Articles Posted in Healthcare Fraud

As followers of this blog have seen, there are far too many cases of healthcare fraud in the United States. They have also been reminded of the fact that the fraud negatively impacts the Treasury and U.S. taxpayers as well as potentially compromises the health of Medicare enrollees and results in higher premiums. There are myriad schemes for defrauding the government, but a relatively new one has come to light concerning the digitizing of medical records that San Francisco qui tam lawsuit attorney Gregory J. Brod is particularly interested in.

One would think that the improved technology of maintaining records that digitizing permits would be a welcome potential cost-saving measure. The federal government has, no doubt, thought along those lines as it has invested more than $22 billion to encourage hospitals and medical professionals to employ electronic health records.

However, according to The New York Times, the potential for inflating costs and overbilling through the use of EHRs is something that Washington did not bank on, and that the lack of safeguards could encourage fraudsters to exploit the system. These systemic flaws were detailed in a report issued this month by the Office of the Inspector General for the Health and Human Services Department – the second such report in the last two months.

The inspector general’s criticism focused on the copy-and-paste function, a practice that, when used by writers and editors, is very useful, indeed, but when used by medical professionals could result in overcharging. Doctors would be inclined to cut and paste information from one document to another to save time, but when the practice, also known as cloning, is used for EHRs, it can also be used to detail more extensive, and thus more expensive, exams or treatment than actually occurred.

No one really knows how much the federal government has lost due to cloning on EHRs, but earlier government estimates suggested the total could run in the hundreds of millions of dollars. And as the new technology of digitizing record becomes more widespread, the potential for a much bigger hit to the Treasury could be very great, indeed.

As our healthcare fraud law firm has pointed out before, one of the most popular forms of Medicare fraud is so-called “upcoding,” or charging for services that were not rendered. Interestingly enough, The New York Times reported in September 2012 that there was a major uptick in Medicare spending on the most expensive procedures at hospitals that had received funding to switch over to the new digitized record-keeping systems.
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Some cases of healthcare fraud involve complex financial schemes. Other cases are more closely tied to medical treatment, involving poor patient care. Ultimately, both forms hurt patients but the latter is a more direct threat to patient health. Doctors who, in the course of fraudulent schemes, prescribe inappropriate medications or encourage prescription drug abuse are putting lives at risk. Such cases can result in major criminal trials and can also give rise to individual civil claims on behalf of those harmed by physician misconduct. Our San Francisco health care lawyer is proud to fight fraud through both whistleblower fraud cases and individual injury claims.

Sentence Handed Down for Doctor Involved In Fraud and Illegal Distribution Claims

This week, as detailed in a Department of Justice press release, a Florida doctor was sentenced to a 30 year prison term for health care fraud, illegal distribution of controlled substances, and failure to appear. From 2001 to 2005 Dr. Robert L. Ignasiak, Jr., now age 58, operated the Freeport Medical Clinic and became known for freely prescribing controlled medications such as oxycodone, hydrocodone, morphine, alprazolam, and diazepam. He prescribed these highly addictive substances in dosages and combinations that led patients to abuse the drugs and become addicted. This dangerous prescribing continued even after Ignasiak became aware that patients were abusing the drugs. Patient misconduct included: Not taking the drugs as prescribed; Stealing drugs; “Doctor shopping” to obtain drugs; Mixing medications and alcohol; Suffering from overdoses; and Exhibiting signs that medication use was out of control. Despite the many indications misuse, Ignasiak continued writing the prescriptions. These practices lead to several patient deaths.

The federal government announced Tuesday that it had reached a settlement with a Florida-based physician over allegations that he and his clinics violated the False Claims Act by knowingly billing Medicare for procedures and offices visits conducted by unqualified personnel. And San Francisco qui tam lawsuit attorney Gregory J. Brod would point out that the case is a good example of many claims the federal government pursues against alleged schemes to defraud Medicare that are settled before going to trial.

