$55M fraud scheme earns 84 months in prison

Involvement in a $55 million health fraud scheme earned a medical clinic owner 84 months in prison. She pleaded guilty in October 2015 to using her two Brooklyn, New York-based clinics, Prime Care on the Bay LLC and Bensonhurst Mega Medical Care PC to submit false and fraudulent claims to Medicare and Medicaid.

Scheme

According to the guilty plea, the owner and various co-conspirators paid kickbacks to induce patients to come to the clinics. She then submitted false claims for services induced by these kickbacks or provided by unlicensed staff. She also wrote checks from the clinics’ accounts to third-party companies that were ostensibly vendors, but were actually not providing services. These payments were used to generate cash for the kickbacks. The owner was ordered to forfeit over $29 million.

Several other co-conspirators have pleaded guilty to their part in the scheme. These include the former medical directors of both clinics, six therapists, three drivers, a former patient who received kickbacks, and the owner of several of the vendor companies used to launder funds.

Kusserow on Compliance: Oncology remains high federal enforcement priority

Oncology continues to be a high enforcement priority for the DOJ, OIG, FBI, and CMS.  The latest fraud investigation by the DOJ involves CCS Oncology, large and prominent providers of cancer care. The reported question being investigated relates to possible billing irregularities involving Medicare and Medicaid. As with most cases related to oncology irregularities, the predication was by a “whistleblower.” The complaint alleges CCS billed for more expensive procedures than were actually performed, billed for procedures that never were performed, and performed medically unnecessary procedures on patients, among other violations, according to the source. The stream of cases is long enough to outline key factors that have led to settlements with the DOJ and OIG. Compliance Officers, whose portfolio of responsibilities include oncology services may wish to review the following to ensure none of these factors are at work in a manner that may trigger investigation.

Common Oncology Enforcement Issues

  1. Employees knowingly submitted false records to Medicare and Medicaid to increase revenue
  2. Claims submitted for services performed without required physician supervision
  3. Offering unnecessary treatments and services to patients
  4. Recruitment and treatment of terminal patients that should have been referred to hospice care
  5. Re-treatment of patients in excess of prescribed dosage limits
  6. Claims for services when physician reviews had not taken place
  7. Claims where treatment occurred without prior required IGRT scan
  8. Physicians allowed registered nurses to fill out prescriptions for medications
  9. Offering inducements (“kickbacks”) to patients by waiving their co-pays
  10. Conducting not necessary fluorescence in situ hybridization (FISH) tests for bladder cancer
  11. Filing payment claims for GAMMA functions by improperly trained physicians and staff
  12. Seeking payments for tests whose results doctors had not reviewed
  13. Billing E&M services on the same day as a related procedure
  14. Double and over-billing Medicare for services that lacked supporting documentation
  15. Improperly billing for radiation treatment without proper physician supervision
  16. Submitting false claims for magnetic resonance imaging (MRI) services
  17. Billing for services that were not documented in the patients’ medical records
  18. Billing twice for the same services
  19. Misrepresentation of the level of a service provided to increase reimbursement
  20. Routinely waived patient copayments as an inducement, then billing Medicare for them.
  21. Claims for services not performed, medically necessary, and/or properly documented
  22. Claims for services rendered to patients referred by physicians benefiting from referral
  23. Purchasing cancer treatments from unlicensed sources for oncology practice
  24. Diluting patients’ chemotherapy treatments and delivering in a manner designed to extend period of treatment time
  25. Claims for medically unnecessary or properly documented intensity-modulated radiation therapy (IMRT)
  26. Unsupported add-on claims for “special treatment procedures” and “specialty physics consults”
  27. Violating the Stark Laws and Anti-Kickback statute by rewarding referring physicians

 

Timing key for internal audits, self-disclosure

There is an art to conducting internal compliance audits and determining when to begin a self-disclosure protocol—the ideal compliance program should promote prevention, detection, and resolution of any conduct that fails to comply with the requirements of state and federal health care programs. Knowing when to perform an internal investigation or audit to encourage a healthy program is key, according to Leia C. Olsen, shareholder, Hall Render, who was presenting at a Health Care Compliance Association (HCCA) webinar.

