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Feds Arrest 36 More California & Florida Providers On Defrauding Medicare Of More than $66 Million

May 16, 2013

The Federal Medicare Fraud Strike Force’s arrest of 36 providers in California and Florida highlights again the continuing and growing zeal of federal health care fraud investigation and enforcement efforts. On May 14, 2013 the Justice Department announced it arrested and charged with Medicare fraud 12 defendants in Los Angeles here and 24 South Florida residents here in fraud enforcement actions on opposite coasts. The charges show the continuing commitment by Federal officials to find an prosecute health care fraud.

Florida Arrests

In South Florida, Federal officials announced charges against 24 South Florida residents for their alleged participation in various schemes to defraud Medicare out of more than $45,299,935 million. The charges in South Florida are part of a nationwide takedown by Medicare Fraud Strike Force operations in eight cities that resulted in charges against 89 individuals, including doctors, nurses and other licensed professionals, for their alleged participation in Medicare fraud schemes involving approximately $223 million in false billings.

Specifically, the South Florida cases announced as part of the nationwide Medicare Fraud Strike Force takedown include the following:

U.S. v. Emilio Amador, Cristobal Gonzalez, Eduims Mora, Jose Contreras, and Elizabeth Monteagudo, where five defendants are charged with conspiracy to receive health care kickbacks and substantive counts of receiving kickbacks in connection with a federal health care program. According to the indictment, the defendants participated in a scheme involving Caring Nurse Home Health, Corp. and Good Quality Home Health, Inc. The defendants allegedly supplied patients to Caring Nurse and/or Good Quality in exchange for kickbacks and bribes. Caring Nurse and Good Quality, in turn, fraudulently billed Medicare for approximately $50 million for home health services that were not provided and/or were not medically necessary. If convicted, the defendants face up to five years for each count.
United States v. Rafael Meana and Janet Farigola, where Defendants Rafael Meana and Janet Farigola are charged with conspiracy to commit health care fraud and several substantive counts of health care fraud. According to the indictment, the defendants participated in a scheme involving Lord’s Medical & Rehab Center, Inc. (Lords), a medical clinic that purportedly provided Medicare Advantage beneficiaries with medical items and services. From February 2010 through July 2011, Meana and Farigola allegedly caused Lord’s to submit approximately $5,497,047 in Medicare claims falsely claiming that health care benefits and services were medically necessary and had been provided to Medicare beneficiaries. As a result of the submission of these claims, Medicare paid Lord’s approximately $2,240,134. If convicted, the defendants face up to ten years in prison for each count of health care fraud.
United States v. Jose Moran, Rafael Meana, and Armando Rubio Cordero, where the defendants are charged with conspiracy to commit health care fraud and several substantive counts of health care fraud. According to the indictment, the defendants participated in a scheme involving Lord Family Services, Inc., a medical clinic that purportedly provided Medicare Advantage beneficiaries with medical items and services. From January 2010 through September 2011, the defendants allegedly caused Lord Family Services, Inc. to submit approximately $1,919,751 in Medicare claims falsely claiming that health care benefits and services were medically necessary and had been provided to Medicare beneficiaries. As a result of the submission of these claims, Medicare paid Lord Family Services, Inc. approximately $976,476. If convicted, the defendants face up to ten years in prison for each count of health care fraud.
United States v. Karina Merino, where defendant Karina U. Merino is charged with a single count of health care fraud in connection with her role in a massive health care fraud scheme involving Ideal Home Health, Inc. (Ideal), which submitted more than $40 million in fraudulent claims to Medicare. The Information alleges that Merino, as a nurse for Ideal, falsified patient visitation logs to reflect that home health care nursing services had been provided to beneficiaries when such services had, in fact, not been provided. Ideal fraudulently billed the Medicare program for approximately $148,000. If convicted of the health care fraud charge, Merino faces up to ten years in prison.
United States v. Delia Y. Chaveco and Arturo Y. Chaveco,
where Delia Y. Chaveco and Arturo Y. Chaveco (the Chavecos) were charged by Information with a single count of conspiracy to receive kickbacks in connection with a federal health care benefit program. This charge stems from the Chavecos’ role in a health care fraud scheme involving Ideal Home Health Inc. (Ideal), an agency that submitted more than $40 million in fraudulent claims to the Medicare program. The Information alleges that Ideal and other Miami-Dade area home health agencies paid the Chavecos kickbacks in exchange for recruiting Medicare beneficiaries that they later used to bill the Medicare program. If convicted, the defendants face up to five years in prison.
United States v. Roberto Marrero, Sandra Fernandez Viera and Enrique Rodriguez, where defendants are charged with conspiracy to commit health care fraud, conspiracy to receive and pay health care kickbacks, and substantive kickback charges. Defendants Roberto Marrero and Sandra Fernandez Viera were the owners and operators of Trust Care Health Services, Inc. (Trust Care), which allegedly paid kickbacks and bribes to patient recruiters and beneficiaries to obtain Medicare beneficiaries, and then submitted more than $20 million in false and fraudulent claims to Medicare, primarily for skilled nursing diabetic care and physical/occupational therapy. Defendant Enrique Rodriguez worked as a patient recruiter for Trust Care, supplying patients in exchange for kickbacks and bribes. A civil injunction is being filed under 18 U.S.C. § 1345 to restrain the defendants’ assets to satisfy restitution in the criminal matter. If convicted, the defendants face up to ten years for the health care fraud charges and five years for each count of the kickback charges.
United States v. Dora Moreira, Ivan Alejo, and Hugo Morales,
where the defendants are charged with conspiracy to commit health care fraud, conspiracy to receive and pay health care kickbacks, substantive kickback charges, conspiracy to commit money laundering, and substantive money laundering. Defendant Dora Moreira was the owner and operator of Anna Nursing Services Corp. (Anna Nursing), which paid kickbacks and bribes to patient recruiters and beneficiaries to obtain Medicare beneficiaries. Anna Nursing was paid more than $7 million for the false claims it submitted to Medicare, which claims were primarily for physical/occupational therapy. Defendant Ivan Alejo worked at Anna Nursing, and was responsible for, among other things, negotiating kickback rates and distributing kickback payments to patient recruiters on behalf of Anna Nursing. Defendant Hugo Morales worked as a physical therapist on behalf of Anna Nursing, and was responsible for, among other things, fabricating patient medical documentation. Defendant Dora Moreira laundered money for the purpose, among others, of concealing the proceeds of the fraud and the payment of kickbacks to recruiters. The Asset Forfeiture Section has obtained restraining orders on the corporate bank account and on real property that is traceable to the fraud. If convicted, the defendants face up to ten years for the health care fraud charges, five years for each count of the kickback charges, and twenty years for the money laundering charges.
United States v. Marina Sanchez Pajon and Miguel Jimenez,
where Federal officials charge defendants with conspiracy to commit health care fraud, conspiracy to receive and pay health care kickbacks, and substantive kickback charges. Defendants Marina Sanchez Pajon and Miguel Jimenez were the owners and operators of Flores Home Health Care Inc. (Flores Home Health), which allegedly paid kickbacks and bribes to patient recruiters and beneficiaries to obtain Medicare beneficiaries. Flores Home Health was paid more than $8 million for the false claims it submitted to Medicare, which claims were primarily for physical/occupational therapy. The Asset Forfeiture Section has obtained seizure warrants and restraining orders on five vehicles and bank accounts containing $160,000. They have also filed lis pendens against four real properties that were purchased with proceeds of the fraud. If convicted, the defendants face up to ten years for the health care fraud charges and five years for each count of the kickback charges.
United States v. Miguel A. Rodriguez, where defendant Miguel A. Rodriguez is charged with three counts of paying kickbacks in connection with a federal health care program. The defendant allegedly paid kickbacks and bribes to induce medical providers to refer Medicare beneficiaries to his medical company for services, including x-rays. If convicted, the defendant faces up to five years in prison for each count of the kickback charges.
United States v. Enrique Alberto Siret Rodriguez, where defendant Enrique Alberto Siret Rodriguez is charged with four counts of health care fraud and two counts of paying kickbacks in connection with a federal health care program. The defendant allegedly paid kickbacks and bribes to a doctor for fraudulent home health care prescriptions that could be used to fraudulently bill Medicare. If convicted, the defendant faces up to 10 years in prison for each health care fraud count and up to five years for each of the kickback counts.
United States v. Alberto Cosme Garcia, where defendant Alberto Cosme Garcia is charged with one count of health care fraud and two counts of paying kickbacks in connection with a federal health care program. The defendant allegedly paid kickbacks and bribes to a doctor for fraudulent home health care prescriptions that could be used to fraudulently bill Medicare. If convicted, the defendant faces up to 10 years in prison for the health care fraud count and up to five years for each of the kickback counts.

