Latest OCR Resolution Agreement Hits Public Health Department, Shows Needs To Stay Up-To-Date

March 16, 2014

Health Department HIPAA Violations Cost County $250,000, Requires Sweeping HIPAA Reforms

Hear Update On Resolution Agreement & Other New HIPAA Developments At 3/18 North Texas Healthcare Professionals Association Meeting - 

RSVP here by Noon on March 17, 2014

Skagit County, Washington will pay a $215,000 monetary settlement and work closely with the Department of Health and Human Services (HHS) Office of Civil Rights (OCR) to correct deficiencies in its HIPAA compliance program to settle potential violations of the Health Insurance Portability and Accountability Act of 1996 (HIPAA) Privacy, Security, and Breach Notification Rules by the Skagit County Public Health Department (Health Department) under a Resolution Agreement announced by OCR on March 7, 2014.  The Resolution Agreement makes clear the need for health care providers, health plans, health care clearinghouses and their business associates to update and maintain their policies and practices in compliance with the constantly evolving OCR guidance and resolution agreements, as well as to timely investigate and report breaches.   Interested persons are invited to hear a briefing on a series of new developments including this latest Resolution Agreement at the March 18, 2014 North Texas Healthcare Professionals Association Meeting.

OCR investigated the Health Department after receiving a breach report that unknown parties accessed money receipts with electronic protected health information (ePHI) of seven individuals after the ePHI had been inadvertently moved to a publicly accessible server maintained by the County.

OCR reports its investigation revealed a broader exposure of protected health information involved in the incident, which included the ePHI of 1,581 individuals. Many of the accessible files involved sensitive information, including protected health information about the testing and treatment of infectious diseases.

OCR’s investigation further uncovered general and widespread non-compliance by Skagit County with the HIPAA Privacy, Security, and Breach Notification Rules.

Specifically, the Resolution Agreement between OCR and the Health Department states that OCR found the following conduct occurred (“Covered Conduct”).

  • From approximately September 14, 2011 until September 28, 2011, Skagit County disclosed the ePHI of 1,581 individuals in violation of the Privacy Rule by providing access to ePHI on its public web server;
  • From      November 28, 2011 until present, Skagit County failed to provide notification as required by the Breach Notification Rule to all of the individuals for whom it knew or should have known that the privacy or security of the individual’s ePHI had been compromised as a result of the breach incident;
  • From April 20, 2005 until present, Skagit County failed to implement sufficient policies and procedures to prevent, detect, contain, and correct security violations;
  • From April 20, 2005 until June 1, 2012, Skagit County failed to implement and  maintain in written or electronic form policies and procedures reasonably designed to ensure compliance with the Security Rule; and
  • From April 20, 2005 until present, Skagit County failed to provide security awareness  and training to all workforce members, including its Information Security staff members, as necessary and appropriate for the workforce members to carry out their functions within Skagit County.

To resolve OCR’s allegations of these breaches, Skagit County agrees under the Resolution Agreement to pay HHS $215,000.00 and to ensure that the Health Department implements a series of corrective actions.  Among other things, the Resolution Agreement requires that the Health Department:

  • Provide substitute Breach Notification to individuals not previously notified of the breach of their ePHI in accordance with the Resolution Agreement
  • Revise to the satisfaction of OCR and adopt revised accounting for disclosure, hybrid entity designations, policies on safeguarding PHI, including its sample business associate agreements;
  • Conduct an accurate and thorough assessment of the potential risks and vulnerabilities to the confidentiality, integrity, and availability of electronic protected health information (ePHI) held by the covered health care components of Skagit County as identified in its hybrid entity documentation approved by HHS and implement security measures sufficient to reduce the risks and vulnerabilities identified in the risk analysis to a reasonable and appropriate level.
  • Create and revise, as necessary, written policies and procedures for its covered health care components to comply with the Federal standards that govern the privacy, security, and breach notification of individually identifiable health information;
  • Comply with strict workforce training requirements;
  • Notify and OCR of the occurrence of some reported breaches, its investigation and corrective actions;
  • Provide a summary of the reported events and the status of any corrective and preventative action relating to all such Reportable Events; and
  • Provide OCR with an attestation signed by an officer of Skagit County attesting that he or she has reviewed the Annual Report, has made a reasonable inquiry regarding its content and believes that, upon such inquiry, the information is accurate and truthful.

In addition to bringing its policies and practices up to date with OCR regulations in effect at the time of the breach that resulted in the Resolution Agreement, the Health Department also will have to update its polic9ies and practices to meet changes to OCR’s HIPAA rules that have taken effect since the breach under the revised rules published by OCR in its Modifications to the HIPAA Privacy, Security, Enforcement, and Breach Notification Rules Under the Health Information Technology for Economic and Clinical Health Act and the Genetic Information Nondiscrimination Act; Other Modifications to the HIPAA Rules; Final Rule (Omnibus Final Rule) OCR published January 25, 2013 as well as a series of recently issued OCR rules such as the following:

With OCR stepping up both audits and enforcement and penalties for violations higher than ever since the HITECH Act amended HIPAA, Covered Entities and business associates should act quickly to review and update their policies, practices and training to implement any adjustments needed to maintain compliance and manage other risks under these ever-evolving HIPAA standards.

Covered Entities & Business Associates Should Review & Tighten Practices in Response To Resolution Agreement & Other New Guidance

Other covered entities and their business associates should carefully evaluate and tighten their existing practices in response to the Resolution Agreement and other recent guidance.  In the past, OCR officials have stated it expects that other health care providers, health plans, health care clearinghouses and their business associates will review resolution agreements like this one along with other emerging OCR guidance and update their practices as necessary to address concerns within their own organization that might be similar to those reflected in the applicable resolution agreement.  The Resolution Agreement documents this expectation by specifically incorporating this requirement as part of its terms.

When conducting these efforts, Covered Entities and business associates not only carefully watch for and react promptly to new OCR guidance and enforcement actions, but also document their commitment and ongoing compliance and risk management activities to help support their ability to show their organization maintains the necessary “culture of compliance” commitment needed to mitigate risks in the event of a breach or other HIPAA violation and take well-documented, reasonable steps to encourage their business associates to do the same.    When carrying out these activities, most covered entities and business associates also will want to take steps to monitor potential responsibilities and exposures under other federal and state laws like the privacy and data security requirements that often apply to personal financial information, trade secrets or other sensitive data under applicable federal and state laws and judicial precedent.

Hear Stamer’s Update On Resolution Agreement & Other New HIPAA Developments At 3/18 North Texas Healthcare Professionals Association Meeting

Scribe for the American Bar Association Annual Agency Meeting with OCR for the fourth year, attorney Cynthia Marcotte Stamer will overview these and other HIPAA developments when she presents “Tutoring On OCR’s Latest HIPAA Homework” at the North Texas Healthcare Professionals Association Study Group Luncheon on Tuesday,  March 18, 2014 from 11:30 p.m. to 1:00 p.m. at the offices of the Dallas Ft Worth Hospital Council, 250 Decker Drive, Irving, TX 75062-2706.  A complimentary luncheon will be served to guests to who register in advance.  There is no charge to particulate but space is limited.  RSVP here by Noon on March 17, 2014.

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 24 years experience advising health industry clients about these and other matters. Her experience includes advising hospitals, nursing home, home health, rehabilitation and other health care providers and health industry clients to establish and administer compliance and risk management policies; prevent, conduct and investigate, and respond to peer review and other quality concerns; and to respond to Board of Medicine, Department of Aging & Disability, Drug Enforcement Agency, OCR Privacy and Civil Rights, HHS, DOD 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. Her presentations and programs include a wide range of other workshops, programs and publications on fraud and other compliance, operational and risk management, and other health industry matters.

Her insights on these and other related matters appear in the Health Care Compliance Association, Atlantic Information Service, Bureau of National Affairs, 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 responding to concerns about the matters discussed in this publication or other health care concerns, wish to obtain information about arranging for training or presentations by Ms. Stamer, wish to suggest a topic for a future program or update, or wish to request other information or materials, please contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here.

If you or someone else you know would like to receive future updates about developments on these and other concerns from Ms. Stamer, see  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:

If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information – including your preferred e-mail – by creating or updating your profile here. For important information about this communication click here. 

THE FOLLOWING DISCLAIMER IS INCLUDED TO COMPLY WITH AND IN RESPONSE TO U.S. TREASURY DEPARTMENT CIRCULAR 230 REGULATIONS.  ANY STATEMENTS CONTAINED HEREIN ARE NOT INTENDED OR WRITTEN BY THE WRITER TO BE USED, AND NOTHING CONTAINED HEREIN CAN BE USED BY YOU OR ANY OTHER PERSON, FOR THE PURPOSE OF (1) AVOIDING PENALTIES THAT MAY BE IMPOSED UNDER FEDERAL TAX LAW, OR (2) PROMOTING, MARKETING OR RECOMMENDING TO ANOTHER PARTY ANY TAX-RELATED TRANSACTION OR MATTER ADDRESSED HEREIN.

©2014 Cynthia Marcotte Stamer, P.C.  Non-exclusive license to republish granted to Solutions Law Press.  All other rights reserved.


OCR Assigns More HIPAA Compliance Work To Health Care Providers

March 5, 2014

Think your health care organization or health plan has health care privacy covered?  Think again.

A series of supplemental guidance issued by the Department of Health & Human Services Office of Civil Rights (OCR) in recent weeks is giving health care providers, health plans, health care clearinghouses (Covered Entities) and their business associates even more to do in reviewing and updating their policies, practices and training for handing protected health information (PHI) beyond bringing their policies and practices into line with OCR’s restatement and update to the Modifications to the HIPAA Privacy, Security, Enforcement, and Breach Notification Rules Under the Health Information Technology for Economic and Clinical Health Act and the Genetic Information Nondiscrimination Act; Other Modifications to the HIPAA Rules; Final Rule (Omnibus Final Rule) OCR published January 25, 2013.

Covered Entities generally have been required to comply with most requirements the Omnibus Final Rule’s restated regulations restating OCR’s regulations implementing the Health Insurance Portability & Accountability Act (HIPAA) Privacy, Security and Breach Notification Rules to reflect HIPAA amendments enacted by the Health Information Technology for Economic and Clinical Health (HITECH) Act since the Omnibus Final Rule took effect on March 26, 2013 and to have updated business associate agreements in place since September 23, 2013.  Meanwhile, the Omnibus Final Rule generally has required business associates have updated business associate agreements in place and otherwise to have come into compliance with all of the applicable requirements of the Omnibus Final Rule since September 23, 2013.  Although these deadlines are long past, many Covered Entities and business associates have yet to complete the policy, process and training updates required to comply with the modifications implemented in    the Omnibus Final Rule.

Even if a Covered Entity or business associate completed the updates required to comply with the Omnibus Final Rule, however, recent supplemental guidance published by OCR means that most organizations now have even more work to do on HIPAA compliance. This includes the following supplemental guidance concerning its interpretation and enforcement of HIPAA against Covered Entities and business associates published by OCR since January 1, 2014 alone:

Beyond this 2014 guidance, Covered Entities and their business associates also should look at enforcement actions and data as well as other guidance OCR issued during 2013 after publishing the Omnibus Final Rule such as:

With OCR stepping up both audits and enforcement and penalties for violations higher than ever since the HITECH Act amended HIPAA, Covered Entities and business associates should act quickly to review and update their policies, practices and training to implement any adjustments needed to maintain compliance and manage other risks under these ever-evolving HIPAA standards.