Olsen noted that many qui tam actions arise when employees do not feel as though their concerns are being heard and taken seriously. She stressed the importance of having a mechanism for reporting incidents, and timely monitoring identified issues and implementing remedial measures. However, she noted that qui tam suits can potentially be prevented not only by conducting an internal investigation, but also by self-disclosing, which can trigger the public disclosure bar. Self-disclosure of identified wrongdoing is encouraged by the Department of Justice and HHS, but, per the Yates memorandum, all relevant facts must be provided by a company before it can receive credit for cooperating and voluntary self-disclosure. Therefore, it is important to conduct a thorough investigation, collecting all available information and documentation, before self-disclosing.

The 60-day refund rule, promulgated under Sec. 6402 of the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148), together with the Fraud Enforcement and Recovery Act of 2009 (FERA) (P.L. 111-21), creates False Claims Act (FCA) liability for providers who fail to report and return identified overpayments within 60 days of identifying the overpayment. Therefore, Olsen said, the time to meet the reasonable diligence standard after learning of a potential overpayment is limited. Having a protocol in place to quickly decide whether to self-disclose is critical in securing the greatest amount of cooperation credit.

Kusserow on Compliance: OIG reports on the Senior Medicare Patrol (SMP) program

The OIG issued a report on the 2016 performance data for the Senior Medicare Patrol (SMP) program. It is a little known program for many people designed to empower and assist Medicare beneficiaries, their families, and caregivers to prevent, detect, and report health care fraud, errors, and abuse through outreach, counseling, and education. SMPs are grant-funded projects of HHS, U.S. Administration for Community Living (ACL). They play a unique role in the fight against Medicare errors, fraud, and abuse. SMP volunteers and staff are viewed as “eyes and ears” in their communities, educating beneficiaries to be the first line of defense; a sort of ‘neighborhood watch” team. Their work involves conducting presentations to groups, exhibit at events, and work one-on-one with Medicare beneficiaries; engaging volunteers to protect elderly person’s health, finances, and medical identity while saving precious Medicare dollars is a cause that attracts civic-minded Americans; and receiving beneficiary complaints and determining whether it may involve fraud, errors, or abuse. When fraud or abuse is suspected, they make referrals to the appropriate state and federal agencies for further investigation.

The OIG used five performance measures pertaining to recoveries, savings, and cost avoidance; and another five performance measures relating to volunteer and outreach activities.  In 2016, there were 53 SMP projects that had a total of 6,126 total active team members who conducted a total of 26,220 group outreach and education events that reached an estimated 1.5 million people.   The projects also had 195,386 individual interactions with, or on behalf of, a Medicare beneficiary.  The projects reported $163,904 in cost avoidance on behalf of Medicare, Medicaid, beneficiaries, and others. Savings to beneficiaries and others totaled $53,449. Expected Medicare recoveries totaled $2,672. Further, two projects provided information to federal prosecutors that resulted in settlements totaling an additional $9.2 million in expected Medicare recoveries. There were no expected Medicaid recoveries.

Compared to 2015, the projects reported much higher amounts for cost avoidance ($163,904, up from $21,533) and somewhat higher amounts of savings to beneficiaries and others ($53,449, up from $35,059). However, the projects reported significantly lower expected Medicare recoveries ($2,672, down from $2.5 million). The projects reported no Medicaid recoveries in either year. Some common examples of suspected Medicare fraud or abuse identified by the SMP include:

  • Billing for services or supplies that were not provided
  • Providing unsolicited supplies to beneficiaries
  • Misrepresenting a diagnosis, beneficiary’s identity, service provided, or other facts
  • Prescribing or providing excessive or unnecessary tests and services
  • Violating the participating provider agreement with Medicare by refusing to bill Medicare for covered services or items and billing the beneficiary instead
  • Offering or receiving a kickback (bribe) in exchange for a beneficiary’s Medicare number
  • Requesting Medicare numbers at an educational presentation or in an unsolicited phone call
  • Routinely waiving co-insurance or deductibles

The OIG noted that the projects may not be receiving full credit for recoveries, savings, and cost avoidance attributable to their work. It is not always possible to track referrals to Medicare contractors or law enforcement from beneficiaries who have learned to detect fraud, waste, and abuse from the projects. In addition, the projects are unable to track the potentially substantial savings derived from a sentinel effect, whereby Medicare beneficiaries’ scrutiny of their bills reduces fraud and errors.

Richard P. Kusserow served as DHHS Inspector General for 11 years. He currently is CEO of Strategic Management Services, LLC (SM), a firm that has assisted more than 3,000 organizations and entities with compliance related matters. The SM sister company, CRC, provides a wide range of compliance tools including sanction-screening.

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Copyright © 2017 Strategic Management Services, LLC. Published with permission.