Source- http://www.justice.gov/opa/pr/2012/March/12-crm-373.html
WASHINGTON – Biomet Inc. has entered into a deferred prosecution agreement with the Department of Justice to resolve improper payments by the company and its subsidiaries in violation of the Foreign Corrupt Practices Act (FCPA), announced the Justice Department’s Criminal Division.
The matter is part of an investigation into bribery by medical device companies of health care providers and administrators employed by government institutions. Previously, Johnson & Johnson and Smith & Nephew Inc. have agreed to pay criminal penalties and entered into deferred prosecution agreements related to the ongoing investigation.
Biomet, headquartered in Warsaw, Ind., manufactures and sells medical devices worldwide and is listed on the NASDAQ. According to the criminal information filed today in U.S. District Court in the District of Columbia in connection with the agreement, Biomet, its subsidiaries, employees and agents made various improper payments from approximately 2000 to 2008 to publicly-employed health care providers in Argentina, Brazil and China to secure lucrative business with hospitals. During this time, more than $1.5 million in direct and indirect corrupt payments were made. In addition, at the end of each fiscal year, Biomet, its executives, employees and agents falsely recorded the payments on its books and records as “commissions,” “royalties,” “consulting fees” and “scientific incentives” to conceal the true nature of the payments.
As part of the agreement, Biomet will pay a $17.28 million criminal penalty and is required to implement rigorous internal controls, cooperate fully with the department and retain a compliance monitor for 18 months. The agreement recognizes Biomet’s cooperation with the department’s investigation; thorough and wide-reaching self-investigation of the underlying conduct; and the remedial efforts and compliance improvements undertaken by the company. In addition, Biomet received a reduction in its penalty as a result of its cooperation in the ongoing investigation of other companies and individuals.
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Source- http://www.justice.gov/opa/pr/2012/April/12-civ-474.html
AmMed Direct LLC has agreed to pay the United States and the state of Tennessee $18 million plus interest to settle allegations that it submitted false claims to Medicare and Tennessee Medicaid (TennCare), the Justice Department announced today. Under the agreement, AmMed will pay $17,560,997 to the United States and $439,003 to Tennessee.
The United States and Tennessee allege that, from September 2008 through January 2010, the Antioch, Tenn.-based company submitted false claims to Medicare and TennCare for diabetes testing supplies, vacuum erection devices and heating pads. The United States and Tennessee asserted that AmMed widely advertised free cookbooks in order to induce Medicare beneficiaries to contact AmMed or its hired telemarketing firm. Once AmMed confirmed that a beneficiary was covered by Medicare, AmMed representatives improperly attempted to sell the beneficiary supplies that would be paid for by Medicare. Medicare rules prohibit medical businesses from making unsolicited telephone contact with beneficiaries to sell them their products, unless specific exceptions apply.
The United States and Tennessee further alleged that, as a result of AmMed’s improper marketing, many Medicare beneficiaries who called AmMed to receive the advertised free cookbooks returned their diabetic supplies to AmMed. AmMed, however, failed to timely refund the money to Medicare or TennCare. Rather, AmMed allowed the unpaid refunds to accrue from September 2006 until January 2010. Prior to learning of the United States’ and Tennessee’s investigation, AmMed disclosed to the Medicare Administrative Contractors its failure to refund monies for returned supplies and began paying the refunds to Medicare and TennCare.
“Government health care programs have in place important rules that prohibit suppliers from improperly contacting beneficiaries regarding their products,” said Stuart F. Delery, Acting Assistant Attorney General for the Justice Department’s Civil Division. “The Department of Justice is committed to ensuring that companies that bill government health care programs abide by those rules.”
“Enforcement of the False Claims Act remains a top priority of this office,” said Jerry E. Martin, U.S. Attorney for the Middle District of Tennessee. “All Medicare providers must comply with Medicare rules for reimbursement. The U.S. Attorney’s Office for the Middle District of Tennessee will continue to devote the resources necessary to vigorously protect taxpayers’ interests and aggressively pursue fraud and abuse.”
“We are grateful for the hard work and cooperation of our state and federal agencies in this case,” said Tennessee Attorney General Bob Cooper. “Working to stop healthcare fraud is a major priority for all of us because ultimately everyone pays for this kind of theft.”
The allegations arose from a lawsuit brought under the qui tam, or whistleblower, provisions of the False Claims Act, which permit private citizens with knowledge of false claims against the government to bring an action on behalf of the United States and to share in any recovery. The qui tam action was filed in 2009 in federal district court in Nashville, Tenn., by former AmMed Direct employee Bryan McNeese. The relator will receive approximately $2.88 million as his share of the settlement proceeds.
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Source- http://www.justice.gov/opa/pr/2012/April/12-civ-446.html
Tenet Healthcare Corporation has agreed to pay the United States $42.75 million to settle allegations that it violated the False Claims Act by overbilling the federal Medicare program, the Justice Department announced today.
