Healthcare Fraud Lawyer Blog

June 15, 2015

Focusing on the Victims: Medicare Fraud, Mental Health, and a Partial Hospitalization Program Scam

Who are the victims of Medicare fraud? As a law firm specializing in health care fraud matters, we understand that question requires a multi-part answer. At the broadest level, Medicare fraud is theft and the target is a taxpayer-funded government program, meaning every U.S. taxpayer is a victim. Narrowing the focus a bit, Medicare fraud depletes an already strained budget and thus it jeopardizes the health and well-being of all Medicare beneficiaries. Medicare fraud also has more specific victims, individuals who are treated as mere pawns by the scammers. A recent case involving mental health benefit fraud in Texas brings these individual victims to the forefront of our minds.

Medicare and Mental Health

Medicare recognizes that true health involves both physical and mental well-being. In order to understand the Texas case, it is helpful to understand a bit about Medicare’s mental health coverage. Medicare Part B includes outpatient mental health services holdinghand for all program beneficiaries. This coverage includes an annual depression screening and necessary outpatient mental health treatment such psychotherapy and medication management. If a beneficiary requires inpatient mental health treatment, coverage is provided via Medicare Part A, the hospital insurance arm of the program.

June 1, 2015

Pharmaceutical Fraud: Kick-backs Limit Patient Choice

by Gregory J. Brod

One of the many ways that patients are at the mercy of their health care providers and insurers is through pharmaceuticals and prescriptions. Doctors write specific prescriptions, sometimes based on pharmaceutical advertisements, that may require that patients receive name brand drugs. Insurers place limitations on the types of drugs that insureds can access. Another way that insurers and pharmaceutical companies have been limiting patient options is by engaging in health care fraud in order to increase profits at the expense of patient choice. Luckily, False Claims Act lawsuits have exposed pharmaceutical fraud, and actions have been taken against some major perpetrators.

Medco Fraud Settlement

According to the Corporate Crime Reporter, former AstraZeneca employees filed a qui tam lawsuit against AstraZeneca, a pharmaceutical manufacturer, and Medco, a company that manages pharmacy benefits. The lawsuit alleged that Medco and AstraZeneca entered into hidden financial agreements based on which Medco received lower prices on three AstraZeneca drugs in exchange for including one of AstraZeneca’s medications as the only one of its kind on some of Medco’s list of covered prescriptions.

May 29, 2015

New U.S. Supreme Court Ruling is a Mixed Bag for Whistleblowers

by Gregory J. Brod

When someone identifies an act of health care fraud, it is important that they speak up. However, under the False Claims Act (FCA) the ways in which they speak up are limited by Federal law. A recent Supreme Court ruling on qui tam lawsuits arising under the FCA will have broad implications for whistleblowers.

The Background

According to the LII Supreme Court Bulletin, Benjamin Carter first filed a qui tam suit against Kellogg Brown & Root Services, Inc. (KBR) in 2006. His lawsuit alleged that KBR had fraudulently billed the United States government for water purification services that were either performed improperly or not performed at all. The District Court dismissed the complaint based on the first-to-file rule which states that when a private person brings a qui tam lawsuit under the FCA, no person can bring a related action based on the same underlying facts. In this case, Mr. Carter’s complaint was dismissed because there was a pending case with similar claims that had been filed earlier. While Mr. Carter appealed, the pending case was dismissed. Mr. Carter filed a new lawsuit, which was also dismissed for the same reason – the pending case was now pending on appeal.

May 22, 2015

Medicare Fraud: Home Health Care Scams

by Gregory J. Brod

According to ABC News, the rate of Medicare fraud is on the rise. One of the areas in which Medicare fraud is growing is home health care fraud. It’s important to be aware of this type of fraud, as it makes up a significant portion of health care fraud and often takes advantage of some of the most vulnerable members of society.

Home health care fraud can include billing for medically unnecessary services or care that was not actually provided. Home health care companies may fraudulently obtain patients’ personal medical information –including their Medicare numbers -and falsify medical documents and records in order to send fraudulent bills to Medicare for costly home health care services.

Health care fraud whistleblowers play a critical role in ending the perpetration of Medicare fraud, including home health care fraud. To protect those individuals who are most at risk, it’s important for witnesses to report suspicions of health care fraud.

