counts of federal income tax evasion;
Ricardo Gonzales, a physician charged with one count of health care fraud conspiracy, 19 counts of health care fraud, and one count of violating the medical anti-kickback statute;
Rosalie Gonzales, a registered nurse and Ricardo Gonzales’ daughter, charged with one count of violating the medical anti-kickback statute;
Perpetual data entry employees James Davis, Francis Galang, and Michael Pacis each face one count each of health care fraud conspiracy;
Regelina “Queenie” David,a Perpetual quality assurance employee, faces charges of one count of health care fraud conspiracy;
Kennedy Lomillo, who provided bookkeeping and payroll services to Perpetual and prepared a corporate tax return for Perpetual, as well as an individual return for Lubaton, was charged with two counts of aiding and abetting the preparation of false income tax returns; and
The indictment also seeks forfeiture of $20 million against the Gabriel brothers and Lubaton.

Federal officials charge that as part of the conspiracy, Gabriel, acting in various combinations with the nine co-conspirator, allegedly obtained personal information of Medicare beneficiaries to bill Medicare without the beneficiaries’ knowledge or consent; paid bribes and kickbacks in cash and by check, directly and indirectly, to physicians and others in exchange for referrals of patients to Perpetual and Legacy; created false patient files to support fraudulent Medicare claims and submitted false claims based on those records; used Medicare proceeds to pay themselves and others who assisted in carrying out the scheme; and concealed the fraud proceeds by directing Perpetual and Legacy to issue checks payable to fictitious entities, John Gabriel’s friends and associates.

Among other details, the indictment alleges that John and Jassy Gabriel, Lubaton, and Reyes authorized Perpetual and Legacy to pay various amounts, ranging between $200 and $800, to employees and others, including indirectly to Ricardo Gonzales, for each patient they referred and enrolled in home health care services. John Gabriel and others also cold-called Medicare beneficiaries to try to persuade them to enroll with Perpetual and Legacy.

As part of allegedly falsifying patient records, John Gabriel directed Perpetual and Legacy employees, including Davis, Galang, and Pacis, to systematically complete standard forms by listing the same false diagnoses, including arthropathy (joint disease) and hypertension, which enabled them to claim a higher level of Medicare reimbursement, according to the charges.

In addition to the fraud counts, the money laundering charges allege that between October and December 2010, Gabriel cashed 11 checks in amounts under $10,000 — usually $9,000 and all involving fraud proceeds — to avoid federal currency transaction reporting requirements.

The four tax evasion counts against John Gabriel allege that for calendar years 2006 through 2009, he failed to pay taxes totaling approximately $889,062 on gross income totaling more than $2.82 million. The three tax evasion counts against Dela Torre allege that for calendar years 2005 through 2007, she failed to pay taxes totaling approximately $158,405 on gross income totaling more than $560,000.

Lubaton was charged with filing a false tax return for 2007 for allegedly failing to report all of her income, which was in excess of the $546,442 that she reported, and Lomillo was charged with aiding and abetting the preparation of her false return. Jassy Gabriel was charged with filing a false tax return for 2007 for allegedly failing to report all of his adjusted gross income, which exceeded the $603,974 that he reported, and Lomillo was charged with aiding and abetting the preparation of his false return.

Health care fraud conspiracy and each count of health care fraud carries a maximum penalty of 10 years in prison and a maximum fine of $250,000, or an alternate fine totaling twice the loss or twice the gain, whichever is greater, as well as mandatory restitution. Each count of money laundering carries a maximum 20-year prison term and a maximum fine of $500,000. Violating the medical anti-kickback statute carries a maximum penalty of five years in prison and a $250,000 fine. Each count of tax evasion carries a five-year maximum prison term, while each count of filing a false income tax return carries a three-year maximum, and a $250,000 fine. In addition, defendants convicted of tax offenses must pay the costs of prosecution and remain liable for any and all back taxes, as well as a potential civil fraud penalty of 75 percent of the underpayment plus interest. If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines.

HEAT Task Force Honing In On Home Health Care Fraud

In recent months, federal health care fraud investigators have used statistical profiling and other tools to find and target fraudulent practices in the home health industry. The Chicago indictments announced March 8 follow the Justice Department’s February 28, 2012 indictment of a Dallas-area physician, the office manager of his medical practice, and five home health agency owners for involvement in a home health care fraud conspiracy that federal prosecutors allege defrauded Medicare of $375 million. Justice Department officials say the conduct charged in the Dallas indictment represents the single largest fraud amount orchestrated by one doctor in the history of the HEAT initiative. Both the Chicago and Dallas indictments resulted from the efforts of 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. Federal prosecutors and investigators credit statistical profiling and other new tools in their fraud detection and enforcement efforts. See, e.g., Data Mining, Statistical Profiling Play Key Role In Arrest of Dallas Doctor, Office Manager & 5 Home Health Agency Owners.

These home health care fraud prosecutions are part of the ongoing and expanding Federal health care fraud enforcement effort that Federal officials credit with having recovered nearly $4.1 billion in taxpayer dollars in Fiscal Year (FY) 2011. See FY 2011 Health Care Fraud and Abuse Control Program Report. The Justice Department and HHS credit this fraud investigation and enforcement success to their vigorous use of enhanced fraud investigation and enforcement tools created under the Patient Protection & Affordable Care Act (Affordable Care Act) and other recently enacted laws. 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.

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 prepare their organization to respond and defend against potential investigations or charges.

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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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Data Mining, Statistical Profiling Play Key Role In Arrest of Dallas Doctor, Office Manager & 5 Home Health Agency Owners

February 29, 2012

Volume, Cutting Edge Treatment or Other Statistical Variations in Care Patterns

Increasingly Raise Potential Fraud Examination Risk

Dallas Home Health Care Indictments

Filed in the Northern District of Texas, the indictment unsealed February 28, 2012 charges Jacques Roy, M.D., 54, of Rockwall, Texas; Cynthia Stiger, 49, of Dallas; Wilbert James Veasey Jr., 60, of Dallas; Cyprian Akamnonu, 63, of Cedar Hill, Texas; Patricia Akamnonu, RN, 48, of Cedar Hill; Teri Sivils, 44, of Midlothian, Texas; and Charity Eleda, RN, 51, of Rowlett, Texas, each with one count of conspiracy to commit health care fraud. Roy also is charged with nine counts of substantive health care fraud. Veasey, Patricia Akamnonu and Eleda each are charged with three counts of health care fraud. Eleda also is charged with three counts of making false statements related to a Medicare claim

According to the indictment, Dr. Roy owned and operated Medistat Group Associates P.A. in the Dallas area. Medistat was an association of health care providers that primarily provided home health certifications and performed patient home visits. Federal officials charge that Dr. Roy allegedly certified or directed the certification of more than 11,000 individual patients from more than 500 HHAs for home health services during the past five years. Between January 2006 and November 2011, Medistat certified more Medicare beneficiaries for home health services and had more purported patients than any other medical practice in the United States. Federal officials charge these certifications allegedly resulted in more than $350 million being fraudulently billed to Medicare and more than $24 million being fraudulently billed to Medicaid by Medistat and HHAs.

The indictment charges Dr. Roy used HHAs as recruiters so that Medistat could bill unnecessary home visits and medical services. The indictment charges three of the HHAs Dr. Roy used as part of the scheme were Apple of Your Eye Healthcare Services Inc., owned and operated by Stiger and Veasey; Ultimate Care Home Health Services Inc., owned and operated by Cyprian and Patricia Akamnonu; and Charry Home Care Services Inc., owned and operated by Eleda. According to the indictment, Veasey, Akamnonu, Eleda and others recruited beneficiaries to be placed at their HHAs so that they could bill Medicare for the unnecessary and not provided services. As part of her role in the scheme, Eleda allegedly visited The Bridge Homeless Shelter in Dallas to recruit homeless beneficiaries staying at the facility, paying recruiters $50 per beneficiary they found at The Bridge and directed to Eleda’s vehicle parked outside the shelter’s gates.

According to the indictment, Medistat maintained a “485 Department,” named for the number of the Medicare form on which the plan of care was documented. Dr. Roy allegedly instructed Medistat employees to complete the 485s by either signing his name by hand or by using his electronic signature on the document. Federal officials claim Dr. Roy and other Medistat physicians used this process to certify and recertify plans of care so that HHAs also were able to bill Medicare for home health services that were not medically necessary and not provided. In addition, Dr. Roy allegedly performed unnecessary home visits and ordered unnecessary medical services.

Apple allegedly submitted claims to Medicare from Jan. 1, 2006, through July 31, 2011, totaling $9,157,646 for home health services to Medicare beneficiaries that were medically unnecessary and not provided. Dr. Roy or another Medistat physician certified the services. From Jan. 1, 2006, to Aug. 31, 2011, Ultimate submitted claims for medically unnecessary home health services totaling $43,184,628. Charry allegedly submitted fraudulent claims from Aug. 1, 2008, to June 30, 2011, totaling $468,858 in medically unnecessary and not provided home health services.

The indictment alleges that Sivils, as Medistat’s office manager, helped facilitate the fraud scheme by, among other actions, supervising the processing of thousands of plans of care that contained Dr. Roy’s electronic signature and other Medistat physicians’ signatures, permitting HHAs to bill Medicare for unnecessary home health services and accepting cash payments from Cyprian Akamnonu in exchange for ensuring plans of care contained Dr. Roy or another Medistat physician’s signature.

As outlined in the government’s request to the court to detain Dr. Roy, in June 2011, CMS suspended provider numbers for Dr. Roy and Medistat based on credible allegations of fraud, thus ensuring Dr. Roy did not receive payment from Medicare. Immediately after the suspension, nearly all of Medistat’s employees started billing Medicare under the provider number for Medcare House Calls. The court document alleges that Dr. Roy was in fact in charge of day-to-day operations at Medcare, and that Dr. Roy continued to certify patients for home health despite the suspension.

Each charged count of conspiracy to commit health care fraud and substantive health care fraud carries a maximum penalty of 10 years in prison and a $250,000 fine. Each false statement charge carries a maximum penalty of five years in prison and a $250,000 fine. The indictment also seeks forfeiture of numerous items including funds in bank accounts, a sailboat, vehicles and multiple pieces of property.

In announcing the indictment, Federal officials said an indictment is merely an allegation and defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

New Data Mining & Other Anti-Fraud Tools Credited

In announcing the indictments, federal officials credited new data analysis mining and other fraud fighting tools with playing a key role in uncovering the alleged misconduct leading to the indictment against the Medistat defendants and as well as growing list of other federal health care fraud defendants.

Of particular note in the Medistat investigation and a growing number of other cases are new data mining tools. 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.

The Medistat indictments illustrate how the HEAT team is using these new tools. “Using sophisticated data analysis we can now target suspicious billing spikes,” said HHS Inspector General Levinson. “In this case, our analysts discovered that in 2010, while 99 percent of physicians who certified patients for home health signed off on 104 or fewer people – Dr. Roy certified more than 5,000.”

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 highlighted in the Medistat indictments, 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 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

Health Care Providers Must Act To Manage Risks

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3 Comments | 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, pain management, pharmacist, pharmacy, physical therapy, Physician | Permalink
Posted by Cynthia Marcotte Stamer

DOJ & HHS Health Care Fraud Enforcement Nets $4 Billion + In 2011

February 21, 2012

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 the Department of Health & Human Services (HHS) and the Justice Department on Valentines Day. This is the highest annual amount ever recovered from individuals and companies who attempted to defraud seniors and taxpayers or who sought payments to which they were not entitled. These latest statistics should leave little room for doubt that health care providers need to exercise care to manage fraud investigation and exposures risks.