The settlement resolves allegations pertaining to the various inpatient rehabilitation facilities (IRFs) that Dallas-based Tenet has owned and operated throughout the country. IRFs are designed for patients who need an intense rehabilitation program that requires a multidisciplinary, coordinated team approach to improve their ability to function. Because the patients treated at these facilities require more intensive rehabilitation therapy and closer medical supervision than is provided in other settings, such as acute care hospitals or skilled nursing facilities, Medicare generally pays IRFs at a higher rate for rehabilitation care than it pays for such care in other settings.
The Justice Department alleged that, between May 15, 2005, and Dec. 31, 2007, Tenet improperly billed Medicare for the treatment of patients at its IRFs when, in fact, these patient stays did not meet the standards to qualify for an IRF admission. Today’s settlement is the United States’ single largest recovery pertaining to inappropriate admissions to IRFs.
“The Department of Justice is committed to protecting the Medicare program against all types of overcharging by health care providers,” said Stuart F. Delery, Acting Assistant Attorney General for the Justice Department's Civil Division. “As today's settlement demonstrates, inpatient rehabilitation facilities will not be permitted to bill Medicare for patients who were not qualified for admission.”
“This settlement demonstrates our office’s continued commitment to protect crucial Medicare dollars from fraud and abuse. Inpatient rehabilitation facilities are expensive, and Medicare dollars should be reserved for patients who need the services–not for hospitals seeking to make money through improper billing,” said Sally Quillian Yates, U.S. Attorney for the Northern District of Georgia.
“Tenet disclosed this matter to my office as required under its corporate integrity agreement (CIA),” said Daniel R. Levinson, Inspector General of the U.S. Department of Health and Human Services. “Our CIA reporting provisions have resulted in recovery of millions of taxpayer dollars back into the Medicare program.”
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Source- http://www.justice.gov/usao/ma/news/2012/April/GuerrieriThomasPleaPR.html
BOSTON - The former vice-president of a medical device company was convicted today in federal court with violating the Anti-Kickback law.
Thomas P. Guerrieri, 51, of Youngstown, Ohio, pleaded guilty in federal court before U.S. District Judge Rya W. Zobel for violating the Anti-Kickback statute. Guerrieri was the former vice-president of sales at a medical device company that sold bone growth stimulators. His sentencing is scheduled for July 11, 2012 at 2:30 p.m. He faces up to five years in prison, to be followed by three years of supervised release, a $250,000 fine and forfeiture.
Had the case proceeded to trial, the Government would have proven that Guerrieri facilitated signing up a surgeon in New York to a “consulting” agreement with the company to induce the surgeon to prescribe the company’s bone growth stimulators. The surgeon was paid tens of thousands of dollars by the company, but provided little or no consulting services in return. The surgeon was supposed to document his services in time sheets provided to the company, but for years he did not fill out these forms or provide any legitimate consulting services, even though he was paid every month.
In or about Aug. 2007, the surgeon became concerned about increased government scrutiny of consulting arrangements such as his. The surgeon, Guerrieri, and a territory manager for the company decided to create and backdate time sheets going back to 2006 to make it appear as though the surgeon filled out these forms contemporaneously and performed legitimate consulting services. In addition, at the surgeon’s request, Guerrieri and the territory manager obtained a letter from the company’s general counsel indicating that the surgeon was compliant under his consulting agreement, which was not true. Guerrieri did these things to induce the surgeon to continue to order bone growth stimulators from the company.
In addition, Guerrieri and others executed a scheme to pay Michael Cobb, a RI physician’s assistant, for each bone growth stimulator ordered by Cobb. The surgeon had delegated to Cobb the choice of which stimulator his patients received. For years, the device company paid Cobb $50-$100 for each stimulator that his surgeon prescribed. In Sept. 2008, the device company issued a policy expressly prohibiting any payments to anyone who works for a surgeon that prescribes the company’s products. Guerrieri and others were concerned that if they could no longer pay Cobb under the new policy, the company might lose Cobb’s business. Thus, Guerrieri, and others, devised a scheme where Cobb continued to be paid for each order, but the payments were made by a vendor of the device company, making it more difficult to trace the paper trail back to the device company. Cobb is also charged with violating the Anti-Kickback law. His plea hearing is set for April 19, 2012 at 3:15 p.m. before Judge George A. O’Toole, Jr.
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Source- http://www.justice.gov/usao/nj/Press/files/Stein,%20Dr.%20Michael%20Sentencing%20News%20Release.html
NEWARK, N.J. – A North Caldwell, N.J., doctor was sentenced today to 24 months in prison for his role in defrauding Blue Cross Blue Shield of more than $725,000 by submitting false claims for services he never performed, U.S. Attorney Paul J. Fishman announced.
Dr. Michael P. Stein, 63, previously pleaded guilty before U.S. District Judge Esther Salas to an Information charging him with one count of defrauding Blue Cross Blue Shield by filing false claims for services that were not rendered and office visits that did not occur. Judge Salas also imposed the sentence today in Newark federal court.
According to documents filed in this case and statements made in court:
Between August 2004 and September 2010 Stein was the owner and operator of Randolph Otolaryngology P.C., a medical treatment facility. Stein treated a patient with the initials J.F. for nasal problems and billed Blue Cross Blue Shield for the services he purportedly performed.