When conducting these efforts, Covered Entities and business associates not only carefully watch for and react promptly to new OCR guidance and enforcement actions, but also document their commitment and ongoing compliance and risk management activities to help support their ability to demonstrate their organization maintains the necessary “culture of compliance” commitment needed to mitigate risks in the event of a breach or other HIPAA violation and take well-documented, reasonable steps to encourage their business associates to do the same.    When carrying out these activities, most covered entities and business associates also will want to take steps to monitor potential responsibilities and exposures under other federal and state laws like the privacy and data security requirements that often apply to personal financial information, trade secrets or other sensitive data under applicable federal and state laws and judicial precedent.

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 24 years experience advising health industry clients about these and other matters. Her experience includes advising hospitals, nursing home, home health, rehabilitation and other health care providers and health industry clients to establish and administer compliance and risk management policies; prevent, conduct and investigate, and respond to peer review and other quality concerns; and to respond to Board of Medicine, Department of Aging & Disability, Drug Enforcement Agency, OCR Privacy and Civil Rights, HHS, DOD 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. Her presentations and programs include a wide range of other workshops, programs and publications on fraud and other compliance, operational and risk management, and other health industry matters.

Her insights on these and other related matters appear in the Health Care Compliance Association, Atlantic Information Service, Bureau of National Affairs, 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 responding to concerns about the matters discussed in this publication or other health care concerns, wish to obtain information about arranging for training or presentations by Ms. Stamer, wish to suggest a topic for a future program or update, or wish to request other information or materials, please contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here.

If you or someone else you know would like to receive future updates about developments on these and other concerns from Ms. Stamer, see  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:

If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information – including your preferred e-mail – by creating or updating your profile here. For important information about this communication click here. 

THE FOLLOWING DISCLAIMER IS INCLUDED TO COMPLY WITH AND IN RESPONSE TO U.S. TREASURY DEPARTMENT CIRCULAR 230 REGULATIONS.  ANY STATEMENTS CONTAINED HEREIN ARE NOT INTENDED OR WRITTEN BY THE WRITER TO BE USED, AND NOTHING CONTAINED HEREIN CAN BE USED BY YOU OR ANY OTHER PERSON, FOR THE PURPOSE OF (1) AVOIDING PENALTIES THAT MAY BE IMPOSED UNDER FEDERAL TAX LAW, OR (2) PROMOTING, MARKETING OR RECOMMENDING TO ANOTHER PARTY ANY TAX-RELATED TRANSACTION OR MATTER ADDRESSED HEREIN.

©2014 Cynthia Marcotte Stamer, P.C.  Non-exclusive license to republish granted to Solutions Law Press.  All other rights reserved.


Federal Health Care Fraud Enforcement Recouped Record $4.3 Billion in FY 2013

March 4, 2014

Health care providers got another reminder last week of their ever-growing exposure to federal health care fraud detection and enforcement efforts.  The joint federal health care fraud enforcement efforts of the Departments of Justice (DOJ) and Health and Human Services (HHS) set new records for recoveries in Fiscal Year (FY) 2013, according to the newly released annual Health Care Fraud and Abuse (HCFAC) Program Report (the “Fraud Report”).

Record Breaking Fraud Recoveries In FY 2013 Highlight Health Care Fraud Enforcement Risk

According to the Fraud Report, the government’s health care fraud prevention and enforcement efforts recovered a record-breaking $4.3 billion in taxpayer dollars in Fiscal Year (FY) 2013, up from $4.2 billion in FY 2012, from individuals and companies who attempted to defraud federal health programs serving seniors or who sought payments from taxpayers to which they were not entitled.  Over the last five years, the Fraud Report says administration’s enforcement efforts have recovered $19.2 billion, up from $9.4 billion over the prior five-year period.  Since the inception of the program in1997, the HCFAC Program has returned more than $25.9 billion to the Medicare Trust Funds and treasury.

These reported recoveries show the commitment and growing success of federal health care fraud detection, investigation and enforcement efforts targeting providers and others in health care.  This is the fifth consecutive year that the program has increased recoveries over the past year, climbing from $2 billion in FY 2008 to over $4 billion every year since FY 2011.

Recoveries Show Providers Big & Growing

The DOJ and HHS credit the success of these efforts largely to the joint Health Care Fraud Prevention and Enforcement Action Team (HEAT) program DOJ and HHS created in 2009 to target health care fraud and reforms passed as part of the Patient Protection and Affordable Care Act (ACA) that aid government investigation and enforcement efforts.

DOJ and HHS have used HEAT and expanded powers in ACA to strengthen and grow their join fraud detection and enforcement efforts.  ACA reforms have strengthened these efforts by giving the agencies new tools.

Among other things, ACA empowered HHS to:

  • Suspend payments to providers and suppliers based on credible allegations of fraud in Medicare and Medicaid;
  • Impose a temporary moratorium on Medicare, Medicaid, and CHIP enrollment on providers and suppliers when necessary to help prevent or fight fraud, waste, and abuse without impeding beneficiaries’ access to care.
  • Strengthen and build on current provider enrollment and screening procedures to more accurately assure that fraudulent providers are not gaming the system and that only qualified  health care providers and suppliers are allowed to enroll in and bill Medicare, Medicaid and CHIP;
  • Terminate providers from Medicaid and CHIP when they have been terminated by Medicare or by another state Medicaid program or CHIP;
  • Require provider compliance programs, now required under the Affordable Care Act, that will ensure providers are aware of and comply with CMS program requirements.

These tools make it easier for HHS to detect and prevent potential questionable activities, as well as aid DOJ and HHS in investigating and prosecuting suspected fraud or other misconduct.  The agencies tout their use of these tools along with their heightened enforcement and coordination for the growing success of their health care fraud detection and prosecution efforts.

“With these extraordinary recoveries, and the record-high rate of return on investment we’ve achieved on our comprehensive health care fraud enforcement efforts, we’re sending a strong message to those who would take advantage of their fellow citizens, target vulnerable populations, and commit fraud on federal health care programs,” said Attorney General Eric Holder.  “Thanks to initiatives like HEAT, our work to combat fraud has never been more cooperative or more effective.  And our unprecedented commitment to holding criminals accountable, and securing remarkable results for American taxpayers, is paying dividends.”

“These impressive recoveries for the American taxpayer are just one aspect of the comprehensive anti-fraud strategy we have implemented since the passage of the Affordable Care Act,” said HHS Secretary Sebelius.  “We’ve cracked down on tens of thousands health care providers suspected of Medicare fraud. New enrollment screening techniques are proving effective in preventing high risk providers from getting into the system, and the new computer analytics system that detects and stops fraudulent billing before money ever goes out the door is accomplishing positive results – all of which are adding to savings for the Medicare Trust Fund.”

Federal officials also give credit to new new authorities given to them by the Affordable Care Act that help HHS and the Centers for Medicare & Medicaid Services (CMS) to detect and target heatlh care fraud.

In FY 2013, CMS announced the first use of its temporary moratoria authority granted by the    Affordable Care Act.  The action stopped enrollment of new home health or ambulance enrollments in three fraud hot spots around the country, allowing CMS and its law enforcement partners to remove bad actors from the program while blocking provider entry or re-entry into these already over-supplied markets.

The Justice Department and HHS have improved their coordination through HEAT and are currently operating Medicare Fraud Strike Force teams in nine areas across the country. The strike force teams use advanced data analysis techniques to identify high-billing levels in health care fraud hot spots so that interagency teams can target emerging or migrating schemes as well as chronic fraud by criminals masquerading as health care providers or suppliers. The Justice Department’s enforcement of the civil False Claims Act and the Federal Food, Drug and Cosmetic Act has produced similar record-breaking results.  These combined efforts coordinated under HEAT have expanded local partnerships and helped educate Medicare beneficiaries about how to protect themselves against fraud.

In Fiscal Year 2013, the strike force secured records in the number of cases filed (137), individuals charged (345), guilty pleas secured (234) and jury trial convictions (46). Beyond these remarkable results, the defendants who were charged and sentenced are facing significant time in prison – an average of 52 months in prison for those sentenced in FY 2013, and an average of 47 months in prison for those sentenced since 2007.

In FY 2013, the Justice Department opened 1,013 new criminal health care fraud investigations involving 1,910 potential defendants, and a total of 718 defendants were convicted of health care fraud-related crimes during the year.  The department also opened 1,083 new civil health care fraud investigations.

The strike force coordinated a takedown in May 2013 that resulted in charges by eight strike force cities against 89 individuals, including doctors, nurses and other licensed medical professionals, for their alleged participation in Medicare fraud schemes involving approximately $223 million in false billings. As a part of the May 2013 takedown, HHS also suspended or took other administrative action against 18 providers using authority under the health care law to suspend payments until an investigation is complete.

In FY 2013, the strike force secured records in the number of cases filed (137), individuals charged (345), guilty pleas secured (234) and jury trial convictions (48). Beyond these remarkable results, the defendants who were charged and sentenced are facing significant time in prison – an average of 52 months in prison for those sentenced in FY 2013, and an average of 47 months in prison for those sentenced since 2007.

In March 2011, CMS began an ambitious project to revalidate all 1.5 million Medicare enrolled providers and suppliers under the Affordable Care Act screening requirements. As of September 2013, more than 535,000 providers were subject to the new screening requirements and over 225,000 lost the ability to bill Medicare due to the Affordable Care Act requirements and other proactive initiatives.  Since the Affordable Care Act, CMS has also revoked 14,663 providers and suppliers’ ability to bill the Medicare program. These providers were removed from the program because they had felony convictions, were not operational at the address CMS had on file, or were not in compliance with CMS rules.

HHS and the Justice Department are leading historic efforts with the private sector to bring innovation to the fight against health care fraud. In addition to real-time data and information exchanges with the private sector, CMS’ Program Integrity Command Center worked with the HHS Office of the Inspector General and the FBI to conduct 93 missions to detect, investigate, and reduce improper payments in FY 2013.

From May 2013 through August 2013, CMS led an outreach and education campaign targeted to specific communities where Medicare fraud is more prevalent.  This multimedia campaign included national television, radio, and print outreach and resulted in an increased awareness of how to detect and report Medicare fraud.

These and other activities make it more important than ever that hospitals, physicians and other health care providers participating in Medicare, Medicaid or other federal health care programs tighten their compliance and risk management practices and processes to manage their exposures.

Providers Urged To 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.

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 24 years experience advising health industry clients about these and other matters. Her experience includes advising hospitals, nursing home, home health, rehabilitation and other health care providers and health industry clients to establish and administer compliance and risk management policies; prevent, conduct and investigate, and respond to peer review and other quality concerns; and to respond to Board of Medicine, Department of Aging & Disability, Drug Enforcement Agency, OCR Privacy and Civil Rights, HHS, DOD 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. Her presentations and programs include a wide range of other workshops, programs and publications on fraud and other compliance, operational and risk management, and other health industry matters.

Her insights on these and other related matters appear in the Health Care Compliance Association, Atlantic Information Service, Bureau of National Affairs, 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 responding to concerns about the matters discussed in this publication or other health care concerns, wish to obtain information about arranging for training or presentations by Ms. Stamer, wish to suggest a topic for a future program or update, or wish to request other information or materials, please contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here.

If you or someone else you know would like to receive future updates about developments on these and other concerns from Ms. Stamer, see  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:

If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information – including your preferred e-mail – by creating or updating your profile here. For important information about this communication click here. 

THE FOLLOWING DISCLAIMER IS INCLUDED TO COMPLY WITH AND IN RESPONSE TO U.S. TREASURY DEPARTMENT CIRCULAR 230 REGULATIONS.  ANY STATEMENTS CONTAINED HEREIN ARE NOT INTENDED OR WRITTEN BY THE WRITER TO BE USED, AND NOTHING CONTAINED HEREIN CAN BE USED BY YOU OR ANY OTHER PERSON, FOR THE PURPOSE OF (1) AVOIDING PENALTIES THAT MAY BE IMPOSED UNDER FEDERAL TAX LAW, OR (2) PROMOTING, MARKETING OR RECOMMENDING TO ANOTHER PARTY ANY TAX-RELATED TRANSACTION OR MATTER ADDRESSED HEREIN.

