Healthcare Fraud Lawyer Blog

Good doctors should be paid well. Good doctors make huge sacrifices, racking up huge schooling bills and sacrificing sleep and personal time to serve their patients. This, along with the desire to attract talented minds to medical practice, makes paying doctors well incredibly important. However, when a doctor’s pay, including Medicare and Medicaid reimbursements, is way out of line with his/her colleagues, it raises a red flag. High billings can be one sign of health care billing fraud. It is one of many pieces of evidence that our California medical billing fraud law firm in San Francisco uses to evaluate and build a qui tam (aka whistleblower-brought) case against providers who commit health care fraud.

Doctor Charged With Medicare Fraud

A San Francisco Chronicle report published last week focused on the indictment of Dr. Robert A. Glazer on a charge of conspiracy to commit health care fraud, a charge involving allegations that he defrauded Medicare, filing $33.5 million worth of phony claims. Prosecutors allege that between January 2006 and May 2014, the Hollywood, California-based doctor billed the agency for services that were not medically necessary and sometimes hadn’t even been performed. They also suggest Glazer received kickbacks tied to phony hospice, wheelchair, and other medical supply prescriptions. One witness said she was offered everything from shoes to oil to rice and beans in exchange for coming to the clinic and that the clinic wouldn’t let her leave until she agreed to a sonogram. Further, Glazer ordered more than 1,000 power wheelchairs in the timeframe in contrast with other providers, even those focused on senior care, who may prescribe one or two a year.

If you are a regular reader of this blog, you are well aware that Medicare fraud is a serious problem that costs our nation billions of dollars each year. Understanding health care fraud and the many forms it can take is essential to fighting it, especially since private whistleblowers often alert the government to cases of fraud and even help pursue wrongdoers through lawsuits called qui tam actions. In this post, our California fraudulent health care billing lawyer discusses one of the most prevalent types of fraud – upcoding. While even a one-time choice to charge Medicare for a more expensive service than that provided is fraud, upcoding becomes an even greater threat when it is a matter of routine and a practice encouraged by a company looking to put profit above patient care.

A Basic Overview of Upcoding

The Patient Empowerment section of the About.com website provides a brief, patient-oriented discussion of upcoding. As the article explains, medical providers use numbers called CPT codes (“current procedural terminology”) to bill insurance providers, including Medicare and Medicaid, for each service they provide to a patient. Each CPT codes is tied to a service and the amount that the provider will be paid for performing it. Upcoding is the practice of using a CPT code that commands a greater payment than the proper code would elicit. For example, a doctor may have performed a quick check up but bill using the code for an expanded check up, resulting in a higher payment from Medicare than is actually appropriate. Upcoding is fraudulent and illegal, costing the taxpayers money and also endangering the health of individual patients by building a false medical record.

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.