Stein admitted he filed fraudulent claims with Blue Cross Blue Shield for medical procedures that were not performed during office visits. Stein submitted claims for approximately 900 nasal endoscopies he purportedly conducted on the patient, when only a few were actually performed. Stein also admitted he filed fraudulent claims for office visits and medical procedures that purportedly occurred while he was away on vacation. Between Sept. 6, 2010, and Sept. 27, 2010, Stein billed Blue Cross Blue Shield for 11 nasal endoscopies and 10 office outpatient visits for purported services rendered to J.F. In truth, J.F. ceased seeing Stein around Sept. 3, 2010, and Stein was in Germany from Sept. 11, 2010 through Sept. 27, 2010. Stein received $725,156.45 from Blue Cross Blue Shield as a result of his submission of the false claims, and, under the plea agreement, agreed to pay restitution and forfeiture in the same amount.
In addition to the prison term, Judge Salas sentenced Stein to three years of supervised release and ordered him to forfeit $725,156.45 and pay restitution of $725,156.45. He has also surrendered his medical license.
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Source- http://www.fbi.gov/miami/press-releases/2012/miami-area-assisted-living-facility-owner-pleads-guilty-to-fraud-and-kickback-scheme
WASHINGTON—The owner of a Miami-area assisted living facility pleaded guilty yesterday for her role in a kickback scheme that funneled patients to a fraudulent mental health provider, American Therapeutic Corporation (ATC), announced the Department of Justice, FBI, and Department of Health and Human Services (HHS).
Billy Denica, 50, pleaded guilty before U.S. District Judge Joan A. Lenard in Miami to one count of conspiracy to commit health care fraud. Denica was the owner of an assisted living facility called Robyll Care Assisted Living Facility.
According to court documents, Denica agreed to send Medicare beneficiaries who resided at Robyll to ATC for mental health treatment called partial hospitalization program (PHP) services in exchange for illegal health care kickbacks. ATC purported to operate PHPs in seven different locations throughout south Florida and Orlando. According to court documents, Denica admitted that she knew ATC fraudulently billed Medicare for the PHP treatment that her referrals purportedly received at ATC. Denica was aware that some of the Robyll residents would be offered gifts such as money, cigarettes, and candy, so that they would agree to be admitted to a hospital for purposes of later attending ATC. She also admitted that she referred her residents to ATC simply because they had Medicare, because she would receive a cash kickback, and because they were willing to go.
According to the plea agreement, Denica’s participation in the fraud resulted in more than $1.1 million in fraudulent billing to the Medicare program. At sentencing, scheduled for June 11, 2012, Denica faces a maximum of 10 years in prison and a $250,000 fine.
ATC, its management company Medlink Professional Management Group Inc., a related company called American Sleep Institute (ASI), and various owners, managers, doctors, therapists, patient brokers, and marketers of ATC and Medlink and ASI were charged with various health care fraud, kickback, money laundering, and other offenses in two indictments unsealed on February 15, 2011. ATC, Medlink, and 14 of the individual defendants have pleaded guilty or have been convicted at trial. Seven other defendants are scheduled for trial April 9, 2012 before U.S. District Judge Patricia A. Seitz, and one defendant’s trial has been deferred until after June 2012. A defendant is presumed innocent unless proven guilty beyond a reasonable doubt in a court of law.
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Source- http://www.fbi.gov/detroit/press-releases/2012/detroit-medical-clinic-owner-pleads-guilty-to-medicare-fraud-scheme
WASHINGTON—The owner of a Detroit medical clinic pleaded guilty today for his participation in a Medicare fraud scheme, announced the Department of Justice, the FBI, and the Department of Health and Human Services (HHS).
Juan Villa, 29, of Miami, pleaded guilty before U.S. District Judge Arthur J. Tarnow in the Eastern District of Michigan to one count of conspiracy to commit health care fraud. At sentencing, Villa faces a maximum penalty of 10 years in prison and a $250,000 fine.
According to the plea documents, Villa owned Blessed Medical Clinic in Livonia, Michigan. Villa admitted that he hired patient recruiters who paid cash bribes to Medicare beneficiaries to attend the clinic and provide their Medicare numbers and other information. Villa admitted that he used the beneficiary information to bill for medically unnecessary diagnostic tests and treatments. According to court documents, Blessed Medical Clinic fraudulently billed Medicare $2.4 million during the course of the scheme.
Today’s guilty plea was announced by Assistant Attorney General Lanny A. Breuer of the Criminal Division; U.S. Attorney for the Eastern District of Michigan Barbara L. McQuade; Special Agent in Charge Andrew G. Arena of the FBI’s Detroit Field Office; and Special Agent in Charge Lamont Pugh, III of the HHS Office of Inspector General’s (OIG) Chicago Regional Office.
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Source- http://www.justice.gov/usao/gan/press/2012/04-03-12.html
ROME, GA – GEORGE DAYLN HOUSER, 63, of Atlanta, has been convicted on charges of conspiring with his wife to defraud the Medicare and Medicaid programs by billing them for “worthless services” in the operation of three deficient nursing homes between July 2004 and September 2007. Medicare and Medicaid paid HOUSER more than $32.9 million during that time for food, medical care, and other services for nursing home residents that he either did not provide, or that were so deficient that they were worthless. This is the first time that a defendant has been convicted after a trial in federal court for submitting claims for payment for worthless services.