According to the Justice Department, the government alleged that, between 2009 and 2010, Dr. Ravi Sharma, who owned and operated a clinic in the Tampa area called Premier Vein Centers, had sent text messages to his office manager instructing her to perform varicose vein injections on patients when he was not present in the office. The government also alleged that Sharma performed unnecessary vein injections and ultrasound imaging procedures associated with those injections.

Between 2009 and 2010, Sharma also owned a weight loss clinic in the Tampa area called Life’s New Image. The government alleged that at that facility unqualified personnel met with patients, but Sharma billed the visits as physician office visits by using his own Medicare provider number. Sharma closed Premier Vein Centers and Life’s New Image in 2010.

There are many methods that healthcare scammers employ to defraud government programs such as Medicare. The allegations against Sharma generally fall into the category of fake or phantom billing, which involves the submitting of bills for unnecessary procedures or medical tests or the billing for procedures or tests that were never performed. In Sharma’s case, the added twist was that he allegedly authorized unqualified employees to perform the procedures.

As part of his deal with the government to resolve the allegations, Sharma has agreed to pay $400,000 and to enter a three-year integrity agreement with the Office of Inspector General of the Department of Health and Human Services. The latter requires Sharma to attend training classes held by the Centers for Medicare and Medicare Services, and the deal sets in motion an independent external review of Sharma’s federal health care program coding and billing procedures.

The allegations against Sharma arose out of a lawsuit filed by Patti Lovell, who was Sharma’s former office manager, under the qui tam, or whistleblower, provisions of the False Claims Act. Those provisions permit private parties to file a lawsuit on behalf of the government and to receive a share of any recovery. As a result of her role as the whistleblower in the case against Sharma, Lovell will receive $72,000.

Against the backdrop of the more recent cases the federal government has pursued for alleged violations against the False Claims Act, putting a monetary price tag on the Sharma case would categorize is as a relatively small one – since January 2009, the DOJ has recouped more than $17 billion through False Claims Act cases, with $12.2 billion of that arising from fraud against federal health care programs. However, the case is an excellent example of how charges in such lawsuits are often resolved and the whistleblower associated with the case is justly rewarded.
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We’ve written a great deal in these pages about the financial costs of health care fraud. It is a crime that costs the government billions and causes financial losses throughout the health care industry that, in turn, impacts the wallet of every single one of us as past and future consumers of medical services. The “costs” of health care fraud also extend beyond the economic realm, a reality our San Francisco Medicare fraud law firm was reminded of recently as state legislators eye the potential impact of fraud on a hospital chain’s reputation.

Allegations of Exaggerated Diagnoses, Fraudulent Billings, and Unearned Reputations

According to a report in the San Francisco Chronicle, leaders of the Legislature’s state health policy committees are questioning rankings received by Prime Healthcare Services of Ontario, a San Bernadino-based hospital chain. In three of the past five years, Truven Health Analytics service listed Prime as one of the nation’s top fifteen health systems. This year eight of the networks 23 hospitals were listed among the country’s top 100 hospitals. State Senator Ed Hernandez and Assemblyman Richard Pan wrote to Truven urging them to reconsider these ratings, saying they are at odds with the chain’s reputation and record in the state.

As readers of this blog have learned, health care fraud can take many forms, even when the focus is on fraud involving public programs such as Medicare, Medi-Cal, and Medicaid. A similarly broad response applies to the related question: Who commits healthcare fraud? Perpetrators of Medicare fraud range from executives at large companies built on a culture of fraud, to the managers of medical organizations created for the sole purpose of advancing fraud, to individual providers and patients. Our California Medicare fraud attorney is committed to fighting fraud on all levels and welcomes calls from potential whistleblowers who wish to report any form of this heinous crime and any perpetrator of fraud that steals from the government and diverts monies desperately needed for the care of our country’s elderly, impoverished, and ill.