The Justice Department and HHS credit this fraud investigation and enforcement success to their vigorous use of enhanced fraud investigation and enforcement tools created under the Patient Protection & Affordable Care Act (Affordable Care Act) and other recently enacted laws, including:

Tough New Rules and Sentences for Criminals: The Affordable Care Act increases the federal sentencing guidelines for health care fraud offenses by 20-50 percent for crimes that involve more than $1 million in losses. The law establishes penalties for obstructing a fraud investigation or audit and makes it easier for the government to recapture any funds acquired through fraudulent practices. The law also makes it easier for the Department of Justice (DOJ) to investigate potential fraud or wrongdoing at facilities like nursing homes. Convictions under the Health Care Fraud and Abuse Control Program increased by over 27 percent (583 to 743) between 2009 and 2011, and the number of defendants facing criminal charges filed by federal prosecutors in 2011 increased by 74 percent compared with 2008 (1430 vs. 821).
Enhanced Screening and Other Enrollment Requirements:Last year CMS published rules to enforce some of the Affordable Care Act’s most powerful new fraud prevention tools.
- New requirements for providers and suppliers wishing to participate in Medicare, Medicaid, and CHIP who may pose a higher risk of fraud or abuse are now required to undergo a higher level of scrutiny. This scrutiny includes licensure checks and site visits to confirm legitimacy and location.
- To support the Affordable Care Act’s new requirements for risk-based provider enrollment CMS implemented a new Automated Provider Screening (APS) system 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. The new system replaces the time- and resource-intensive process of manual review of the enrollment application.
- In addition to the enhanced enrollment and screening requirements, the Affordable Care Act also allows the 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. CMS will publish a Federal Register notice to announce any enrollment moratorium and to explain the agency’s rationale for its action.
Increased Coordination of Fraud Prevention Efforts: Many of the Affordable Care Act antifraud provisions increase coordination among states, CMS, and its law enforcement partners at the Office of the Inspector General (OIG) and DOJ. For instance, the law expressly authorizes CMS, in consultation with OIG, to suspend Medicare payments to providers or suppliers during the investigation of a credible allegation of fraud. This initiative reverses a long-standing Medicare practice of paying claims then attempting to recoup funds if the claim is found to be an error or fraudulent. States must also withhold payments to Medicaid providers where there is a pending investigation of a credible allegation of fraud unless the State Medicaid agency has good cause not to do so. The Affordable Care Act also ensures that fraudulent providers and suppliers cannot move easily from state to state or between Medicare and Medicaid by requiring all states to terminate anyone whose billing privileges have been revoked by Medicare or who has been terminated by another state Medicaid program for cause.
Health Care Fraud Prevention and Enforcement Action Team (HEAT): One of the most visible examples of increased collaboration is the Health Care Fraud Prevention and Enforcement Action Team (HEAT), a joint effort between HHS and DOJ to fight health care fraud. It has engaged law enforcement and professional staff at the highest levels of HHS and DOJ to increase coordination, intelligence sharing, and training among investigators, agents, prosecutors, analysts, and policymakers. A key component of HEAT is the Medicare Strike Force: interagency teams of analysts, investigators, and prosecutors who can target emerging or migrating fraud schemes, including fraud by criminals masquerading as health care providers or suppliers. In 2011, HEAT coordinated the largest-ever federal health care fraud takedown. In one action, Strike Force teams charged 115 defendants in nine cities, including doctors, nurses, health care company owners and executives, for their alleged participation in Medicare fraud schemes involving more than $240 million in false billing. In another takedown, Strike Force prosecution teams charged 91 defendants in eight cities for their alleged participation in a Medicare fraud scheme involving more than $290 million in false billings.
Use of State-of-the-Art Fraud Detection Technology: 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. This targets investigative resources on areas of vulnerability that demand immediate attention and response. 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.
New Focus on Compliance and Prevention: Under the new law, some preventive measures focus on certain categories of providers and suppliers that historically have presented concerns, including Home Health agencies, and Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) suppliers. On November 17, 2010, CMS published final regulations authorized under the Affordable Care Act requiring physician certification of a patient’s “face-to-face” visit with an appropriate health care professional to ensure Medicare only pays for necessary and covered Medicare home health and hospice services. On July 12, 2011, CMS proposed “face-to-face” encounter requirements for Medicaid home health including medical supplies, equipment and appliances. Additional face-to-face requirements to combat fraud among Medicare DME suppliers will be proposed later this year.
Expanded Overpayment Recovery Efforts: The Affordable Care Act expands the Recovery Audit Contractor (RAC) program to Medicaid, Medicare Advantage, and Medicare Part D programs. The Medicaid RAC program became effective on January 1, 2012 and is projected to save $2.1 billion over the next five years, of which $900 million will be returned to states. These efforts build on the success of the Medicare fee-for-service RAC program which in fiscal year 2011 recouped nearly $800 million in overpayments.
New Durable Medical Equipment (DME) Requirements: Under a new risk-based approach to fighting fraud, CMS has focused its efforts on combating fraud among DME suppliers by instituting enhanced enrollment standards and screening requirements. On August 27, 2010, CMS issued final rules enhancing Medicare enrollment standards for DME suppliers such as more stringent operations and facilities requirements to ensure only legitimate suppliers can participate in Medicare. Additionally, the competitive bidding program is expected to save the Medicare program and its beneficiaries $28 billion over 10 years. The second phase of the program will be expanded from 9 to 100 metropolitan areas across the country.
New Resources to Fight Fraud: The Affordable Care Act provides an additional $350 million over 10 years to ramp up anti-fraud efforts, including increasing scrutiny of claims before they’ve been paid, investments in sophisticated data analytics, and an increased number of law enforcement agents and others to fight fraud in the health care system.
Greater Oversight of Private Insurance Abuses: The new law also provides enhanced tools and authorities to address abuses of multiple employer welfare arrangements and protect employers and employees from insurance scams. It also gives new powers to the Secretary and Inspector General to investigate and audit the health insurance exchanges. This, plus the new rules to ensure accountability in the insurance industry, will protect consumers and increase the affordability of health care.
Senior Medicare Patrols: As a part of the new resources dedicated to fighting fraud, the Obama Administration has significantly expanded funding for Senior Medicare Patrols – groups of senior citizen volunteers to educate and empower their peers to identify, prevent and report health care fraud. The 75 percent increased funding from FY2008 to FY 2011 has helped thousands of Medicare beneficiaries host thousands of community meetings and educational events to increase awareness of fraud among people with Medicare and to solicit their help in preventing fraud.

Act To Manage Risks

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Update Charity and Sliding Fee Scale Policies For 2012 Federal Poverty Rate Changes

February 21, 2012

Health care and other social service agencies should review and update their charity care or sliding fee scale policies in response to the 2012 Poverty Guidelines published in late January by the U.S. Department of Health and Human Services published updated federal poverty guidelines for 2012. See here. Today, the U.S. Department of Labor followed up by releasing its updated 2012 Poverty Guidelines

Many federal programs use the federal poverty guidelines as one criterion for federal program eligibility. For example, the Medicaid and State Children’s Health Insurance (SCHIP) programs determine eligibility largely on the basis of whether the applicant’s income is below the federal poverty guidelines. Other programs determine financial eligibility based on a percentage or multiplier of the federal poverty guidelines (for example, 125 percent of federal poverty guidelines). In addition, the federal poverty guidelines are used in the immigration context, such as the required Affidavit of Support.

For 2012, the federal poverty guideline in the 48 contiguous states and Washington, D.C., for a family of 4 is 23,050. For each additional person, the poverty guideline goes up by $3,960. Alaska and Hawaii have slightly higher poverty guidelines.

Many health care and social services organizations, especially non-profit organizations, use a sliding fee scale or fee waiver based on the federal poverty guidelines. In addition, many health care organizations base their charitable care policies on the federal poverty guidelines. While use of the federal poverty guidelines is not mandated by law except by federally funded programs, keep in mind that the Joint Commission as part of its accreditation and survey process may ask whether the organization has used the most recent update to the federal poverty guidelines in its sliding scale or fee waiver policies. Therefore, if your organization will be surveyed in the near future, you should review the charity care or fee waiver policies as part of your preparation for the survey.

For More Information Or Assistance

If you need help reviewing or responding to health care related policy, 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.

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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Posted by Cynthia Marcotte Stamer

Broad-Reaching Prosecution Of Individuals Participating In Operations Of Companies Convicted Of Fraud Shows Risks Of Participation

January 18, 2012

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

Health care owners and employees at all levels should heed the lesson shown from the continuing successful prosecution by the Justice Department against individuals ranging from owners to marketing employees for their participation in a Medicare fraud scheme allegedly orchestrated by the owners and operators of American Therapeutic Corporation (ATC); its management company, Medlink Professional Management Group Inc.; and the American Sleep Institute (ASI). The mounting guilty pleas and convictions obtained from individuals who participated in the execution of the scheme since the Justice Department secured guilty pleas from ATC, ASI and their owners shows that individuals electing to take part in aggressive Medicare referral or billing practices by their health care companies or other business partners stand a high risk of criminal prosecution if their organizations get caught engaging in health care fraud. The successful prosecutions shows 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 against the corporations and principles who were the primary actors in the scheme.

Health Care Fraud Scheme Prompts Continuing Series of Prosecutions

ATC and Medlink pleaded guilty in May 2011 to conspiracy to commit health care fraud. ATC also pleaded guilty to conspiracy to defraud the United States and to pay and receive illegal health care kickbacks. On Sept. 16, 2011, the two corporations were sentenced to five years of probation per count and ordered to pay restitution of $87 million. While both corporations have been defunct since their owners were arrested in October 2010, the Justice Department has continued its prosecution of a broad range of other individuals that it charges participated in the scheme.

Following the announcement of a January 17, 2012 guilty plea from Miami-area health care marketing representative Sandra Jimenez, Federal officials credit the investigation and prosecution activities of the Health Care Fraud Task Force with netting guilty pleas or trial convictions from ATC, Medlink and nine of the individual defendants indicted in February 2011 for their involvement in the alleged health care fraud conspiracy that the Justice Department claims resulted in the submission of $200 million in fraudulent Medicare claims. Other defendants are scheduled for trial on April 9, 2012. In addition to the prosecution of the criminal indictments, the Justice Department’s Civil Division also has filed a related civil action.

The guilty pleas, criminal convictions and other ongoing prosecutions stem from charges made against ATC, Medlink, ASI, Jimenez and several other parties in indictments unsealed on February 15, 2011 in the Southern District of Florida. Jimenez was indicted along with ATC, Medlink, and various owners, managers, doctors, therapists, patient brokers and marketers of ATC, Medlink and ASI for various health care fraud, kickback, money laundering and other offenses in the February 15, 2011 indictments.

According to court filings, ATC, Medlink and ASI were all Florida corporations headquartered in Miami. ATC operated purported partial hospitalization programs (PHPs) – a form of intensive treatment for severe mental illness – in seven different locations throughout South Florida and Orlando. ASI purported to provide diagnostic sleep disorder testing. ATC’s owners and operators paid kickbacks to owners and operators of assisted living facilities (ALFs) and halfway houses and to patient brokers in exchange for delivering ineligible patients to ATC and ASI. In some cases, Justice Department officials say the patients received a portion of those kickbacks. Throughout the course of the ATC and ASI conspiracy, Justice Department officials say millions of dollars in kickbacks were paid in exchange for Medicare beneficiaries, who did not qualify for PHP services, to attend treatment programs that were not legitimate PHPs. ATC and ASI then billed Medicare for the medically unnecessary services. According to court filings, to obtain the cash required to support the kickbacks, the co-conspirators laundered millions of dollars of payments from Medicare.

Owners To Serve 91 Months To 50 Years In Prison & Ordered To Pay Millions In Restitution

Not surprisingly, the owners and principles of the convicted corporations were the first parties individually convicted for their involvement in the alleged scheme.

Co-conspirator Margarita Acevedo, pleaded guilty on April 7, 2011, for her role in the fraud scheme. Acevedo was sentenced to 91 months in prison followed by three years of supervised release and ordered to pay more than $72 million in restitution, jointly and severally with her co-defendants.

On August 23, 2011, a jury found co-conspirator Judith Negron, one of the owners of ATC, guilty of all 24 felony counts charged in the February 2011 superseding indictment.

In September, 2011, Marianella Valera, the owner of ATC, was sentenced to 35 years in prison and ordered to pay more than $87 million in restitution, jointly and severally with her co-defendants. Valera was also sentenced to three years of supervised release following her prison term. Meanwhile, another ATC owner, Lawrence Duran, was sentenced on Sept. 16, 2011, to 50 years in prison for his role in the fraud scheme. Duran’s sentence is the longest prison sentence ever imposed in a Medicare Fraud Strike Force case. The sentencing came after Valera pleaded guilty in April, 2011 to 21 felony counts and Duran to 38 felony counts, including conspiracy to commit health care fraud, health care fraud, conspiracy to pay and receive illegal health care kickbacks, conspiracy to commit money laundering, money laundering and structuring to avoid reporting requirements.

In pleading guilty, Duran and Valera admitted that they orchestrated and executed a scheme to defraud Medicare beginning in 2002 and continuing until they were arrested in October 2010. Duran and Valera submitted false and fraudulent claims to Medicare through ATC. Duran and Valera also admitted to using the related company, ASI, to submit fraudulent Medicare claims.

According to court documents, Duran, Valera and others paid bribes and kickbacks to recruit Medicare beneficiaries to attend ATC and ASI and billed Medicare for treatments purportedly provided to these recruited patients. According to court documents, the treatments were medically unnecessary or never provided at all. Duran and Valera supported the kickbacks through an extensive money laundering scheme that aimed to hide the illicit conversion of Medicare payments to cash. The defendants and their co-conspirators used advanced measures to hide their fraudulent activities from Medicare and from law enforcement.