Los Angeles Charges

In Los Angeles, the Health Care Fraud Task Force action resulted in 12 arrests including California’s second-largest biller for chiropractic services, a physician’s assistant, and owners of durable medical equipment and ambulance companies, in relation to seven criminal cases that the Justice Department alleges resulted in the cumulative submission of more than $22 million in false billings to Medicare. The charges filed in Los Angeles are part of a nationwide “takedown” by Medicare Fraud Strike Force operations in eight cities that led to charges against 89 individuals for their alleged participation in schemes to collectively submit about $223 million in fraudulent claims to Medicare. See here.

The dozen defendants taken into custody are among 13 people charged in Los Angeles in cases that allege health care fraud. A thirteenth defendant is a fugitive.

Federal officials charge Dr. Houshang Pavehzadeh, of the Sylmar Physician Medical Group, allegedly billed Medicare more than $1.7 million for chiropractic treatments he never performed. During the scheme, which ran from 2005 through 2012, Dr. Pavehzadeh, 40, of Agoura Hills, became the second-largest Medicare biller in California for chiropractic services – even though he was not in the United States when some of the alleged services were performed. In addition to being charged with health care fraud, Pavehzadeh is charged with aggravated identity theft related to Medicare beneficiaries whose information he used to bill Medicare as a part of the scheme. When investigators tried to conduct an audit of Pavehzadeh’s claims, he falsely reported to the Los Angeles Police Department that he had been carjacked and that patient files requested by the auditors had been stolen from his car. Pavehzadeh surrendered this morning, and he is scheduled to be arraigned with other Los Angeles-area defendants this afternoon in the Roybal Federal Building.

Nine defendants affiliated with DME companies were also charged in five separate indictments.

Olufunke Fadojutimi, 41, of Carson, a registered nurse; Ayodeji Temitayo Fatunmbi, 41, formerly of Carson, and now believed to be residing in Nigeria; and Maritza Velazquez, 40, of Las Vegas, were charged with health care fraud. The scheme allegedly revolved around Lutemi Medical Supplies, a DME company Fadojutimi owned and where Fatunmbi and Velazquez worked. According to the indictment in this case, Lutemi billed Medicare more than $8.3 million in claims, primarily for medically unnecessary power wheelchairs. Fadojutimi and Fatunmbi allegedly laundered Medicare funds in order to purchase fraudulent prescriptions for those power wheelchairs and pay illegal kickbacks to recruit Medicare beneficiaries. Fadojutimi was arrested this morning in Los Angeles, while Velazquez was arrested in Las Vegas. Fatunmbi is currently a fugitive being sought by federal authorities.
Susanna Artsruni, 45, of North Hollywood, and Erasmus Kotey, 76, of Montebello, a licensed physician’s assistant, allegedly worked together to commit health care fraud out of a medical clinic on Vermont Avenue where they both worked. Kotey allegedly prescribed medically unnecessary DME, including power wheelchairs, for Medicare beneficiaries. Many of those power wheelchair prescriptions were then used by Artsruni’s DME company, Midvalley Medical Supply, to support fraudulent claims to Medicare. In only four months, the clinic and Midvalley billed Medicare more than $525,000 for these fraudulent claims. Artsruni has previously been convicted of health care fraud and was on pretrial supervision at the time she allegedly laundered some of the proceeds of this fraud. Artsruni was arrested this morning, while Kotey self-surrendered.

Three other DME cases were also charged, alleging fraudulent Medicare billing for medically unnecessary power wheelchairs that were sometimes never even delivered.

In one case, Akinola Afolabi, 53, of Long Beach, the owner of Emmanuel Medical Supply, allegedly submitted more than $2.6 million in in false and fraudulent billing to Medicare.
In another case, Queen Anieze-Smith, 52, of Encino, and Abdul King-Garba, 47, of Westwood, the owners and operators of ITC Medical Supply, allegedly submitted more than $1.8 million in false and fraudulent billing to Medicare.
In the third case, Clement Etim Aghedo, 53, of Fontana, the owner of Ace Medical Supply Company, allegedly submitted more than $1.8 in false and fraudulent claims to Medicare. Afolabi, Anieze-Smith, and King-Garba were all arrested this morning, while Aghedo self-surrendered.

In the seventh case brought as part of today’s takedown, three defendants affiliated with Gardena-based ProMed Medical Transportation, an ambulance company, were charged with submitting more than $5.9 million in false claims to Medicare between 2008 and 2011. ProMed’s owner, Yaroslav Proshak, 45, of Valley Village; general manager Sharetta Wallace, 35, of Inglewood; and office manager and biller Sergey Mumjian, 40, of West Hollywood, submitted claims for medically unnecessary transportation services and then created fake documentation purporting to support those claims. Proshak, Wallace, and Mumjian were arrested this morning.

The charge of health care fraud carries a statutory maximum penalty of 10 years in federal prison. Money laundering carries a potential penalty of 20 years in prison. Aggravated identity theft carries a mandatory two-year prison term.

Aggressive Medicare Health Care Fraud Task Force Enforcement Continues

The announcement of these arrests provides more evidence of the continuing zealousness of Federal health care fraud investment and enforcement efforts targeting heath care providers for health care fraud or other aggressive activities.

The Medicare Fraud Strike Force operations that lead to todays’ charges are part of the continuing activities Health Care Fraud Prevention & Enforcement Action Team (HEAT), a joint initiative announced in May 2009 between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country.

Since March 2007, Federal officials credit Strike Force operations in nine locations with leading to charges against more than 1,500 defendants who collectively have falsely billed the Medicare program for more than $5 billion.