A Recent Example: Doctor Sentenced After Submitting Nearly $1 Million in Falsified Claims

With an increasing number of Medicare fraud cases in the news recently, we’ve also seen a wide range of defendants. This month, the San Francisco Chronicle carried an Associated Press report on a case involving an orthopedic surgeon in Lake Charles, Louisiana. Dr. Lynn E. Foret entered a guilty plea to charges he defrauded Medicare, Medicaid, and private insurance carriers out of almost $1 million. According to evidence presented at the plea hearing, between 2003 and 2009 Foret repeatedly injected a steroid solution into the knees of patients while billing and collecting payments from the public and private insurers for a more expensive drug called Hyalgan.

As with many other forms of fraud, cases of health care fraud often involve a few primary wrongdoers who rely on the silence and/or complicity of many for their schemes to succeed. A federal jury in our own area was recently confronted with a case that follows this pattern and is a reminder of the fact that fraudulent actors rely on the willingness of people to cooperate with their schemes. Our San Francisco Medicare fraud lawyer is committed to the fight against Medicare fraud and to working with the brave individuals who speak up for what is right when they see companies and individuals engaged in this rampant crime.

Kickbacks, Solicitations, and Conspiracy to Commit Medicare Fraud

On December 4, the Justice Department announced that a federal jury in San Francisco had convicted Patrick Adebowale Sogbein, Adebola Adefunke Adebimpe (Sogebin’s wife), and Eduardo Abad on charges stemming from a Medicare fraud scheme. According to evidence presented at trial, Sogbein began working with a physician, Edna Calaustro, in December 2006 to obtain and file bogus prescriptions for power wheelchairs and related accessories. Initially, the scheme involved Debs Medical Distributors, a company owned by Sogbein. By 2008, Medicare began scrutinizing the claims more closely, leading Sogbein to partner with his wife and submit claims through Dignity Medical Supply, a Santa Clara-based company opened in Adebimpe’s name.

As a California health care fraud law firm, we work with the brave men and women who help bring fraud to light. We are committed to the success of these cases, actions that protect the health care system and all who come into contact with it. We are also committed to protecting health care fraud whistleblowers. This includes ensuring that no adverse actions are taken against them, helping them collect rewards where appropriate, and simply helping them get through what can be a long, arduous process.

Who Initiates Whistleblower Claims and Why

A fascinating (at least to us!) study from the New England Journal of Medicine (“NEJM”), published in 2010, titled “Whistle-Blowers’ Experiences in Fraud Litigation against Pharmaceutical Companies.” The study notes 90% of health care fraud cases are initiated by whistleblowers rather than the government itself, cases known as qui tam actions. Authors spoke to 26 whistleblowers, also known as realtors, most of whom worked in the industry and learned of the fraud during some form of career change. Nearly all had attempted to deal with their concerns internally before going outside the company to a lawyer or government official.

Suppose you were reviewing your credit card bill and noticed that a company had billed you twice for the same product or service. Most of us would respond with an angry call to the company and would be unlikely to accept the company’s attempt to justify the double-billing. At the very least, most consumers would refuse to give the company business in the future. Recently, the state settled a lawsuit involving allegations that one of California’s largest hospital chains engaged in double-billing. A problem in both private and public health arenas, double-billing is one of many forms of financial misdeeds that costs our health care system millions each year and it is one of the reasons our Northern California health care fraud attorney is focused on going after companies that use technical jargon to justify fraudulent billing practices.

Health Care Fraud Case Leads to Record Settlement

Earlier this month, as reported in The Sacramento Bee, Sutter Health announced that it agreed to pay $46 million to settle a lawsuit that started with a whistleblower and, according to Insurance Commissioner Dave Jones, exposed double-billing for anesthesia services. The settlement is a record-high for the Department of Insurance which joined the suit in 2011, two years after it was filed by billing auditor Rockville Recovery Associates. Despite the settlement, the health company, through spokesman Bill Gleason, continues to deny wrongdoing. Gleeson defends the company’s billing practices saying they are within industry standards, in accordance with 90% of hospitals in California, and in keeping with state and federal rules. Still, he notes that Sutter Health agrees with the commissioner’s position that the newly agreed to method will provide clarity and predictability to payers and consumers.

