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.

Former ALJ pleads guilty for role in $550 million scam

A former administrative law judge (ALJ) for the Social Security Administration (SSA) pleaded guilty in federal district court in Kentucky on May 12, 2017, for his part in a scheme that defrauded the SSA of over $550 million in federal disability payments for thousands of claimants.

For more than 20 years, the ALJ adjudicated disability claims on behalf of the SSA. As part of his guilty plea, he admitted to accepting over $609,000 in cash payments over some seven years in more than 3,100 cases from a Kentucky Social Security disability lawyer. The former ALJ admittedly divided the cash deposits among various accounts in an attempt to conceal the source of the cash.

In exchange for the illegal gratuities, the ALJ advised the lawyer as to the type of medical evidence to submit for his clients and he awarded disability benefits to thousands of claimants represented by the lawyer without holding hearings. As a result, the lawyer received at least $7.1 million in representative fees from the SSA, and by his misconduct, the ALJ obligated the SSA to pay more than $550 million in lifetime benefits to claimants.

The ALJ was indicted on April 1, 2016, along with the lawyer and a clinical psychologist. They were charged with conspiracy, fraud, false statements, money laundering and other related offenses in connection with the scheme. The lawyer pleaded guilty to the fraud scheme earlier this year; the clinical psychologist is currently awaiting trial; and the ALJ’s sentencing is set for Aug. 25, 2017.

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.