May 18, 2015

When Competitors Collaborate and Costs Rise: Government Contract Fraud Attorney on Bid Rigging

by Gregory J. Brod

In many ways, government procurement contracts are similar to procurement agreements in the private sphere. The basic elements of all contracts are the same, an offer and acceptance made between two or more competent parties for a legal purpose that creates obligations for both parties (e.g. payment for and the provision of goods/services). However, the government contract system is much more controlled than the private contracting sphere. The government contract bidding process is complex, highly-regulated process that relies upon companies filing honest, competitive offers to fill a given need. Bid rigging is a violation of government trust and a form of government contract fraud. As a bid rigging whistleblowers’ law firm, the Brod Law Firm partners with individuals who see this fraud happen and step forward to report it. When fraud occurs in the private sphere, the companies involved can suffer. When fraud occurs in the government contracting arena, the trust of every American is violated and every taxpayer suffers.

Bid Rigging: Overview and Forms

A useful explanation of bid rigging can be found in a Department of Justice contract2 (“DOJ”) primer written to help people identify various forms of collusion among prospective government contractors. As the primer explains, at a broad level, bid rigging involves competitors conspiring to raise the price of goods/services being purchased by the government. Bid rigging occurs when competitors agree who will submit the best offer during the bidding process, agreements that eliminate/limit true competition. In some cases, the collusion involves some, not all, of the bidders for a given project. Although the primer focuses on antitrust matters, bid rigging can also be a violation of the False Claims Act.

May 11, 2015

Record Settlement in Non-Intervened Health Care Fraud Case

by Gregory J. Brod

When it comes to the world of health care fraud, there’s one truth we cannot emphasize enough – Honest individuals are the key to winning the fight against fraud. It is a truth we see again and again in our work as a whistleblower’s law firm. The False Claims Act (“FCA” or “the Act”) provides a financial incentive for people to elect the morally right path and report suspected cases of health care fraud and other forms of government claims fraud. The importance of health care fraud whistleblowers in the fight for right is emphasized by the emerging story of a record-breaking case against one the nation’s largest kidney dialysis companies.

DaVita Settles False Claims Act Case for $495 Million

In 2007, according to last week’s Denver Post, Dr. Alon J. Vainer and nurse Daniel D. Barbir filed a whistleblower lawsuit against Denver’s DaVita HealthCare Partners. The pair had been working for DaVita when they noticed the company was throwing out good medicine and dividing single use doses into multiple vials. They only filed suit after internal questions/complaints went unanswered. DaVita was, per the allegations, overbilling Medicare and Medicaid. For example, the lawsuit suggests a physician would use part of a 100mg vial of Zemplar (vitamin D) or Venofer (an iron supplement), charging for the whole dosage despite the fact that the patient only needed 25mg. In other cases, doctors were told to treat a patient who needed 8mg of medicine with a 10mg vial instead of a cheaper option of four 2mg vials.

May 4, 2015

Medicare Fraud: A Problem Invading All Aspects of Health Care

by Gregory J. Brod

Among the lessons we’ve learned as a Medicare fraud law firm is that fraud doesn’t always look like you think it does or involve the type of services you’d typically expect. Most people would presume a case of Medicare fraud would involve a geriatric doctor, senior care facility, provider of age-related medical devices, or maybe a general practitioner. However, as the case discussed below reminds us, Medicare fraud extends into every facet of the health care industry. It is only with the help of honest whistleblowers that we can hope to tame this growing beast.

Indictment Filed in Medicare Fraud Case Against Florida Ophthalmologist

In April, the Justice Department announced the filing of a seventy-six count indictment charging South Florida Doctor Salamon Melgen with assorted counts tied to his alleged participation in a Medicare fraud scheme. The charges include 46 counts of health care fraud, 19 counts involving filing false claims, and 11 counts of making false statements involving health care. From January 2008 through December 2013, Melgen billed Medicare for more than $190 million and his practice received reimbursements in excess of $105 million. Officials believe much of this money was received as the result of fraudulent actions.

April 27, 2015

The Role of Compliance Department in Fighting (or Perpetuating) Health Care Fraud

by Gregory J. Brod

Sometimes health care fraud is a well-known secret, something many in a company’s leadership know about and either passively or actively conceal. Likewise, a number of lower-level employees may know about and be asked to help perpetuate the fraud. Fraud takes cooperation. How does this happen when almost everyone we meet agrees that it a blatant violation of both law and their moral codes? Often, especially in cases involving larger organization, our Medicare fraud law firm finds health care fraud continues because the company’s structure allows it.