As part of the fraud scheme, Duran, Valera and others paid kickbacks to owners and operators of assisted living facilities (ALFs) and halfway houses and to patient brokers in exchange for delivering ineligible patients to ATC and ASI. In some cases, the patients received a portion of those kickbacks. The defendants and their co-conspirators actively recruited ALF and halfway house owners and operators and patient brokers to take part in the scheme. Throughout the course of the ATC and ASI conspiracy, millions of dollars in kickbacks were paid in exchange for Medicare beneficiaries, who did not qualify for PHP services, to attend treatment programs that were not legitimate PHP programs so that ATC and ASI could bill Medicare for more than $205 million in medically unnecessary services.

According to the superseding indictment to which they pleaded guilty, Duran, Valera and others caused the alteration of patient files and therapist notes for the purpose of making it falsely seem that patients being treated by ATC qualified for PHP treatments. According to court documents, Duran and Valera also instructed employees and doctors to alter diagnoses and medication types and levels to make it falsely seem that ATC patients qualified for PHP services. Duran, Valera and co-conspirators caused doctors to refer ATC patients to ASI even though the patients did not qualify for sleep studies.

According to the superseding indictment to which they pleaded guilty, the defendants also engaged in a money laundering conspiracy to enrich themselves and to provide cash for the millions of dollars in kickbacks paid to recruit Medicare beneficiaries. According to court documents, Duran and Valera used another company they owned and operated, Medlink Professional Management Inc., to hide the health care fraud and kickbacks from Medicare and law enforcement. Once Medicare paid ATC and ASI for the fraudulently billed services, Duran, Valera and others transferred millions of dollars to Medlink. They and others opened phony corporations to receive checks and wire transfers from both ATC and Medlink to convert that money into cash for their personal enrichment and for the payment of kickbacks. According to court documents, Duran, Valera and others cashed checks at different bank branches and different locations to conceal the true purpose of their activities and to evade reporting requirements.

Referring Facility Owner Pompano Faces Up To 10 Years Imprisonment & $250,000 Fine At Sentencing

Previously in November, 2011, Justice Department officials announced that the owner and operator of a Florida assisted living facility, Joseph B. Williams, pleaded guilty for his role in the Medicare fraud kickback scheme associated with the ATC fraud scheme. Williams admitted that in exchange for illegal health care kickbacks, he agreed to provide Medicare beneficiaries who resided at Avondale to ATC for mental health treatment through partial hospitalization program services. According to court documents, Williams was paid approximately $30 per beneficiary per day the beneficiary attended ATC. In his plea, Williams knew that ATC fraudulently billed Medicare for the partial hospitalization program treatment that his referrals purportedly received. Williams also admitted that he billed Medicaid for assisted living services purportedly provided at Avondale when, in fact, those services were never provided. Justice Department allegations reflect Williams paid owners and operators of halfway houses to obtain the personal identifiers of Medicaid enrollees who resided in those halfway houses and used that information to bill Medicaid fraudulently and also also billed Medicaid for assisted living services provided to residents of Avondale at times when they were not receiving any services.

According to the plea agreement, Williams’s participation in the fraud resulted in more than $2 million in fraudulent billing to the Medicare and Medicaid programs. At sentencing, scheduled on February 8, 2012, Williams faces a maximum of 10 years in prison and a $250,000 fine for each count.

Starter House Owner Nash Faces Up To 10 Years Imprisonment and $250,000 Fine When Sentenced

Barry Nash, the owner and operator of the Broward County, Florida-area halfway house, Starter House, pleaded guilty on January 5, 2012 to one count of conspiracy to commit health care fraud for his role in funneling patients through a fraudulent mental health company under the alleged fraud scheme.

In his plea, Nash admitted that, in exchange for illegal health care kickbacks, he agreed to refer Medicare beneficiaries who resided at Starter House to ACT for purported intensive mental health treatment through a partial hospitalization program and to ATC for purported sleep treatment. Nash admitted that he knew that ATC and ASI would fraudulently bill Medicare for the PHP treatment and sleep studies that his referrals would purportedly receive.

According to the plea agreement, Nash’s participation in the fraud resulted in more than $959,901 in fraudulent billing to the Medicare program. At sentencing, scheduled for March 8, 2012, Nash faces a maximum of 10 years in prison and a $250,000 fine.

Marketing Representative Jimenez Faces Up To 15 Years In Prison When Sentenced

Most recently, the Justice Department, HHS and FBI jointly announced on January 17, 2012 that marketing representative Sandra Jimenez admitted she participated in the alleged fraud scheme involving ATC, ASI and Medlink when she pleaded guilty to one count of conspiracy to commit health care fraud and one count of conspiracy to defraud the United States and to pay and receive illegal health care kickbacks.

In pleading guilty, Jimenez admitted that while serving as a marketer for ATC and ASI, she solicited beneficiaries and paid kickbacks to assisted living facility owners in exchange for the beneficiaries. The amount of the kickback was based on the number of days each patient spent at ATC. Jimenez also admitted that she participated in a separate Medicare fraud scheme through Priority Home Health, a Miami home health agency that submitted fraudulent claims to Medicare for home health services . Jimenez and her co-conspirators recruited Medicare beneficiaries to Priority Home Health who did not qualify for home health services.

According to the plea agreement, Jimenez’s participation in the ATC fraud and the Priority Home Health fraud resulted in $46 million in fraudulent billings to the Medicare program.

Sentencing for Jimenez is scheduled for June 27, 2012. She faces up to 15 years in prison and a $250,000 fine after pleading guilty to participating in a Medicare fraud scheme that Justice Department officials say resulted in the submission of more than $200 million in fraudulent Medicare claims.

Prosecutions & Convictions Show Participants In Health Care Fraud Activities Face High Risks

The zealous prosecution by the Justice Department of these and other parties who participated in the operation and furtherance of the health care fraud scheme highlights the advisability for all health care organizations and each individual working in or with health care organizations to exercise care to fully understand, and avoid participation, in aggressive activities that could be considered health care fraud.

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 and other individuals involved in their operations, health care providers covered by federal false claims, referral, kickback and other health care fraud laws as well as other parties who participate in their operations should act to manage their exposures.

Health care organizations should take clear steps to manage compliance. Their management should make clear by policy and action their organization’s commitment to compliance. They also 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.

Meanwhile, individuals also need to assume responsibility for managing their own involvement to avoid stepping into the potential health care fraud fire.

Individuals should not assume that the prosecution of their corporations or their management leaders will insulate them from prosecution for their own participation in potential fraudulent activities will escape notice or prosecution.

Parties participating in health care marketing, billing or other activities that may give rise to potential fraud activities should take steps to develop their own strong understanding of the types of conduct that HHS or federal or state fraud investigators or prosecutors are likely to consider fraud and to avoid participating in these activities. Participants should take steps to resolve concerns about potential activities before engaging in conduct that might expose them or their companies to criminal or civil prosecution.

Individuals and corporations who participate in the conduct of activities targeted for audit or enforcement scrutiny also should consider planning in advance for the possible need to defend their actions by documenting the appropriateness of their actions as well as planning for the costs of defense that are likely to arise if their actions are called into question by making arrangements for insurance, indemnification or other sources to adequately fund these costs.

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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Posted by Cynthia Marcotte Stamer

Hospitals Can Expect CMS To Add Hospital Incident Reporting To Surveys In Response To OIG Report

January 6, 2012

Hospitals should prepare to face greater scrutiny from the Centers From Medicare & Medicaid Services (CMS) of the adequacy of their patient harm incident reporting.

CMS reportedly is preparing standards for its surveyors to use to assess the quality for hospital safety reporting in response to an Office of Inspector General (OIG) a report highly critical of the adequacy of hospital patient harm incident reporting systems. See Report here.

As a condition of participation in the Medicare program, Federal regulations require that hospitals develop and maintain a Quality Assessment and Performance Improvement (QAPI) program. To satisfy QAPI requirements, hospitals must “track medical errors and adverse patient events, analyze their causes, and carry out preventive actions and mechanisms that include feedback and learning throughout the hospital.” To standardize hospital event reporting, AHRQ developed a set of event definitions and incident reporting tools known as the Common Formats.

According to the OIG Report, hospital incident reporting systems captured only an estimated 14 percent of the patient harm events experienced by Medicare beneficiaries. The Report found hospitals investigated those reported events that they considered most likely to lead to quality and safety improvements and made few policy or practice changes as a result of reported events. Hospital administrators classified the remaining events (86 percent) as either events that staff did not perceive as reportable (61 percent) or as events that staff commonly report but did not report in this case (25 percent).

Because hospitals rely on incident reporting systems to track and analyze events, OIG believes that improving the usefulness of these systems is critical to hospitals’ efforts to improve patient safety.

Based upon concerns about the adequacy in hospital incident reporting in the Report, OIG is recommending various steps be taken to improve the quality of hospital incident reporting. Among other things, OIG is recommending that:

AHRQ and CMS collaborate to create and promote a list of potentially reportable events for hospitals to use;
CMS provide guidance to accreditors regarding their assessments of hospital efforts to track and analyze events;
CMS suggest that surveyors evaluate the information collected by hospitals using AHRQ’s Common Formats
CMS scrutinize survey standards for assessing hospital compliance with the requirement to track and analyze events and reinforce assessment of incident reporting systems as a key tool to improve event tracking.

According to OIG, CMS has responded that it is developing draft guidance for surveyors regarding assessment of patient safety improvement efforts within hospitals as part of its continuing quality inititives. Hospitals participating in the Medicare program can anticipate tighter oversight of the adequacy of their incident reporting will be forthcoming.

For More Information Or Assistance

If you need help reviewing or responding to health care related policy, 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.

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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DFW Hospital Council Foundation Among 26 Organizations Selected To Lead Quality Effort

December 15, 2011

Affordable Care Act funding seeks to help health providers identify and spread local ideas to improve care, reduce preventable healthcare acquired conditions

The Dallas-Fort Worth Hospital Council Foundation, the Texas Center for Quality & Patient Safety Hospitals and Lifepoint Hospitals, Inc. are three of the 26 state, regional, national, or hospital system organizations selected as Hospital Engagement Networks by the U.S. Department of Health and Human Services (HHS).

As part of the Partnership for Patients initiative, a nationwide public-private collaboration to improve the quality, safety, and affordability of health care for all Americans, the selected entities will share in $218 million in funding to help find solutions already working to reduce healthcare acquired conditions, and work to spread them to other hospitals and health care providers across the country.

Learn more at http://wp.me/psDUd-3B.

For More Information Or Assistance

If you need assistance reviewing or responding to health care related policy, 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.

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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Former Houston Texas Physician Gets 70 Month Prison Sentence For Fraud Conviction

November 27, 2011

A Federal court on November 14, 2011 sentenced Armando Chavez, 42, a former physician and owner of the Chavez Medical Group in East Houston to 60 months for the conspiracy charge and to 70 months for each of the three mail fraud charges. In addition to the prison sentences, which will run concurrently, Chavez was also ordered to pay $3,821,082 in restitution.

The prosecution and sentencing of Chavez highlights the heightened risk that physicians and others engaging in aggressive health care billings risk if Federal officials view their actions as crossing the line. The Chavez case is particularly notable as it primarily stemmed from claims submitted to private health care payers.

The Chavez sentence resulted from Chavez’ guilty plea to one count of conspiracy and three counts of mail fraud in connection with billings made at the Chavez Medical Group.

The charges brought in April, 2011 stem from improper billing at the Chavez Medical Group between 2005 and 2007. Federal prosecutors charged that Chavez billed for services he did not perform through a process of “unbundling” medical codes used on claims he filed to increase the amount he was paid by insurance companies. While most health care providers recognize potential exposures to health care fraud prosecution for making false claims to Medicare, Medicaid or other federal programs, many providers fail to recognize this same exposure also can result from false billings to private health plans and insurers.

Following the initiation of the investigation, Chavez voluntarily surrendered his medical license to the Texas Board of Medicine. Filing false health care claims is one of many types of personal misconduct that justifies loss of licensure or other discipline under Texas Medical Board rules.

According to the documents filed of record in the case, Chavez was board certified in internal medicine, licensed by the Texas Board of Medicine in 1997. He started his medical practice in family medicine and in 2005, began to perform endovenous laser ablation, a procedure used to repair varicose veins in the legs.

For purposes of billing, the medical insurance industry provides certain billing codes for the laser ablation procedure, which include a group of procedures billed under one code for the entire procedure. Chavez instructed his staff to “unbundle” or separate the codes for this procedure and to bill for individual steps in the procedure, resulting in greater reimbursement and payment for each patient. Additionally, Chavez submitted claims alleging he repaired all six veins for each patient, when in fact – in most cases – he repaired fewer than six veins. By alleging he repaired all six veins, Chavez alleged he performed six procedures over a period of six days, another aspect of the fraudulent billing which he used to justify the unbundling of codes and allowed him to be reimbursed at the highest possible rate.

