Putting Money Over Medicine: Health Care Fraud, Kickbacks and Patient Recruiters

Fraud is a crime that hits people in their pocketbooks and can also feel like a betrayal of trust. Health care fraud fits both these characterizations but also includes an added danger — it is often a direct threat to our physical and mental well-being, endangering people’s health and even jeopardizing lives. Money should not cloud decisions about what treatments are appropriate and medically necessary. This is why the problem of kickbacks to patient recruiters is of great concern. The danger posed to people’s health and well-being, in addition to the economic threat, also motivates our California health care fraud law firm in our work to stop all forms of improper payments for medical referrals.

FBI Announces Sentencing of Patient Recruiter in Kickback Scheme
This month, the Federal Bureau of Investigation (“FBI”) issued a press release announcing a criminal sentence for Richard Shannon, age 41, a patient recruiter who took part in a Medicare fraud scheme. At trial, evidence showed that Shannon solicited Medicare beneficiaries in the Detroit area to sign blank forms for physical therapy treatments that were not medically necessary and were never actually provided. The beneficiaries were typically destitute individuals that Shannon found in housing projects and Detroit-area soup kitchens. In exchange for their patient information and signatures, Shannon provided cash and the promise of narcotics prescribed by physicians who were also involved in the conspiracy. Shannon’s co-conspirators, including the owners of All American and Patient Choice, two home health care companies based in Oak Park, then paid doctors to issue referrals and related documents necessary to bill Medicare for the same fake services.

To finish the scheme, physical therapists and therapy assistants used the pre-signed forms that Shannon and other recruiters provided to create fake medical records, making it look like therapy services had actually been provided where no actual service was rendered. The scheme involved nearly $14.5 million in claims. In October 2012, a federal jury convicted Shannon and two others, Dr. Pramrod Raval and Chiradeep Gupta, of conspiracy to commit health care fraud (see the press release on the verdict). On May 13, 2014, U.S. District Judge Denise Page Hood sentenced Shannon to a prison term of 86 months, three years of supervised release, and ordered him and his co-defendants to pay more than $1.6 million in restitution.

The Problem of Kickbacks and the Power of Whistleblowers
A key piece of health care fraud legislation, the Anti-Kickback Statute, forbids anyone from paying or providing other forms of compensation in return for a referral for services pursuant to a federal health care program (i.e. paying a doctor to refer a Medicare patient for physical therapy treatments). Kickback schemes often involve other fraudulent acts, such as the actions of a patient recruiter who knowingly pays Medicare beneficiaries to provide information needed to further the kickback scheme. Both criminal and civil claims can be used to help the government recoup fraudulent payments and punish the offenders.

If you are aware of a company or individual involved in offering kickbacks for referrals or soliciting beneficiaries of government health programs in order to use their information to build false claims, you have the power to help bring fraud to an end. Our California whistleblowers’ law firm will work with you to protect your interests while fighting health care fraud. In addition to being protected from retaliation, you may also be entitled to a substantial monetary reward for your efforts. Call to learn more – you do not need to fight alone.

The Many Guises of Medicare Fraud: Part III

(Photo by Kathea Pinto)