Articles Posted in Healthcare Fraud

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.

In the wake of the week in which the federal government arrested 90 healthcare professionals accused of fraudulent acts against Medicare, it would be useful to review the key pieces of legislation, the so-called Anti-Kickback Statute and the Stark Law, that often undergird the government’s actions in sweeps such as these. In addition to reviewing these laws, San Francisco qui tam lawsuit attorney Gregory J. Brod would like to revisit the federal False Claims Act, which is the legal basis of support for action by a whistleblower on behalf of the government in cases where fraud has occurred.

A kickback, of course, is basically negotiated bribery in which some form of a commission, usually money, is paid to the person who takes the bribe in return for services he or she performs for the person who offers the bribe. In such a quid pro quo arrangement, the person taking the bribe and the person offering it are in collusion.

Kickbacks are a pervasive factor in government corruption involving public officials, but they are also a troubling incentive for fraud to be committed against the government by private individuals and entities, for example, in schemes that are cooked up to steal money from Medicare. The problem of medical companies paying doctors to refer patients to them for treatment, tests or other healthcare, whether the patient needs the care or not, has been a growing phenomenon in the United States. In 1972, Congress passed major legislation to discourage this sort of behavior in the form of the Anti-Kickback Statute, 42 U.S.C. Secs. 1320a-7b(b), which forbids anyone from offering, paying, soliciting or accepting anything of value in order to encourage or reward referrals or generate federal healthcare program business.

In 2011, Congress went an important step further in its quest to combat Medicare fraud when it passed the Stark Law. The Stark Law, 42 U.S.C. Sec. 1395nn, was named after its sponsor, former U.S. Rep. Pete Stark of California, and it is a limitation on certain types of physician referrals. Specifically, the Stark Law forbids a doctor from referring Medicare patients for designated healthcare to an entity in which that doctor or an immediate family member has a financial stake; the law also prohibits such designated healthcare entities from submitting claims to Medicare for services that have occurred as result of the prohibited referral.

While the Anti-Kickback Statute and the Stark Law are relatively new pieces of legislation, the main weapon in the federal government’s arsenal for combatting fraud, the False Claims Act, is much older, having been on the books since 1863. The False Claims Act, 31 U.S.C. Secs. 3729-3733, also known as the Lincoln Law, assigns liability to individuals and companies that knowingly defraud government programs.

The important “qui tam” provision of the False Claims Act permits individuals who are not affiliated with the government but have knowledge of fraud committed against programs such as Medicare to file a lawsuit on behalf of the government, with the person initiating the action known as a whistleblower. Such qui tam lawsuits account for a large majority of all legal action under the False Claims Act, and the whistleblowers who initiate them stand to receive 15 percent to 25 percent of any recovered damages.
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It seems as though a week or month does not go by these days without some story cropping up about another case of healthcare fraud, but this week turned out to be an especially active period for legal action taken against those accused of fleecing the federal government. Though the government’s haul of 90 charged with $260 million in Medicare fraud was an encouraging example of law enforcement, the scope of the actions leads San Francisco qui tam lawsuit attorney Gregory J. Brod to wonder how many other cases Washington may have missed.

According to USA Today, the 90 people who were arrested for alleged schemes to defraud Medicare, which law enforcement officials announced on Tuesday, included 16 doctors, with the 90 suspects accused of scams across the country that took in an estimated $260 million.

While the arrests were spread around the country, Miami was the epicenter of the law enforcement actions, with 50 people there charged with fraudulent billings – known as fake or phantom billing – for home healthcare, mental health services and pharmacy services valued at an estimated $65.5 million. As an example from Miami, two suspects were charged with soliciting kickbacks from a pharmacy owner for sharing Medicare beneficiary information, which was used to bill for drugs that were never provided; that scheme alone raked in $23 million.

Beyond the schemes in Miami, elsewhere in Florida, specifically in Tampa, five people were charged with conducting a money-laundering operation that allegedly submitted bills for services purportedly provided in Tampa employing the names of beneficiaries who were located 300 miles away in Miami.