Federal prosecutors claimed The typical patient whose billing was submitted as “bundled” into one code resulted in payment of approximately $6000, while the patient whose billing codes were “unbundled” typically resulted in payment of approximately $14,000. Based on these figures, Federal prosecutors claim that Chavez billed insurance companies and programs, including Medicare and Medicaid, a total of $14.1 million for which he collected $3.8 million between 2005 and 2007.

The investigation of this case was conducted by the FBI and the Texas Attorney General’s Medicaid Fraud Control Unit. Assistant United States Attorney Cedric L. Joubert prosecuted the case. According to the Justice Department, the case is being investigated by the Dallas Health Care Fraud Prevention and Enforcement Action Team (HEAT) Strike Force, which includes the U.S. Department of Health and Human Services Office of Inspector General, the FBI and the Texas Attorney General’s Medicaid Fraud Control Unit. Since their inception in March 2007, Strike Force operations in nine locations have charged more than 1,140 defendants who collectively have falsely billed the Medicare program for more than $2.9 billion.

While health care fraud enforcement remains a lead Federal priority, health care providers in Texas and other HEAT Strike Force targeted regions face heightened exposures to HEAT task force scrutiny and prosecution. 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 assistance providing compliance or other training, reviewing or responding to these or other health care related risk management, compliance, enforcement or management concerns, the author of this update, attorney Cynthia Marcotte Stamer, may be able to help. Vice President of the North Texas Health Care Compliance Professionals Association, Past Chair of the ABA Health Law Section Managed Care & Insurance Section and the former Board Compliance Chair of the National Kidney Foundation of North Texas, Ms. Stamer has more than 24 years experience advising health industry clients about these and other matters. Ms. Stamer has extensive experience advising and assisting health care providers and other health industry clients to establish and administer medical privacy and other compliance and risk management policies, to health care industry investigation, enforcement and other compliance, public policy, regulatory, staffing, and other operations and risk management concerns. A popular lecturer and widely published author on health industry concerns, Ms. Stamer continuously advises health industry clients about compliance and internal controls, workforce and medical staff performance, quality, governance, reimbursement, and other risk management and operational matters. Ms. Stamer also publishes and speaks extensively on health and managed care industry regulatory, staffing and human resources, compensation and benefits, technology, public policy, reimbursement and other operations and risk management concerns/ She also regularly designs and presents risk management, compliance and other training for health care providers, professional associations and others. Her publications and insights appear in the Health Care Compliance Association, Atlantic Information Service, Bureau of National Affairs, World At Work, The Wall Street Journal, Business Insurance, the Dallas Morning News, Modern Health Care, Managed Healthcare, Health Leaders, and a many other national and local publications. You can get more information about her health industry experience here. If you need assistance with these or other compliance concerns, wish to inquire about arranging for compliance audit or training, or need legal representation on other matters please contact Ms. Stamer at (469) 767-8872 or via e-mail here.

About Solutions Law Press

Leave a Comment » | DME, Doctor, false claims act, Federal Sentencing Guidelines, Health Care, Health Care Finance, Health Care Fraud, Health Care Provider, Health Care Quality, Health Plan, Health Plans, Home Health, Hospital, Hospital, Medicaid, Medicare, Medicare Advantage, Money Laundering, OIG, Physician, Physician Licensing, Reimbursement | Tagged: false claims act, Health Care Fraud, HEAT, Medical Licensure, Physician, texas medical board | Permalink
Posted by Cynthia Marcotte Stamer

Euless Healthcare Corporation Owner, Associates Face Conspiracy And Health Care Fraud Charges For Alleged Submission Of $700,000+ In Fraudulent Health Care Claims

November 27, 2011

Three defendants indicted for engaging in various Federal health care fraud offenses related to their involvement in the operation of a North Texas based health care company, Euless Healthcare Corporation, were arrested on November 17, 2011. The charges highlight the health care fraud risks that health care providers, their owners and leaders face for engaging in activities that Federal officials view as prohibited under health care fraud laws.

According to the Justice Department, a 10-count indictment unsealed against Ovsanna Agopian, aka “Joanna Ovsanna,” “Joanna Smbatyan,” and “Ovsanna Agopian,” Boghos Babadjanian and Tolulope Labeodan charges each defendant wit one count of conspiracy to commit health care fraud and nine substantive counts of health care fraud.

According to the indictment, Agopian was the principal operator of Euless Healthcare Corporation (EHC), located at 222 West Bedford Euless Road in Hurst. Babadjanian was the owner of EHC and Labeodan was an employee of EHC. The indictment alleges that the three defendants ran a conspiracy to defraud Medicare by submitting claims for office visits and diagnostic tests that were never performed. The indictment alleges that Agopian recruited doctors to work for EHC by telling them that they would treat beneficiaries in the beneficiaries’ homes. However, the doctors that Agopian recruited never saw beneficiaries at the EHC clinic or beneficiaries’ homes. Prosecutors claim Agopian directed Labeodan, who is not a medical professional and does not have a Medicare provider number, to take beneficiary files from the EHC clinic and purportedly see beneficiaries. However, many beneficiaries, in whose names EHC submitted claims for reimbursement, have never heard of EHC or any of the doctors Agopian recruited.

Federal prosecutors claim that EHC used those doctors’ Medicare provider numbers to falsely bill Medicare more than $700,000 for office visits and diagnostic test for which the defendants allegedly collected Medicare reimbursement checks totaling more than $370,000.

According to the Justice Department, the case is being investigated by the Dallas Health Care Fraud Prevention and Enforcement Action Team (HEAT) Strike Force, which includes the U.S. Department of Health and Human Services Office of Inspector General, the FBI and the Texas Attorney General’s Medicaid Fraud Control Unit. Since their inception in March 2007, Strike Force operations in nine locations have charged more than 1,140 defendants who collectively have falsely billed the Medicare program for more than $2.9 billion.

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Posted by Cynthia Marcotte Stamer

Former Manager 9th Employee Sentenced For Involvement In Maxim Medicare False Claims Action

November 27, 2011

Employees Do Time For Involvement In False Claims Act Crimes

The sentencing of another former Maxim Healthcare Services, Inc. (“Maxim”) employee last week highlights the risks that health care management employees and consultants face when they participate in activities leading to false billing of Medicare or other federal programs by their employer health care provider organizations.

In his sentencing, Shipman became the eighth former Maximum employee sentenced for helping Maxim submit false charges to Medicare for health care services for services provided through an unlicensed facility. Maxim coughed up Shipman and other workers who helped to orchestrate and administer the billing scheme as part of a plea agreement reached with the Justice Department in September.

On November 21, 2011, a Federal judge sentenced former Maxim senior manager Brian Lee Shipman to five months in prison and five months of home confinement with electronic monitoring for his involvement in the unlicensed operation of Maxim office that billed nearly a million dollars to government health care programs. In addition to the prison term, Judge Thompson sentenced Shipman to two years of supervised release and ordered him to pay a $10,000 fine.

On Sept. 12, 2011, Maxim – one of the nation’s leading providers of home healthcare services – entered into a settlement agreement to resolve criminal and civil charges relating to a nationwide scheme to defraud Medicaid programs and the Veterans Affairs program of more than $61 million. Maxim was charged in a criminal Complaint with conspiracy to commit health care fraud, and entered into a Deferred Prosecution Agreement (“DPA”) with the Department of Justice. The agreement allows Maxim to avoid a health care fraud conviction on the charges if it complies with the DPA’s requirements. As required by the DPA, Maxim agreed to pay approximately $150 million – a criminal penalty of $20 million and approximately $130 million in civil settlements in the matter, including to settle federal False Claims Act claims.

Shipman is one of nine individuals – eight former Maxim employees, including three senior managers, and the parent of a former Maxim patient – to have pleaded guilty to and been sentenced on felony charges arising out of the submission of fraudulent billings to government health care programs, the creation of fraudulent documentation associated with government program billings, or false statements to government health care program officials regarding Maxim’s activities.

The sentencing of Shipman and the 8 other individual Maxim defendants criminally convicted in connection with the false billing shows that while health care organizations often pay significant fines to resolve health care fraud charges, the highest price tends to be paid by the individual employees and consultants convicted of orchestrating or participating in the activities underlying the fraud charges. Maxim shows that both health care organizations and their people need a clear understanding what activities expose them to prosecution under federal health care fraud laws and how to respond when and if asked to participate in, or confronted with ongoing practices within their organization, that may violate these laws. .

The Maxim charges against these defendants were investigated and prosecuted by the Department of Justice with the involvement of the Department of Health & Human Services and other agencies participating in the Medicare Fraud Strike Force. Since their inception in March 2007, the Medicare Fraud Strike Force operations in nine districts have charged thousands of individuals with falsely billing Medicare or more than $2.9 billion.

The rising emphasis of DOJ, HHS and other federal and state officials on health care fraud detection and enforcement requires that health care providers tighten their billing, medical recordkeeping, training and other compliance efforts to guard against false claims and other health care fraud charges. The Maxim prosecution and sentencing of senior employees who participated in the prohibited billings highlights that both health care organizations and their management employees face risks for participating in prohibited or other aggressive health care billing or other transactions.

Health care organizations, their management and other employees need to clearly understand the implications of federal rules prohibiting health care fraud and how to respond when confronted with practices or proposed practices that may expose them or their organizations to liability. With enforcement on the rise, both health care organizations and their people need to understand what actions are likely to violate health care fraud laws. Both organizations and their employees should participate in training and other activities to inform themselves about activities that create prosecution or other health care fraud exposures. Learn more here.

Management and other employees should engage in well-documented ongoing compliance efforts and learn what to do when presented with questionable situations. If a situation arises that may present health care fraud concerns, a health care organization or its employee also promptly should seek competent, experienced legal advice to discuss potential exposures and how to manage them within the scope of attorney-client privilege as soon as possible.

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Posted by Cynthia Marcotte Stamer

Detroit-Area Foot Doctor Pleads Guilty to Medicare Fraud Scheme

November 27, 2011

A Detroit-area foot doctor pleaded guilty to health care fraud on November 22 for his participation in a Medicare fraud scheme. The guilty plea highlights the expanding reach of the heightened health care fraud detection and enforcment emphasis of Federal officials and the resulting need for heightened care by physicians and other health care providers in their health care billing and other operations to guard against getting caught in this expanding net.

According to the Department of Justice (DOJ), Federal Bureau of Investigation (FBI) and the Department of Health and Human Services (HHS), podiatrist Errol Sherman pleaded guilty in the Eastern District of Michigan to one count of health care fraud. At sentencing, Sherman faces a maximum penalty of 10 years in prison and a $250,000 fine

According to the plea documents, between January 2003 and December 2006, Sherman billed Medicare and Blue Cross Blue Shield of Michigan for a procedure known as an “avulsion of the nail plate” or “nail avulsion” procedure thousands of times with respect to hundreds of beneficiaries. According to court documents, Sherman billed Medicare for nail avulsion procedures never rendered.

Since their start in March 2007, the Medicare Fraud Strike Force operations in nine districts have charged thousands of individuals with falsely billing Medicare or more than $2.9 billion.

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 set up and administer medical privacy and other compliance and risk management policies, to health care industry investigation, enforcement and other compliance, public policy, regulatory, staffing, and other operations and risk management concerns. A popular lecturer and widely published author on health industry concerns, Ms. Stamer continuously advises health industry clients about compliance and internal controls, workforce and medical staff performance, quality, governance, reimbursement, and other risk management and operational matters. Ms. Stamer also publishes and speaks extensively on health and managed care industry regulatory, staffing and human resources, compensation and benefits, technology, public policy, reimbursement and other operations and risk management concerns/ She also regularly designs and presents risk management, compliance and other training for health care providers, professional associations and others. Her publications and insights appear in the Health Care Compliance Association, Atlantic Information Service, Bureau of National Affairs, World At Work, The Wall Street Journal, Business Insurance, the Dallas Morning News, Modern Health Care, Managed Healthcare, Health Leaders, and a many other national and local publications. You can get more information about her health industry experience here. If you need assistance with these or other compliance concerns, wish to inquire about arranging for compliance audit or training, or need legal representation on other matters please contact Ms. Stamer at (469) 767-8872 or via e-mail here.

About Solutions Law Press

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Posted by Cynthia Marcotte Stamer

Houston Doctor Gets 135 Month Health Care Fraud Sentence

November 6, 2011

Conviction Highlights Growing Fraud Enforcement Risks Reach Broadly

A Houston Federal Court recently sentenced Houston doctor Christina Joy Clardy to 135 months in federal prison for her conviction on charges arising from a health care fraud conspiracy that federal officials charged resulted in false billings to Medicare and Texas Medicaid programs for $45,039,230 over a 2 ½-year-period. Clardy, who was found guilty of one count of conspiracy to commit health care fraud, 14 counts of health care fraud and three counts of mail fraud on May 27, 2011, after an 18-day trial in front of U.S. District Judge Melinda Harmon, also was ordered to pay $15,626,084.01 in restitution to Medicare and Medicaid.