In addition, the HHS Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.

In announcing the Florida charges, HHS Secretary Sebelius commented on the effect of recent legal changes that have given Federal officials new tools in investigating and fighting health care fraud. She said, “The Affordable Care Act has given us additional tools to preserve Medicare and protect the tens of millions of Americans who rely on it each day,” said Secretary Sebelius. “By expanding our authority to suspend Medicare payments and reimbursements when fraud is suspected, the law allows us to better preserve the system and save taxpayer dollars. Today we’re sending a strong, clear message to anyone seeking to defraud Medicare: You will get caught and you will pay the price. We will protect a sacred trust and an earned guarantee.”

Meanwhile, U.S. Attorney General Holder said, “Today’s announcement marks the latest step forward in our comprehensive efforts to combat fraud and abuse in our health-care systems.”

In the face of these criminal efforts and expanding civil and administrative enforcement actions by Federal officials targeting heaelth care fraud and other aggressive billing and referral efforts, health care providers should exercising continuing care to maintain compliance with applicable rules and carefully document these and other compliance and risk management efforts.

For Help With Compliance, Investigations Or Other Needs

If you need assistance providing compliance or other training, reviewing or responding to these or other health care related risk management, compliance, enforcement or management concerns, the author of this update, attorney Cynthia Marcotte Stamer, may be able to help. Vice President of the North Texas Health Care Compliance Professionals Association, Past Chair of the ABA Health Law Section Managed Care & Insurance Section and the former Board Compliance Chair of the National Kidney Foundation of North Texas, Ms. Stamer has more than 24 years experience advising health industry clients about these and other matters. Ms. Stamer has extensive experience advising and assisting health care providers and other health industry clients to establish and administer medical privacy and other compliance and risk management policies, to health care industry investigation, enforcement and other compliance, public policy, regulatory, staffing, and other operations and risk management concerns. A popular lecturer and widely published author on health industry concerns, Ms. Stamer continuously advises health industry clients about compliance and internal controls, workforce and medical staff performance, quality, governance, reimbursement, and other risk management and operational matters. Ms. Stamer also publishes and speaks extensively on health and managed care industry regulatory, staffing and human resources, compensation and benefits, technology, public policy, reimbursement and other operations and risk management concerns/ She also regularly designs and presents risk management, compliance and other training for health care providers, professional associations and others. Her publications and insights appear in the Health Care Compliance Association, Atlantic Information Service, Bureau of National Affairs, World At Work, The Wall Street Journal, Business Insurance, the Dallas Morning News, Modern Health Care, Managed Healthcare, Health Leaders, and a many other national and local publications. You can get more information about her health industry experience here. If you need assistance with these or other compliance concerns, wish to inquire about arranging for compliance audit or training, or need legal representation on other matters please contact Ms. Stamer at (469) 767-8872 or via e-mail here.

About Solutions Law Press

Solutions Law Press™ provides business risk management, legal compliance, management effectiveness and other resources, training and education on human resources, employee benefits, compensation, data security and privacy, health care, insurance, and other key compliance, risk management, internal controls and other key operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press resources including:

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Posted by Cynthia Marcotte Stamer

Former White House Cybersecurity Coordinator Schmidt, Stamer & Others Share Key HIPAA & Other Privacy & Data Security Insights 5/21 In LA

May 3, 2013

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Former White House Cybersecurity Coordinator Howard Schmidt and Solutions Law Press, Inc. editor attorney Cynthia Marcotte Stamer are two of an impressive lineup of leaders scheduled to share key HIPAA & other privacy and data security compliance and risk management strategies at the Healthcare HITECH Privacy and Security Summit at the Fifth Annual Information Security Summit on May 21 in Los Angeles. The program offers essential insights for hospitals, physicians, and other health care providers, health plans and insurers, employers and other health plan sponsors, fiduciaries and administrators, their business associates and other business partners and others on what their organizations should do to cope with the rapidly changing and expanding privacy and data security obligations of HIPAA and other federal and state laws.

With the rapidly approaching and privacy and data breach penalties and enforcement rising, health care providers, health plans, health care clearinghouses and their business associates must get moving to update business associate contracts, policies and notices and processes to meet changing HIPAA rules while managing ongoing compliance and risks.

Former Cybersecurity Coordinator Schmidt Keynotes

The Healthcare HITECH Privacy and Security Summit will bring together leaders in Privacy and Security within government and private industry for a day of collaboration, networking and presentations by leading Privacy and Security professionals sharing who HIPAA covered entities and business associates need to know to comply with new HITECH rules and OCR investigations.

Stamer Speaks On Latest HIPAA Rules & Developments

Solutions Law Press, Inc. editor attorney Cynthia Marcotte Stamer will help lay the foundation for the workshop by briefing participants on changes made to HIPAA rules by the new Omnibus HIPAA Rulemaking changes that the Office of Civil Rights (OCR) plans to start enforcing in September, 2013.

Armed with the latest insights from serving as the scribe for the ABA JCEB annual agency meeting with the Office of Civil Rights (OCR), Ms. Stamer, a practicing attorney and widely published author and speaker, will discuss required changes and other recommended steps and strategies that covered entities and their business associates should take to maintain HIPAA compliance and manage HIPAA and other related risks in light of the Omnibus HIPAA Rulemaking changes, new OCR guidance for health care providers about disclosures to avert threats to health or safety, recent audit and enforcement activities and other changing risks and responsibilities including:

The latest on OCR’s regulatory guidance, audit and investigation and enforcement rules, actions and strategies and their implications on covered entities and business associates;
Changes to breach notification rules and their implications on covered entities and their business associates;
Practical implications of new rules on who is covered and their responsibilities;
Required and recommended updates to policies, business associate and other agreements, privacy notices and other HIPAA compliance arrangements;
Effective training and other risk management strategies;
Planning for, investigating and mitigating PHI privacy breaches and other compliance concerns under new rules other selected events; and
Other selected strategies for coordinating HIPAA and other privacy and data breach responsibilities and risk management; and
Participant questions.

For a complete agenda, to register, to get details on sponsorship or for other information, see here.

For More Information Or Assistance

A board certified labor and employment attorney widely known for her extensive and creative knowledge and experience with health plan privacy and data security matters, Ms. Stamer serves as the scribe for the ABA JCEB Annual Technical Session meeting with OCR each May and has worked, spoken and published extensively on these and other privacy and data security concerns and controls. Extensively published and a popular speaker on HIPAA and other data security matters, Ms. Stamer works extensively with health care providers, health plans, employers, insurance and financial services, technology and other clients on privacy, data seurity and other privacy and cybercrime concerns. She also serves as the Scribe for the ABA JCEB Agency Techical Sessions Meetings with the Office of Civil Rights which occur each May in Washington, D.C.