Five of the doctors accused of committing fraud practiced medicine in the Houston area, and those physicians were charged with a conspiracy to bill for “medically unnecessary” home health services, a growing problem that these pages has focused on in a previous blog post.

In California, one Los Angeles doctor alone allegedly accounted for $24 million in Medicare losses in connection with fraudulent billings and referrals for medical equipment. The equipment included 1,000 wheelchairs that were not medically necessary and “frequently not provided.”

But perhaps the biggest single scheme in dollar terms was centered on the charges levied against a Brooklyn doctor who allegedly submitted $85 million in bills to Medicare during a three-year period for surgeries that never took place.

All in all, multiple arrests were made in Miami, Tampa, Brooklyn and Detroit.

Healthcare fraud is a serious crime punishable under the law. The specific federal law that is applicable to schemes to defraud Medicare and other healthcare programs is found in 18 United States Code Section 1347 (a), which authorizes prison terms and fines for the following:

Whoever knowingly and willfully executes, or attempts to execute, a scheme of artifice –
(1) to defraud any healthcare benefit program; or (2) to obtain, by means of false or fraudulent pretenses, representations, or promises, any of the money or property owned by, or under the custody or control of, any healthcare benefit program.
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Trust is an essential element of good service. This is particularly true in the legal and medical professions, two arenas in which people trust professionals to provide guidance based on the client’s needs rather than placing profits above service. Although they may initially seem like very different practices, our work as a Northern California attorney malpractice law firm and as counsel for whistleblowers in California health care fraud cases share a commitment to similar principles of professional duty, trustworthiness, and customer service.

California Federal Court Looking At Claims of Fraudulent Billings and Medically Unnecessary Services

A case currently pending in a California-based federal court involves alleged violations of professional duties in both the medical and legal arenas. As described in a Law360 report, the underlying legal action involves allegations that Los Angeles Metropolitan Medical Center (“LAMMC”), a hospital owned by Pacific Health Corporation (“PHC”), violated the False Claims Act by filing fraudulent Medicare and Medi-Cal claims. Specifically, Julie Macias, a registered nurse who worked at LAMMC from 2003 till 2012, filed the case under the Act’s qui tam provisions claiming that the hospital knowingly filed bills for millions of dollars in unnecessary services. The fraudulent claims involved “5150 holds” which, when used properly, involuntarily hold mentally ill patients believed to be a danger to themselves or others for a 72 hour observation period. Macias says she reported her concerns internally but was first ignored and then subjected to retaliation for raising the issue.

Whether recovering from surgery or facing a terminal illness, many of our nation’s seniors share a similar desire – to stay in their own homes rather than a hospital or nursing home. While many home health and hospice care companies are committed to making this wish a reality, others put profit above honest service to their patients. Health care fraud permeates all facets of our medical system and home-based senior care is, as a recent case suggests, no exception. Our California health care fraud firm is committed to helping fight all forms of Medicare fraud, including fraud involving this growing facet of our health care system.

Large Home Health Company Pays $150 Million to Settle Fraudulent Billing Claims

Along with its affiliates, Amedisys Inc. comprises one of the largest providers of home health care services, with five locations in Northern and Central California according to the company website. Late last month, the Department of Justice (“DOJ”) issued a press release announcing that the company agreed to pay $150 million in order to resolve allegations filed pursuant to the False Claims Act. The claims suggested that, from 2008 through 2010, Amedisys improperly billed Medicare for services that were medically unnecessary, were provided to patients that were not eligible for home care, or otherwise involved misrepresentations of patients’ medical conditions in order to increase Medicare payments. According to the DOJ, the fraudulent claims arose from pressure on employees to provide care based on the company’s financial interests rather than the actual needs of their patient. Additionally, the lawsuits alleged that the company maintained inappropriate financial relationships with certain referring doctors.