Federal prosecutors had charged that Clardy was a key player in a massive federal health care fraud scheme under which City Nursing Services of Texas, Inc (City Nursing Services) billed more than $25 million worth of physical therapy services under Clardy’s physician provider numbers between January 2007 and August 2008.

Clardy is the third defendant to be sentenced in this matter.

The charges against Clardy and others convicted in the City Nursing Services action are one of a growing number of health care fraud prosecutions resulting from the actions of the Medicare Fraud Strike Force that are conducted as part of the Health Care Fraud Prevention & Enforcement Action Team (HEAT). HEAT is a joint initiative 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. The joint Department of Justice-HHS Medicare Fraud Strike Force 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 their September 7, 2011 announcement, HHS and DOJ credited Strike Force Operations in nine locations with resulting in charges against more than 1,140 defendants who the government charged collectively falsely billed the Medicare program for more than $2.9 billion. Learn more here.,

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.

Act To Manage Risks

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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Posted by Cynthia Marcotte Stamer

Health Care Fraud Enforcement Packs New Heat

December 16, 2010

As part of ongoing efforts to prevent and fight health care fraud, US Department of Health and Human Services Secretary Kathleen Sebelius and Attorney General Eric Holder today announced that the Centers for Medicare and Medicaid Services (CMS) plans to acquire and new state-of-the-art predictive modeling fraud fighting analytic tools to prevent wasteful and fraudulent payments in Medicare, Medicaid and the Children’s Health Insurance Program before they occur As Sebelius and Holder made the announcement at a Fraud Prevention Summit held at the University of Massachusetts in Boston, CMS issued a solicitation for state-of-the-art fraud fighting analytic tools to help the agency predict and prevent potentially wasteful, abusive or fraudulent payments before they occur. These actions come as CMS and the Justice Department are touting record recoveries from already ongoing enforcement actions.

CMS intends to use these new tools into the National Fraud Prevention Program and to complement and expand fraud detection and enforcement work and practices utilized by the joint HHS and Department of Justice Health Care Fraud Prevention and Enforcement Action Team (HEAT) in recent years.

CMS is already starting to take administrative action to stop payments in various pilot programs or other anti-fraud initiatives. The move to acquire and use additional predictive model tools comes as CMS is implementing new and expanded health care fraud detection and enforcement authority provided in the Patient Protection and Affordable Care Act (Affordable Care Act). CMS and the Justice Department are moving aggressively to take advantage of these new powers and resources. In recent months HHS founded the new Center for Program Integrity within CMS would focus on identifying and stopping fraud and acting swiftly to protect beneficiaries. It also proposed new rules implementing enhanced health care fraud investigation and enforcement powers enacted as part of the Affordable Care Act.

Meanwhile, CMS and the Justice Department have continued to aggressively investigate and prosecute suspected health care fraud. Already, stepped up fraud enforcement efforts have produced significant recoveries. In Fiscal Year 2010, the Department of Justice obtained settlements and judgments of more than $2.5 billion in False Claims Act matters alleging health care fraud. This is more than ever before obtained in a single year, up from $1.68 billion in Fiscal Year 2009.

In light of these developments, health care providers should tighten billing and other compliance practices and monitoring of enforcement and other oversight activities by CMS and the Justice Department. Get more details here.

For Assistance

The author of this update, attorney Cynthia Marcotte Stamer, has extensive experience advising and assisting health care providers and other health industry clients to respond to these and other health care industry enforcement and other compliance, public policy, regulatory, staffing, and other operations and risk management matters.

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 physicians, hospitals and other health industry clients about regulatory compliance and enforcement, quality assurance, peer review, licensing and discipline, and other medical staff performance matters. She continuously advises health industry clients about the use of technology, process and other mechanisms to promote compliance and internal controls, workforce and medical staff performance, quality, governance, reimbursement, and other risk management and operational needs. As part of this experience, she has worked extensively with health care providers, payers, health care technology and consulting and other health industry clients, as well as other businesses, on privacy, data security, trade secret and related matters. A popular lecturer and widely published author on health industry concerns, Ms. Stamer also publishes and speaks extensively on health care compliance, staffing and human resources, compensation and benefits, technology, medical staff, public policy, reimbursement, privacy, technology, and other health and managed care industry regulatory, and other operations and risk management concerns for medical societies and staffs, hospitals, the HCCA, American Bar Association, American Health Lawyers Association and many other health industry groups and symposia. Her highly popular and information packed programs include many highly regarded publications on HIPAA, FACTA, medical confidentiality, state identity theft and privacy and other many other related matters. 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. To review some of her many publications and presentations, or for additional information about Ms. Stamer, her experience, involvements, programs or publications, see here.

Other Recent Developments

If you found this information of interest, you also may be interested in reviewing some of the following recent Updates available online by clicking on the article title:

For More Information

We hope that this information is useful to you. You can review other recent health care and internal controls resources and additional information about the health industry and other experience of Ms. Stamer here. If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information – including your preferred e-mail – by creating or updating your profile at here or e-mailing this information here. To unsubscribe, 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. If you or someone else you know would like to receive future updates and notices about other upcoming Solutions Law Press events, please be sure that we have your current contact information – including your preferred e-mail- by creating or updating your profile at here. For important information concerning this communication click here. For important information concerning this communication click here.

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Posted by Cynthia Marcotte Stamer

Federal HEAT & Other Federal Health Care Fraud Efforts Score More Than 15 Successes As OIG Claims $20.97 Billion Saved From Enforcement Activities In December

December 30, 2009

As the interagency Medicare Fraud Strike Force targeting Medicare Fraud scored another series of more than 15 successful criminal enforcement actions across the national during December, 2009, the Department of Health & Human Services (HHS) Office of Inspector General (OIG) credited the Medicare Fraud Strike Force and other stepped up oversight and enforcement activities as helping it achieve $20.97 Billion in Medicare and other federal health care program savings during Fiscal Year 2009 in its Semiannual Report to Congress.

The Detroit convictions were among three of more than 15 other criminal enforcement successes reported by the Department of Justice during December. These and other reports document the rising prosecution and enforcement risks that health care providers face for failing to tailor their billing and other practices to comply with federal health care fraud laws. In light of the growing enforcement and emphasis of federal prosecutors and regulations on the detection and prosecution of organizations and individuals participating in billing or other activities that violate federal health care fraud laws, health care organizations, their officers, directors, employees, consultants and other business partners should tighten practices and step up oversight to minimize the likelihood that they or their organizations will engage in activities that federal regulators view as federal health care fraud.

December 13 Detroit Criminal Convictions

The U.S. Department of Justice Criminal Division (Justice Department), Federal Bureau of Investigation (FBI) and Inspector General for the U.S. Department of Health and Human Services (HHS) jointly announced Friday (December 11, 2009) that Baskaran Thangarasan, Sandeep Aggarwal and Wayne Smith had plead guilty for their roles in connection with several Detroit-area health care fraud scheme.

On December 9, 2009, Thangarasan plead guilty to one count of conspiracy to commit health care fraud and Aggarwal plead guilty to one count of conspiracy to launder money. On December 11, 2009, Smith plead guilty to one count of conspiracy to commit health care fraud.

Thangarasan Guilty Plea To Conspiracy To Commit Health Care Fraud

On December 9, 2009, Thangarasan plead guilty to one count of conspiracy to commit health care fraud. And Aggarwal plead guilty to one count of conspiracy to launder money. He faces a maximum sentence of 10 years in prison and a $250,000 fine at sentencing.

According to information contained in plea documents, Thangarasan, a licensed physical therapist, admitted that he began working in approximately September 2003 as a contract therapist for a co-conspirator. This co-conspirator owned and controlled several companies operating in the Detroit area that purported to provide physical and occupational therapy services to Medicare beneficiaries. Thangarasan admitted that he, the co-conspirator and others created fictitious therapy files appearing to document physical therapy services provided to Medicare beneficiaries, when in fact no such services had been provided. According to court documents, the fictitious services reflected in the files were billed to Medicare through sham Medicare providers controlled by Thangarasan’s co-conspirators.

Thangarasan admitted that his role in creating the fictitious therapy files was to sign documents and progress notes indicating he had provided physical therapy services to particular Medicare beneficiaries, when in fact he had not. Thangarasan was paid approximately $50 by co-conspirators per file that he falsified in this manner. Thangarasan also admitted that in the course of the scheme charged in the indictment, he signed approximately 1,011 fictitious physical therapy files, falsely indicating he had provided physical therapy services to Medicare beneficiaries. Thangarasan admitted he knew that the files he helped falsify were used to justify fraudulent billings to Medicare.

In addition, Thangarasan admitted that between approximately September 2003 and May 2006, his co-conspirators submitted claims to the Medicare program totaling approximately $5,055,000 for files that were falsified by Thangarasan. Medicare actually paid approximately $2,325,000 on those claims. Thangarasan admitted that throughout the conspiracy, he was fully aware that Medicare was being billed for occupational therapy services he had falsely indicated he had performed.

Aggarwal Guilty Plea to Money Laundering

Aggarwal faces a maximum sentence of 20 years in prison and a $500,000 fine after admitting in the same case to assisting co-conspirator Suresh Chand in laundering the proceeds of Chand’s Medicare fraud scheme. Chand, who pleaded guilty in September 2009 to conspiracy to commit health care fraud and conspiracy to launder money, admitted to conspiring to submit approximately $18 million in fraudulent physical and occupational therapy claims to the Medicare program. Aggarwal, who admitted working at Chand’s office, acknowledged that his role in the scheme was to set up sham entities at Chand’s direction, with the purpose of using those entities to distribute the proceeds of the fraud to the various co-conspirators. According to plea documents, one such entity was called Global Health Care Management Services. Aggarwal admitted that Global Health Care Management Services, which he helped create, provided no health or management services of any type, but existed solely as a mechanism to conceal the location of fraudulently obtained Medicare proceeds. Aggarwal admitted in his plea that he and Chand laundered approximately $393,000 through this sham entity.

Smith Guilty Plea To Conspiracy To Commit Health Care Fraud

At sentencing, Smith face a maximum sentence of 10 years in prison and a $250,000 fine for his participation in a scheme to falsely bill Medicare. His indictment charged that he transported and paid Medicare beneficiaries to attend Sacred Hope Center, a Southfield, Mich.-infusion clinic. According to the indictment, the Medicare beneficiaries he paid and transported were paid to sign paperwork indicating that they had received infusions and injections of specialty medications that they did not in fact receive.

According to the indictment, Sacred Hope Center routinely billed the Medicare program for services that were medically unnecessary and/or never provided. The primary owners and operators of Sacred Hope Center have pleaded guilty and admitted purchasing only a small fraction of the medications that the clinic billed the Medicare program for providing. These co-conspirators have also stated that patients were prescribed medications at the clinic based not on medical need, but instead based on which medications were likely to generate Medicare reimbursements.

Other Criminal Enforcement Actions During December

The Detroit convictions are three of nearly 20 successful criminal enforcement activities that DOJ announced during December, 2009. During the same month, DOJ also announced:

On December 20, 2009, sentencing of an Audiologist to six months in prison for Medicare Fraud in California here
On December 17, 2009 , the guilty plea and sentencing of a Houston physician for operating an illegal pill mill here
On December 16, 2009, the sentencing in Michigan of the owner of health care agency to 18 months prison in Medicare kickback scheme here
On December 15, 2009, the sentencing of a Lexington. South Carolina doctor to perform community service in a health care fraud case here
On December 15, 2009, the guilty plea of a Plymouth, Minnesota man to defrauding Medicaid out of $74,000 here
On December 14, 2009, the sentencing of a Miami, Georgia man to more than a decade in Federal prison for million dollar Medicaid fraud here
On December 11, 2009, the charging of a durable medical equipment company and six other defendants in Pennsylvania in a Medicare Fraud And Kickback Scheme here
On December 11, 2009, the guilty plea of an Aulander, North Carolina woman to $650,000 Health Care Fraud here
On December 7, 2009, the guilty plea of a corporation various health care fraud schemes here
On December 6, 2009, the guilty plea of a Dallas, Texas durable medical equipment business owner to aggravated id theft in a Medicare Fraud scheme here
On December 3, 2009, the arrest of the owner of a Florida home health care provider and his alleged accomplice for a scheme to bribe a government contractor here
On December 3, 2009, the conviction of two defendants for Health Care Fraud in Idaho here
On December 2, 2009, the entry of an order requiring a Sioux City, Iowa hospital to pay $400,000 to resolve false claims allegations here
On December 1, 2009, the admission by a Maryland man to health care fraud on a hospital in the District of Columbia here
On December 1, 2009, the arrest of a Miami, Florida man for obstructing a Health Care Fraud Investigation here
On December 1, 2009, the $125,000 fine of a Michigan chiropractor for Falsifying Records here

HEAT Operations Continued & Expanded

The Detroit and many of these other criminal successes resulted from joint investigations by the FBI and the OIG as part of the Medicare Fraud Strike Force as part of various interagency Medicare Fraud “Strike Forces” operating in several regions of the U.S. as part of the continuing Health Care Fraud Prevention and Enforcement Action Team (HEAT) operations of the FBI, HHS and the Justice Department which DOJ credits with producing more than 250 criminal convictions since their inception, Based on initial successes of Strike Force operations in Miami (Phase One) and Los Angeles (Phase Two), the Justice Department and HHS on May 20, 2009 expanded the scope of these operations to include Detroit and Houston Strike Force teams. Recently, DOJ and HHS announced the expansion of its HEAT operations to include Strike Force teams also targeting health care fraud in Brooklyn, New York; Tampa, Florida and Baton Rouge, Louisiana.