Ms. Stamer has extensive experience advising and assisting health care providers and other health industry clients to establish and administer compliance and risk management policies and to respond to DEA and other health care industry investigation, enforcement and other compliance, public policy, regulatory, staffing, and other operations and risk management concerns. A popular lecturer and widely published author on health industry concerns, Ms. Stamer continuously advises health industry clients about compliance and internal controls, workforce and medical staff performance, quality, governance, reimbursement, and other risk management and operational matters. Ms. Stamer also publishes and speaks extensively on health and managed care industry regulatory, staffing and human resources, compensation and benefits, technology, public policy, reimbursement and other operations and risk management concerns including a number of programs and publications on OCR Civil Rights rules and enforcement actions. Her insights on these and other related matters appear in the Health Care Compliance Association, Atlantic Information Service, Bureau of National Affairs, World At Work, The Wall Street Journal, Business Insurance, the Dallas Morning News, Modern Health Care, Managed Healthcare, Health Leaders, and a many other national and local publications. You can get more information about her health industry experience here. If you need assistance with these or other compliance concerns, wish to ask about arranging for compliance audit or training, or need legal representation on other matters please contact Ms. Stamer at (469) 767-8872 or via e-mail here.

About Solutions Law Press

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Posted by Cynthia Marcotte Stamer

CMS Proposes To Further Tighten Medicare Provider Enrollment Rules

May 1, 2013

The proposed rule would also strengthen certain provider enrollment provisions including allowing HHS to deny enrollment of providers affiliated with an entity that has unpaid Medicare debt, deny or revoke billing privileges for individuals with felony convictions, and revoke privileges for providers and suppliers who are abusing their billing privileges.

Since provider enrollment is the gateway to Medicare, CMS routinely evaluates its provider enrollment policies, and has implemented new safeguards as a result of the Affordable Care Act. In the February 2011 final screening rule (72 FR 5862). CMS identified additional changes in enrollment policy that would increase the integrity of the Medicare program. Now, CMS is proposing include the following provisions:

Add the ability to deny the enrollment of providers, suppliers and owners affiliated with an entity that has unpaid Medicare debt. This proposal would prevent individuals and entities from being able to incur substantial debt to Medicare, leave the Medicare program and then re-enroll as a new business to avoid repayment of the outstanding Medicare debt. We are proposing that CMS would only enroll individuals or entities if they repay the debt or enter into a repayment plan, if they are otherwise eligible for the program.
Deny enrollment or revoke the billing privileges of a provider or supplier if a managing employee has been convicted of certain felony offenses. This provision ensures that CMS can block or remove bad actors from the Medicare program to protect beneficiaries and safeguard the Medicare Trust Fund.
Permit CMS to revoke billing privileges of providers and suppliers that have a pattern or practice of billing for services that do not meet Medicare requirements. This proposal is intended to address providers and suppliers that regularly submit inaccurate claims in such a way that it poses a risk to the Medicare program.
Make the effective date of billing privileges consistent across certain provider and supplier types. Most practitioners and practitioner groups may only submit bills as of the filing date of their enrollment application. CMS is proposing to eliminate ambulance suppliers’ current ability to bill for up to a year prior to enrollment in the Medicare program. CMS is also proposing to require that ambulance providers and other provider and supplier types submit any claims within 60 days of revocation of billing privileges, consistent with the requirements for practitioners and practitioner groups.

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Posted by Cynthia Marcotte Stamer

HHS Proposes Increasing Health Care Fraud Reporting Rewards To Up To $9.9 Million

May 1, 2013

The Department of Health and Human Services (HHS) Centers for Medicare & Medicaid Services (CMS) plans to increase rewards paid to Medicare beneficiaries and others whose tips about suspected fraud lead to the successful recovery of funds to as high as $9.9 million. Secretary Kathleen Sebelius announced proposed regulations that would increase the penalties on April 24. In addition, a new funding opportunity released this month supports the expansion of Senior Medicare Patrol (SMP) activities to educate Medicare beneficiaries on how to prevent, detect and report Medicare fraud, waste and abuse.

The Obama Administration has made health care fraud prosecutions and settlement a key element of its health care cost containment plan. Over the last three years, the administration claims its enforcement efforts have recovered over $14.9 billion in fraud, some of which resulted from fraud reporting by individuals.

Summary Of The SMP Incentive Reward Program Proposals

The SMP is a national, volunteer-based program that empowers Medicare beneficiaries to prevent and report Medicare fraud, waste, and abuse. Since 1997, HHS reports more than 7,000 referrals have been made to CMS and the Office of the Inspector General (OIG) for investigation since 1998.

Under the proposed changes, CMS is proposing to increase the potential reward amount for information that leads to a recovery of Medicare funds from 10 percent to 15 percent of the final amount collected. HHS currently offers a reward of 10 percent up to $1,000 under the current incentive reward program. In changes are modeled on an IRS program that has returned $2 billion in fraud since 2003, HHS proposes to increase the portion of the recovery on which CMS will pay a reward up to the first $66 million recovered – this means an individual could receive a reward of $9.9 million if CMS recovers $66 million or more.

HHS began paying rewards to individuals who reported tips that led to the recovery of funds in 1998. According to HHS, to date, HHS has recovered approximately $3.5 million as a result of this program and paid just $16,000 for 18 rewards. The proposed changes are similar to the IRS whistleblower program that has resulted in recoveries of over $2 billion since 2003.

To expand the SMP program’s capacity to reach more Medicare beneficiaries, the Administration for Community Living issued a new funding opportunity. Each of the current 54 SMP projects is eligible for varying funding levels, up to a total of $7.3 million across the program.

HHS says thhese proposed changes will support the administration’s comprehensive approach to program integrity, including the work being done with the Health Care Fraud Prevention and Enforcement Action Team, a joint effort between HHS and the Department of Justice to fight health care fraud. The Obama Administration credits this joint effort with recovering a record $4.2 billion in taxpayer dollars in fiscal year 2012.

The proposed increase in the reward for blowing the whistle on health care fraud is intended to fuel further reports by beneficiaries, workers and others of suspected health care fraud. Health care providers should share any concerns about the proposed increase in the rewards as well as review and tighten their health care fraud prevention and risk management to defend against rising exposures.

For more details, read a fact sheet on the proposed rule available here for more details.

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CMS Proposes Changes To Accute Care Hospital & Skilled Nursing Facility Propective Payment Rules

May 1, 2013

Acute care hospitals and skilled nursing facilities participating in Medicare should review proposed changes to key Medicare reimbursement rules and act quickly to share feedback on any provisions of significant concern.

The Centers For Medicare & Medicaid Services (CMS) is proposing changes to its Prospective Payment Systems and other reimbursement key reimbursement rules for Hospitals and Skilled Nursing Facilities for Fiscal Year (FY) 2014. Advance copies of the proposed rules were made available May 1.

CMS’ proposed rules on Prospective Payment System and Consolidated Billing for Skilled Nursing Facilities for FY 2014 are scheduled for official publication on May 1, 2013.

CMS’ proposed rules on Hospital Inpatient Prospective Payment Systems for Acute Care Hospitals and Long Term Care Hospital Prospective Payment System, etc. are scheduled for official publication on May 10, 2013.

Acute care hospitals and skilled nursing facilities should evaluate the implications of the proposed changes and provide relevant feedback as necessary to CMS.

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OCR Shares New Tools to Educate Consumers and Providers about HIPAA Privacy and Security

April 30, 2013

The U.S. Department of Health and Human Services (HHS) Office for Civil Rights (OCR) has developed an array of new tools to educate consumers and health care providers about the Health Insurance Portability and Accountability Act (HIPAA) Privacy and Security Rules.

