Wheels of justice turning quickly: DOJ puts on the HEAT

The Department of Justice (DOJ) has made progress in several health care fraud cases in the past few days. Additionally, the DOJ announced the appointment of a new acting administrator of the Drug Enforcement Administration (DEA). Assistant Attorney General Caldwell also offered remarks at an American Bar Association conference, pointing out that the DOJ has had success in health care fraud prosecutions, but is now also faced with industry cybersecurity challenges.

Florida settlement

The U.S. has reached a settlement with nine hospitals in the Jacksonville, Florida area, as well as one ambulance company. These hospitals allegedly ordered basic life support transportation, even when it was not medically necessary. This was accomplished by providing Certificates of Medical Necessity that stated the need for basic life support. The ambulance company, Century Ambulance, allegedly up-coded claims submitted to federal health care programs from basic to advanced life support. These allegations included charges under the False Claims Act (FCA) (31 U.S.C. §3729). The settlements totaled $7.5 million.

Miami sentencing

The owner of a home health care agency in Miami, Longcare Home Health Corporation (Longcare), pleaded guilty to one count of conspiracy to commit health care fraud. Alexander Lara admitted to fraudulently billing Medicare for physical therapy and home health services. These services were either not medically necessary, or not provided. As part of the scheme, he paid kickbacks and bribes to beneficiaries in exchange for referrals, as well as patient recruiters. He also paid doctors’ offices and clinics for fraudulent prescriptions for unnecessary therapy and services. Medicare paid about $13.7 million for these fraudulent claims from January 2009 through November 2014. Lara was ordered to forfeit the amount paid and sentenced to 10 years in prison.

CVS must pay up

CVS Health settled allegations against two of its retail stores to the tune of $22 million. During an investigation as part of the DEA’s efforts to put a halt to Florida pill mills, it was discovered that these two retail locations were filling prescriptions written without regard to medical need. These prescriptions had “red flags” indicating that they were not prescribed for legitimate purposes. CVS acknowledged that the pharmacies had a responsibility to issue drugs only based on medical need, and that its retail stores also failed to completely fulfill compliance obligations under the Controlled Substances Act (21 U.S.C. §801).

California supply company owner sentenced

Across the country, a registered nurse in the Los Angeles area was sentenced to 4 years in prison for her part in a Medicare fraud scheme. Olufunke Ibiyemi Fadojutimi was convicted by a jury in July 2014 of seven counts of health care fraud, one count of conspiracy to commit health care fraud, and one count of money laundering. Fadojutimi was a registered nurse and the owner of Lutemi Medical Supply. Through the company, which was a supplier of durable medical equipment, she billed Medicare over $8 million for equipment that was not medically necessary. Between September 2003 and May 2010, the scheme involved paying kickbacks to physicians for fraudulent prescriptions and patient recruiters in exchange for referrals. Medicare paid almost $4.3 million on a total of $8.3 million in submitted claims.

Not getting off easy in the Big Easy

A New Orleans jury convicted two doctors, a nurse, and an office manager for participation in a Medicare fraud scheme. The scheme involved claiming that thousands of Medicare beneficiaries in the area required nursing and therapy home health services when the patients were actually not homebound. Medicare paid approximately $50.7 on over $56 million in mostly fraudulent claims. Nine other defendants have already pleaded guilty to their roles in the scheme. These settlements are part of the government’s focus on combating health care fraud via the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by the Departments of Justice and Health and Human Services.

DEA administrator

Chuck Rosenberg has been appointed to serve as the new DEA acting administrator. He is currently the chief of staff to the director of the FBI. In this role, he worked on issues such as counterterrorism, intelligence, and criminal investigations including cyber investigations. Previously, he served as the U.S. Attorney of the Eastern District of Virginia and the Southern District of Texas. He has also spent time working in private practice and as a federal prosecutor. Attorney General Loretta E. Lynch stated that his appointment was “well-deserved” and that she could “think of no better individual to lead this storied agency.”

New challenges in combating fraud

Assistant Attorney General Leslie R. Caldwell spoke at the American Bar Association’s 25th Annual National Institute on Health Care Fraud, highlighting the success the DOJ has had in prosecuting health care fraud over the last 25 years. She reflected on the days when law enforcement was reactive to fraud cases and waited on CMS to refer cases. Now, she said, the Medicare Fraud Strike Force is taking steps to investigate areas that are known for fraudulent billing practices, such as durable medical equipment in Miami, Florida, to identify and halt fraudulent schemes as early as possible. She also noted that as criminal attacks causing health care data breaches continue to rise, the Cybersecurity Unit is developing best practices to mitigate risk. She also requested that companies begin partnering with the unit to exchange ideas and experiences to more effectively put a stop to attacks before they happen.