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.

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.

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.

Feds snare 16 hospice providers in $60M Medicare fraud scheme

Sixteen individuals were charged with offenses related to a health care fraud scheme in a federal court in Texas. The scheme alleges that from July 2012 to September 2016, Novus Health Services, owned and operated by the 16 individuals, billed Medicare and Medicaid more than $60 million for fraudulent hospice services, of which more than $35 million was paid to Novus. The individuals submitted false claims for hospice services and continuous care hospice services, recruited ineligible hospice beneficiaries via kickbacks to physicians and health care facilities, and falsified and destroyed documents to conceal these activities. The grand jury indictment was the result of an investigation into Novus by the Federal Bureau of Investigation, HHS Office of Inspector General (OIG), and the Texas Attorney General’s Medicaid Fraud Control Unit (MFCU).

Scheme

Novus and Optim Health Services, Inc. were operated and co-owned by one of the individuals, a certified public accountant without any medical licenses. Licensed physicians who were paid Novus medical directors provided little to no oversight of Novus’s hospice patients. Some of the indicted individuals were not physicians and they would determine whether a beneficiary would be certified for, recertified for, or discharged from hospice; whether they would be placed on continuous care; and how and to what extent they would be medicated with drugs. These decisions on medical care were often driven by financial interest rather than patient need.

The scheme also involved directing that beneficiaries be placed on continuous care, whether the beneficiaries needed the service or not, and often without any consultation with a physician. Continuous care physician’s orders were falsified and uploaded into Novus’s electronic medical records database. When a beneficiary was on continuous care, the Novus nurses would unnecessarily administer high doses of Schedule II controlled medications such as morphine or hydromorphone. The Schedule II medications were obtained with prescription forms unlawfully pre-signed by medical directors. The investigators found instances when these excessive dosages resulted in serious bodily injury or death to the beneficiaries.

If convicted, each count of conspiracy to commit health care fraud and substantive health care fraud count carries a maximum statutory penalty of 10 years in federal prison and a $250,000 fine.