If one were asked what type of medical professional would be in receipt of millions of dollars from Medicare, cardiologists, oncologists or some other high-value speciality of medicine would probably rank highly as likely answers. Few would suspect that a physical therapist could rake in multimillion-dollar revenue from the government, but San Francisco healthcare fraud attorney Gregory J. Brod would not be surprised that such a calling has turned out to be a leading field for drawing Medicare dollars – and some justifiable scrutiny.

In fact, according to a recent report in The New York Times, physical therapists working in offices managed to draw $1.8 billion from Medicare in 2012 alone, making the field the 10th most lucrative field for Medicare payments among 74 medical specialties. On average, physical therapists collected $49,000 in Medicare payments in 2012, and those therapists who drew significantly higher amounts have attracted the attention of experts who have followed the issue and suspect potential fraud.

It turns out that Brooklyn has been an epicenter for big hauls from Medicare for physical therapists. Indeed, of the 10 physical therapists nationwide who were paid the most by Medicare in 2012, half offered their services out of Brooklyn addresses. And one therapist working in a modest-looking office in the Coney Island neighborhood of the borough, Wael Bakry, collected a whopping $4.1 million from Medicare in 2012. In that year, Bakry’s practice treated about 1,950 Medicare patients, and he was paid by Medicare for 94 separate procedures for each one of those patients. Extrapolating those numbers on an annualized basis, there would have been about 183,000 treatments for the year, 500 per day and 21 per hour, a pace all the more remarkable because one person purportedly performed all of the treatment from Bakry’s office, according to Medicare billing records.

The eyebrow-raising numbers notwithstanding, Bakry has contended that Medicare never questioned his billing practices nor denied payments to his office. Bakry also contended that his practice had about two dozen physical therapists and assistants working from four offices in 2012 – the care all those employees provided went under his Medicare billing number because he owned the practice. And Bakry does not appear on a database of providers who are excluded from the Medicare program.

Federal authorities have suspected that physical therapy is a tempting field for fraudulent billing because unscrupulous practitioners can more easily bill Medicare for unnecessary treatments or procedures they never perform – known as fake or phantom billing – than in other medical fields such as cardiology or oncology. And, with the nation’s population increasingly tilted toward older, more healthcare-relient people, the demand for physical therapy as well as opportunities for schemes to defraud Medicare is bound to multiply.

In Brooklyn, the federal government’s law enforcement efforts have already yielded major results, including a physical therapist who pleaded guilty in 2011 to submitting almost $12 million in false or fraudulent claims to Medicare during a period of five years.
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Identity theft has been a hot issue for the past few years. Increasing numbers of Americans are keeping a close eye on their bank and credit card statements, even taking the next step of reviewing their full credit report. However, unless it has impacted them or someone close to them, fewer are aware of the danger of medical identity theft. Our Northern California health care fraud attorney hopes to help increase awareness and to ultimately turn the growing tide of identity crimes. Often medical identity theft is a component of a Medicare fraud scheme or other type of health care fraud aimed at stealing from the already-limited coffers of government and private health care programs. In addition to hurting the health care system generally, medical identity theft can have serious, even life-threatening consequences for the targeted individuals.

An Overview of Medical Identity Theft and Its Dangers

A recent report from Kaiser Health calls medical identity theft the “most virulent” strain in the plague of identity theft. Medical identity theft involves the fraudulent acquisition of an individual’s personal identification information (i.e. social security number, health insurance identification number) in order to illegally obtain medicine, medical devices, insurance reimbursement money, or other medical services/financing. Kaiser cites a survey finding 43% of identity thefts nationwide in 2013 were related to medical matters, making medical-identity theft more common than that involving banking/finance, government/military, or education matters.

In an era when personalized, time-intensive medical care is seemingly a thing of the past, house calls from doctors have become a quaint, increasingly rare form of interaction between physicians and their patients. That is why San Francisco healthcare fraud attorney Gregory J. Brod finds reports that some medical personnel may have managed to rack up potentially $2 billion in bogus billing to Medicare as symptomatic of a larger, serious assault upon our healthcare system, the U.S. Treasury and the taxpayers.