HOUSER was convicted by United States District Judge Harold L. Murphy, who issued an order with findings of fact and conclusions of law on Monday, April 2, 2012. HOUSER had requested a bench trial, which Judge Murphy conducted from January 30, 2012, through February 28, 2012. In addition to the health care fraud count, HOUSER was also convicted of eight counts of failing to pay over $800,000 in his nursing home employees' payroll taxes to the IRS, and failing to file personal income tax returns in 2004 and 2005.
“It almost defies the imagination to believe that someone would use millions of dollars in Medicare and Medicaid money to buy real estate for hotels and a house while his elderly and defenseless nursing home residents went hungry and lived in filth and mold,” said United States Attorney Sally Quillian Yates. “We will continue to aggressively protect our most vulnerable citizens and hold accountable those who prey on the elderly and steal precious healthcare dollars.”
Brian D. Lamkin, Special Agent in Charge, FBI Atlanta Field Office, stated: “While the FBI works tirelessly to protect the federally funded Medicare and Medicaid programs from abuse, we are also working hard to protect those that these much needed healthcare programs were intended to serve. The Housers' actions have left an indelible mark on all of those individuals who assisted in bringing this matter forward. The level of greed and lack of compassion for others that was seen in this case reflect the very reason that the FBI, in working with its many and varied law enforcement partners, dedicates vast investigative resources in combating healthcare fraud.”
“To see nursing homes residents subjected to such horrendous conditions, while Mr. Houser used Medicare and Medicaid funds as his personal piggy bank, is a travesty,” said Derrick L. Jackson, Special Agent in Charge of the U.S. Department of Health and Human Services, Office of Inspector General for the Atlanta region. “The Office of Inspector General and our law enforcement partners will aggressively investigate then bring these criminals to justice.”
“The guilty verdict in this case is an important victory for the American taxpayer,” said Rodney E. Clarke, IRS Criminal Investigation Special Agent in Charge. “The IRS, along with our law enforcement partners, will vigorously pursue individuals who victimize the less fortunate in our society while holding positions of trust. I believe justice has been served in this case and the defendant will now be held accountable for his actions.”
According to United States Attorney Yates, the charges and other information presented in court, or contained in Judge Murphy’s findings of fact and conclusions of law: HOUSER and his wife ran two nursing homes in Rome, Georgia between July 2004 and July 2007, known as Mount Berry and Moran Lake. Each home had approximately 100 residents. They also ran a home known as Wildwood in Brunswick, Georgia from September 2004 until September 2007, and it had the capacity for 204 residents. Between July 2004 and September 2007, HOUSER billed Medicare and Medicaid approximately $39.4 million, and they paid him $32.9 million – based on his certifications and promises that he was providing the residents with a safe, clean physical environment, nutritional meals, medical care, and services that would promote or enhance the residents’ quality of life.
In sharp contrast to the pretenses under which HOUSER accepted Medicare and Medicaid payments, the Court concluded that the evidence showed “a long-term pattern and practice of conditions at Defendant’s nursing homes that were so poor, including food shortages bordering on starvation, leaking roofs, virtually no nursing or housekeeping supplies, poor sanitary conditions, major staff shortages, and safety concerns, that, in essence, any services that Defendant actually provided were of no value to the residents.” The Court further found that “the supposed ‘care’ Defendant provided to residents during the relevant time period was so deficient that the bundle of services had no medical value.”
During the trial, the government introduced evidence that instead of providing sufficient care for the nursing home residents, HOUSER diverted slightly more than $8 million of Medicare and Medicaid funds to his personal use. HOUSER spent more than $4.2 million on real estate for a hotel complex that he planned to build in Rome, and he also had plans to develop hotels in Atlanta and Brunswick. HOUSER also bought his ex-wife a house in Atlanta for $1.4 million, and instead of paying her alimony, he paid her a salary as a nursing home employee, though she never worked at any of the homes. HOUSER also used the nursing homes' corporate bank accounts for personal expenses, such as Mercedes-Benz automobiles, furniture, and vacations.
The trial evidence showed several examples of the deficiencies at HOUSER'S nursing homes, including:
Inadequate staffing: HOUSER failed to maintain a nursing staff that was sufficient to take proper care of the residents. Staffing shortages started plaguing the homes after HOUSER started writing bad paychecks to his employees, which resulted in numerous staff resignations. HOUSER also withheld health insurance premiums from his employees, but let the insurance lapse for non-payment, leaving many employees with large unpaid medical bills for surgery and treatment. The payroll and insurance problems, and unpaid garnishments, prompted many employees to seek work elsewhere and discouraged new applicants.
Inadequate Physical Environments: The roofs in two homes were so leaky that employees used 55-gallon barrels and plastic sheeting to catch and divert the rainwater. The leaks worsened over time, but HOUSER never replaced the roofs, nor did he repair or replace broken air conditioning and heating units. Fiberglass ceiling tiles would become saturated with water until they fell out of the ceiling, occasionally on residents’ beds. The residents kept their windows open to vent the foul odors in the homes, but flies, other insects, and rodents easily entered the homes through ill-fitting screens and doors. The insect problems were aggravated by mounds of rotting garbage, which piled up around the dumpsters near the homes because HOUSER failed to pay the trash collection services. The moisture and inability to control the humidity in the homes gave rise to rampant mold and mildew growth.