Many consumers are unfamiliar with their rights under the HIPAA Privacy Rule. With that in mind, OCR has posted a series of factsheets, also available in eight languages, to inform consumers about their rights under the HIPAA Privacy Rule. These materials are available on OCR’s website here.

The fact sheets compliment a set of seven consumer-facing videos released earlier this year on OCR’s YouTube channel. An additional video, The HIPAA Security Rule, has been designed for providers in small practices and offers an overview of how to establish basic safeguards to protect patient information and comply with the Security Rule’s requirements. The videos are available on the HHS OCR YouTube Channel at here.

OCR has also launched three modules for health care providers on compliance with various aspects of the HIPAA Privacy and Security Rules, available at Medscape.org:

Patient Privacy: A Guide for Providers at here;
HIPAA and You: Building a Culture of Compliance here; and
Examining Compliance with the HIPAA Privacy Rule here.

The Medscape modules offer free Continuing Medical Education (CME) credits for physicians and Continuing Education (CE) credits for health care professionals.

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Posted by Cynthia Marcotte Stamer

HHS Publishes Medicaid Expansion Final Regs, Invites Public Comment

April 1, 2013

The Department of Health & Human Services (HHS) has published its final rule with a request for comments that provides, effective January 1, 2014, the federal government will pay 100 percent of the cost of certain newly eligible adult Medicaid beneficiaries. These payments will be in effect through 2016, phasing down to a permanent 90 percent matching rate by 2020. The Affordable Care Act authorizes states to expand Medicaid to adult Americans under age 65 with income of up to 133 percent of the federal poverty level (approximately $15,000 for a single adult in 2012) and provides unprecedented federal funding for these states.

Under the Affordable Care Act, states that cover the new adult group in Medicaid will have 100 percent of the costs of newly eligible Americans paid for by the federal government in 2014, 2015, and 2016. The federal government’s contribution is then phased-down gradually to 90 percent by 2020, and remains there permanently. For states that had coverage expansions in effect prior to enactment of the Affordable Care Act, the rule also provides information about the availability of an increased FMAP for certain adults who are not newly eligible.

For the full text of the final rule, see http://www.ofr.gov/inspection.aspx.

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Hospitals with 2012 CMS Adverse Complaint Inspection Reports in AHCJ Data Bank Should Prepare Response

March 27, 2013

Acute-care and critical access hospitals that had adverse complaint inspections in 2012 by the Centers for Medicare & Medicaid Services (CMS) may want to prepare to respond to press and public inquiries. The Association of Health Care Journalists (AHCJ) updated its website, healthcareinspectionreports.com, to include details about deficiencies cited during complaint inspections at acute-care and critical access hospitals throughout the United States since January 1, 2011 obtained from CMS.

Although AHCJ cautions in its website that the posted data should not be used to rank hospitals because of omissions and limitations in the data, hospitals with posted reports in the data bank should expect that the reports on their hospital may draw the attention of the media, patients, health plans and others.

AHCJ publishes the reports, which historically have not been easily accessible to the general public. AHCJ cautions that the data is not necessarily complete and should not be used to rank hospitals within a state. AHCJ says data on acute-care and critical hospital access hospitals is incomplete because CMS has just begun gathering this data and releasing it in electronic format. AHCJ also says some reports are missing narrative details. Beyond that, CMS acknowledges that other reports that should appear may not. It does not include results of routine inspections or those of psychiatric hospitals or long-term care hospitals. It also does not include hospital responses to deficiencies cited during inspections. Those can be obtained by filing a request with a hospital or the U.S. Centers for Medicare and Medicaid Services (CMS).AHCJ to make future iterations of this data more complete. At this time, this data should not be used to rank hospitals within a state or between states. It can be used to review issues identified at hospitals during recent inspections.

Subject to these limitations, an individual wishing to review the available data can click on a state on the map will retrieve a list of all hospitals with their violations grouped together.

In anticipation of potential media or public review and reaction to the AHCJ website posting, hospitals with adverse reports posted on the website should consider acting proactively. Hospitals should consult with counsel and their public relations team to plan and prepare a factually accurate response to the shared reports and other suitable mitigation activities.

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Posted by Cynthia Marcotte Stamer

OCR Invites Comments On Plans to Survey HIPAA Covered Entities Audited Under 2012 HIPAA Audit Program

March 25, 2013

The Department of Health & Human Services (HHS) Office of Civil Rights (OCR) wants to ask the 115 health plans, health care clearinghouses, and health care providers (covered entities) that OCR audited in 2012 for compliance with Privacy and Security Rules of the Health Insurance Portability & Accountability Act (HIPAA) under its HIPAA Audit Program to share feedback about their experience. The planned survey announcement follows OCR’s recent released of restated HIPAA Privacy & Security Rules scheduled to take effect in September, 2013 and as OCR continues and expanding its HIPAA Audit Program in 2013. All together, the signs are clear that covered entities should update and strengthen their HIPAA compliance and risk management practices to withstand the tightened rules and enforcement.

OCR initiated the HIPAA Audit Program in 2012 to comply with Section 13411 of the Health Information Technology for Economic and Clinical Health Act’s requirement that it audit covered entity and business associate compliance with the HIPAA privacy, security, and breach notification rules. While it continues its HIPAA Audit Program in 2013, OCR also is evaluating the effectiveness of the HIPAA Audit Program audits in 2012.

To this end, OCR currently is conducting a review of the HIPAA Audit program to determine its efficacy in assessing the HIPAA compliance efforts of covered entities. As part of that review, OCR plans to ask covered entities audited under the HIPAA Audit Program in 2012 to complete an online survey about their experience. In anticipation of its conduct of the proposed surveys, OCR is inviting public comment on the burden to Covered Entities to complete the planned online survey, which OCR estimates will take two hours to complete through May 20, 2013. According to OCR, the survey will gather information on the effect of the audits on the audited entities and the entities’ opinions about the audit process. The online survey will be used to:

Measure the effect of the HIPAA Audit program on covered entities;
Gauge their attitudes towards the audit overall and in regards to major audit program features, such as the document request, communications received, the on-site visit, the audit report findings and recommendations;
Obtain estimates of costs incurred by covered entities, in time and money, spent responding to audit-related requests;
Seek feedback on the effect of the HIPAA Audit program on the day-to-day business operations; and
Assess whether improvements in HIPAA compliance were achieved as a result of the Audit program.

OCR says it will use the information, opinions, and comments collected using the online survey to produce recommendations for improving the HIPAA Audit program.

For instructions to comment or more details, see here.

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Posted by Cynthia Marcotte Stamer

On Health Reform Law’s 3rd Anniversary, Test Your Reform Knowledge

March 21, 2013

March 21, 2013 is the 3rd Anniversary of the Affordable Care Act. With the 2014 rollout of the next round of reforms approaching, the Kaiser Family Foundation invites you to take its latest interactive quiz to test your knowledge about what’s in – and what’s not in – the health reform law and encourage your friends and family to do the same. You can compare your knowledge with others and share your results on Facebook and Twitter. The quiz also includes links to more information about specific provisions of the law.

