Prohibition on paid referrals not limited to ‘relevant decisionmakers’

The Seventh Circuit affirmed the conviction of an individual under the Anti-Kickback Statute (AKS) (42 U.S.C. § 1320a-7b) whose referral agency had provided referrals to a home health company in exchange for $500 per referral. In affirming the lower court’s decision, the Seventh Circuit found that criminal liability under the AKS is not limited to relevant decisionmakers and that no safe harbors applied (U.S. v. George, August 14, 2018, Rovner, I.).

Referrals for money

The referrer was a certified homemaker employed by Help at Home, a home healthcare agency, beginning in 2007. In 2010, she decided to start a referral agency and signed a work for hire agreement with another home health service, Rosner Home Health Care, Inc. (Rosner), in which she agreed to convince providers, including doctors, case managers, discharge planners, and social workers, to refer patients to Rosner. In exchange, Rosner paid the referrer $500 for each patient referred. In 2015, the referrer was indicted and then found guilty of two counts of violating the AKS and one count of violating the general conspiracy statute (see Receipt of per-patient referrals, knowledge of illegality enough to overcome doubt, Health Law Daily, March 25, 2016).

Appeal

Under the AKS, the government must demonstrate that the referrer knowingly and willfully solicited or received remuneration in return for referring an individual to Rosner to provide or arrange services paid at least in part under Medicare. The referrer appealed her conviction arguing that there was insufficient evidence to support the substantive counts of her conviction falling under the AKS. According to the court, rather than merely demonstrate that evidence could have supported a finding of innocence, the referrer must demonstrate on appeal that the evidence could not have allowed a reasonable trier of fact to find her guilty.

Relevant decisionmakers

The referrer argued that she could not be held liable, as the statute applied only to “relevant decisionmakers,” which she was not. In making this argument, the referrer relied on a previous Fifth Circuit decision in which the court held that payments to a marketing firm distributing advertisement brochures of a provider to physicians did not fall within the AKS because they were not payments made to the relevant decisionmaker in exchange for sending patients to the provider. However, the court cited a subsequent case rejecting an interpretation of that case limiting criminal liability to persons would could be deemed relevant decisionmakers.

Safe harbors

The referrer also argued that she had a reasonable basis to believe she fell within the safe harbor provision of the AKS applying to “any amount paid by an employer to an employee (who has a bona fide employment relationship with such employer) for employment in the provision of covered items or services. However, her written agreement with Rosner specifies that she was acting as an independent referral agency, not an employee. The court also noted that the referrer was paid for referrals, not for the provision of items or services covered by Medicare. Thus, the safe harbor provision did not apply.

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.

Fighting home health and ambulance fraud by putting providers on a map

CMS released public data sets and a mapping tool regarding the availability and use of Medicare services provided by ground ambulance suppliers and home health agencies. The data release is intended to improve care delivery through transparency and information sharing. CMS is using the data to identify areas where services are saturated and where there are high risks of fraud and abuse.

Data

On February 2, 2016, CMS announced a six-month extension of the temporary enrollment moratoria on new ground ambulance suppliers and home health agencies sub-units and branch locations in Medicare, Medicaid, and the Children’s Health Insurance Programs (CHIP) in seven geographic areas (see Some new providers still unable to enroll in high-risk fraud areas, Health Law Daily, February 1, 2016). Together with the data and mapping tool, CMS believes it can use the moratoria to fight fraud and safeguard the federal healthcare programs.

Fraud

Home health providers see the data release as a signal from CMS that it plans to step up its home health fraud fighting efforts. Along with the data release, CMS announced plans to use the data to pinpoint high-risk providers for increased site visits. CMS also plans to engage in monthly monitoring of home health enrollment data in order to identify and deactivate providers that do not meet Medicare requirements.

Data tools

The Moratoria Provider Services and Utilization Data Tool includes interactive maps and a dataset to identify geographic areas that might undergo consideration for a new moratorium on provider and supplier enrollments. The data includes the number of providers in a given geographic area and identifies the number of beneficiaries that use a specific health service in a particular region. The interactive maps allow for comparisons between these regions. The tool was developed from ground ambulance and home health agency paid claims data covering October 1, 2014 through September 30, 2015. The data will be updated quarterly.