©2014 Cynthia Marcotte Stamer, P.C.  Non-exclusive license to republish granted to Solutions Law Press.  All other rights reserved.


2/28/14 Deadline To Submit Quality Data for 2013 PQRS-Medicare EHR Incentive Pilot

January 17, 2014

February 28, 2014 is the deadline for any eligible professional participating or wishes to participate in the 2013 PQRS-Medicare EHR Incentive Pilot to submit its quality data.  Eligible providers wishing to participate in the pilot must submit 12 months of CQM data by February 28, 2014 at 11:59 pm ET.  The system is currently open to accept this data so eligible professionals wishing to participate should complete the collection and submission of this data as soon as possible.

Steps to Successfully Participate
To successfully participate in the pilot, you must do the following by February 28, 2014:

  1. Register      for an IACS account (for EHR submission only)
  2. Indicate      intent to report CQMs using pilot in EHR Registration & Attestation      System
  3. Generate      required reporting files
  4. Test data      submission
  5. Submit      quality data

Eligible professionals that cannot submit their CQM data for 12 months electronically through PQRS must return to the EHR Attestation System and deselect the electronic reporting option.  Please note: if a provider does not submit its 2013 quality data or deselect the electronic reporting option in the EHR Attestation System, CMS says the provider will not receive an EHR incentive payment.

For More Information
For further guidance on the 2013 PQRS-Medicare EHR Incentive Pilot, eligible providers should read the Participation Guide and Quick-Reference Guide.

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 24 years experience advising health industry clients about these and other matters. Her experience includes advising hospitals, nursing home, home health, rehabilitation and other health care providers and health industry clients to establish and administer compliance and risk management policies; prevent, conduct and investigate, and respond to peer review and other quality concerns; and to respond to Board of Medicine, Department of Aging & Disability, Drug Enforcement Agency, OCR Privacy and Civil Rights, HHS, DOD 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. Her presentations and programs include How to Ensure That Your Organization Is In Compliance With Regulations Governing Discrimination, as well as a wide range of other workshops, programs and publications on discrimination and cultural diversity, as well as a broad range of compliance, operational and risk management, and other health industry matters.

Her insights on these and other related matters appear in the Health Care Compliance Association, Atlantic Information Service, Bureau of National Affairs, 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 responding to concerns about the matters discussed in this publication or other health care concerns, wish to obtain information about arranging for training or presentations by Ms. Stamer, wish to suggest a topic for a future program or update, or wish to request other information or materials, please contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here.

If you or someone else you know would like to receive future updates about developments on these and other concerns from Ms. Stamer, see  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:

If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information – including your preferred e-mail – by creating or updating your profile here. For important information about this communication click here. 

THE FOLLOWING DISCLAIMER IS INCLUDED TO COMPLY WITH AND IN RESPONSE TO U.S. TREASURY DEPARTMENT CIRCULAR 230 REGULATIONS.  ANY STATEMENTS CONTAINED HEREIN ARE NOT INTENDED OR WRITTEN BY THE WRITER TO BE USED, AND NOTHING CONTAINED HEREIN CAN BE USED BY YOU OR ANY OTHER PERSON, FOR THE PURPOSE OF (1) AVOIDING PENALTIES THAT MAY BE IMPOSED UNDER FEDERAL TAX LAW, OR (2) PROMOTING, MARKETING OR RECOMMENDING TO ANOTHER PARTY ANY TAX-RELATED TRANSACTION OR MATTER ADDRESSED HEREIN.

©2014 Cynthia Marcotte Stamer, P.C.  Non-exclusive license to republish granted to Solutions Law Press.  All other rights reserved.


Final CMS Rule To Expand Medicaid Support For Community & Home-Based Care

January 12, 2014

New Rule Expands Medicaid Coverage For Community Living For Disabled Aging Adults

Caregivers and service providers caring the Medicaid-eligible aging or disabled individuals will want to check out the new final rule on Home and Community-Based Services published by the Department of Health & Human Services (HHS) Centers for Medicare & Medicaid Services (CMS) on Friday, January 10.  See Final Rule: Home and Community-Based Services (“Final Rule”).

HHS views the Final Rule as supporting its Community Living Initiative, which seeks to expand and improve community services in order to allow aging and disabled people to live, work, and participate in the greater community.  The Initiative reflects the growing community support for helping aging and disabled individuals to avoid institutionalization and instead “age in place” by offering broader care options, developing community services that extend options for disabled and aging persons to live independently, and other actions that support the ability of individuals to live safely within community rather than institutional settings.  In announcing the Final Rule, HHS Secretary Kathleen Sebelius. “Today’s announcement will help ensure that all people participating in Medicaid home and community-based services programs have full access to the benefits of community living.”

The Final Rule  expands the conditions under which Medicaid provides coverage for home and community-based services as an alternative to institutional care for older.. adults covered by Medicaid.  Among other things, the Final Rule defines home and community-based settings and implements new flexibility authorized by the Patient Protection and Affordable Care Act (ACA) that gives states additional options as part of their State Plan Option to expand home and community-based services and to target services to specific populations under the provisions of Section 1915(i) on home and community-based services. It also amends the 1915(c) home and community-based services waiver program to add new person-centered planning requirements, allow states to combine multiple target populations in one waiver, and streamlines waiver administration. The final rule also includes a transitional period for states to adjust their programs to meet the new home and community-based services settings requirements.  CMS says technical assistance will also be available for states.

Service providers and community agencies caring for Medicaid-eligible populations will want to check out these new rules for insights on helping the aging and disabled covered by Medicaid and their families to adapt care plans in response to the new options that the Final Rule may afford.

For more information about Home and Community-Based Services available under Medicaid, see here. For information about the HHS Community Living Initiative, see hereFor additional resources, persons interested in these and other aging in place trends and resources may want to contact the author of this update, Cynthia Marcotte Stamer, who regularly speaks and writes on these concerns.

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 24 years experience advising health industry clients about these and other matters. Her experience includes advising hospitals, nursing home, home health, rehabilitation and other health care providers and health industry clients to establish and administer compliance and risk management policies; prevent, conduct and investigate, and respond to peer review and other quality concerns; and to respond to Board of Medicine, Department of Aging & Disability, Drug Enforcement Agency, OCR Privacy and Civil Rights, HHS, DOD 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. Her presentations and programs include How to Ensure That Your Organization Is In Compliance With Regulations Governing Discrimination, as well as a wide range of other workshops, programs and publications on discrimination and cultural diversity, as well as a broad range of compliance, operational and risk management, and other health industry matters.

Her insights on these and other related matters appear in the Health Care Compliance Association, Atlantic Information Service, Bureau of National Affairs, 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 responding to concerns about the matters discussed in this publication or other health care concerns, wish to obtain information about arranging for training or presentations by Ms. Stamer, wish to suggest a topic for a future program or update, or wish to request other information or materials, please contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here.

If you or someone else you know would like to receive future updates about developments on these and other concerns from Ms. Stamer, see  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:

If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information – including your preferred e-mail – by creating or updating your profile here. For important information about this communication click here. 

THE FOLLOWING DISCLAIMER IS INCLUDED TO COMPLY WITH AND IN RESPONSE TO U.S. TREASURY DEPARTMENT CIRCULAR 230 REGULATIONS.  ANY STATEMENTS CONTAINED HEREIN ARE NOT INTENDED OR WRITTEN BY THE WRITER TO BE USED, AND NOTHING CONTAINED HEREIN CAN BE USED BY YOU OR ANY OTHER PERSON, FOR THE PURPOSE OF (1) AVOIDING PENALTIES THAT MAY BE IMPOSED UNDER FEDERAL TAX LAW, OR (2) PROMOTING, MARKETING OR RECOMMENDING TO ANOTHER PARTY ANY TAX-RELATED TRANSACTION OR MATTER ADDRESSED HEREIN.

©2014 Cynthia Marcotte Stamer, P.C.  Non-exclusive license to republish granted to Solutions Law Press.  All other rights reserved.


Abbott Labs, Sisters of Charity Paying More Than $9M In Two Anti-Kickback Settlements

January 2, 2014

The Justice Department’s recovery of more than $9 million in two physician kickback settlements during the last week of December, 2013 sends another strong warning to health care providers and physicians of the risks of structuring physician compensation or other arrangements that run afoul of the federal Anti-kickback Statute, STARK Law or False Claims Act   Health care providers and physicians or others who may be receiving or seeking compensation or other benefits prohibited by these and other federal or state health care fraud laws should seek advice and assistance from experienced qualified legal counsel to structure or review any proposed or existing transactions that could create these risks.

The two settlements both stem from alleged payments of kickbacks to physicians to induce referrals in contravention of federal health care fraud laws.

On December 31, 2013, DOJ announced that Butte, Montana based St. James Healthcare (St. James) and its Denver-based parent company, Sisters of Charity of Leavenworth Health System (Sisters of Charity), have agreed to pay $3.85 million to resolve allegations that they violated the Anti-Kickback Statute, the Stark Law and the False Claims Act by improperly providing financial benefits to physicians and physician groups that made referrals to the hospital.  Colorado Health Care Organization and One of Its Montana Hospitals to Pay $3.85 Million for Allegedly Providing Financial Benefits to Referring Physicians and Physician Groups.

The St. James settlement announcement follows DOJ’s December 27, 2013 announcement that pharmaceutical giant Abbot Laboratories has agreed to pay the United States $5.475 million to resolve allegations that it violated the False Claims Act by paying kickbacks to induce doctors to implant the company’s carotid, biliary and peripheral vascular products. U.S. Department of Justice.  Abbott Laboratories Pays U.S. $5.475 Million to Settle Claims That Company Paid Kickbacks to Physicians.

St. James/Sisters of Charity Settlement

The settlement with St. James and Sisters of Charity resolves DOJ charges that they provided various improper financial incentives to physicians and physician groups involved in a joint venture with St. James to own and run a medical office building on the St. James campus.  These incentives included a payment to the joint venture that increased the share values for the physicians and physician groups in the joint venture and resulted in below fair market value lease rates for the physicians renting space in the medical office building.  Additional incentives provided by St. James and Sisters of Charity included below fair market value lease rates for the land upon which the medical office building was constructed and other below fair market value arrangements related to shared facilities, use and maintenance.  These issues were disclosed by St. James and Sisters of Charity to the government.  To resolve their liability, St. James and the Sisters of Charity will pay $3.85 millions to the U.S. Government.

In announcing the settlement, U.S. Attorney for the District of Montana Michael W. Cotter cautioned other heath care providers to review their own transactions and to take the rules seriously, stating.  “We are encouraged that hospitals like St. James Healthcare are taking these issues seriously by reviewing their operations and making disclosures to the government where necessary.”

Abbott Laboratories Settlement

The Abbott Laboratories settlement requires it to pay the U.S. $5.475 million to resolve allegations that Abbott Laboratories knowingly paid prominent physicians for teaching assignments, speaking engagements and conferences with the expectation that these physicians would arrange for the hospitals with which they were affiliated to purchase Abbott’s carotid, biliary and peripheral vascular products in violation of the Anti-Kickback Act and caused the submission of false claims to Medicare for the procedures using these Abbott products .

The settlement resolves allegations originally brought in a lawsuit filed by Steven Peters and Douglas Gray, former Abbott employees, under the qui tam provision of the False Claims Act.  See United States ex rel. Peters et al. v. Abbott Laboratories, Inc., Civil Action No. 3:09-CV-430 (E.D. Tenn.).   The False Claims Act allows whistleblowers to file suit on behalf of the United States for false claims and share in any recovery   Whistleblower claims are a major tool in the enforcement efforts and success of the DOJ in its campaign to find and prosecute health care fraud.  As part of the Abbott Laboratory’s settlement, the two whistleblowers will receive a total payment of more than $1 million.