If you need assistance reviewing or responding to these or other health care related risk management, compliance, enforcement or management concerns, the author of this update, attorney Cynthia Marcotte Stamer, may be able to help. Vice President of the North Texas Health Care Compliance Professionals Association, Past Chair of the ABA Health Law Section Managed Care & Insurance Section and the former Board Compliance Chair of the National Kidney Foundation of North Texas, Ms. Stamer has more than 25 years experience advising health industry clients about these and other matters. Ms. Stamer has extensive experience advising and assisting health care providers and other health industry clients to establish and administer compliance and risk management policies and to respond to DEA and other health care industry investigation, enforcement and other compliance, public policy, regulatory, staffing, and other operations and risk management concerns. A popular lecturer and widely published author on health industry concerns, Ms. Stamer continuously advises health industry clients about compliance and internal controls, workforce and medical staff performance, quality, governance, reimbursement, and other risk management and operational matters. Ms. Stamer also publishes and speaks extensively on health and managed care industry regulatory, staffing and human resources, compensation and benefits, technology, public policy, reimbursement and other operations and risk management concerns including a number of programs and publications on OCR Civil Rights rules and enforcement actions. Her insights on these and other related matters appear in the Health Care Compliance Association, Atlantic Information Service, Bureau of National Affairs, World At Work, The Wall Street Journal, Business Insurance, the Dallas Morning News, Modern Health Care, Managed Healthcare, Health Leaders, and a many other national and local publications. You can get more information about her health industry experience here. If you need assistance with these or other compliance concerns, wish to ask about arranging for compliance audit or training, or need legal representation on other matters please contact Ms. Stamer at (469) 767-8872 or via e-mail here.

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Posted by Cynthia Marcotte Stamer

Maintaining Patient Problem List Under Meaningful Use Core Measure 3 To Support Patient Care

March 16, 2013

ONC is sharing resources to help health care providers see the value of and effectively incorporate and use active patient problem lists as part of the electronic health records systems (EHRs).

Meaningful Use Core Measure 3 calls for physicians and other eligible professionals to design their electronic health record systems to incorporate and maintain an up-to-date problem list of current and active diagnoses of patients.

The requirement reflects ONC’s determination that accurate active problem lists and the fast overview of patient history’s they provide are a “mainstay” of efficient and effective primary care. Effective active patient problem lists in EHRs make this information available to all clinic staff and the on-call team improves the efficiency and effectiveness of the care team.

To support this goal, the requirement that Meaningful Use Core Measure 3 calls for more than 80 percent of all unique patients seen by the eligible professional have at least one entry or an sign that no problems are known for the patient recorded as structured data.

Review the requirements of Core Measure 3 and access other tips and resources for developing and using effective patient problem lists in EHRs here.

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Posted by Cynthia Marcotte Stamer

CMS 2nd Recalculation Medicare Readmission Penalties In 6 Months Cuts Overall Penalties By $10M

March 15, 2013

The Centers for Medicare & Medicaid Services (CMS)for the second time in six months has corrected errors in its calculation of Medicare readmission penalties imposed against more than 1,000 hospitals imposed under the Medicare Hospital Readmission Reduction Program.

Under the Medicare Readmission Reduction Program, CMS is penalizing hospitals whose readmissions within 30 days following their discharge of heart attack, heart failure and pneumonia patients exceed the rate CMS expects based on their patient risks with the loss of up to 1 percent of their regular payments. This maximum penalty ramps is slated to rise to up to 2 percent in October and 3 percent in 2014.

While some hospital’s penalties went up and most went down, the net effect of the recalculation back to the program’s origination last October is a $10 million reduction in the overall penalties resulting in an adjusted total of $280 million for 2013.

An updated chart of the corrected readmission penalties prepared by Kaiser Health News is available here.

Part of new CMS ”quality” provisions, the readmission penalties have prompted widespread concern by many hospital and other health care leaders as penalizing hospitals for readmissions beyond their control. Supports of the penalties say that the penalties can encourage hospitals to provide better quality and reduce costs by emphasizing appropriate discharge planning.

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Posted by Cynthia Marcotte Stamer

Par Pharmaceutical Pays $45 Million For Illegal Off-Label Marketing Of Megace ES

March 11, 2013

New Jersey-based Par Pharmaceutical Companies Inc. (Par) must pay more than will pay $45 million to resolve their criminal and civil liability under its March 5, 2013 guilty plea to illegally promoting off-label uses of the prescription drug Megace ES in violation of Food and Drug Administration (FDA) rules and wrongfully promoting and billing Medicare for its use. The Par guilty plea followed a guilty plea by Par’s Chief Executive Officer Paul V. Campanelli earlier in the day in a New Jersey federal court.

Par also entered into a civil settlement that resolved three lawsuits filed under the whistleblower provisions of the False Claims Act, which let private parties to file suit on behalf of the United States and obtain part of the government’s recovery. The civil lawsuits filed in New Jersey are U.S. ex rel. McKeen and Combs v. Par Pharma ceutical, et al., U.S. ex rel. Thompson v. Par Pharmaceutical, et al., and U.S. ex rel. Elliott & Lundstrom v. Bristol-M yers Squibb, Par Pharma ceutical, et al. As part of today’s resolution, relators McKeen and Combs will receive $4.4 million. The actions provide another example of the growing role of whistleblowers to the success of federal health care fraud detection and enforcement efforts.

Par Criminal & Charges

The Federal Food, Drug and Cosmetic Act (FDCA) requires companies such as Par to specify the intended uses of a product in its new drug application to the FDA. Once approved, a drug may not be distributed in interstate commerce for unapproved or “off-label” uses until the company receives FDA approval for the new intended uses.

Par pleaded guilty to a federal a criminal misdemeanor violation of these rules by misbranding Megace ES in violation of the FDCA. Megace ES, a megestrol acetate drug product was approved by the FDA to treat anorexia, cachexia, or other significant weight loss suffered by patients with AIDS. Federal prosecutors charged that Megace ES distributed nationwide by Par was criminally misbranded because its FDA-approved labeling lacked adequate directions for use in the treatment of non-AIDS-related geriatric wasting, a use that was intended by Par but never approved by the FDA.

Federal Judge Judge Arleo fined Par $18 million and ordered $4.5 million in criminal forfeiture. Par also entered into a civil settlement agreement to settle associated civil liability.

The civil settlement agreement requires Par to pay $22.5 million to the federal government and various states to resolve claims arising from its off-label marketing. The civil settlement resolves allegations that Par, by promoting the sale and use of Megace ES for uses that were not FDA-approved and not covered by Federal health care programs, caused false claims to be submitted to these programs. The United States further alleged that Par deliberately and improperly targeted sales to elderly nursing home residents with weight loss, whether or not such patients suffered from AIDS, and launched a long-term care sales force to market to this population. During this marketing campaign, the government charged Par was aware of adverse side effects associated with the use of megestrol acetate in elderly patients, including an increased risk of deep vein thrombosis, toxic reactions in elderly patients with impaired renal function, and mortality. The United States alleged that Par made unsubstantiated and misleading representations about the superiority of Megace ES over generic megestrol acetate for elderly patients to encourage providers to switch patients from generic megestrol acetate to MegaceES, despite having conducted no well-controlled studies to support a claim of greater efficacy for Megace ES.