Failure to pay vendors: The Medicare and Medicaid programs require nursing homes to provide sufficient dietary, pharmaceutical, and environmental service to care for their residents' needs. HOUSER failed to provide these services, in part by failing to pay food suppliers and vendors of pharmacy and clinical laboratory services, medical waste disposal, trash disposal, and nursing supplies, and in part by failing to repair washing machines and dryers, water heaters, air conditioners, and leaking roofs. The nursing homes suffered continual food shortages, and employees spent their own money to buy milk, bread, and other groceries, so that residents would not starve. Employees also bought nursing supplies for the residents and cleaning supplies for the homes, and they also washed the residents’ laundry in laundromats or their homes. One nursing home resident testified that residents used to pass the time by making bets on which service or utility would be the next to be cut off for nonpayment.
The Georgia Department of Human Resources (DHR) Office of Regulatory Services (ORS) received many complaints about the HOUSERS' nursing home from families, staff, and vendors. After giving the nursing homes many opportunities to correct deficiencies, the ORS closed the two nursing homes in Rome in June 2007, and it closed the Brunswick home in September 2007. One state surveyor inspected the Moran Lake home in Rome in late May 2007, and she testified that the heat, flies, filth, and stench made for an environment best described as “appalling” and “horrendous.”
In addition to the healthcare fraud count, HOUSER was convicted of eight counts of deducting $806,305 in federal payroll taxes from his employees’ paychecks, but not paying that money over to the IRS. HOUSER wrote worthless checks to the IRS worth hundreds of thousands of dollars at the same time that he was using the nursing homes’ funds to buy real estate. HOUSER was also convicted of failing to file personal income tax returns for 2004 and 2005.
HOUSER and his wife RHONDA WASHINGTON HOUSER, 48, of Atlanta, were indicted on April 14, 2010, and charged with conspiring to defraud Medicare and Medicaid in the operation of two nursing homes in Rome, Georgia, and another in Brunswick, Georgia. RHONDA WASHINGTON HOUSER pleaded guilty to misprision of the felony of health care fraud in December 2011, and she awaits sentencing. HOUSER’s sentencing is scheduled for June 29, 2012.
The healthcare fraud charge against HOUSER carries a maximum sentence of 20 years in prison and a fine of $250,000. The eight counts that charge HOUSER with failing to pay over payroll taxes to the IRS each carry a maximum sentence of 5 years in prison and a fine of $10,000 per count. The charges that HOUSER failed to file tax returns carries a maximum sentence of one year in prison and a fine of $25,000. In determining the actual sentence, the Court will consider the United States Sentencing Guidelines, which are not binding but provide appropriate sentencing ranges for most offenders.
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Source- http://www.justice.gov/opa/pr/2012/April/12-crm-420.html
WASHINGTON – Two owners and two employees of a Miami home health care agency pleaded guilty for their participation in a $20 million Medicare fraud scheme involving false billings for home health care services, announced the Department of Justice, the FBI and the Department of Health and Human Services (HHS).
Ariel Rodriguez, 41, Reynaldo Navarro, 37, and Ysel Salado, 26, each pleaded guilty today before U.S. District Judge Marcia G. Cooke to one count of conspiracy to commit health care fraud, and Melissa Rodriguez, 24, pleaded guilty on March 28, 2012, before Judge Cooke to the same charge.
According to court documents, Ariel Rodriguez and Reynaldo Navarro were the owners of Serendipity Home Health Inc., a Florida home health agency that purported to provide home health care and physical therapy services to eligible Medicare beneficiaries. Melissa Rodriguez and Ysel Salado were employees at Serendipity Home Health.
According to plea documents, Ariel Rodriguez, Navarro and their co-conspirators paid kickbacks and bribes to patient recruiters. In return, the recruiters provided patients to Serendipity, as well as prescriptions, plans of care (POCs) and certifications for medically unnecessary therapy and home health services. Ariel Rodriguez and Navarro used the prescriptions, POCs and medical certifications to fraudulently bill the Medicare program, which Ariel Rodriguez and Navarro knew was in violation of federal criminal laws.
Melissa Rodriguez and Salado admitted that they cashed checks from Serendipity and provided the cash to Ariel Rodriguez and Navarro to use for the kickback payments.
According to plea documents, Serendipity nurses and office staff falsified patient files for Medicare beneficiaries to make it appear that the beneficiaries qualified for home health care and therapy services. In fact, the beneficiaries did not actually qualify for and did not receive such services. Ariel Rodriguez and Navarro admitted that they knew files were falsified so that Medicare could be billed for medically unnecessary services.
From approximately April 2007 through March 2009, Ariel Rodriguez, Navarro and their co-conspirators submitted approximately $20 million in false and fraudulent claims to Medicare. Medicare paid approximately $14 million on those claims.
