$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.

Feds allege 412 individuals responsible for $1.3B in Medicare fraud

In the largest health care fraud enforcement action by the Medicare Fraud Strike Force, 412 individuals allegedly participated in schemes involving almost $1.3 billion in false billings. The Department of Justice (DOJ) and HHS noted that the charges were levied against the individuals across 41 federal districts and included 115 doctors, nurses, and other licensed medical professionals. Over 120 defendants were named, including doctors for their roles in prescribing and distributing opioids and other dangerous narcotics. Thirty state Medicaid Fraud Control Units participated in the arrests. HHS also initiated suspension actions 295 providers, including doctors, nurses and pharmacists.

The Medicare Fraud Strike Force cases are being prosecuted and investigated by U.S. Attorney’s Offices in the states of Florida, Michigan, New York, Texas, California, Louisiana, and Illinois, along with Medicare Fraud Strike Force teams from the Criminal Division’s Fraud Section, the FBI, DEA, and various state fraud entities. In addition to the Strike Force locations, enforcement actions included cases and investigations brought by an additional 31 U.S. Attorney’s Offices.

Charges

The charges focus on Medicare, Medicaid, and TRICARE billing schemes for medically unnecessary prescription drugs and compounded medications that often were never purchased or distributed to beneficiaries. According to court documents, patient recruiters, beneficiaries and other co-conspirators were allegedly paid cash kickbacks in return for supplying beneficiary information to providers, so that the providers could then submit fraudulent bills to Medicare for services that were medically unnecessary or never performed. The fraud schemes also involved medical professionals who unlawfully distributed opioids and other prescription narcotics.

For example, in the Southern District of Florida, a total of 77 defendants were charged with offenses relating to their participation in various fraud schemes involving over $141 million in false billings for services including home health care, mental health services, and pharmacy fraud. The DOJ highlighted one case where the owner and operator of a purported addiction treatment center and home for recovering addicts and one other individual were charged in a scheme involving the submission of over $58 million in fraudulent medical insurance claims for purported drug treatment services. The allegations included recruiting patients to move to South Florida in order to bill insurance companies. Patients were provided kickbacks in the form of gift cards, free airline travel, casino trips, and drugs.

Seven defendants in Louisiana were charged in connection with health care fraud, wire fraud, and kickback schemes involving more than $207 million in fraudulent billing. In another instance, a pharmacist was charged with submitting and causing the submission of $192 million in false and fraudulent claims to TRICARE and other health care benefit programs for dispensing compounded medications that were not medically necessary and often based on prescriptions induced by illegal kickback payments

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.

Home health owner/operator pleads guilty to Texas-sized Medicaid fraud

Billed as the largest provider attendant services (PAS) fraud in Texas history, the owner/operator of five Houston-area home health agencies pleaded guilty in a $17 million fraud conspiracy case, the last conspirator in the scheme to plead guilty. The owner/operator pleaded guilty to two counts of conspiring to defraud Medicare and the Texas Medicaid-funded home and community-based service and primary home care programs and one count of conspiring to launder money. His sentencing is scheduled for June 22, 2017.

The owner/operator, whose co-conspirators included his daughter and other family members, admitted to the following:

1. obtaining patients for the home health agencies by paying illegal kickbacks to patient recruiters and office employees;
2. paying cash, checks, Western Union, and Moneygram funds to Medicare and Medicaid patients for receiving services from the home health agencies in exchange for using their Medicare and Medicaid numbers to bill for home health and PAS services;
3. paying patients for recruiting other Medicaid and Medicaid patients to the home health agencies;
4. paying physicians illegal kickbacks for referring and certifying Medicare and Medicaid patients for home health and PAS services; and
5. using fraudulently-obtained money from Medicare and Medicaid to pay the illegal kickbacks to promote the conspiracies and to ensure that they would continue.

Over $17 million in fraudulent claims were submitted to Medicare and Medicaid and the conspirators received approximately $16 million in payments from the programs.