As part of plea agreement and corporate integrity agreements reached to resolve its civil and criminal charges, Par committed to the Department of Justice, the Department of Health & Human Services (HHS) and its Office of Inspector General. Par to implement several compliance measures and annually provide the U.S. Attorney’s Office and other agencies with certain reports.

The plea agreement and corporate integrity agreement include provisions that require Par to implement changes to the way it does business. The plea agreement and agreement prohibit Par from providing compensation to sales representatives or their managers based on the volume of sale of Megace ES, and in the corporate integrity agreement, based on the volume of Megace ES and any branded successor megestrol acetate drug.

The agreements also dictate individual accountability of Par’s board and executives. Under the agreement, Par is also required to change its executive compensation program to permit the company to recoup annual bonuses from covered executives if they, or their subordinates, engage in significant misconduct. Company executives may have to forfeit annual bonuses if they or their subordinates engage in significant misconduct, and sales representatives may not be paid incentive compensation for the drug involved in the case, or successor branded versions of that drug. For instance, the plea agreement requires Par give the Justice Department a sworn certification from its chief executive officer that the company has not unlawfully marketed any of its pharmaceutical products.

Par Prosecutions Part Of Larger Aggressive Health Care Fraud Enforcement

The Par civil and criminal charges were brought as part of the ongoing war against health care fraud conducted by federal and state officials. Its announcement is just one of high-profile health care fraud charges, settlements and convictions announced by the Justice Department in the first seven days of March. See, e.g., Health Care Clinic Director Pleads Guilty in Miami for Role in $63 Million Health Care Fraud Scheme; Orange County Doctor Convicted of Six Counts of Health Care Fraud in Multi-Million Dollar Scam involving Durable Medical Equipment; Manhattan U.S. Attorney Sues Park Avenue Medical Associates for Medicare Billing Fraud; Par Pharmaceuticals Pleads Guilty and Agrees to Pay $45 Million to Resolve Civil and Criminal Allegations Related to Off-Label Marketing; Doctor gets 50 Month Sentence for Health Care Fraud & Tax Evasion; and Nelson County, Kentucky Drug Store Owner Charged With Health Care Fraud and Wire Fraud.

Already a lead federal enforcement priority for more than a decade, the Health Care Fraud and Abuse Control Program Annual Report for Fiscal Year 2012 (FY2012 Report) documents that DOJ and HHS health care fraud enforcement activities scored big in 2012, and that qui tam whistleblowers played a big part and shared big in the profits. See Federal Health Care Fraud & Abuse Recovery of $4.2 Billion In FY 2012 Shows Enforcement Risks Growing.

Act To Manage Risks

In response to the growing emphasis and effectiveness of Federal officials in investigating and taking action against health care providers and organizations, health care providers covered by federal false claims, referral, kickback and other health care fraud laws should consider auditing the adequacy of existing practices, tightening training, oversight and controls on billing and other regulated conduct, reaffirming their commitment to compliance to workforce members and constituents and taking other appropriate steps to help prevent, detect and timely redress health care fraud exposures within their organization and to position their organization to respond and defend against potential investigations or charges. Along with a broad health care fraud enforcement and compliance programs, these efforts should include targeted efforts to prevent and manage fraud and other whistleblower claims by employees, business partners and others.

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Posted by Cynthia Marcotte Stamer

Corpus Christi Radiology Group & Clinic $2.3 Million To Settle Health Care Fraud Charges

March 11, 2013

Children’s Physician Services of South Texas (CPSST) and Radiology Associates jointly will pay $2.3 million to settle claims they violated the False Claims Act and the Texas Medicaid Fraud Prevention Act between 2002 and 2007.

The CPSST & Radiology Associates Settlement as part of another busy week of health care fraud enforcement by the Justice Department. See, Health Care Clinic Director Pleads Guilty in Miami for Role in $63 Million Health Care Fraud Scheme; Orange County Doctor Convicted of Six Counts of Health Care Fraud in Multi-Million Dollar Scam involving Durable Medical Equipment; Manhattan U.S. Attorney Sues Park Avenue Medical Associates for Medicare Billing Fraud; Par Pharmaceuticals Pleads Guilty and Agrees to Pay $45 Million to Resolve Civil and Criminal Allegations Related to Off-Label Marketing; Doctor gets 50 Month Sentence for Health Care Fraud & Tax Evasion; and Nelson County, Kentucky Drug Store Owner Charged With Health Care Fraud and Wire Fraud. These and other growing health care fraud charges, settlements and convictions show the zealous enforcement by federal prosecutors is continuing. To guard against getting caught in the health care fraud hopper, health care providers must constantly look at current and past practices against emerging regulations and enforcement and take prompt steps to maintain compliance and minimize risks as they become clear.

CPSST & Radiology Associates Settlement Highlights

According to the March 5, 2013 announcement of United States Attorney Kenneth Magidson, the charges settled involved allegations that CPSST billed and received payment for Radiology Associates’ professional services and, without disclosing the payments, directed Radiology Associates to bill and receive payment for the same professional services. Magidson says that CPSST, a part of the Driscoll Health System, agreed to pay $1.5 million, while Radiology Associates, an independent physician group serving the Driscoll Health System, agreed to pay $800,000 to settle claims they billed and received payment twice for the professional reading and interpretation of genetic ultrasounds.

Medicare billing rules recognize two components for each ultrasound, a technical component and a professional component. The technical component refers to the actual taking of the ultrasound by a technician and the professional component refers to the reading and interpretation of the ultrasound images by a physician, usually a radiologist.

According to federal prosecutors, CPSST made arrangements to have Radiology Associates read and interpret the ultrasounds taken at CPSST. From Jan. 1, 2002, to June 1, 2007, Radiology Associates read and interpreted several thousand ultrasounds for CPSST. The understanding between the two providers was that CPSST would bill and receive payment solely for the technical component and Radiology Associates would bill and receive payment solely for the professional component. In reality, CPSST billed and received payment for both the technical and professional components without informing or disclosing this fact to Radiology Associates. Upon discovery of this fact, Radiology Associates informed CPSST about the double billing for the professional component, but CPSST denied billing for the professional component except for a few accidental and isolated occasions. Instead, CPSST instructed and directed Radiology Associates to continue to bill for the professional component and reaffirmed that CPSST would only bill for the technical component. Despite additional evidence of double billing, Radiology Associates ignored the evidence, accepted CPSST’s misrepresentations without question and continued to bill and receive payment for the professional component.

Government funded health care programs such as Medicare, Medicaid, TRICARE and the Federal Employees Health Benefits program agree to pay enrolled health care providers once for the technical and professional components of each ultrasound performed on a patient covered by theses health care programs. Health care providers enrolled and servicing patients covered by these government-funded health care programs are prohibited from billing and receiving payment twice for the ultrasound’s technical or professional component.