Settlements Reflect Heightened Enforcement Risks For Health Care Providers Participating In Kickback Arrangements

Health care providers offering or providing illegal or otherwise aggressive inducements to physicians or others for referrals of health care services covered by Medicare, Medicaid or other federal health care programs should heed the settlements as a warning.  The two settlements illustrate the growing emphasis on the investigation and enforcement of Anti-Kickback, STARK and False Claims Act laws against health care providers by the DOJ and Department of Health & Human Services (HHS). The Anti-Kickback Statute prohibits the provision of remuneration with the intent to induce referrals of government health care program business unless the transaction falls within one of the safe harbors or otherwise qualifies as exempt from the prohibition.  The Stark Law restricts financial relationships that hospitals or other designated health care providers may enter into with physicians who refer patients to them unless the arrangement meets the criteria to qualify as exempt from the prohibition. When either of these two prohibitions is violated, billing for services for care rendered creates additional fraud law exposures.  Federal law prohibits payment by federal health care programs of medical claims that result from arrangements that violate the Anti-Kickback Statute or the Stark Law. The settlements announced this week both stemmed from civil prosecutions by the Justice Department.  However, violations of these health care fraud laws also may result in criminal prosecutions.

DOJ, HHS and other federal and state agencies acting through the Medicare Fraud Strike Force activities conducted as part of the Health Care Fraud Prevention & Enforcement Action Team (HEAT), federal RAC audits and other actions hunting for, and increasingly finding an prosecuting health care providers and others who participate in transactions that violate these and other federal health care fraud laws as part of efforts to control health care costs and expenditures.  HEAT is a joint initiative 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.  The joint Department of Justice-HHS Medicare Fraud Strike Force is a multi-agency team of federal, state and local investigators designed to combat Medicare fraud through the use of Medicare data analysis techniques and an increased focus on community policing.  Since its announcement, the Strike Force has used the combined resources of agents from the FBI, HHS-Office of Inspector General (HHS-OIG), multiple Medicaid Fraud Control Units, and other state and local law enforcement agencies to investigate and prosecute a rising number of organizations and individuals throughout the industry for alleged violations of Federal health care fraud prohibitions.

The effectiveness of these Federal efforts to deter, find and prosecute false claims and other perceived abuses of Federal health care law has been significantly strengthened since Congress passed the Patient Protection & Affordable Care Act (Affordable Care Act).  Among other things, ACA empowered HHS to:

  • Suspend payments to providers and suppliers based on credible allegations of fraud in Medicare and Medicaid;
  • Impose a temporary moratorium on Medicare, Medicaid, and CHIP enrollment on providers and suppliers when necessary to help prevent or fight fraud, waste, and abuse without impeding beneficiaries’ access to care.
  • Strengthen and build on current provider enrollment and screening procedures to more accurately assure that fraudulent providers are not gaming the system and that only qualified  health care providers and suppliers are allowed to enroll in and bill Medicare, Medicaid and CHIP;
  • Terminate providers from Medicaid and CHIP when they have been terminated by Medicare or by another state Medicaid program or CHIP;
  • Require provider compliance programs, now required under the Affordable Care Act, that will ensure providers are aware of and comply with CMS program requirements.

In its Abbott Laboratories settlement announcement, DOJ touted the HEAT efforts with resulting in the recovery of a total of more than $17 billion through False Claims Act cases, with more than $12.2 billion of that amount recovered in cases involving fraud against federal health care programs.

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.

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 24 years experience advising health industry clients about these and other matters. Her experience includes advising hospitals, nursing home, home health, rehabilitation and other health care providers and health industry clients to establish and administer compliance and risk management policies; prevent, conduct and investigate, and respond to peer review and other quality concerns; and to respond to Board of Medicine, Department of Aging & Disability, Drug Enforcement Agency, OCR Privacy and Civil Rights, HHS, DOD 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. Her presentations and programs include How to Ensure That Your Organization Is In Compliance With Regulations Governing Discrimination, as well as a wide range of other workshops, programs and publications on discrimination and cultural diversity, as well as a broad range of compliance, operational and risk management, and other health industry matters.

Her insights on these and other related matters appear in the Health Care Compliance Association, Atlantic Information Service, Bureau of National Affairs, 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 responding to concerns about the matters discussed in this publication or other health care concerns, wish to obtain information about arranging for training or presentations by Ms. Stamer, wish to suggest a topic for a future program or update, or wish to request other information or materials, please contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here.

If you or someone else you know would like to receive future updates about developments on these and other concerns from Ms. Stamer, see  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:

If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information – including your preferred e-mail – by creating or updating your profile here. For important information about this communication click here. 

THE FOLLOWING DISCLAIMER IS INCLUDED TO COMPLY WITH AND IN RESPONSE TO U.S. TREASURY DEPARTMENT CIRCULAR 230 REGULATIONS.  ANY STATEMENTS CONTAINED HEREIN ARE NOT INTENDED OR WRITTEN BY THE WRITER TO BE USED, AND NOTHING CONTAINED HEREIN CAN BE USED BY YOU OR ANY OTHER PERSON, FOR THE PURPOSE OF (1) AVOIDING PENALTIES THAT MAY BE IMPOSED UNDER FEDERAL TAX LAW, OR (2) PROMOTING, MARKETING OR RECOMMENDING TO ANOTHER PARTY ANY TAX-RELATED TRANSACTION OR MATTER ADDRESSED HEREIN.

©2014 Cynthia Marcotte Stamer, P.C.  Non-exclusive license to republish granted to Solutions Law Press.  All other rights reserved.


Hollywood Pavillion & Other Fraud Convictions Show Individuals Risk Prison Time For Health Care Fraud Involvement

July 6, 2013

Convictions Show Growing Fraud Enforcement Risks Reach Broadly To Broad Range Of Actors

Do you love your health care organization enough to go to jail?  With federal and state prosecutors stepping up health care fraud investigation and enforcement, this is a question that individuals leading, working or investing in health care organizations increasingly need to seriously consider.

As federal and state officials continue to ramp up their war on health care fraud, the ever-growing list of criminal convictions of individuals found to have participate in or tolerated prohibited billing, referral or other activities prohibited under federal or state health care fraud laws are intended to both punish the guilty and send a strong message to others throughout the industry: Don’t Do The Crime If You Don’t Want To Serve The Time!

Hollywood Pavilion Convictions

The July 28 federal jury conviction of four individuals for their involvement in nearly $70 million of fraudulent Medicare billings by Hollywood Pavilion (HP), a Miami-area mental health care hospital is the latest case in point.  The successful prosecutions shows again the readiness of the Justice Department to prosecute individuals at all levels of organizations for their participation in health care fraud activities even after obtaining criminal convictions, civil settlements, and program disqualification or other administrative consequences against the health care organizations, their leaders, employees and others that participate illegal schemes that defraud federal health care programs like Medicare, private health insurance plans or both.

In the verdicts announced July 28 stemmed from the Justice Department’s prosecution of the  former Chief Executive Officer, the former in-patient clinical director, former head of  intensive outpatient care and former director of physical therapy for various health care fraud, wire fraud and other charges for their participation in a massive scheme that attempted to defraud the United States of approximately $70 million by taking advantage of Medicare beneficiaries.

Federal officials originally announced charges against the four defendants as part of high-profile sting and takedown by the Medicare Fraud Strike Force of 91 individuals across the nation for their alleged involvement in submitting approximately $430 million in false billings to federal health care programs. See Indictment of 91 Shows Growing Heath Care Fraud Enforcement Risk.

The convictions resulted after the Justice Department tried the defendants with illegally paying bribes to a network of patient recruiters, falsifying documents and other criminal conduct in violation of federal health care fraud, wire fraud and other laws.  Based on evidence presented at trial, the federal jury found:

  • Karen Kallen-Zury, 59, and Daisy Miller, 44, each guilty of one count of conspiracy to commit wire fraud and health care fraud, five substantive counts of wire fraud and two substantive counts of health care fraud;
  • Michele Petrie, 64, guilty of one count of conspiracy to commit wire fraud and health care fraud and three substantive counts of wire fraud;
  • Kallen-Zury, Miller, Petrie and a fourth defendant, Christian Coloma, 49, of one count of conspiracy to pay bribes in connection with Medicare; and
  • Kallen-Zury and Coloma also each guilty of five substantive counts of paying bribes.

The convictions resulted after Federal prosecutors charged the four defendants and one other individual with participating and aiding HP to illegally bill Medicare for nearly $70 million for services that were not properly rendered, for patients that did not qualify for the services being billed and for claims for patients procured through bribes and kickbacks from at least 2003 through at least August 2012.

At trial, Federal prosecutors claimed that the defendants and their co-conspirators caused the submission of false and fraudulent claims to Medicare through HP, a state-licensed psychiatric hospital located in Hollywood that purportedly provided, among other things, inpatient psychiatric care and intensive outpatient psychiatric care.  Prosecutors claimed the defendants paid illegal bribes and kickbacks to patient brokers in order to obtain Medicare beneficiaries as patients at HP who did not qualify for psychiatric treatment, then illegally submitted claims to Medicare for those patients who were procured through bribes and kickbacks.

Among other things, Federal prosecutors charged and introduced evidence that:

  • Karen Kallen-Zury, the CEO and registered agent of HP, attempted to conceal the payment of bribes and kickbacks by creating false documents to make it appear as if legitimate services were being rendered;
  • Miller, the clinical director of HP’s inpatient facility, and Petrie, the head of HP’s intensive outpatient program, facilitated the payment of bribes to patient recruiters and oversaw the fraudulent admissions and treatment of unqualified patients;
  • Coloma, the director of physical therapy for an entity associated with HP, facilitated the payment of bribes and kickbacks, and he supervised the creation of false documents to conceal the bribery scheme.

All four defendants now are awaiting sentencing.

Zealous Investigation & Prosecution Part of National Anti-Health Care Fraud Campaign

These and other convictions provide tangible proof of the growing success of the efforts to zealously investigate and prosecute health fraud by the Justice Department, HHS and other federal officials under their joint the Health Care Fraud Prevention & Enforcement Action Team (HEAT), Medicare Fraud Strike Force and other anti-fraud efforts.   The joint Department of Justice-HHS Medicare Fraud Strike Force that lead to these charges and convictions is a multi-agency team of federal, state and local investigators designed to combat Medicare fraud through the use of Medicare data analysis techniques and an increased focus on community policing.  Since its announcement, the Strike Force has used the combined resources of agents from the FBI, HHS-Office of Inspector General (HHS-OIG), multiple Medicaid Fraud Control Units, and other state and local law enforcement agencies to investigate and prosecute a rising number of organizations and individuals throughout the industry for alleged violations of Federal health care fraud prohibitions.

In recent years, Congress has amended the False Claims Act and enacted other reforms that give the Justice Department and other federal officials working in these anti-fraud efforts new tools that they are using to strengthen the effectiveness of their anti-fraud investigation and prosecution efforts.  See Health Care Fraud Enforcement Packs New Heat.