The heightened emphasis on enforcement of federal health care fraud laws reflected in the HEAT program the enactment of recent amendments to the False Claims Act, 31 U.S.C. § 3729 (FCA) under the “Fraud Enforcement and Recovery Act of 2009”(FERA). The FERA amendments increase the likelihood both that whistleblowers will turn in health care providers and other individuals and organizations that file false claims in violation of the FCA and the liability that violators may incur for that misconduct.

The FERA amendments and the HEAT Team and Strike Force activities are part of a broader emphasis in the enforcement of federal health care fraud laws by both the Administration and Congress. President Obama’s proposed Fiscal Year 2010 budget seeks to further increase funding for fraud prevention and enforcement by investing $311 million — a 50 percent increase from 2009 funding — to strengthen program integrity activities within the Medicare and Medicaid programs. The Obama Administration anticipates that all combined, the anti-fraud efforts in the President’s budget could save $2.7 billion over five years by improving oversight and stopping fraud in the Medicare and Medicaid programs, including the Medicare Advantage and Medicare prescription drug programs. Many state agencies also are stepping up their health care fraud investigations and enforcement.

Health Care Providers Must Step Up Compliance & Risk Management

In light of this new emphasis upon health care fraud detection and enforcement, health care providers now more than ever need to prepare to demonstrate the appropriateness and defensibility of their health care billing and other compliance efforts.

Solutions Law Press author and Curran Tomko and Tarski LLP Health Care Practice Chair Cynthia Marcotte Stamer has extensive experience advising and assisting health care practitioners and other businesses and business leaders to establish, administer, investigate and defend health care fraud and other compliance and internal control policies and practices to reduce risk under federal and state health care and other laws. You can get more information about the CTT Health Care Practice and more specifics about Ms. Stamer’s health industry experience here on the CTT Website.

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 Cynthia Marcotte Stamer, CTT Health Care Practice Group Chair, at cstamer@cttlegal.com, 214.270.2402, CTT White Collar Defense Litigation Practice Chair Edwin J. Tomko at etomko@cttlegal.com, or 214.270.1405 or another Curran Tomko Tarski LLP attorney of your choice..

Other Helpful Resources & Other Information

We hope that this information is useful to you. If you found these updates of interest, you also be interested in other updates on HEAT activities such as the following:

Other recent updates that also may be of interested published on our electronic Solutions Law Press Health Care Update publication include:

If you or someone else you know would like to receive future updates about developments on these and other concerns, please register to receive this Solutions Law Press Health Care Update here and be sure that we have your current contact information – including your preferred e-mail- by creating or updating your profile at here. You can access other recent updates and other informative publications and resources provided by Curran Tomko Tarski LLP attorneys and get information about its attorneys’ experience, briefings, speeches and other credentials here.

For important information concerning this communication click here. If you do not wish to receive these updates in the future, send an e-mail with the word “Remove” in the Subject here.

Leave a Comment » | Anti-KickBack, Corporate Compliance, false claims act, Federal Sentencing Guidelines, Health Care, Health Care Finance, Health Care Fraud, Health Care Provider, Hospital, Inpatient Rehabilitation Facility, Medicaid, Medicare, Money Laundering, OIG, Physician, Reimbursement, Stark | Tagged: Corporate Compliance, Doctor, false claims act, Federal Sentencing Guidelines, Fraud, Health Care, Health Care Fraud, Health Care Provider, Health Care Reimbursement, HHS, Hospital, Identity Theft, Medicare, Medicare Part B, Physician, Physicians, Reimbursement | Permalink
Posted by Cynthia Marcotte Stamer

North Texas Healthcare Compliance Professional Association To Meet At Texas Health Resources On October 13

September 29, 2009

NORTH TEXAS HEALTHCARE COMPLIANCE PROFESSIONAL ASSOCIATION

October 13, 2009 Meeting Reminder

2:00 – 4:00 p.m. at the Texas Health Resources Pavilion

North Texas Health Care Compliance Professional Association’s October 13, 2009 Meeting will feature a participatory Health Care Compliance Roundtable Discussion of Hot Topics moderated by the Erma E. Lee, JPS Health Network District Compliance Officer and NTPCA President on Tuesday, October 13, 2009 from 2:00 – 4:00 p.m at the Texas Health Resources Pavilion located at 612 E. Lamar Blvd., Arlington, TX. Topics to be discussed include:

HIPAA Data Breach, Red Flag & Other Evolving Privacy & Data Security Obligations & Risks
Office of Civil Rights Health Industry Disability & Other Civil Rights Enforcement
Tax-Exemption Issues Including Proposed Form 990 and Exemption Reforms In Health Care Reform
Health Care Fraud Enforcement
Other Hot Developments

Come catch up on these and other new developments and exchange thoughts and insights with other Health Care Compliance Professionals!

NTHCPA thanks Texas Health Resources for hosting this month’s meeting.

For additional information, please contact NTHCPA Vice-President Cynthia Marcotte Stamer at (214) 270-2402 or by e-mail at cstamer@solutionslawyer.net.

We look forward to seeing you there!

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.

To register or update your registration or to receive notice of future meetings, 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 to here.

Leave a Comment » | Anti-KickBack, ARRA, Disability Discrimination, Discrimination, Doctor, Electronic Health Records, Electronic Medical Records, Health Care, Health Care Finance, Health Care Fraud, Health Care Provider, Health Care Quality, Health IT, Health Policy, HIPAA, HITECH Act, Medicaid, Medicare, OCR, OIG, Physician, Privacy, Reimbursement, Tax, Tax-Exemption, Technology | Tagged: Data Security, Doctor, Events, false claims act, Form 990, Health Care, Health Care Compliance, Health Care Discrimination, Health Care Fraud, Health Care Policy, Health Care Reform, Health Care Reimbursement, Health Policy, HIPAA, HITECH Act, Hospital, North Texas Health Care Compliance Professionals Association, Physician, Red Flag Rules, Reimbursement, Tax-Exemption | Permalink
Posted by Cynthia Marcotte Stamer

Pfizer To Pay $2.3 Billion For Fraudulent Marketing In Largest DOJ Health Care Fraud Settlement

September 2, 2009

Announcement Highlights Growing Fraud Prosecution Risks of Health Industry Businesses

Today’s announcement that Pfizer Inc. and its subsidiary Pharmacia & Upjohn Company Inc. (collectively “Pfizer”) will pay $2.3 billion, the largest health care fraud settlement in the history of the Department of Justice, to resolve criminal and civil liability for alleged illegal promotion of certain pharmaceutical products 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.

The pharmaceutical giant Pfizer Inc. and its subsidiary Pharmacia & Upjohn Company Inc. have agreed to pay $2.3 billion, the largest health care fraud settlement in the history of the Department of Justice, to resolve criminal and civil liability arising from the alleged illegal promotion of certain pharmaceutical products, the Justice Department (DOJ) announced today (September 2, 2009).

According to DOJ, Pharmacia & Upjohn Company agreed to plead guilty to a felony violation of the Food, Drug and Cosmetic Act for misbranding Bextra with the intent to defraud or mislead. Bextra is an anti-inflammatory drug that Pfizer pulled from the market in 2005.

The Food, Drug and Cosmetic Act requires that a company specify the intended uses of a product in its new drug application to FDA. Once approved, the drug may not be marketed or promoted for so-called “off-label” uses – i.e., any use not specified in an application and approved by FDA. DOJ charged Pfizer promoted the sale of Bextra for several uses and dosages that the FDA specifically declined to approve due to safety concerns. Under the announced settlement, Pfizer will pay a criminal fine of $1.195 billion, the largest criminal fine ever imposed in the United States for any matter. Pharmacia & Upjohn will also forfeit $105 million, for a total criminal resolution of $1.3 billion.

In addition, Pfizer agreed to pay $1 billion to resolve allegations under the civil False Claims Act that the company illegally promoted four drugs – Bextra; Geodon, an anti-psychotic drug; Zyvox, an antibiotic; and Lyrica, an anti-epileptic drug – and caused false claims to be submitted to government health care programs for uses that were not medically accepted indications and therefore not covered by those programs. The civil settlement also resolves allegations that Pfizer paid kickbacks to health care providers to induce them to prescribe these, as well as other, drugs. The federal share of the civil settlement is $668,514,830 and the state Medicaid share of the civil settlement is $331,485,170. This is the largest civil fraud settlement in history against a pharmaceutical company.

As part of the settlement, Pfizer also has agreed to enter into an expansive 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.

Whistleblower lawsuits filed under the qui tam provisions of the False Claims Act that are pending in the District of Massachusetts, the Eastern District of Pennsylvania and the Eastern District of Kentucky triggered this investigation. As a part of today’s resolution, six whistleblowers will receive payments totaling more than $102 million from the federal share of the civil recovery.

Today’s announcement of this historic settlement emphasizes the continuing and growing government commitment to, coordination and sophistication in the investigation and prosecution of health care crimes by pharmaceutical industry and other health care providers. 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.

The enhanced coordination among agencies central to this strategy is reflected in the collaboration among the many agencies involved in the investigation leading to these charges. The U.S. Attorney’s offices for the District of Massachusetts, the Eastern District of Pennsylvania, and the Eastern District of Kentucky, and the Civil Division of the Department of Justice handled these cases. The U.S. Attorney’s Office for the District of Massachusetts led the criminal investigation of Bextra. The investigation was conducted by the Office of Inspector General for the Department of Health and Human Services (HHS), the FBI, the Defense Criminal Investigative Service (DCIS), the Office of Criminal Investigations for the Food and Drug Administration (FDA), the Veterans’ Administration’s (VA) Office of Criminal Investigations, the Office of the Inspector General for the Office of Personnel Management (OPM), the Office of the Inspector General for the United States Postal Service (USPS), the National Association of Medicaid Fraud Control Units and the offices of various state Attorneys General.

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.

Register Now For Upcoming September Health Industry Update Programs

If you found this information of interest, you also may be interested in one of the following upcoming health industry programs to be presented by Ms. Stamer during September:

HITECH ACT Health Data Security & Breach Update on September 9, 2009 hosted live or via teleconference by Curran Tomko Tarski LLP
How to Ensure That Your Organization Is In Compliance With Regulations Governing Discrimination — What You Should Be Doing To Be Prepared for the New, Stepped Up Enforcement Actions on September 10, 2009 hosted via teleconference by Health Resources Publishing
Health Information Security & Data Breach Under HITECH Act on September 17, 2009 hosted via teleconference by the Health Care Compliance Association

To register or for other details about these and other upcoming programs and presentations by Ms. Stamer and other Curran Tomko Tarski members, see here.

Other Recent Developments

If you found this information of interest, you also may be interested in reviewing some of the following recent Curran Tomko Tarski LLP Latest in Health Care Updates available online by clicking on the article title:

For More Information

We hope that this information is useful to you. If you need assistance with auditing or defending health care fraud concerns or other health care compliance, risk management, transaction or operation concerns, please contact the author of this update, Curran Tomko Tarski LLP Health Practice Group Chair, Cynthia Marcotte Stamer, at (214) 270‑2402, cstamer@cttlegal.com, Edwin J. Tomko at (214) 270-1405 or another Curran Tomko Tarski LLP Partner of your choice. Ms. Stamer has extensive experience advising clients and writes and speaks extensively on these and other health industry and other internal controls and risk management matters.

You can review other recent health care and internal controls resources and additional information about the health industry and other experience of Ms. Stamer here. If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information – including your preferred e-mail – by creating or updating your profile at here or e-mailing this information to cstamer@cttlegal.com.

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 at here or e-mailing this information here. To unsubscribe, e-mail here.

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

Where To Read & Share Your Feedback About The Health Care Reform Legislation

August 1, 2009

As the health care reform policy debate continues, Americans increasingly are asking where to read the text of the health care reform legislation that members of Congress are debating and how to share their input.