According to the Washington Times, a report from the office of the inspector general of the Department of Health and Human Services says that, despite new regulations in force as a result of the Affordable Care Act, the practice of doctors billing Medicare for home visits they never made has become rampant, with the financial hit amounting up to $2 billion.

The ACA mandates that doctors conduct a face-to-face visit first in order to ensure that patients who request home care are actually too ill to travel to a healthcare facility. The law also requires that doctors provide the specific proof that they are, in fact, paying a house call.

“The Medicare program doesn’t really have a system in place to ensure that providers are meeting the face-to-face requirement,” said Danielle Fletcher, a program analyst in the inspector general’s Office of Evaluation and Inspections. “Medicare has found a lot of fraud in home health. The expectation is that the face-to-face visit helps prevent that fraud by ensuring the physicians see and assess the patient, and document that visit and assessment.”

Investigators from the inspector general’s office say that about one-third of all house calls were lacking proof that the visit ever happened, usually consisting of a description of the visit or a signature from a supervisor. At the very least, 10 percent of all face-to-face visits lacked any documentation whatsoever, totaling $605 million in charges against Medicare, according to the inspector general. If the one-third of cases with sketchy accounting were also made up, then the financial hit that the government has absorbed would balloon upward toward the $2 billion figure.

The office of the inspector general suspected that fraudulent behavior associated with house calls was particularly rife in Miami and Chicago, and agency’s investigators placed a moratorium last year on new home healthcare providers in those cities. The Center for Medicare and Medicaid Services says that in Miami alone the number of doctors claiming to provide house calls was 2,000 percent higher than in other parts of Florida. That’s especially curious since urban areas tend to have more accessible healthcare networks and facilities than more rural areas.

Whatever the distance from patient to healthcare provider, though, it seems that physicians have been hard-pressed to explain why patients have not been able to make the trek to a doctor’s office themselves, according to the inspector general’s office. The most common reasons that have been offered were that the patient was “weak” or that it would be a “taxing effort to leave home.”

Such explanations, however, offer scant information on whether payment for these visits was warranted, according to Fletcher.

“The phrase ‘taxing effort to leave home’ is included in Medicare’s definition of ‘homebound,’ so it doesn’t really tell us anything specific about the patient’s condition,” Fletcher said.
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Narcotic medications can be a critical part of a pain-management regime. While these drugs can be miraculous for those in medical need, misuse has reached epidemic levels. Sadly, sometimes this abuse is fueled by the very medical practitioners who should be on the front lines of prevention. These wayward practitioners are often motivated by financial gain, with some taking part in pharmaceutical fraud schemes that endanger public health twice — First by improperly distributing powerful drugs and Second by defrauding the health care system generally and diverting money from legitimate health needs. Our Oakland health care fraud lawyer is committed to fighting these schemes with the help of the brave whistleblowers who call our office. Ending these fraudulent prescription schemes returns money to already-strapped government programs, provides an award to the whistleblowers for reporting and prosecuting the scheme, and helps restore public faith in our medical system by bringing the errant practitioners to justice.

“And a Side Order of Percocet…”

Last week, according to the Contra Costa Times, a federal grand jury returned an indictment, formally charging an East Bay doctor with health care fraud and counts related to improper distribution of controlled substances. On Thursday, officers arrested 62 year-old Dr. Toni Daniels of Berkeley who appeared in court the following morning. In the indictment, prosecutors (including U.S. Attorney Melinda Haag) allege that from October 2010 through April 2011, Daniels met clients at an odd assortment of Oakland-area locations including Burger King, Starbucks, and Dick’s Donuts. At these meetings, she allegedly sold prescriptions for controlled substances, providing strong medications such as oxycodone and hydrocodone in return for cash. Allegedly Daniels also knew that many of these customers relied on Medicare, Medi-Cal, or private insurance to cover the cost of the prescribed substances.