Empowered by these and other new tools, the Justice Department and other participants in the HEAT and Medicare Fraud Strike Force increasingly are successful in prosecuting and convicting health care providers and others for participating in activities and schemes that violate federal or state health care fraud, referral, anti-kickback or other federal or state laws.  See, e.g., North Texas Medical Supply Company Owner Indicted For Health Care Fraud Now Also Charged With Immigration Fraud; Former Houston Texas Physician Gets 70 Month Prison Sentence For Fraud ConvictionEuless Healthcare Corporation Owner, Associates Face Conspiracy And Health Care Fraud Charges For Alleged Submission Of $700,000+ In Fraudulent Health Care Claims; Former Manager 9th Employee Sentenced For Involvement In Maxim Medicare False Claims Action; Detroit-Area Foot Doctor Pleads Guilty to Medicare Fraud Scheme; Merck To Pay $950 Million To Settle Vioxx® Off-Label Marketing ChargesIndeed, since the jury rendered its July 28 verdict, Justice Department officials already have announced several other prosecutorial successes.  See, e.g.,Los Angeles Medical Supply Company Owner Sentenced to Five Years in Prison for $8.4 Million Medicare Fraud Scheme; Los Angeles-Area Doctor and Patient Recruiter Plead Guilty to Participating in a Power Wheelchair Scheme That Defrauded Medicare of Over $10.1 MillionOwner of Rehabilitation Facility Pleads Guilty to Mail Fraud Charge; Local Oncology Practice Sentenced To Pay Millions for Medicare Fraud

In addition to criminal prosecutions, the HHS Centers for Medicare and Medicaid Services, working with the HHS-OIG, are using a wide range of new and old tools in their campaign against what they perceive as fraudulent providers and to deter other perceived aggressiveness by health care providers and organizations.  See e.g., U.S. to use software to crack down on Medicare, Medicaid, CHIP fraud;   Health Care Fraud Enforcement Packs New Heat; OIG Shares Key Insights On When Owners, Officers & Managers Face OIG Program Exclusion Based On Health Care Entity Misconduct; OIG Launch of Health Care Fraud “Most Wanted” List Sign of Enforcement Risks; CMS Delegated Lead Responsibility For Development of New Affordable Care Act-Required Medicare Self-Referral Disclosure Protocol; HHS announces Rules Implementing Tools Added By Affordable Care Act to Prevent Federal Health Program Fraud.

The effectiveness of these Federal efforts to deter, find and prosecute false claims and other perceived abuses of Federal health care law has been significantly strengthened since Congress passed the Patient Protection & Affordable Care Act (Affordable Care Act).  Among other things, ACA empowered HHS to:

  • Suspend payments to providers and suppliers based on credible allegations of fraud in Medicare and Medicaid;
  • Impose a temporary moratorium on Medicare, Medicaid, and CHIP enrollment on providers and suppliers when necessary to help prevent or fight fraud, waste, and abuse without impeding beneficiaries’ access to care.
  • Strengthen and build on current provider enrollment and screening procedures to more accurately assure that fraudulent providers are not gaming the system and that only qualified  health care providers and suppliers are allowed to enroll in and bill Medicare, Medicaid and CHIP;
  • Terminate providers from Medicaid and CHIP when they have been terminated by Medicare or by another state Medicaid program or CHIP;
  • Require provider compliance programs, now required under the Affordable Care Act, that will ensure providers are aware of and comply with CMS program requirements.

See HHS announces Rules Implementing Tools Added By Affordable Care Act to Prevent Federal Health Program Fraud.

Act To Manage Risks

In response to the growing emphasis and effectiveness of Federal officials in wielding these and other tools 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.

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 24 years experience advising health industry clients about these and other matters. Her experience includes advising hospitals, nursing home, home health, rehabilitation and other health care providers and health industry clients to establish and administer compliance and risk management policies; prevent, conduct and investigate, and respond to peer review and other quality concerns; and to respond to Board of Medicine, Department of Aging & Disability, Drug Enforcement Agency, OCR Privacy and Civil Rights, HHS, DOD 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. Her presentations and programs include a wide range of compliance, risk management and other workshops, programs and publications.

Her insights on these and other related matters appear in the Health Care Compliance Association, Atlantic Information Service, Bureau of National Affairs, 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 responding to concerns about the matters discussed in this publication or other health care concerns, wish to obtain information about arranging for training or presentations by Ms. Stamer, wish to suggest a topic for a future program or update, or wish to request other information or materials, please contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here.

If you or someone else you know would like to receive future updates about developments on these and other concerns from Ms. Stamer, see  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:

If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information – including your preferred e-mail – by creating or updating your profile here. For important information concerning this communication click here. 

THE FOLLOWING DISCLAIMER IS INCLUDED TO COMPLY WITH AND IN RESPONSE TO U.S. TREASURY DEPARTMENT CIRCULAR 230 REGULATIONS.  ANY STATEMENTS CONTAINED HEREIN ARE NOT INTENDED OR WRITTEN BY THE WRITER TO BE USED, AND NOTHING CONTAINED HEREIN CAN BE USED BY YOU OR ANY OTHER PERSON, FOR THE PURPOSE OF (1) AVOIDING PENALTIES THAT MAY BE IMPOSED UNDER FEDERAL TAX LAW, OR (2) PROMOTING, MARKETING OR RECOMMENDING TO ANOTHER PARTY ANY TAX-RELATED TRANSACTION OR MATTER ADDRESSED HEREIN.

©2013 Cynthia Marcotte Stamer, P.C.  Non-exclusive license to republish granted to Solutions Law Press.  All other rights reserved.


Detroit-Area Doctor Charged for Role in Alleged $40 Million Medicare Fraud Scheme

September 23, 2012
A Detroit-area doctor was charged and arrested on September 20, 2012 in the Eastern District of Michigan for his alleged leading role in a $40 million Medicare fraud scheme involving physician home visits and home health services.  The Department of Justice (DOJ), the Department of Health and Human Services (HHS), the Federal Bureau of Investigations (FBI) and the HHS-Office of Inspector General (OIG) jointly announced the charges.  In addition to the arrest, law enforcement agents executed search warrants at three locations and seizure warrants for three bank accounts related to the scheme.

According to a criminal complaint unsealed today in U.S. District Court in Detroit, Dr. Hicham Elhorr, 45, masterminded a $40 million scheme involving the submission of fraudulent claims submitted to Medicare for services that were medically unnecessary and/or never provided through House Calls Physicians (HCP), a physician home visiting service he owned and operated.  Elhorr allegedly submitted claims through HCP for physician home visits for patients who were never seen and for visits conducted by doctors who were not licensed.  The complaint alleges Elhorr submitted claims to Medicare for physician home visits purportedly rendered when he was out of the country, when beneficiaries were hospitalized or when the beneficiary was dead.

Elhorr is also alleged to have referred Medicare beneficiaries for medically unnecessary home health services, as well as accepted kickbacks from home health agencies in exchange for writing these referrals.  According to court documents, since January 2008, HCP has billed Medicare for approximately $9.2 million.  In the same time period, HCP has allegedly referred Medicare beneficiaries for home health services that have resulted in approximately $30.8 million of reimbursements from Medicare.

The case is being prosecuted by Trial Attorney Catherine K. Dick of the Criminal Division’s Fraud Section.  The investigations were conducted jointly by the FBI and HHS-OIG, as part of the Medicare Fraud Strike Force, supervised by the U.S. Attorney’s Office for the Eastern District of Michigan and the Criminal Division’s Fraud Section.

Act To Manage Health Care Fraud Exposures

High profile criminal charges like this one tell only part of the story.  While important and growing, the OIG and other civil audit and enforcement are targeting both health care providers that engage in overly aggressive billing and treatment practices while scaring legitimate providers into avoiding legitimate care and its billing in treatment areas subject to high audit and underbilling for fear of the costs and risks associated with drawing government scruitiny.  Amid this quagmire, legitimate health care providers must carefully document their care and the underlying justification and manage their billing practices to mitigate fraud exposures while also ensuring that their care meets the requisite standards of care to meet professional standards of care.  It’s a tough but critical task for which reimbursement is declining.

As health care fraud enforcement remains a lead Federal priority, health care providers face ever-heightening exposures to HEAT task force scrutiny and prosecution. 

Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,330 defendants who have collectively billed the Medicare program for more than $4 billion.

Along with these criminal investigation and enforcement activities, health care providers also face civil monetary penalty, federal program disqualification and other civil and administrative remedies from billing, reimbursement and other health care fraud, billing audits and other enforcement and audit activities. 

HHS’s Centers for Medicare and Medicaid Services, working in conjunction with HHS-OIG, is stepping up audits, tightening pre-payment review, stepping up program disqualifications, and taking other steps to increase accountability and decrease the presence of fraudulent providers.

In response to these and other investigation and oversight activities, health care providers should strengthen their compliance practices and oversight and take other special care to position themselves and their billings to defend against possible challenge.

For Help With Compliance, Investigations Or Other Needs

If you need help 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. 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:

If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information – including your preferred e-mail – by creating or updating your profile here. For important information concerning this communication see here. 

THE FOLLOWING DISCLAIMER IS INCLUDED TO COMPLY WITH AND IN RESPONSE TO U.S. TREASURY DEPARTMENT CIRCULAR 230 REGULATIONS.  ANY STATEMENTS CONTAINED HEREIN ARE NOT INTENDED OR WRITTEN BY THE WRITER TO BE USED, AND NOTHING CONTAINED HEREIN CAN BE USED BY YOU OR ANY OTHER PERSON, FOR THE PURPOSE OF (1) AVOIDING PENALTIES THAT MAY BE IMPOSED UNDER FEDERAL TAX LAW, OR (2) PROMOTING, MARKETING OR RECOMMENDING TO ANOTHER PARTY ANY TAX-RELATED TRANSACTION OR MATTER ADDRESSED HEREIN.

©2012 Cynthia Marcotte Stamer, P.C.  Non-exclusive license to republish granted to Solutions Law Press.  All other rights reserved


Supreme Court Now Expected To Release Ruling On Health Care Reform Law Thursday

June 25, 2012

The Supreme Court did not release its ruling on challenges to the constitutionality to the Patient Protection And Affordable Care Act (“ACA”) health care reform today.   The Supreme Court now is expected to release its much-anticipated decision on a series of consolidated challenges to the ACA on Thursday.  Thursday is the last day that the Court can issue rulings before the Justices end their term.  They are not scheduled to return until the new 2012 Session begins in October.

Regardless of how the Supreme Court rules, it is clear that health care reform will remain a key point of debate for the upcoming election and in Congress.  With opinions sharply divided about health care reform among members of the public and budget challenges looming, members of Congress from both parties have made clear that they expect to continue to wrangle over the reforms.  Whether or not the Supreme Court rules any part of the law unconstitutional, Republicans and Democrats in Congress largely share support of the mandates and other reforms scheduled for implementation before 2014.  To the extent that ACA survives its pending constitutional challenges, implementation of the law will progress.   To the extent that the Supreme Court ruling would adversely impact these provisions, Republican and Democrat leaders alike have indicated an intention to act quickly to reenact many of these provisions.  In the meanwhile, regardless of the status of the law, market and state law reforms implemented in anticipation of the law inevitably will prevent a reversion to pre-ACA status regardless of the Supreme Court’s rulings.

Project COPE: Coalition On Patient Empowerment & Coalition For Responsible Health Care Quality

Amid the continuing debate and uncertainty, Americans more then ever need to stay involved in the discussion.  Project COPE: Coalition on Patient Empowerment & the Coalition for Responsible Health Care Quality  are coalitions of individuals and organizations that share the belief that every American and American organization has a stake, and something to contribute to our ability to find and implement the best options for ensuring that the U.S. health care system provides quality, affordable health care.

Health care impacts every individual and every organization in America.  Consequently, every American citizen and organization including but not limited to health care providers, employers, insurer, and community organizations should take part.    The government, health care providers, insurers and community organizations can help by providing education and resources to make understanding and dealing with the realities of illness, disability or aging easier for a patient and their family, the affected employers and others. At the end of the day, however, caring for people requires the human touch.  Americans can best improve health care by not waiting for someone else to step up or speak up. 