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Source- http://www.justice.gov/opa/pr/2012/April/12-civ-425.html
WASHINGTON – WellCare Health Plans Inc. will pay $137.5 million to the federal government and nine states to resolve four lawsuits alleging violations of the False Claims Act, the Justice Department announced today. WellCare, based in Tampa, Fla., provides managed health care services for approximately 2.6 million Medicare and Medicaid beneficiaries nationwide.
The lawsuits alleged a number of schemes to submit false claims to Medicare and various Medicaid programs, including allegations that WellCare falsely inflated the amount it claimed to be spending on medical care in order to avoid returning money to Medicaid and other programs in various states, including the Florida Medicaid and Florida Healthy Kids programs; knowingly retained overpayments it had received from Florida Medicaid for infant care; and falsified data that misrepresented the medical conditions of patients and the treatments they received.
Additionally, it was alleged that WellCare engaged in certain marketing abuses, including the “cherrypicking” of healthy patients in order to avoid future costs; manipulated “grades of service” or other performance metrics regarding its call center; and operated a sham special investigations unit.
The settlement requires that Wellcare pay the United States and nine states – Connecticut, Florida, Georgia, Hawaii, Illinois, Indiana, Missouri, New York and Ohio – a total of $137.5 million. WellCare may also be required to pay an additional $35 million in the event that the company is sold or experiences a change in control within three years of this agreement.
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Source-
http://www.justice.gov/usao/waw/press/2012/Mar/johnson.html
ANTOINE JOHNSON, 41, a former resident of Aberdeen, Washington, and his mother, LAWANDA JOHNSON, 63, were sentenced today in U.S. District Court in Tacoma for more than two dozen federal felonies connected with their operation of four health care clinics in Western Washington, announced U.S. Attorney Jenny A. Durkan. The JOHNSONs were convicted in November 2011, following a three week jury trial. ANTOINE JOHNSON was sentenced to 151 months in prison, three years of supervised release and $1,281,873 in restitution for 24 counts of health care fraud, four counts of filing false income tax returns and five counts of illegal drug distribution. LAWANDA JOHNSON was sentenced to 87 months in prison, three years of supervised release and $1,227,746 in restitution for 24 counts of health care fraud and six counts of filing false income tax returns. Orders of criminal forfeiture of funds were also entered. Sentencing them to the high end of the guidelines range, U.S. District Judge Ronald B. Leighton said the Johnsons “manipulated the standard of care for patients, they have manipulated the rules of reimbursement, they manipulated the Hippocratic Oath, they manipulated the Justice system....They have invented more excuses than they distributed pills.”
“Antoine Johnson not only defrauded taxpayers, he betrayed his oath as a doctor to ‘do no harm.’ Instead of healing his patients, he fed their addiction for narcotic painkillers to satisfy his own greed,” said U.S. Attorney Jenny A. Durkan. “Mother and son ruined many lives, sent the bill to taxpayers and then filed false tax returns.”
According to testimony at trial and records in the case, in 2008 law enforcement investigated information obtained by the Grays Harbor County Drug Task Force and the Washington State Medicaid Fraud Control Unit that the clinics were dispensing a high number of prescriptions for narcotic pain medications without examining the patient. ANTOINE JOHNSON was the only medical doctor employed by the four clinics, the “Broadway Clinic” in Aberdeen and the “Johnson Family Practice” clinics in Tacoma, Lakewood, and Lacey. Dr. JOHNSON churned out prescriptions for Schedule II controlled substances such as Oxycodone and Methadone. Evidence introduced at trial indicated that these clinics had thousands of patients and over half of those patients were prescribed controlled substances by Dr. JOHNSON. These prescriptions were refilled for months and years at a time. Often, the patients would come to the clinic, get their weight and blood pressure taken by a nursing assistant, and then pick up a Schedule II prescription that had been pre-signed by Dr. JOHNSON. Sometimes a family member of a patient would pick up a prescription for another family member, but was required to pay a $75 or $100 fee to the clinic for the signed prescription.
“One of the things Mr. Johnson claimed he did was serve disadvantaged communities, but he actually caused them great harm,” said Laura M. Laughlin, Special Agent-in-Charge of the FBI Seattle office. “Mr. Johnson turned patients into addicts and facilitated others in drug dealing. This is an egregious case of someone who is well placed to heal and treat deserving people but instead used his medical license to advance his greed at the expense of his neighbors’ health.”
The health care fraud investigation began following an audit by the Washington State Department of Social and Health Services (DSHS) of Medicaid billing practices at the clinics. Testimony and evidence at trial showed that the clinics, through their business manager LAWANDA JOHNSON and their only medical doctor, ANTOINE JOHNSON, consistently billed for a higher level of service that was actually provided. Evidence introduced at trial showed that the clinic routinely billed Medicaid and Labor and Industries for high-level service even though a patient was only in the clinic for a refill of a controlled substance medication and only had the patients’ vitals taken.
“Dr. Johnson and his mother inflated bills for office visits and had taxpayers pick up the tab. Worse yet, too often little or no medical services were provided other than writing prescriptions for highly-addictive pain pills,” said Ivan Negroni Special Agent in Charge for the Office of Inspector General of the Department of Health and Human Services region serving Washington. “As in this case, we will work in tight coordination with State and other Federal agencies to shut off the flow of dangerous, prescription drugs.”