While numerous alternatives presently are pending before Congress, much of recent discussion and debate has focused around one of the following bills:

H.R. 3200: America’s Affordable Health Choices Act of 2009, introduced in the House by Rep Dingell, John D. on July 14, 2009 the text of which as originally introduced may be reviewed here. It has been the focus of significant mark up negotiation through out July before the following House Energy and Commerce, House Ways & Means, and House Education & Labor Committees; and
S. __, the Affordable Health Choices Act approved by the Senate Committee on Health, Education, Labor and Pensions, the text of which as approved may be reviewed here.

When reviewing these bills, Americans should keep in mind that members of Congress are engaged in ongoing negotiations about the specific provisions and language of these bills, as well as other legislation. Official developments generally may be monitored here.

Many American businesses and individuals also are asking about how and where to share their views, how to organize others to do the same and other questions about getting the word out. Here a some quick ideas. We encourage others to share.

The Coalition For Patient Empowerment and the Coalition for Responsible Health Care Reform linkedin group are two one of many resources where individuals are sharing information about these matters.
Concerned individuals should share their views both by faxing, e-mailing or telephoning key decisionmakers in Congress, as well as joining and participating in activities of other individuals and groups that share their concerns. Contact and get involved with this and other groups that share your concerns.
Contact the offices of your Congressional representatives in the House and Senate as well as other members of Congress that support your views and ask them about other groups and ways that you can share your views. They will welcome your input and involvement.
If you are aware of or involved in a group that shares your views, we encourage you to share it on the Coalition for Responsible Health Care Reform linkedin group. If you or others are planning a town hall or other health care reform meeting, use this or other linked in groups to spread the word.
If you are interested in volunteering to plan events in your region, let us know.

When communicating, consider targeting your messages to members of Congress whose votes are likely to be impacted by your communications.

For instance, with both the House and Senate in the majority in Congress, Democrats generally have greater control over what legislation moves forward. The Democratic Leadership of the House and Sentate generally can get legislation passed by their members as long as they can maintain consensus among the members of their parties. In connection with the health care reform proposals, however, cost and other considerations have made maintaining a consensus more difficult than on other legislation. Certain fiscally moderate members of the Democratic Party have expressed concern about the expense and other aspects of their Leadership proposed health care reform proposals. These Democrats in Congress generally the members of Congress whose votes are most likely to be impacted by public input and feedback generally and from voters in their districts and contributors specifically.

In the House of Representatives, these members likely are the “Blue Dog Democrats.” Read about Blue Dog Democrats here.

The fiscal conservatism of Blue Dog Democrats makes them more likely to listen to concerns about the cost and other concerns relating to the health care reform bills touted by the Democrat Leadership in the House and Senate. In fact, many Blue Dog Democrats already are speaking out about their concerns about the cost and other aspects of the Bill.

Contact from voters and contributors in their districts and others could make a major difference in the ability that the House Democrat Leadership needs to pass their Bill. Immediately contacting these members and getting others – particularly voters and contributors in the districts that elect these members – is one of the most important steps that concerned Americans can do to position their concerns to be heard.

For most concerned voters, telephone or fax contact is the best means to convey these messages. To minimize spam, most members only accept e-mail submitted through their website links. Security concerns can delay receipt of written correspondence for weeks.

For persons interested in making their voices heard and sharing information with others who wish to do the same, the following contact information may be of interest:

The number of the Capital Switchboard is 202-224-3121.

The Blue Dog Leadership Team and there telephone and fax numbers are:

Rep. Stephanie Herseth Sandlin (SD), Blue Dog Co-Chair for Administration, Telephone: 202.225.2801 , Fax: 202.225.5823

Rep. Baron Hill (IN-09), Blue Dog Co-Chair for Policy,Telephone: 202-225-4031, Fax: (202) 226-6866

Rep. Charlie Melancon (LA-03), Blue Dog Co-Chair for Communications, Telephone: 202-225-4031, Fax: (202) 226-3944

Rep. Heath Shuler (NC-11), Blue Dog Whip, Telephone: 202-225-6401, Fax: (202) 226-6422

The Blue Dog Members and their telephone numbers are :

Altmire, Jason (PA-04),(202)225-2565
Arcuri, Mike (NY-24), (202)225-3665
Baca, Joe (CA-43),(202)225-6161
Barrow, John (GA-12), (202) 225-2823
Berry, Marion (AR-01), (202) 225-4076
Bishop, Sanford (GA-02), (202) 225-3631
Boren, Dan (OK-02), (202) 225-2701
Boswell, Leonard (IA-03), (202) 225-3806
Boyd, Allen (FL-02), (202) 225-5235
Bright, Bobby (AL-02), (202) 225-2901
Cardoza, Dennis (CA-18), (202) 225-6131
Carney, Christopher (PA-10), (202) 225-3731
Chandler, Ben (KY-06), (202) 225-4706
Childers, Travis (MS-01), (202) 225-4306
Cooper, Jim (TN 5^th), (202) 225-4311
Costa, Jim (CA 20^th), (202) 225-3341
Cuellar, Henry (TX 28^th), (202) 225-1640
Dahlkemper, Kathleen A. (PA 3^rd), (202) 225-5406
Davis, Lincoln (TN 4^th),(202) 225-6831
Donnelly, Joe (IN 2^nd), (202) 225-3915
Ellsworth, Brad (IN 8^th), (202) 225-4636
Giffords, Gabrielle (AZ 8^th), (202) 225-2542
Gordon, Bart (TN 6^th), (202) 225-4231
Griffith, Parker (AL 5^th), (202) 225-4801
Harman, Jane (CA 36^th), (202) 225-8220
Herseth Sandlin, Stephanie (SD At Large), (202) 225-2801
Hill, Baron P. (IN 9^th), (202) 225-5315
Holden, Tim (PA 17^th), (202) 225-5546
Kratovil, Frank Jr. (MD 1^st), (202) 225-5311
McIntyre, Mike (NC 7^th), (202) 225-2731
Marshall, Jim (GA 8^th), (202) 225-6531
Matheson, Jim (UT 2^nd), (202) 225-3011
Melancon, Charlie (LA 3^rd), (202) 225-4031
Michaud, Michael H. (ME 2^nd), (202) 225-6306
Minnick, Walt (ID 1^st), (202) 225-6611
Mitchell, Harry E. (AZ 5^th), (202) 225-2190
Moore, Dennis (KS 3^rd), (202) 225-2865
Murphy, Patrick J. (PA 8^th), (202) 225-4276
Nye, Glenn C. (VA 2^nd), (202) 225-4215
Peterson, Collin C. (MN 7^th), (202) 225-2165
Pomeroy, Earl (ND At Large), (202) 225-2611
Ross, Mike (AR 4^th), (202) 225-3772
Salazar, John T. (CO 3^rd), (202) 225-4761
Sanchez, Loretta (CA 47^th), (202) 225-2965
Schiff, Adam B. (CA 29^th), (202) 225-4176
Scott, David (GA 13^th), (202) 225-2939
Shuler, Heath (NC 11^th), (202) 225-6401
Space, Zachary T. (OH 18^th), (202) 225-6265
Tanner, John S. (TN 8^th), (202) 225-4714
Taylor, Gene (MS 4^th), (202) 225-5772
Thompson, Mike (CA 1^st), (202) 225-3311
Wilson, Charles (OH-06), (202) 225-5705

We also encourage you and others to join the discussion about these and other health care reform proposals and concerns by joining the Coalition for Responsible Health Care Reform Group on Linkedin, registering to receive these updates here The author of this article, Curran Tomko and Tarski LLP Health Care Practice Chair Cynthia Marcotte Stamer has extensive experience advising and assisting health industry clients and others about a diverse range of health care policy, regulatory, compliance, risk management and operational concerns. You can get more information about her health industry experience here.

If you need assistance evaluating or formulating comments on the proposed reforms contained in the House Bill or on other health industry matters please contact Cynthia Marcotte Stamer, CTT Health Care Practice Group Chair, at cstamer@cttlegal.com, 214.270.2402 or your other favorite Curran Tomko Tarski LLP attorney.

Other Helpful Resources & Other Information

We hope that this information is useful to you. If you found these updates of interest, you also be interested in one or more of the following other recent articles published on our electronic Solutions Law Press Health Care Update publication available here. If you or someone else you know would like to receive future updates about developments on these and other concerns, please register to receive this Solutions Law Press Health Care Update here and be sure that we have your current contact information – including your preferred e-mail- by creating or updating your profile at here. You can access other recent updates and other informative publications and resources provided by Curran Tomko Tarski LLP attorneys and get information about its attorneys’ experience, briefings, speeches and other credentials here.

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Leave a Comment » | Consumer Driven Health Care, Employer, Health Care, Health Care Provider, Health Care Quality, Health Care Reform, Health Plan, Health Plans, Patient Empowerment, Public Policy | Tagged: Affordable Health Choices Act, American's Affordable Health Choices Act, Doctor, Employer, false claims act, Health Care, Health Care Policy, Health Care Provider, Health Care Reform, Health Care Reimbursement, Health Insurance, Health Plans, Health Policy, Hospital, Medicare, Medicare Part B, PBMs, Physician, Physicians, Prescription Drugs, Privacy, public health, Public Policy, Reimbursement | Permalink
Posted by Cynthia Marcotte Stamer

8 Miami-Area Residents Charged, Assets Frozen in $22 Million Home Health Medicare Fraud Scheme

June 29, 2009

Eight Miami-Dade County, Florida residents have been indicted in connection with an alleged $22 million Medicare fraud scheme operated out of Miami businesses purporting to specialize in home health care services and the assets of those charged and their companies frozen as part of a joint Department of Justice (DOJ) and Department of Health & Human Services (HHS) Medicare Fraud Strike Force operation.

DOJ and HHS officials jointly announced the Florida indictments and injunction action on June 26, 2009, just two days after their June 24, 2009 joint announcement of that a Detroit Medicare Fraud Strike Force had secured indictments against 53 people for schemes to submit more than $50 million in false Medicare claims.

Both the Florida and Detroit actions arose from health care fraud conducted by Medicare Fraud Strike Force teams acting as part of a recently formalized and expanded Health Care Fraud Prevention & Enforcement Action Team (HEAT) jointly announced by the DOJ and HHS on May 20, 2009. The Florida and Detroit actions announced last week reflect the growing commitment of federal officials to investigate and prosecute Medicare and other alleged heath care fraud.

8 Florida Indictments

The Florida indictments announced June 26, 2009 charge Gladys Zambrana, Javier Zambrana, Enrique Perez, Alejandro Hernandez Quiros aka Alex Hernandez, Vanessa Estrada, Vicenta Tellechea, Modesto Hidalgo and Carlos Castaneda conspiracy to commit health care fraud. Gladys Zambrana was also charged with four counts of health care fraud. Gladys Zambrana and Hernandez Quiros were charged with three counts each of paying health care kickbacks, while Perez, Hidalgo and Tellechea were charged with one count each of paying health care kickbacks. Gladys Zambrana, Perez, Alejandro Quiros, Tellechea and Castaneda were also charged with conspiracy to launder health care fraud proceeds.

According to the indictment, Gladys Zambrana, Perez and Hernandez Quiros operated ABC Home Health Care Inc. (ABC), listing Javier Zambrana as the owner; and Gladys Zambrana and Castaneda operated Florida Home Health Care Providers Inc. (Florida Home Health), listing Tellechea as the owner. Both ABC and Florida Home Health purported to be home health agencies that catered to Medicare beneficiaries. The indictment alleges that at both agencies, beneficiaries were recruited and paid kickbacks and bribes to arrange for their Medicare beneficiary numbers to be used by their co-conspirators to file claims with Medicare for purported home health care services. The indictment alleges that the services were not provided and were not medically necessary.

The indictment alleges that in addition to exerting ownership and control of the home health agencies, Hernandez Quiros and Castaneda acted as Medicare beneficiary recruiters for ABC and Florida Home Health, respectively; and Hidalgo, a medical assistant, falsified medical tests and records to make it appear that the services were needed. The indictment alleges that ABC billed more than $17 million to the Medicare program for services provided from January 2006 through December 2008 that were medically unnecessary and were not actually provided. During that time frame, Medicare paid more than $11 million on those fraudulent claims submitted by ABC. The indictment also alleges that from October 2007 through March 2009, Florida Home Health billed more than $5 million to the Medicare program for services that were medically unnecessary and not actually provided. During that time frame, Medicare paid more than $4 million on those fraudulent claims submitted by Florida Home Health.

The charge of conspiracy to commit health care fraud carries a maximum prison sentence of 10 years. Each charged count of health care fraud carries a maximum prison sentence of 10 years and each count of paying health care kickbacks carries a maximum prison sentence of five years. Conspiracy to launder health care fraud proceeds carries a maximum prison sentence of 10 years per count.