Project COPE urges and invites each individual and organization speak up to help communicate and act to make health care work for themselves, their families and others when you can and share your input to help preserve and continue to develop real meaningful improvements to our health care system by joining Project COPE: Coalition for Patient Empowerment here by sharing ideas, tools and other solutions and other resources. 

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 24 years experience advising health industry clients about these and other matters. Her experience includes advising hospitals, nursing home, home health, rehabilitation and other health care providers and health industry clients to establish and administer compliance and risk management policies; prevent, conduct and investigate, and respond to peer review and other quality concerns; and to respond to Board of Medicine, Department of Aging & Disability, Drug Enforcement Agency, OCR Privacy and Civil Rights, HHS, DOD 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. Her insights on these and other related matters appear in the Health Care Compliance Association, Atlantic Information Service, Bureau of National Affairs, 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 responding to concerns about the matters discussed in this publication or other health care concerns, wish to obtain information about arranging for training or presentations by Ms. Stamer, wish to suggest a topic for a future program or update, or wish to request other information or materials, please contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here.

If you or someone else you know would like to receive future updates about developments on these and other concerns from Ms. Stamer, see 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:

If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information – including your preferred e-mail – by creating or updating your profile here. For important information concerning this communication click here. 

THE FOLLOWING DISCLAIMER IS INCLUDED TO COMPLY WITH AND IN RESPONSE TO U.S. TREASURY DEPARTMENT CIRCULAR 230 REGULATIONS.  ANY STATEMENTS CONTAINED HEREIN ARE NOT INTENDED OR WRITTEN BY THE WRITER TO BE USED, AND NOTHING CONTAINED HEREIN CAN BE USED BY YOU OR ANY OTHER PERSON, FOR THE PURPOSE OF (1) AVOIDING PENALTIES THAT MAY BE IMPOSED UNDER FEDERAL TAX LAW, OR (2) PROMOTING, MARKETING OR RECOMMENDING TO ANOTHER PARTY ANY TAX-RELATED TRANSACTION OR MATTER ADDRESSED HEREIN.

©2012 Cynthia Marcotte Stamer, P.C. Non-exclusive license to republish granted to Solutions Law Press.  All other rights reserved.


Nonprofit CEO Convicted Of Embezzling Medicaid Funds Intended For Mentally Disabled Care

June 18, 2012

Former Chief Executive Officer of Evelyn Douglin Center for Serving People in Need (EDC) Seibert Phillips faces sentencing to up to 15 years in prison after pleading guilty to  stealing over $600,000 from the charity.  The prosecution and conviction of Phillips by the New York Attorney General demonstrates that Medicaid and other health care fraud investigation and oversight by states is thriving along side the much more widely reported federal health care fraud inititives.

Evelyn Douglin Center is a Medicaid-funded corporation which provides care and services to mentally disabled New York City residents. Among other things, it operates supportive and supervised alternative housing and provides residential habilitation and day habilitation programs for those in need. EDC is reimbursed in part by the New York State Medicaid program. Over a five year period, while Chief Executive of EDC, which he founded in 1999, Phillips secretly diverted over $600,000 in Medicaid checks made payable to EDC into a fraudulent account he opened in the corporation’s name. Phillips thereafter used this account for himself, funding frequent personal travel, cars and even his dog trainers. EDC’s Board of Directors was unaware of the secret account and cooperated in the investigation leading to Phillips’s arrest and conviction.

Phillips’s arrest and conviction arises out of the Attorney General’s prior investigation of EDC which concluded last year with a $5 million settlement. Medicaid rules required EDC to draft and maintain daily reports detailing the specific services it provided to Medicaid recipients. The investigation uncovered that, for a five year period ending in 2009, EDC altogether failed to create many of the records. As part of its settlement agreement, EDC also agreed to reconstitute its Board of Directors and to retain a monitor for five years to ensure its compliance with all applicable Medicaid rules and regulations.

Phillips’s secret account came to light during an Attorney General investigation of EDC. Phillips pled guilty today to Grand Larceny in the Second Degree, a class C Felony which carries a maximum penalty of five to fifteen years in state prison. Under the terms of his plea agreement, Phillips will be sentenced to five years of probation, pay back restitution totaling $445,000 to EDC, and perform 500 hours of community service. He will be sentenced on August 7, 2012.  Get more details here

The Phillips conviction is one of a growing list state and federal prosecutions of health care and other organizations and individuals for violations of federal or state health care fraud or other laws.  Driven both by federal program mandates and daunting state health care entitlement program budget expenditures, state regulators and law enforcement teams across the United States increasingly are active and vital participants in the expanding federal and state war against health care fraud and other health care provider misconduct.  See e.g., Health Care Providers Also Should Guard Against Rising Exposures To State Health Care Fraud & Other Enforcement Risks.  

 Health Care Providers Must 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.

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 24 years experience advising health industry clients about these and other matters. Her experience includes advising hospitals, nursing home, home health, rehabilitation and other health care providers and health industry clients to establish and administer compliance and risk management policies; prevent, conduct and investigate, and respond to peer review and other quality concerns; and to respond to Board of Medicine, Department of Aging & Disability, Drug Enforcement Agency, OCR Privacy and Civil Rights, HHS, DOD 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. Her insights on these and other related matters appear in the Health Care Compliance Association, Atlantic Information Service, Bureau of National Affairs, 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 responding to concerns about the matters discussed in this publication or other health care concerns, wish to obtain information about arranging for training or presentations by Ms. Stamer, wish to suggest a topic for a future program or update, or wish to request other information or materials, please contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here.

If you or someone else you know would like to receive future updates about developments on these and other concerns from Ms. Stamer, see 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:

If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information – including your preferred e-mail – by creating or updating your profile here. For important information concerning this communication click here. 

THE FOLLOWING DISCLAIMER IS INCLUDED TO COMPLY WITH AND IN RESPONSE TO U.S. TREASURY DEPARTMENT CIRCULAR 230 REGULATIONS.  ANY STATEMENTS CONTAINED HEREIN ARE NOT INTENDED OR WRITTEN BY THE WRITER TO BE USED, AND NOTHING CONTAINED HEREIN CAN BE USED BY YOU OR ANY OTHER PERSON, FOR THE PURPOSE OF (1) AVOIDING PENALTIES THAT MAY BE IMPOSED UNDER FEDERAL TAX LAW, OR (2) PROMOTING, MARKETING OR RECOMMENDING TO ANOTHER PARTY ANY TAX-RELATED TRANSACTION OR MATTER ADDRESSED HEREIN.

©2012 Cynthia Marcotte Stamer, P.C. Non-exclusive license to republish granted to Solutions Law Press, Inc.  All other rights reserved.

 


Health Companies Looking To Raise Funds Beware: Old Practices & Forms May Need Update For Securities Law Changes

June 7, 2012

Health care entrepreneurs and other businesses looking to raise investment from private investors without registration in accordance with applicable federal and state securities laws requirements for publicly traded investments need to exercise care that their practices meet all requirements, particularly in light of recent changes to the regulations.

For example, health care, health care IT and other businesses looking to raise capital in a private versus publicly registered context often plan to rely upon the restriction of offers and sales to individuals who qualify as “accredited investors” and other compliance with the accredited investor exemptions to registration requirements under federal and state securities laws. 

When planning to raise capital, however, reliance on past experience and recycling old documents can be risky.  Due to recent changes in the accredited investor regulations, however, businesses intending to rely upon the accredited investor exception may need to update their accredited investor questionnaires and other practices to avoid unintentionally running afoul of modified rules.

On December 21, 2011, the U.S. Securities and Exchange Commission adopted final rules that amended the “accredited investor” definition in the rules under the U.S. Securities Act of 1933, as amended.

The recent regulatory amendments respond to securities laws changes enacted by Section 413(a) of the U.S. Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”).

Among many other changes it enacted, Dodd-Frank requires the definition of “accredited investor” in the Securities Act rules to exclude the value of a person’s primary residence for purposes of determining whether the person qualifies as an “accredited investor” on the basis of having a net worth in excess of US $1,000,000.

Securities Act Rules 215 and 501, as amended, in response to Dodd-Frank now define “accredited investor” to include, among other things, any natural person whose individual net worth, or joint net worth with that person’s spouse, exceeds US$1,000,000, excluding the value of the investor’s primary residence.  SEC regulations provide guidance about the application of this revised requirement. 

Because of the change to the accredited investor requirements of federal securities laws, investor questionnaires may need to be updated to reflect the new definition. Investors relying on the net worth category of the accredited investor definition may also need to get valuations of their residences to determine their fair market value and may also need to disclose the value of any mortgages thereon and the timing of when such mortgages were incurred to confirm accredited investor status.

The changes to the accredited investor exemption rules is just one of many changes in securities registration exemption, reporting, and other requirements.  Protect yourself and your business.  Review your practices and documentation to confirm they are up to date and compliant before you get started and keep a careful eye on compliance and out for more changes coming down the pike on an ongoing basis.

Interested persons can see a copy of the SEC’s final rule  here

 

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 24 years experience advising health industry clients about these and other matters. Her experience includes advising hospitals, nursing home, home health, rehabilitation and other health care providers and health industry clients to establish and administer compliance and risk management policies; prevent, conduct and investigate, and respond to peer review and other quality concerns; and to respond to Board of Medicine, Department of Aging & Disability, Drug Enforcement Agency, OCR Privacy and Civil Rights, HHS, DOD 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. Her insights on these and other related matters appear in the Health Care Compliance Association, Atlantic Information Service, Bureau of National Affairs, 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 responding to concerns about the matters discussed in this publication or other health care concerns, wish to obtain information about arranging for training or presentations by Ms. Stamer, wish to suggest a topic for a future program or update, or wish to request other information or materials, please contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here.

If you or someone else you know would like to receive future updates about developments on these and other concerns from Ms. Stamer, see 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:

If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information – including your preferred e-mail – by creating or updating your profile here. For important information concerning this communication click here. 

THE FOLLOWING DISCLAIMER IS INCLUDED TO COMPLY WITH AND IN RESPONSE TO U.S. TREASURY DEPARTMENT CIRCULAR 230 REGULATIONS.  ANY STATEMENTS CONTAINED HEREIN ARE NOT INTENDED OR WRITTEN BY THE WRITER TO BE USED, AND NOTHING CONTAINED HEREIN CAN BE USED BY YOU OR ANY OTHER PERSON, FOR THE PURPOSE OF (1) AVOIDING PENALTIES THAT MAY BE IMPOSED UNDER FEDERAL TAX LAW, OR (2) PROMOTING, MARKETING OR RECOMMENDING TO ANOTHER PARTY ANY TAX-RELATED TRANSACTION OR MATTER ADDRESSED HEREIN.

©2012 Cynthia Marcotte Stamer, P.C. Non-exclusive license to republish granted to Solutions Law Press.  All other rights reserved.


Wichita Kansas Physician, Practice To Pay $1.5 Million To Settle False Claims Act

May 25, 2012

Federal officials earlier this week charged a Boston-area man with illegally concealing material information from Medicare.  Blessing Sydney Iwuala, 53, was indicted on charges of knowingly and willfully falsifying, concealing, or covering up by trick, scheme or device a material fact from Medicare.

The Indictment alleges that Iwuala was the owner of Above All Home Care and Supply, Inc. (Above All), a supplier of durable medical equipment (DME) in Braintree. In 2008, he submitted an application to Medicare to supply Medicare beneficiaries with DME. In the application, Medicare required that Iwuala identify any individual who had an ownership interest, was a managing employee, or had a partnership interest in Above All. Iwuala only identified himself and his wife in this section. Iwuala certified that the information in the application was true, correct, and complete, and he certified that he would notify Medicare if he became aware that any information in the application was not true, correct, or complete.

