Houston physician found guilty for role in $1.5M fraud scheme

Following a four-day trial, a Houston-area physician was convicted of conspiracy to commit health care fraud and conspiracy to pay and receive illegal kickbacks in a scheme involving home health services involving Allied Covenant Home Health, Inc. (Allied). Sentencing is scheduled for September 25, 2017.


According to the Department of Justice (DOJ), the physician was involved in a scheme to defraud Medicare by submitting $1.5 million in fraudulent claims from 2006 to 2013. Evidence showed that the physician admitted patients for home health services through Allied without regard for qualification for such services. The physician falsified medical records and signed false documentation to show that patients met Medicare criteria for home health service reimbursement when they did not.

The evidence also showed that the physician paid illegal kickbacks to the owner of Harris Health Care Group (Harris). These kickbacks were paid in order to facilitate Medicare billing for facet injections. These injections were not medically necessary or not provided.

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.

Kusserow on Compliance: OIG reports on new items added to its 2016 work plan

The HHS Office of Inspector General (OIG) released a mid-year update on its 2016 Work Plan that summarizes new and ongoing reviews and activities it plan to pursue with respect to HHS programs and operations during the current fiscal year and beyond. This report includes those items that have been completed, postponed, or canceled, as well as including new items begun since the original plan had been published for this fiscal year, with links to the full summaries for new work. The following is a summary of some of the new items added to the Work Plan for the current year. Compliance Officers might find it useful to review to determine if any of this new work impacts on their organization.

  • Outpatient Outlier Payments for Short-Stay Claims. To determine the extent of potential Medicare savings if hospital outpatient stays were ineligible for an outlier payment. The purpose of the outlier payment is to ensure beneficiary access to services by having the Medicare program share in the financial loss incurred by a provider associated with individual, extraordinarily expensive cases.
  • Skilled Nursing Facility Prospective Payment System. Review of the compliance with the skilled nursing facility (SNF) prospective payment system requirement related to a three-day qualifying inpatient hospital stay. If the beneficiary is subsequently admitted to a SNF, the beneficiary is required to be admitted either within 30 days after discharge from the hospital or within such time as it would be medically appropriate to begin an active course of treatment.
  • National Background Checks for Long-Term Care. Review the procedures implemented by participating states for long-term-care facilities or providers to conduct background checks on prospective employees and providers who would have direct access to patients and determine the costs of conducting background checks to determine the outcomes of the states’ programs and whether the checks led to any unintended consequences.
  • Potentially Avoidable Hospitalizations of Medicare and Medicaid Eligible Nursing Home Residents for Urinary Tract Infections. Review of nursing home records for residents hospitalized for urinary tract infections (UTI) to determine if the nursing homes provided services to prevent or detect UTIs in accordance with their care plans before they were hospitalized.
  • Accountable Care Organizations: Beneficiary Assignment and Shared Savings.  Determine whether CMS properly performed the process of assigning beneficiaries to ACOs in the Medicare Shared Savings Program (MSSP). Examine CMS’ shared savings payments for beneficiaries who were assigned to ACOs under the MSSP to ensure that there is no duplication of payments for the same beneficiaries by other savings programs or initiatives.
  • Medicare Home Health Fraud.  Analyze Medicare claims data to identify the prevalence of potential indicators of home health fraud.
  • Physician-Administered Drugs for Dual Eligibles.  Determine whether Medicare requirements for processing physician-administered drug claims impact state Medicaid agencies’ ability to correctly invoice Medicaid drug rebates for dual eligible enrollees.
  • Oversight and Effectiveness of Medicaid. Determine the extent to which selected States made use of Medicaid waivers and if costs associated with the waivers are efficient, economic, and do not inflate federal costs.
  • State Medicaid Agency Breach Protections. Examine breach notification procedures of State Medicaid agencies and their contractors, as well as their responses to past breaches of unsecured patient health information.
  • CMS Oversight of Risk Adjustment Data. Timelines, Validity, and Review of summary reports produced by the ACA risk adjustment data collection system, as well as to determine the extent of any data discrepancies and what actions were taken by issuers to review and resubmit data as well as the extent to which issuers appealed risk adjustment changes.
  • Risk Corridors: Insights from 2014 and 2015. Assess the difference in reported risk corridors data from benefit years 2014 and 2015; and the guidance and tools that CMS used to ensure the accuracy of reported risk corridors data for the two benefit years.
  • CMS’ Implementation of New Medicare Payment System for Clinical Diagnostic Laboratory Tests-Mandatory Review. Assess CMS’ ongoing activities and progress toward implementing CMS’s new Medicare payment system for clinical diagnostic laboratory tests.
  • Other Providers and Suppliers. Assess CMS’ ongoing activities and progress toward implementing CMS’ new Medicare payment system for clinical diagnostic laboratory tests.

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 © 2016 Strategic Management Services, LLC. Published with permission.