“Today’s sentencing of Dr. Johnson, and his mother, sends a clear message to rogue physicians who dispense medications to patients without regard for their health, while stealing our nation’s precious healthcare dollars,” said Kenneth J. Hines, the IRS Special Agent in Charge of the Pacific Northwest. “IRS will investigate when greed is the motivation for medical professionals to betray their patients. Our role in this case included determining the total amount of loss to the American taxpayer from both the tax and health care frauds.”
The JOHNSONS closed their clinics and left the United States shortly after search warrants were executed at the four clinics and the residence of LAWANDA JOHNSON in January 2009. The pair fled the United States, driving to Canada, from where they flew to Scotland, and then to Madagascar. The United States State Department worked with the FBI and Madagascar authorities resulting in the return of the Johnsons to the United States, where they were arrested and held for trial. The Department of Health revoked Dr. JOHNSON’s license to practice medicine while the Johnsons were in Madagascar. Dr. Johnson’s efforts to contest the revocation of his license upon his return to the United States were unsuccessful.
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Source- http://www.justice.gov/opa/pr/2012/March/12-crm-409.html
WASHINGTON – A Miami-area resident pleaded guilty today for his role in structuring monetary transactions to provide cash for the furtherance of a fraud scheme that resulted in the submission of more than $200 million in fraudulent claims to Medicare, announced the Department of Justice, the FBI and the Department of Health and Human Services (HHS).
Lazaro Acosta, 41, pleaded guilty before U.S. District Judge Patricia A. Seitz in Miami to one count of currency structuring to avoid reporting requirements. Acosta admitted that he structured currency transactions to avoid reporting requirements so he could provide $2.4 million in cash to the owners and operators of American Therapeutic Corporation (ATC); its management company, Medlink Professional Management Group Inc.; and the American Sleep Institute (ASI).
On March 21, 2012, Acosta’s co-defendant, Leyanes Placeres, 31, pleaded guilty before U.S. Magistrate Judge Andrea Simonton in Miami to one count of conspiracy to commit health care fraud and one count of conspiracy to defraud the United States and to pay and receive illegal health care kickbacks. Placeres admitted that she participated in the fraud scheme orchestrated by the ATC, Medlink and ASI owners and operators. Placeres and Acosta were both charged in an indictment unsealed on Feb. 15, 2011, in the Southern District of Florida.
ATC, Medlink and ASI were Florida corporations headquartered in Miami. ATC operated purported partial hospitalization programs (PHPs) in seven different locations throughout South Florida and Orlando. A PHP is a form of intensive treatment for severe mental illness. ASI purported to provide diagnostic sleep disorder testing.
According to court filings, ATC’s owners and operators paid kickbacks to owners and operators of assisted living facilities and halfway houses and to patient brokers in exchange for delivering ineligible patients to ATC and ASI. In some cases, the patients received a portion of those kickbacks. Throughout the course of the ATC and ASI conspiracy, millions of dollars in kickbacks were paid in exchange for Medicare beneficiaries to attend illegitimate treatment programs so that ATC and ASI could bill Medicare for medically unnecessary services. According to court filings, to obtain the cash used to pay the kickbacks, the co-conspirators laundered millions of dollars of payments from Medicare and structured their transactions to avoid detection by bank officials and the authorities.
In pleading guilty, Acosta admitted that he worked with Lawrence Duran, one of the owners and operators of ATC, Medlink and ASI, to use fake identities and create fake Medlink employees. Those fake identities were used to cash thousands of dollars of checks each week through a check cashing business co-owned by Acosta, South Dade Trade Interprises.
Placeres admitted that she served as a driver who worked with patient brokers to provide patients to ATC and ASI in exchange for kickbacks in the form of checks and cash. Placeres drove all of the patients provided by the brokers who worked with her, and she admitted to passing on kickback payments to the brokers. The amount of the kickback was based on the number of days each patient spent at ATC.
According to the plea agreements, Acosta’s structuring amounted to more than $2.4 million in structured funds, and Placeres’s participation in the ATC fraud resulted in $6.5 million in fraudulent billings to the Medicare program.
Sentencing for Acosta is scheduled for June 28, 2012. Acosta faces a maximum penalty of 10 years in prison, and he has agreed to forfeit $162,000 to the federal government. Sentencing for Placeres is scheduled for June 11, 2012. Placeres faces a maximum penalty of 15 years in prison and a $250,000 fine.
ATC, its management company Medlink Professional Management Group Inc., and various owners, managers, doctors, therapists, patient brokers and marketers of ATC, Medlink and ASI, were charged with various health care fraud, kickback, money laundering and other offenses in two indictments unsealed on Feb. 15, 2011. ATC, Medlink and 12 other individual defendants have pleaded guilty or have been convicted at trial. Seven other defendants are scheduled for trial April 9, 2012, before Judge Seitz, and one defendant’s trial has been deferred until after June 2012. A defendant is presumed innocent unless proven guilty beyond a reasonable doubt in a court of law.
