Fraud perpetrators receive lengthy prison sentences for false claims, kickbacks

Two health care fraud scheme perpetrators in separate cases successfully prosecuted by the Department of Justice (DOJ) have been sentenced for their crimes. A physician who accepted kickbacks and committed tax fraud received a sentence of seven years in prison. A Detroit medical biller received a sentence of 50 months in prison for her role in billing $7.3 million in fraudulent claims to Medicare and Medicaid.

Physician

A Pennsylvania physician was sentenced to 84 months in prison with three years’ supervised release, 60 months of which run concurrently with a sentence imposed by a Florida district court. The DOJ presented information to the court showing that the physician, who practiced anesthesiology and pain management, owned and operated pain management clinics. The physician conspired to receive kickbacks from a drug testing lab in exchange for referring patients to the lab, totaling over $2.3 million. Medicare and Medicaid paid the lab over $4.5 million based on the physician’s referrals. The physician also failed to remit employment taxes for a corporation of which he was a 100-percent shareholder.

Medical biller

At trial, the DOJ showed that the medical biller submitted fraudulent bills on behalf of a physician for services that she knew could not have been rendered or were not rendered as billed as part of a $7.3 million fraud scheme. She received 6 percent of the total billings received from Medicare. She was sentenced to 50 months in prison with one year of supervised release and ordered to pay restitution of $3.2 million jointly and severally with co-defendants.

8 years of illegal kickbacks costs Hospice Plus $12M

A group of hospices owned by Curo Health Services and operating under the Hospice Plus brand agreed to pay over $12 million to resolve allegations that they paid kickbacks in exchange for patient referrals in violation of the False Claims Act (31 U.S.C. §3729). The scheme came to light after several whistleblowers filed qui tam lawsuits on behalf of the United States, consolidated as U.S. ex rel. Capshaw v. White. The United States had previously partially intervened in the lawsuit against the corporate defendants for purpose of settlement; the suit remains pending against two former Curo executives, and the United States requested permission to intervene in the remainder.

Kickbacks were allegedly paid to (1) American Physician Housecalls, a physician house call company in the form of sham loans, free equity interest in another entity, stock dividends, and free rental space; and (2) to medical providers, including doctors and nurses, in the form of cash, gift cards, and other valuable items. According to the consolidated whistleblower complaints, the house call company allegedly received kickbacks from 2007 through 2012, while providers allegedly received payments from 2007 through 2014.

The involved hospices primarily operate in and around Dallas, Texas, and were first known as Hospice Plus, Goodwin Hospice, and Phoenix Hospice. The three companies were purchased by Curo Health Services in 2010 and consolidated under the Hospice Plus brand.

Highlight on Florida: Prison for administrator involved in home health Medicare fraud conspiracy

Medicare was scammed of $2.5 million in false and fraudulent claims and another of the conspirators is heading to prison. A home health administrator was sentenced to 126 months in prison for his role in the scheme after a two-week jury trial convicted him in December 2016 of one count of conspiracy to commit health care fraud and wire fraud and one count to defraud the U.S. and pay and receive health care bribes and kickbacks.

While the administrator was the manager of Mercy Home Care Inc. and a billing employee for D&D&D Home Health Care Inc. in Miami-Dade County, Florida, he and others submitted false claims through the companies to Medicare between October 2014 and June 2015, based on services that were (1) not medically necessary, (2) not provided, and (3) for patients brought to the companies through payment of illegal kickbacks to providers and recruiters. The claims the administrator submitted to Medicare were based on forged prescriptions and falsified medical documentation, backdated so services were supposedly provided in prior years, and for beneficiaries who were coached to say they needed services when they were not homebound. According to evidence from trial, he also destroyed evidence prior to his arrest. Medicare paid approximately $2.5 million for false and fraudulent claims submitted by Mercy and D&D&D.

Ten other co-conspirators previously pleaded guilty or were convicted by the Southern District of Florida, including the owner and president of Nerey Professional Services, Inc. That co-conspirator was convicted of one count of receiving kickbacks in connection with a federal health care program and one count of conspiracy to defraud the U.S. and pay health care kickbacks and sentenced to 60 months in prison on May 27, 2016. According to evidence from trial, the co-conspirator was involved in the conspiracy to accept kickbacks in return for referring Medicare beneficiaries to Mercy and D&D&D to serve as patients, even those who did not qualify for home health care services, between October 2014 and September 2015.

Feds snare 16 hospice providers in $60M Medicare fraud scheme

Sixteen individuals were charged with offenses related to a health care fraud scheme in a federal court in Texas. The scheme alleges that from July 2012 to September 2016, Novus Health Services, owned and operated by the 16 individuals, billed Medicare and Medicaid more than $60 million for fraudulent hospice services, of which more than $35 million was paid to Novus. The individuals submitted false claims for hospice services and continuous care hospice services, recruited ineligible hospice beneficiaries via kickbacks to physicians and health care facilities, and falsified and destroyed documents to conceal these activities. The grand jury indictment was the result of an investigation into Novus by the Federal Bureau of Investigation, HHS Office of Inspector General (OIG), and the Texas Attorney General’s Medicaid Fraud Control Unit (MFCU).

Scheme

Novus and Optim Health Services, Inc. were operated and co-owned by one of the individuals, a certified public accountant without any medical licenses. Licensed physicians who were paid Novus medical directors provided little to no oversight of Novus’s hospice patients. Some of the indicted individuals were not physicians and they would determine whether a beneficiary would be certified for, recertified for, or discharged from hospice; whether they would be placed on continuous care; and how and to what extent they would be medicated with drugs. These decisions on medical care were often driven by financial interest rather than patient need.

The scheme also involved directing that beneficiaries be placed on continuous care, whether the beneficiaries needed the service or not, and often without any consultation with a physician. Continuous care physician’s orders were falsified and uploaded into Novus’s electronic medical records database. When a beneficiary was on continuous care, the Novus nurses would unnecessarily administer high doses of Schedule II controlled medications such as morphine or hydromorphone. The Schedule II medications were obtained with prescription forms unlawfully pre-signed by medical directors. The investigators found instances when these excessive dosages resulted in serious bodily injury or death to the beneficiaries.

If convicted, each count of conspiracy to commit health care fraud and substantive health care fraud count carries a maximum statutory penalty of 10 years in federal prison and a $250,000 fine.