It is alleged that at some point, but by no later than Jan. 19, 2009, Iwuala entered into an arrangement with another individual, identified in the indictment as JN, with respect to Above All. JN had a medical supply company as well, but in or around June 2008, Medicare had suspended JN’s privileges to supply DME to Medicare patients. Iwuala and JN allegedly entered into an agreement whereby JN obtained orders for the overwhelming majority of patients who received medical equipment from Above All. It is alleged that JN handled numerous aspects of these orders, including billing Medicare for the orders using Above All’s names, and that Iwuala sent to JN a substantial portion of the Medicare payments to Above All.

On May 6, 2009, a Medicare representative performed a site visit at Above All. By this point, all of the Medicare beneficiaries handled by JN had received their equipment, Above All had begun billing Medicare for claims, and Iwuala had begun to send money to JN and JN’s associates. During the site visit, Iwuala filled out a questionnaire. In one of the items, Iwuala was required to list “all management and owners” of Above All. Iwuala listed himself as the “sole owner” of the company, concealing from Medicare JN’s involvement with the company. If Medicare had been aware of JN’s involvement with Above All, it would not have paid for any Above All orders. Thus, it is alleged that Iwuala knowingly and willfully falsified, concealed, and covered up by trick, scheme, and device from Medicare JN’s true involvement with Above All. In 2009, Above All billed Medicare for more than $1 million of DME, and Medicare paid more than $400,000 for these claims.
.
If convicted, Iwuala faces up to five years in prison, to be followed by three years of supervised release, a $250,000 fine and restitution to Medicare.

United States Attorney Carmen M. Ortiz and Susan J. Waddell, Special Agent in Charge of the Department of Health and Human Services made the announcement today. The case is being prosecuted by Assistant U.S. Attorney David S. Schumacher of Ortiz’s Health Care Fraud Unit.

As part of a broader effort to control Medicare and other federal health care program costs, Federal and state officials are conducting an ever-growing war on health care fraud.  To help this effort, legal reforms and new resources granted under the Patient Protection & Affordable Care Act (Affordable Care Act) and various other legal changes have beefed up the fraud detection and fighting powers of Federal health care fraud investigators and prosecutors.  

To target resources to highly suspect behaviors, CMS has implemented the new Fraud Prevention System, which uses advanced predictive modeling technology to fight fraud.  The system has been screening all Medicare fee-for-service claims before payment is made since June 30, 2011.  Much like the predictive technologies used in the credit card industry, the Fraud Prevention System uses advanced technology to identify “suspicious behavior and billing irregularities.” By streaming claims on a prepayment basis, CMS and its investigative partners are able to more efficiently identify fraudulent claims and respond quickly to emerging trends.

Using these data mining an a host of other new fraud fighting resources created under the Patient Protection & Affordable Care Act (Affordable Care Act) and other recently enacted laws, the HEAT Task Force and other federal health care fraud investigators are enjoying record successes in deploying these tools to achieve successful health care fraud prosecutions.  Government’s health care fraud prevention and enforcement efforts recovered nearly $4.1 billion in taxpayer dollars in Fiscal Year (FY) 2011 according to the FY 2011 Health Care Fraud and Abuse Control Program Report  jointly released by HHS and the Justice Department on February 14, 2012.

In addition to the data mining tools, other new tools helping to boost the success of federal health care fraud investigation and prosecution include:

  • Tough new rules and sentences for criminals
  • Enhanced screening and other enrollment requirements
  • Increased coördination of fraud prevention efforts
  • Health Care Fraud Prevention and Enforcement Action Team (HEAT)
  • New focus on compliance and prevention
  • Expanded overpayment recovery efforts
  • New durable medical equipment (DME) requirements
  • An additional $350 million over 10 years to ramp up anti-fraud efforts
  • Greater oversight of private insurance abuses
  • Senior Medicare Patrols

Wielding these and other tools, Federal and state health care fraud fighters are racking up a growing list of successful prosecutions and settlements against a broad range of health care providers that they say have defrauded the health care system.  See, e.g. Ambulance Worker Gets 46 Month Sentence For Defrauding Medicare By Running Company As Disqualified Person;Temple To Pay $1,088,574.93 To Resolve Exposures From Voluntarily Disclosed Improper Health Care Billings;Former Orthofix Executive Pleads Guilty To Anti-Kickback Law Violations;Houston-Area Nurse Gets 97 Month Sentence For Role In $5.2 Million Medicare Fraud Scheme; Health Care Providers Get Nailed For Using False Statements To Defraud Medicaid, Bankruptcy Court; Texas Medical Supply Medical Supply Company Owner Convicted Of Violating Anti-Kickback Statute Could Get 5 Years; Texas Healthcare Operator’s Guilty Plea To Bankruptcy Fraud Conspiracy Highlights Broad Prosecution Risks

The continuing success of these and other federal health care fraud investigation and enforcement efforts continue to prove the need for health care providers and payers to strengthen their compliance practices and documentation to avoid getting caught in the ever tightening health care fraud dragnet.

Health Care Providers Must 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.

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 24 years experience advising health industry clients about these and other matters. Her experience includes advising hospitals, nursing home, home health, rehabilitation and other health care providers and health industry clients to establish and administer compliance and risk management policies; prevent, conduct and investigate, and respond to peer review and other quality concerns; and to respond to Board of Medicine, Department of Aging & Disability, Drug Enforcement Agency, OCR Privacy and Civil Rights, HHS, DOD 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. Her insights on these and other related matters appear in the Health Care Compliance Association, Atlantic Information Service, Bureau of National Affairs, 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 responding to concerns about the matters discussed in this publication or other health care concerns, wish to obtain information about arranging for training or presentations by Ms. Stamer, wish to suggest a topic for a future program or update, or wish to request other information or materials, please contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here.

If you or someone else you know would like to receive future updates about developments on these and other concerns from Ms. Stamer, see 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:

If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information – including your preferred e-mail – by creating or updating your profile here. For important information concerning this communication click here. 

THE FOLLOWING DISCLAIMER IS INCLUDED TO COMPLY WITH AND IN RESPONSE TO U.S. TREASURY DEPARTMENT CIRCULAR 230 REGULATIONS.  ANY STATEMENTS CONTAINED HEREIN ARE NOT INTENDED OR WRITTEN BY THE WRITER TO BE USED, AND NOTHING CONTAINED HEREIN CAN BE USED BY YOU OR ANY OTHER PERSON, FOR THE PURPOSE OF (1) AVOIDING PENALTIES THAT MAY BE IMPOSED UNDER FEDERAL TAX LAW, OR (2) PROMOTING, MARKETING OR RECOMMENDING TO ANOTHER PARTY ANY TAX-RELATED TRANSACTION OR MATTER ADDRESSED HEREIN.

©2012 Cynthia Marcotte Stamer, P.C. Non-exclusive license to republish granted to Solutions Law Press.  All other rights reserved.


Wichita Kansas Physician, Practice To Pay $1.5 Million To Settle False Claims Act

May 25, 2012

Roger W. Evans, M.D. and his company, EECP Heart Center of Kansas, Inc. (EECP) will pay $1.5 million to settle allegations that Evans and EECP submitted false claims to the Medicare program.   Evans is owner and president of EECP.   The prosecution of and settlement and EEPC settlement of the Wichita, Kansas physician provides another demonstration of the breadth and scope of Federal health care fraud  detection and enforcement.

Evans operated several clinics across Kansas and provided enhanced counterpulsation therapy, an in-patient service for the treatment of coronary artery disease. The United States contends that from July 2005, through June 2009, Evans submitted claims to Medicare for services when Evans was not actually present at the clinics and did not provide direct supervision of the procedures as required by Medicare.

During ECP treatment, a patient is placed on a treatment table and the patient’s lower trunk and lower extremities are wrapped in a series of compressive air cuffs which inflate and deflate in synchronization with the patient’s cardiac cycle. The cuffs compress blood vessels in the calves and thighs to increase blood flow and improve cardiac function. A full course of ECP therapy usually consists of 35 one-hour treatments which may be offered once or twice daily, usually five days per week.

According to the terms of the agreement, Evans and his company will pay $1.5 million to settle False Claims Act charges wuithout admitting any wrongdoing.

As part of a broader effort to control Medicare and other federal health care program costs, Federal and state officials are conducting an ever-growing war on health care fraud.  To help this effort, legal reforms and new resources granted under the Patient Protection & Affordable Care Act (Affordable Care Act) and various other legal changes have beefed up the fraud detection and fighting powers of Federal health care fraud investigators and prosecutors.  

To target resources to highly suspect behaviors, CMS has implemented the new Fraud Prevention System, which uses advanced predictive modeling technology to fight fraud.  The system has been screening all Medicare fee-for-service claims before payment is made since June 30, 2011.  Much like the predictive technologies used in the credit card industry, the Fraud Prevention System uses advanced technology to identify “suspicious behavior and billing irregularities.” By streaming claims on a prepayment basis, CMS and its investigative partners are able to more efficiently identify fraudulent claims and respond quickly to emerging trends.

Using these data mining an a host of other new fraud fighting resources created under the Patient Protection & Affordable Care Act (Affordable Care Act) and other recently enacted laws, the HEAT Task Force and other federal health care fraud investigators are enjoying record successes in deploying these tools to achieve successful health care fraud prosecutions.  Government’s health care fraud prevention and enforcement efforts recovered nearly $4.1 billion in taxpayer dollars in Fiscal Year (FY) 2011 according to the FY 2011 Health Care Fraud and Abuse Control Program Report  jointly released by HHS and the Justice Department on February 14, 2012.

In addition to the data mining tools, other new tools helping to boost the success of federal health care fraud investigation and prosecution include:

  • Tough new rules and sentences for criminals
  • Enhanced screening and other enrollment requirements
  • Increased coördination of fraud prevention efforts
  • Health Care Fraud Prevention and Enforcement Action Team (HEAT)
  • New focus on compliance and prevention
  • Expanded overpayment recovery efforts
  • New durable medical equipment (DME) requirements
  • An additional $350 million over 10 years to ramp up anti-fraud efforts
  • Greater oversight of private insurance abuses
  • Senior Medicare Patrols

Wielding these and other tools, Federal and state health care fraud fighters are racking up a growing list of successful prosecutions and settlements against a broad range of health care providers that they say have defrauded the health care system.  See, e.g. Ambulance Worker Gets 46 Month Sentence For Defrauding Medicare By Running Company As Disqualified Person;Temple To Pay $1,088,574.93 To Resolve Exposures From Voluntarily Disclosed Improper Health Care Billings;Former Orthofix Executive Pleads Guilty To Anti-Kickback Law Violations;Houston-Area Nurse Gets 97 Month Sentence For Role In $5.2 Million Medicare Fraud Scheme; Health Care Providers Get Nailed For Using False Statements To Defraud Medicaid, Bankruptcy Court; Texas Medical Supply Medical Supply Company Owner Convicted Of Violating Anti-Kickback Statute Could Get 5 Years; Texas Healthcare Operator’s Guilty Plea To Bankruptcy Fraud Conspiracy Highlights Broad Prosecution Risks

The continuing success of these and other federal health care fraud investigation and enforcement efforts continue to prove the need for health care providers and payers to strengthen their compliance practices and documentation to avoid getting caught in the ever tightening health care fraud dragnet.

Health Care Providers Must 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.

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 24 years experience advising health industry clients about these and other matters. Her experience includes advising hospitals, nursing home, home health, rehabilitation and other health care providers and health industry clients to establish and administer compliance and risk management policies; prevent, conduct and investigate, and respond to peer review and other quality concerns; and to respond to Board of Medicine, Department of Aging & Disability, Drug Enforcement Agency, OCR Privacy and Civil Rights, HHS, DOD 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. Her insights on these and other related matters appear in the Health Care Compliance Association, Atlantic Information Service, Bureau of National Affairs, 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 responding to concerns about the matters discussed in this publication or other health care concerns, wish to obtain information about arranging for training or presentations by Ms. Stamer, wish to suggest a topic for a future program or update, or wish to request other information or materials, please contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here.