How Corporate Structure Can Contribute to Fraud

Earlier this year, Atlantic Information Services Inc. (“AIS”), a health care publishing and information organization, published a report on how corporate structures can contribute to health care fraud. The Affordable Care Act mandates that Medicare/Medicaid providers have compliance programs (for an overview of this mandate, see the Medicare and Medicaid Services’ Webinar “The Affordable Care Act Provider Compliance Programs: Getting Started”). The AIS report suggests that the compliance mission is hindered when compliance officers report to a company’s general counsel (“GC”) rather than reporting directly to the CEO or the board of directors. According to the author, the mindset of the GC differs from that of the compliance team. Ultimately, the article suggests legislators pass a new regulation forbidding a structure that makes the compliance department subordinate to the general counsel.

April 20, 2015

Provider Medical Identity Theft

by Gregory J. Brod

Identity theft is a common fear and a common problem. Readers of this blog know that identity theft is a problem that reaches beyond the financial sphere. Quite often, health care fraud cases involve an element of medical identity theft. In a previous post, our medical identity theft lawyer discussed the problem of scammers stealing consumers’ medical identities and using the information to submit and collect on false claims. However, consumers are not the only targets of medical identity theft. Provider identity theft is also a component of many health care fraud scams, criminal enterprises that divert critically needed health care dollars and endanger the health and well-being of countless Americans.

Clinic Owner Allegedly Filed Claims Using Former Owner’s Provider Information

In late August 2012, NBC New York reported on the arrest of a man who operated a radiology practice in Queens on charges that he engaged in health care fraud. According to the article, a 34 year-old man by the name of Ting Huan Tai was taken into custody by federal agents who arrested him at his luxury apartment in a Lower Manhattan high- prescription rise. In May 2010, as alleged in court filings, Tai took over operations at United Medical Diagnosis (“UMD”), a radiology clinic in Flushing, New York. From May 2010 through May 2012, Tai and his staff allegedly used the identity of the clinic’s prior owner, a radiologist, to submit more than $30 million in claims to Medicare and Medicaid. The claimed services were not actually performed and the bills were submitted without the knowledge or consent of the former UMD owner. United States Attorney Loretta Lynch explained, “The defendant sought to enrich himself and fund his lifestyle first by stealing a doctor’s identity and then using that stolen identity to steal Medicare and Medicaid funds…While the documentation provided was a sham, the money stolen was very real.”

April 13, 2015

Beneficiary-Reported Medicare Fraud

by Gregory J. Brod

Often, Medicare fraud is brought to light because a brave employee saw a wrong and spoke up. Notably, however, insiders are not the only ones who can bring a Medicare fraud whistleblower lawsuit (aka a qui tam action). Medicare beneficiaries can also witness and report Medicare fraud. We are proud to partner with Medicare beneficiary whistleblowers in addition to working with current/former employees on health care fraud matters. We investigate the whistleblower’s concerns and, when appropriate, file suit. Our mutual goal is recovering wrongfully diverted funds and preventing on-going/future frauds. As a Medicare fraud whistleblower’s law firm, we also vigilantly work to protect the whistleblower from retaliation and ensure s/he receives fair compensation should the information leads to a recovery.

Example 1: Over $5 Million Recovered in Action Initiated by Medicare Beneficiary Whistleblowers

In Fall 2012, RxAmerica (a subsidiary of CVS) agreed to pay $5.25 million to settle a Medicare fraud action that consolidated two suits brought by Medicare beneficiaries. According to Law360, Robert Fischer filed suit against RxAmerica in a New York federal court after noticing suspiciously large payments on an Explanation of Benefits (“EOB”) report sent to him by Medicare. As explained in a Business Wire report, Jan and Max Hauser also filed suit against RxAmerica bringing their claim in a North Carolina federal court. The Hausers also carefully reviewed an EOB statement and they noticed that RxAmerica was charging the government more money for prescription drugs than had listed in the Plan Finder tool they had used when selecting their Medicare Part D plan. This discrepancy meant the Hausers consumed their allowed benefits faster than expected/promised and had to pay out-of-pocket for their prescription medications.