We have talked a good deal in recent weeks about the threat of Medicare fraud and the important roles whistleblowers play in protecting the system. In addition to the danger of fraud against our federal health care programs, there is also the potential for fraud against our state programs. As a San Francisco Medi-Cal lawyer, Attorney Brod is prepared to work with the brave individuals who report past and on-going Medi-Cal fraud schemes that seek to profit at the expense of our state’s most vulnerable.

Overview of Fraud on California’s Medicaid System

Medi-Cal is the Medicaid program for the state of California, a public health insurance program financed by State and federal funds and providing care for low-income Californians including seniors, families with children, pregnant women, disabled individuals, and people suffering from specific health problems. According to the Office of the Attorney General (“OAG”) for California, Medi-Cal fraud occurs when scammers bill the program for services/medications/supplies that are never performed, not necessary, or cost more than the actual care rendered. An additional form of fraud involves either paying or accepting kickbacks for billing referrals.

While a violation of the federal False Claims Act is a principle reason why many qui tam whistleblower lawsuits are filed, a breach of either of two other key laws, the Stark law and the Anti-Kickback law, is also grounds for launching a qui tam whistleblower lawsuit. As we will see in the final installment of this week’s series, some of the most flagrant cases of Medicare fraud involve violations of either the Anti-Kickback law, the Stark law or sometimes one or both and the False Claims Act. Regardless of the cause of action, the qui tam lawsuit specialists at the Brod Law Firm are committed to representing the brave whistleblowers who step forward with information on any of these violations.

Of the two pieces of legislation, the Stark law, 42 U.S.C. Sec. 1395nn, is the more recent to be enacted, becoming law in 2011. Under the law, named after its sponsor, former Bay Area U.S. Rep. Fortney “Pete” Stark, physicians are prohibited from referring Medicare or Medicaid patients for designated health services to a medical provider in which the physician or a family member holds a financial stake, unless an exception applies. The law also prohibits designated health services entities from submitting claims to Medicare that originate from a prohibited referral.

The Stark law may be relatively new, but it has already managed to land several violators in court, including a case against one that is believed to have generated the largest damage amount against a community hospital in U.S. history. The case, against the Tuomey Healthcare System of South Carolina, revolved around lucrative compensatory arrangements Tuomey had with several part-time physicians to refer patients to its medical facilities. The jury in the federal lawsuit found that Tuomey’s arrangements violated both the Stark law and the False Claims Act, and a federal judge this month ordered Tuomey to pay more than $276 million in fines and penalties. The judge also rejected Tuomey’s motions for a new trial, according to The State.
As its name would imply, the Anti-Kickback law, 42 U.S.C. Sec. 1320a-7b(b), prohibits the offering, tendering, soliciting or receiving anything of value to induce or compensate for referrals or generate federal healthcare program business. First enacted in 1972, the act stipulates explicitly that “a claim that includes items or services resulting from a violation” of the act will be considered a bogus or fraudulent claim that falls under the False Claims Act.

One of the biggest cases to trigger an invocation of the Anti-Kickback law was one already cited in this series, the notorious Columbia/HCA qui tam lawsuit that led its successor company, HCA, to plead guilty and pay fines of more than $1.7 billion for, among other things, offering kickbacks to doctors. However, there have been numerous other examples involving a violation of the Anti-Kickback law, including these recent cases in just 2010:

• The Health Alliance of Greater Cincinnati and the Christ Hospital in Mount Auburn, Ohio, agree to pay $108 million to settle accusations they payed physicians kickbacks in exchange for referring cardiac patients to the hospital
• The St. Joseph Medical Center, based in Towson, Md., agrees to pay $22 million to settle a lawsuit alleging payment of kickbacks to MidAtlantic Cardiovascular Associates for purported professional services deals in return for MidAtlantic’s referrals to the medical center.
• The former owners of the City of Angels Medical Center in Los Angeles agree to pay $10 million for a scheme that involved doctors at the center allegedly paying recruiters kickbacks to find homeless patients, who were administered medical treatments, many of which were deemed unnecessary but were billed to the federal government.

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