If you or someone else you know would like to receive future updates about developments on these and other concerns from Ms. Stamer, see 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:

If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information – including your preferred e-mail – by creating or updating your profile here. For important information concerning this communication click here. 

THE FOLLOWING DISCLAIMER IS INCLUDED TO COMPLY WITH AND IN RESPONSE TO U.S. TREASURY DEPARTMENT CIRCULAR 230 REGULATIONS.  ANY STATEMENTS CONTAINED HEREIN ARE NOT INTENDED OR WRITTEN BY THE WRITER TO BE USED, AND NOTHING CONTAINED HEREIN CAN BE USED BY YOU OR ANY OTHER PERSON, FOR THE PURPOSE OF (1) AVOIDING PENALTIES THAT MAY BE IMPOSED UNDER FEDERAL TAX LAW, OR (2) PROMOTING, MARKETING OR RECOMMENDING TO ANOTHER PARTY ANY TAX-RELATED TRANSACTION OR MATTER ADDRESSED HEREIN.

©2012 Cynthia Marcotte Stamer, P.C. Non-exclusive license to republish granted to Solutions Law Press.  All other rights reserved.


Ambulance Worker Gets 46 Month Sentence For Defrauding Medicare By Running Company As Disqualified Person

May 18, 2012

On May, 15, 2012,  ambulance worker Ivan Tkach, 30 was sentenced to 46 months in prison followed by three years of supervised release for his role in a scheme to defraud Medicare and the U.S. Government. Tkach pleaded guilty January 10, 2012 to giving false statements in his application for reinstatement to the Medicare program in 2009, and to paying illegal kickbacks to a secretary at Philadelphia College of Osteopathic Medicine, all in relation to a private ambulance company’s involvement in a health care fraud scheme. In addition to the prison term, Tkach must pay restitution in the amount of $1.26 million to Medicare.

Tkach was indicted along with his boss Ilya Sivchuk who was convicted by a jury in November 2011. Tkach was excluded by the U.S. Department of Health and Human Services in 2004 from providing services under the Medicare Program due to his prior criminal convictions, yet continued to operate Advantage Ambulance Company and drive patients in ambulances. Tkach ran Advantage with the knowledge of Ilya Sivchuk, who also made false statements regarding the nature of Tkach’s employment to federal agents. In addition, Tkach gave kickback payments in 2008 to a worker at a Philadelphia kidney dialysis center in exchange for patient referrals to Advantage. Advantage Ambulance has a new owner. Ilya Sivchuk is awaiting sentencing.  See Ambulance Company Worker Sentenced To Prison Term for Fraud Scheme.

Health Care Providers Must 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 proper 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. 

As part of these efforts, health care providers should carefully credential workers and other service providers to avoid running afoul of these prohibitions.  Federal law prohibits health care providers from billing Medicare or other federal programs for services provided by disqualified persons as well as from otherwise filing false claims with Medicare.  The Tkach prosecution and conviction shows that Federal prosecutors are serious about enforcing these prohibitions.

For Legal Representation or More Information

If you need help 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. Her experience includes advising hospitals, nursing home, home health, rehabilitation and other health care providers and health industry clients to set up and administer compliance and risk management policies; prevent, conduct and investigate, and respond to peer review and other quality concerns; and to respond to Board of Medicine, Department of Aging & Disability, Drug Enforcement Agency, OCR Privacy and Civil Rights, HHS, DOD 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. Her insights on these and other related matters appear in the Health Care Compliance Association, Atlantic Information Service, Bureau of National Affairs, 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 responding to concerns about the matters discussed in this publication or other health care concerns, wish to obtain information about arranging for training or presentations by Ms. Stamer, wish to suggest a topic for a future program or update, or wish to request other information or materials, please contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here.

If you or someone else you know would like to receive future updates about developments on these and other concerns from Ms. Stamer, see 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:

If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information – including your preferred e-mail – by creating or updating your profile here. For important information concerning this communication click here. 

THE FOLLOWING DISCLAIMER IS INCLUDED TO COMPLY WITH AND IN RESPONSE TO U.S. TREASURY DEPARTMENT CIRCULAR 230 REGULATIONS.  ANY STATEMENTS CONTAINED HEREIN ARE NOT INTENDED OR WRITTEN BY THE WRITER TO BE USED, AND NOTHING CONTAINED HEREIN CAN BE USED BY YOU OR ANY OTHER PERSON, FOR THE PURPOSE OF (1) AVOIDING PENALTIES THAT MAY BE IMPOSED UNDER FEDERAL TAX LAW, OR (2) PROMOTING, MARKETING OR RECOMMENDING TO ANOTHER PARTY ANY TAX-RELATED TRANSACTION OR MATTER ADDRESSED HEREIN.

©2012 Cynthia Marcotte Stamer, P.C. Non-exclusive license to republish granted to Solutions Law Press.  All other rights reserved.


Former Orthofix Executive Pleads Guilty To Anti-Kickback Law Violations

May 18, 2012

Thomas P. Guerrieri has pleaded guilty in federal court before U.S. District Judge Rya W. Zobel for violating the Anti-Kickback statute. Guerrieri was the former vice-president of sales at a medical device company, Orthofix,  that sold bone growth simulators. His sentencing is scheduled for July 11, 2012 at 2:30 p.m. He faces up to five years in prison, to be followed by three years of supervised release, a $250,000 fine and forfeiture.

Had the case proceeded to trial, the Government would have proven that Guerrieri facilitated signing up a surgeon in New York to a “consulting” agreement with the company to induce the surgeon to prescribe the company’s bone growth stimulators. The surgeon was paid tens of thousands of dollars by the company, but provided little or no consulting services in return. The surgeon was supposed to document his services in time sheets provided to the company, but for years he did not fill out these forms or provide any legitimate consulting services, even though he was paid every month.

In or about Aug. 2007, the surgeon became concerned about increased government scrutiny of consulting arrangements such as his. The surgeon, Guerrieri, and a territory manager for the company decided to create and backdate time sheets going back to 2006 to make it seem as though the surgeon filled out these forms contemporaneously and performed legitimate consulting services. In addition, at the surgeon’s request, Guerrieri and the territory manager obtained a letter from the company’s general counsel indicating that the surgeon was compliant under his consulting agreement, which was not true. Guerrieri did these things to induce the surgeon to continue to order bone growth stimulators from the company.

In addition, Guerrieri and others executed a scheme to pay Michael Cobb, a RI physician’s assistant, for each bone growth stimulator ordered by Cobb. The surgeon had delegated to Cobb the choice of which stimulator his patients received. For years, the device company paid Cobb $50-$100 for each stimulator that his surgeon prescribed. In Sept. 2008, the device company issued a policy expressly prohibiting any payments to anyone who works for a surgeon that prescribes the company’s products. Guerrieri and others were concerned that if they could no longer pay Cobb under the new policy, the company might lose Cobb’s business. Thus, Guerrieri, and others, devised a scheme where Cobb continued to be paid for each order, but the payments were made by a vendor of the device company, making it more difficult to trace the paper trail back to the device company. Cobb is also charged with violating the Anti-Kickback law. His plea hearing is set for April 19, 2012 at 3:15 p.m. before Judge George A. O’Toole, Jr.

Federal regulators credit sophisticated statistical profiling and other new fraud investigation tools with playing a key role in the federal health care fraud investigation that lead to the arrest on health care fraud indictments today (February 28, 2012) of a Dallas-area physician, the office manager of his medical practice, and five home health agency owners. The Dallas-area defendants charged in the indictments unsealed today face health care fraud charges related to their alleged participation in a nearly $375 million health care fraud scheme involving fraudulent claims for home health services.  In a related action, the Center for Medicare & Medicaid Services (CMS) suspended an additional 78 home health agencies (HHA) associated with defendant Roy based on what CMS views as credible allegations of fraud against them.

Federal officials say today’s arrests and CMS suspensions resulted from Medicare Fraud Strike Force operations conducted by the Health Care Fraud Prevention & Enforcement Action Team (HEAT).   HEAT is 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 anti-fraud laws around the country.  Justice Department officials say the conduct charged in this indictment represents the single largest fraud amount orchestrated by one doctor in the history of the HEAT initiative.

Legal reforms and new resources granted under the Patient Protection & Affordable Care Act (Affordable Care Act) and various other legal changes have beefed up the fraud detection and fighting powers of Federal health care fraud investigators and prosecutors.  Examples of these new tools include:

  • Tough new rules and sentences for criminals
  • Enhanced screening and other enrollment requirements
  • Increased coordination of fraud prevention efforts
  • Health Care Fraud Prevention and Enforcement Action Team (HEAT)
  • New focus on compliance and prevention
  • Expanded overpayment recovery efforts
  • New durable medical equipment (DME) requirements
  • An additional $350 million over 10 years to ramp up anti-fraud efforts
  • Greater oversight of private insurance abuses
  • Senior Medicare Patrols

Using these expanded tools, the HEAT Task Force and other federal health care fraud investigators are enjoying record successes in deploying these tools to achieve successful health care fraud prosecutions.  Government’s health care fraud prevention and enforcement efforts recovered nearly $4.1 billion in taxpayer dollars in Fiscal Year (FY) 2011 according to the FY 2011 Health Care Fraud and Abuse Control Program Report  jointly released by HHS and the Justice Department on February 14, 2012.

The continuing success of these and other federal health care fraud investigation and enforcement efforts continue to demonstrate the need for health care providers and payers to strengthen their compliance practices and documentation to avoid getting caught in the ever tightening health care fraud dragnet.

Health Care Providers Must 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.

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 24 years experience advising health industry clients about these and other matters. Her experience includes advising hospitals, nursing home, home health, rehabilitation and other health care providers and health industry clients to establish and administer compliance and risk management policies; prevent, conduct and investigate, and respond to peer review and other quality concerns; and to respond to Board of Medicine, Department of Aging & Disability, Drug Enforcement Agency, OCR Privacy and Civil Rights, HHS, DOD 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. Her insights on these and other related matters appear in the Health Care Compliance Association, Atlantic Information Service, Bureau of National Affairs, 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 responding to concerns about the matters discussed in this publication or other health care concerns, wish to obtain information about arranging for training or presentations by Ms. Stamer, wish to suggest a topic for a future program or update, or wish to request other information or materials, please contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here.

If you or someone else you know would like to receive future updates about developments on these and other concerns from Ms. Stamer, see 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:

If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information – including your preferred e-mail – by creating or updating your profile here. For important information concerning this communication click here. 

THE FOLLOWING DISCLAIMER IS INCLUDED TO COMPLY WITH AND IN RESPONSE TO U.S. TREASURY DEPARTMENT CIRCULAR 230 REGULATIONS.  ANY STATEMENTS CONTAINED HEREIN ARE NOT INTENDED OR WRITTEN BY THE WRITER TO BE USED, AND NOTHING CONTAINED HEREIN CAN BE USED BY YOU OR ANY OTHER PERSON, FOR THE PURPOSE OF (1) AVOIDING PENALTIES THAT MAY BE IMPOSED UNDER FEDERAL TAX LAW, OR (2) PROMOTING, MARKETING OR RECOMMENDING TO ANOTHER PARTY ANY TAX-RELATED TRANSACTION OR MATTER ADDRESSED HEREIN.

©2012 Cynthia Marcotte Stamer, P.C. Non-exclusive license to republish granted to Solutions Law Press.  All other rights reserved.


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