In conjunction with the criminal case, on June 24, 2009, the U.S. Attorney’s Office filed a civil complaint for injunctive relief under the fraud injunction statute and obtained a temporary restraining order freezing the assets of ABC, Florida Home Health, Gladys Zambrana, Javier Zambrana, Perez, Hernandez Quiros, Castaneda and Tellechea. In addition, that temporary restraining order also freezes certain financial assets of four other companies the defendants owned or controlled and allegedly used to launder money fraudulently obtained from Medicare. The temporary restraining order is intended to preserve the remaining proceeds of the fraud for recovery by the United States as part of the criminal case and any related civil proceedings.

53 Indicted In Detroit June 24

The announcement of the Florida indictment comes just 2 days after DOJ, HHS and FBI officials announced that a Detroit Medicare Fraud Strike Force had secured indictments against 53 people for their involvement in alleged schemes to submit false Medicare claims. The indictments unsealed June 24, 2009 returned by a grand jury in Detroit resulted in arrests in Miami, New York City and Detroit resulted from a concentrated effort by the Detroit Medicare Fraud Strike Force targeting infusion therapy and physical/occupational therapy providers involved in schemes orchestrated to defraud the Medicare program.

Collectively, the Detroit indictment accuses the physicians, medical assistants, patients, company owners and executives charged in the indictments of conspiring to submit more than $50 million in false claims to the Medicare program. According to the indictments, the defendants participated in schemes to submit claims to Medicare for treatments that were in fact medically unnecessary and oftentimes, never provided. In many cases, indictments also allege that beneficiaries accepted cash kickbacks in return for allowing providers to submit forms saying they had received the unnecessary and not provided treatments.

Federal Officials Turning On The HEAT on Health Care Fraud

The Florida and Detroit indictments reflect the growing commitment and cooperation among federal and state officials to investigation and prosecution of health care fraud using Medicare Fraud Task Forces operating as part of HEAT. Drawing upon successful experiences gained from Medicare Fraud Task Forces operating in Miami and Los Angeles since 2007, HEAT is an expanded multi-agency effort jointly announced by HHS and DOJ in May, 2009 that uses a multi-agency team of federal, state and local investigators to investigate and combat Medicare fraud through the use of Medicare data analysis techniques and an increased focus on community policing. Since strike force operations began in March 2007, DOJ officials report that the Medicare Fraud Task Forces already have resulted in the indictment of 257 defendants in 115 cases for their allegedly fraudulently billing Medicare for more than $600 million.

Before the May 20, 2009 HEAT announcement, Medicare Fraud Strike Forces operating demonstration projects in South Florida and Los Angeles already had produced a number of indictments. The Medicare Fraud Strike Force team operating in South Florida has already convicted 146 defendants and secured $186 million in criminal fines and civil recoveries. After the success of operations in South Florida, the Medicare Fraud Strike Force expanded in May 2008 to phase two in Los Angeles, where 37 defendants have been charged with criminal health care fraud offenses. To date in the Los Angeles cases, more than $55 million has been ordered in restitution to the Medicare program. DOJ and HHS officials have indicated that the success of these demonstration projects lies behind the founding of the HEAT initiative.

Curran Tomko and Tarski LLP Health Care Practice Chair Cynthia Marcotte Stamer has extensive experience advising and assisting health care practitioners and other businesses and business leaders to establish, administer, investigate and defend health care fraud and other compliance and internal control policies and practices to reduce risk under federal and state health care and other laws. 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 Cynthia Marcotte Stamer, CTT Health Care Practice Group Chair, at cstamer@cttlegal.com, 214.270.2402 or your other favorite Curran Tomko Tarski LLP attorney.

Other Helpful Resources & Other Information

We hope that this information is useful to you. 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 at here. You can access other recent updates and other informative publications and resources provided by Curran Tomko Tarski LLP attorneys and get information about its attorneys’ experience, briefings, speeches and other credentials here.

Leave a Comment » | Anti-KickBack, Doctor, false claims act, Federal Sentencing Guidelines, Health Care, Health Care Finance, Health Care Fraud, Health Care Provider, Hospital, Medicaid, Medicare, OIG, Physician | Tagged: Corporate Compliance, DME, false claims act, Federal Sentencing Guidelines, Fraud, Health Care, Health Care Reimbursement, HEAT, HHS, home health, Hospital, IV-infusion, Medicare, Medicare Fraud, Medicare Part B, Physician, Physicians, Reimbursement | Permalink
Posted by Cynthia Marcotte Stamer

53 Doctors, Health Care Executives & Beneficiaries Indicted For Involvement In A $50 Million Alleged False Billing Ring

June 24, 2009

Fifty-three people have been indicted for schemes to submit more than $50 million in false Medicare claims in the continuing operation of the Medicare Fraud Strike Force in Detroit, Attorney General Eric Holder, Department of Health and Human Services (HHS) Secretary Kathleen Sebelius, and FBI Director Robert Mueller announced today (June 24, 2009).

The charges were unsealed today against the 53 individuals who are accused of various Medicare fraud offenses, including conspiracy to defraud the Medicare program, criminal false claims and violations of the anti-kickback statutes. The indictments returned by a grand jury in Detroit resulted in arrests in Miami, New York City and Detroit.

According to the DOJ, federal agents from the FBI and the HHS Office of Inspector General (HHS-OIG) began executing arrest warrants and made arrests in Detroit, Miami and New York City earlier today as part of a concentrated effort targeting infusion therapy and physical/occupational therapy providers involved in schemes orchestrated to defraud the Medicare program.

Collectively, the indictment accuses the physicians, medical assistants, patients, company owners and executives charged in the indictments of conspiring to submit more than $50 million in false claims to the Medicare program. According to the indictments, the defendants participated in schemes to submit claims to Medicare for treatments that were in fact medically unnecessary and oftentimes, never provided. In many cases, indictments also allege that beneficiaries accepted cash kickbacks in return for allowing providers to submit forms saying they had received the unnecessary and not provided treatments. An indictment is merely an allegation, and defendants are presumed innocent until and unless proven guilty.

The investigation and enforcement action that lead to today’s indictment was conducted as part of the continuing activities of the new interagency Health Care Fraud Prevention and Enforcement Action Team (HEAT) that DOJ and HHS jointly announced last month. On May 20, 2009, DOJ and HHS jointly announced they were combining forces to find and prosecute health care fraud through the HEAT and identified Detroit and Houston as cities targeted for Medicare Fraud Strike Force attention.

Before the May 20, 2009 HEAT announcement, Medicare Fraud Strike Forces operating demonstration projects in South Florida and Los Angeles already had produced a number of indictments. The Medicare Fraud Strike Force team operating in South Florida has already convicted 146 defendants and secured $186 million in criminal fines and civil recoveries. After the success of operations in South Florida, the Medicare Fraud Strike Force expanded in May 2008 to phase two in Los Angeles, where 37 defendants have been charged with criminal health care fraud offenses. To date in the Los Angeles cases, more than $55 million has been ordered in restitution to the Medicare program. The success of these demonstration projects lies behind the founding of the HEAT initiative.

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 Cynthia Marcotte Stamer, CTT Health Care Practice Group Chair, at cstamer@cttlegal.com, 214.270.2402 or your other favorite Curran Tomko Tarski LLP attorney.

Other Helpful Resources & Other Information

Leave a Comment » | Anti-KickBack, Corporate Compliance, Doctor, false claims act, Federal Sentencing Guidelines, Health Care, Health Care Finance, Health Care Fraud, Health Care Provider, Hospital, Medicaid, Medicare, Medicare Advantage, OIG, Physician, Reimbursement | Tagged: Corporate Compliance, false claims act, Federal Sentencing Guidelines, Fraud, Health Care, Health Care Provider, Health Care Reimbursement, heatlh care fraud, Hospital, Medicare, Medicare Part B, Physician, Physicians, Reimbursement | Permalink
Posted by Cynthia Marcotte Stamer

Newly Enacted FERA Amendments To False Claims Act Signal New Risks For Health Industry Organizations & Others

May 26, 2009

Health care providers and other parties covered by the False Claims Act, 31 U.S.C. § 3729 (FCA), now face expanded whistleblower and other liability under amendments to the FCA enacted under the “Fraud Enforcement and Recovery Act of 2009”(FERA). The amendments increase the likelihood both that whistleblowers will turn in health care providers and other individuals and organizations that file false claims in violation of the FCA and the liability that violators may incur for that misconduct.

Signed into law by President Obama last Wednesday (May 20, 2009), FERA immediately upon enactment:

Amends the whistleblower protections afforded to employees, contractors and agents who suffer retaliation for taking lawful efforts to stop violations of the FCA and to make it easier for those individuals to pursue retaliation claims;
Expands liability under for making false or fraudulent claims to the federal government under the FCA;
Applies liability under the FCA for presenting a false or fraudulent claim for payment or approval (currently limited to such a claim presented to an officer or employee of the federal government); and
Requires persons who violate such Act to reimburse the federal government for the costs of a civil action to recover penalties or damages

Concurrent with President Obama’s signature of FERA into law, the U.S. Departments of Justice (DOJ) and Health & Human Services (HHS) jointly announced the expansion of federal health care fraud enforcement efforts. On May 20, 2009, HHS and DOJ announced their activation of a new interagency team to combat health care fraud highlights the increasing need for health care providers and health plans to review and tighten their practices for dealing with Medicare and other federal programs to survive scrutiny under federal health care fraud initiatives. Coupled with FERA and the already significant increase in federal health care fraud detection and enforcement activities in recent years and a proposed 50 percent increase in funding for these activities included in President Obama’s Fiscal Year 2010 budget, health care providers and payers must be prepared to defend their dealing with Medicare, Medicaid and other federal health care programs.

The expanded protections afforded under FERA to whistleblowers and others suffering retaliation for opposing or reporting illegal actions can be expected to serve as a key tool in these efforts. These new retaliation safeguards are designed further increase the likelihood that employees and other insiders will help government officials ferret out false claims and other fraud. Specifically with regard to retaliatory action claims Section 4(d) of FERA amends 31 U.S.C.§ 3730(h) to provide for the recovery of “all relief necessary to make that employee, contractor, or agent whole” where that individual is discharged, demoted, suspended, threatened, harassed, or in any other manner discriminated against in the terms and conditions of employment because of lawful acts he does or takes on behalf of an individual in furtherance of other efforts to stop a violation of the FCA.

FERA expressly provides that relief to victims of retaliation will include “reinstatement with the same seniority status that employee, contractor, or agent would have had but for the discrimination, 2 times the amount of back pay, interest on the back pay, and compensation for any special damages sustained as a result of the discrimination, including litigation costs and reasonable attorneys’ fees.”

The FERA amendments to the FCA, the new TEAMS enforcement effort announced simultaneously with its signature into law mean that health care industry organizations and others covered by the FCA must implement appropriate fraud prevention, detection, redress and other procedures to help defend against possible FCA or other health care fraud claims and investigations.

The attorneys at Curran Tomko Tarski, LLC have extensive experience representing and advising health industry and other clients against FCA and other federal health care and fraud laws.

For More Information

We hope that this information is useful to you. If you need assistance with auditing or defending health care fraud concerns or other health care compliance, risk management, transactions or operations concerns, please contact Curran Tomko Tarski LLP Partners Cynthia Marcotte Stamer at (214) 270-2402, CStamer@CTTLegal.com; Michael T. Tarski at (214) 270-1420 or MTarski@CTTLegal.com; Edwin J. Tomko at (214) 270-1405 or ETomko@CTTLegal.com.

You can review other recent health care and internal controls resources and additional information about the health industry and white collar experience of the Curran Tomko Tarski LLP attorneys at http://www.CTTLegal.com. 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 at CTTLegal.com or e-mailing this information to CStamer@CTTLegal.com.

Leave a Comment » | Anti-KickBack, ARRA, Construction, Corporate Compliance, Doctor, Federal Sentencing Guidelines, Grants, Health Care, Health Care Fraud, Health Care Provider, Health Care Reform, Health Plan, Health Policy, Hospital, OCR, OIG, Physician, Prescription Drugs, Reimbursement, Stark | Tagged: Antitrust, ARRA, Bid Rigging, Construction, Corporate Compliance, Data Security, Doctor, Economic Aid, Employer, false claims act, Federal Sentencing Guidelines, Fraud, Health Care, Health Care Provider, Health Care Reform, Health Care Reimbursement, Health Insurance, Health Plans, Health Policy, Hospital, Identity Theft, Medicare, Medicare Part B, Nonprofits, PBMs, Physician, Physicians, Prescription Drugs, public health, Reimbursement, retaliation, Retalitory Discharge, Whistleblower | Permalink
Posted by Cynthia Marcotte Stamer

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December 13 Detroit Criminal Convictions

Thangarasan Guilty Plea To Conspiracy To Commit Health Care Fraud

Aggarwal Guilty Plea to Money Laundering

Smith Guilty Plea To Conspiracy To Commit Health Care Fraud

Other Criminal Enforcement Actions During December

HEAT Operations Continued & Expanded

Health Care Providers Must Step Up Compliance & Risk Management

Other Helpful Resources & Other Information

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