The settlement resolves allegations made against Radiology Associates, Children’s Physician Services of South Texas, Center for Genetic Services, and Raymond C. Lewandowski Jr. M.D. in a qui tam or whistleblower lawsuit filed in 2008 by a former revenue manager and coding compliance officer with Radiology Associates. Under the False Claims Act, private citizens can bring suit on behalf of the government and share in any amounts that are obtained through that legal action. In this case, the share will be between 15 – 25% of the proceeds of the overall settlement.

The investigation was conducted by the United States Department of Health and Human Services – Office of Inspector General and the Texas Attorney General’s Medicaid Fraud Control Unit and Civil Medicaid Fraud Division.

Strike Force & Other Zealous Health Care Fraud Enforcement Continues

The settlement and other fraud enforcement actions provide clear evidence of the risks health care providers and their management face if they are found to have participated in activities that federal or state health care fraud prosecutors view as violating health care fraud rules.

The FY2012 Report says DOJ opened 1,131 new criminal health care fraud investigations involving 2,148 potential defendants. Federal prosecutors had 2,032 health care fraud criminal investigations pending, involving 3,410 potential defendants, and filed criminal charges in 452 cases involving 892 defendants. A total of 826 defendants were convicted of health care fraud-related crimes during the year. Also in FY 2012, DOJ opened 885 new civil health care fraud investigations and had 1,023 civil health care fraud matters pending at the end of the fiscal year. In FY 2012, Federal Bureau of Investigation (FBI) health care fraud investigations resulted in the operational disruption of 329 criminal fraud organizations, and the dismantlement of the criminal hierarchy of more than 83 criminal enterprises engaged in health care fraud.

Meanwhile, HHS’ Office of Inspector General (HHS/OIG) excluded 3,131 individuals and entities in FY 2012. Among these were exclusions based on criminal convictions for crimes related to Medicare and Medicaid (912) or to other health care programs (287); for patient abuse or neglect (212); and as a result of licensure revocations (1,463). In addition, HHS/OIG imposed civil monetary penalties against, among others, providers and suppliers who knowingly submitted false claims to the Federal government. HHS/OIG also issued many audits and evaluations with recommendations that, when implemented, would correct program vulnerabilities and save program funds.

The enforcement actions announced by the Justice Department the first week of March, 2013 make clear federal prosecutors are gunning for even greater health care fraud enforcement success in 2013. See Health Care Clinic Director Pleads Guilty in Miami for Role in $63 Million Health Care Fraud Scheme; Orange County Doctor Convicted of Six Counts of Health Care Fraud in Multi-Million Dollar Scam involving Durable Medical Equipment; Manhattan U.S. Attorney Sues Park Avenue Medical Associates for Medicare Billing Fraud; Par Pharmaceuticals Pleads Guilty and Agrees to Pay $45 Million to Resolve Civil and Criminal Allegations Related to Off-Label Marketing; Doctor gets 50 Month Sentence for Health Care Fraud & Tax Evasion; and Nelson County, Kentucky Drug Store Owner Charged With Health Care Fraud and Wire Fraud.

Act To Manage Risks

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Posted by Cynthia Marcotte Stamer

Houston Ambulance Service Owner Convicted Of Health Care Fraud Faces Up To 70 Years

March 11, 2013

A Houston, Texas Federal jury on March 4, 2013 convicted the owner and operator of a Houston-area ambulance company, Olusola Elliott, of one count of conspiracy to commit health care fraud and six counts of health care fraud for submitting false and fraudulent claims to Medicare for ambulance services.

Elliott owned and operated Double Daniels LLC, a Texas entity that purportedly provided non-emergency ambulance services to Medicare beneficiaries in the Houston area. During the course of the scheme, the Justice Department charged that Elliott submitted and caused the submission of approximately $1,713,716 in fraudulent ambulance service claims to Medicare.

According to evidence presented at trial, Elliott and others conspired from April 2010 through December 2011 to unlawfully enrich themselves by submitting false and fraudulent claims to Medicare for ambulance services that were medically unnecessary and not provided. Evidence showed that Elliott falsified patient records in order to fraudulently bill Medicare for beneficiaries who were not in need of ambulance services. According to court documents, Elliot transferred the proceeds of the fraud to himself and others after Medicare payments were sent to Double Daniels.

Elliot is scheduled for sentencing on May 31, 2013, in Houston. The six health care fraud counts and the conspiracy count each carry a maximum potential penalty of 10 years in prison and a $250,000 fine

Federal prosecutors brought the charges as part of the Medicare Fraud Strike Force, supervised by the U.S. Attorney’s Office for the Southern District of Texas and the Criminal Division’s Fraud Section.

Strike Force & Other Zealous Health Care Fraud Enforcement Continues

The conviction is another reminder to health care providers, leaders and organizations of the advisability of tightening compliance practices and taking other steps to guard against ever-expanding health care fraud exposures. Even as the jury convicted Elliott, federal prosecutors finalizing a health care fraud settlement with another group of Texas providers. On March 5, 2013, the Justice Department announced that Children’s Physician Services of South Texas (CPSST) and Radiology Associates had agreed to pay more than $2 million collectively to settle claims they violated the False Claims Act and the Texas Medicaid Fraud Prevention Act between 2002 and 2007. Under the settlement, CPSST, a part of the Driscoll Health System, agreed to pay $1.5 million, while Radiology Associates, an independent physician group serving the Driscoll Health System, will pay $800,000 to settle claims they billed and received payment twice for the professional reading and interpretation of genetic ultrasounds. See, Corpus Christi Radiologist Group and Children’s Genetic Services Clinic Settle False Claims Act Allegations.

Act To Manage Risks

For More Information Or Assistance

If you need assistance reviewing or responding to these or other health care related risk management, compliance, enforcement or management concerns, the author of this update, attorney Cynthia Marcotte Stamer, may be able to help. Vice President of the North Texas Health Care Compliance Professionals Association, Past Chair of the ABA Health Law Section Managed Care & Insurance Section and the former Board Compliance Chair of the National Kidney Foundation of North Texas, Ms. Stamer has more than 23 years experience advising health industry clients about these and other matters. Ms. Stamer has extensive experience advising and assisting health care providers and other health industry clients to establish and administer compliance and risk management policies and to respond to DEA and other health care industry investigation, enforcement and other compliance, public policy, regulatory, staffing, and other operations and risk management concerns. A popular lecturer and widely published author on health industry concerns, Ms. Stamer continuously advises health industry clients about compliance and internal controls, workforce and medical staff performance, quality, governance, reimbursement, and other risk management and operational matters. Ms. Stamer also publishes and speaks extensively on health and managed care industry regulatory, staffing and human resources, compensation and benefits, technology, public policy, reimbursement and other operations and risk management concerns including a number of programs and publications on OCR Civil Rights rules and enforcement actions. Her insights on these and other related matters appear in the Health Care Compliance Association, Atlantic Information Service, Bureau of National Affairs, World At Work, The Wall Street Journal, Business Insurance, the Dallas Morning News, Modern Health Care, Managed Healthcare, Health Leaders, and a many other national and local publications. You can get more information about her health industry experience here. If you need assistance with these or other compliance concerns, wish to ask about arranging for compliance audit or training, or need legal representation on other matters please contact Ms. Stamer at (469) 767-8872 or via e-mail here.

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Posted by Cynthia Marcotte Stamer

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