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WASHINGTON – The owner of a Detroit medical clinic pleaded guilty today for his participation in a Medicare fraud scheme, announced the Department of Justice, the FBI and the Department of Health and Human Services (HHS).
Juan Villa, 29, of Miami, pleaded guilty before U.S. District Judge Arthur J. Tarnow in the Eastern District of Michigan to one count of conspiracy to commit health care fraud. At sentencing, Villa faces a maximum penalty of 10 years in prison and a $250,000 fine.
According to the plea documents, Villa owned Blessed Medical Clinic in Livonia, Mich. Villa admitted that he hired patient recruiters who paid cash bribes to Medicare beneficiaries to attend the clinic and provide their Medicare numbers and other information. Villa admitted that he used the beneficiary information to bill for medically unnecessary diagnostic tests and treatments. According to court documents, Blessed Medical Clinic fraudulently billed Medicare $2.4 million during the course of the scheme.
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Source- http://www.justice.gov/opa/pr/2012/March/12-civ-391.html
Universal Health Services Inc. (UHS) and two subsidiaries have reached a settlement in a False Claims Act lawsuit with the United States and the Commonwealth of Virginia, the Justice Department announced today. Under the settlement, UHS and its subsidiaries, Keystone Education and Youth Services LLC and Keystone Marion LLC, which did business as the Keystone Marion Youth Center, a residential facility in Marion, Va., agreed to pay $6.85 million to the United States and the commonwealth to settle allegations that they provided substandard psychiatric counseling and treatment to adolescents in violation of Medicaid requirements, falsified records and submitted false claims to the Medicaid program. UHS closed the Marion facility earlier this year.
This settlement resolves a whistleblower lawsuit filed by Megan Johnson, Leslie Webb and Kimberly Stafford-Payne, former therapists at the closed facility. UHS and its subsidiaries have paid an additional amount under the terms of the agreement to the former therapists to settle their separate discrimination and attorney’s fees claims. The United States and the Commonwealth of Virginia had intervened in the lawsuit on Nov. 4, 2009.
Under the False Claims Act, an entity that submits false or fraudulent claims to the government is liable for three times the government’s damages, plus a civil penalty for each false claim. The claims settled by this agreement are allegations only; there has been no determination of liability.
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Source- http://www.fbi.gov/detroit/press-releases/2012/detroit-podiatrist-sentenced-to-one-year-in-prison-for-medicare-fraud-scheme
WASHINGTON—A Detroit-area doctor of podiatric medicine was sentenced today to one year in prison for a fraud scheme involving false billings to Medicare, announced the Department of Justice, the FBI, and the Department of Health and Human Services (HHS).
Dr. Errol Sherman was sentenced by U.S. District Judge Gerald E. Rosen in Detroit. In addition to his prison term, Sherman was sentenced to three years of supervised release and ordered to pay $300,000 in restitution. Sherman pleaded guilty on November 22, 2011 to one count of health care fraud.
According to the plea documents, Sherman is a doctor of podiatric medicine licensed in the state of Michigan. Between January 2003 and December 2006, Sherman billed Medicare and Blue Cross Blue Shield of Michigan for a procedure known as an avulsion of the nail plate or nail avulsion procedure. Sherman billed for this procedure thousands of times, claiming that he had performed this procedure on hundreds of beneficiaries from 2003 through 2006. In fact, he had not performed the procedures billed.
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Source- http://www.fbi.gov/dallas/press-releases/2012/texas-orthodontic-clinic-and-former-owner-resolve-allegations-of-false-medicaid
DALLAS—All Smiles Dental Center, Inc. and its former majority owner, Richard Malouf, D.D.S. (collectively “All Smiles”), agreed to pay the U.S. and state of Texas $1.2 million to resolve allegations that they violated the civil False Claims Act and Texas Medicaid Fraud Prevention Act, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas. The U.S. and Texas contend All Smiles caused “unbundled” and other improper claims to be submitted to the Texas Medicaid program for orthodontic-related items and services between 2004 and 2007. All Smiles fully cooperated with the investigation, and by settling, did not admit any wrong-doing or liability.
Orthodontic services generally are reimbursable by the Texas Medicaid program as long as they are medically necessary, correctly coded, and properly documented. The U.S. and Texas contend All Smiles submitted improper Medicaid claims between 2004 and 2007 for orthodontic-related items and services that were not furnished or rendered, were unbundled, and/or not properly documented.
The Texas Medicaid Fraud Control Unit (MFCU) and FBI initiated the case in response to patient complaints, record reviews and data analysis. As part of the settlement, All Smiles entered into a five-year corporate integrity agreement (CIA) with the U.S. Department of Health and Human Services’ Office of Inspector General. The CIA requires All Smiles to adhere to certain policies and procedures to ensure compliance with applicable statutes and regulations that govern claims for federal health care funds.
In April 2010, Dr. Malouf settled potential allegations with the Dallas County District Attorney by repaying to MFCU more than $46,000 for certain orthodontic claims and agreeing not to submit claims to Texas Medicaid for an 18-month period. Dr. Malouf did not admit any wrong-doing or liability as part of that agreement.
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Source- http://www.fbi.gov/neworleans/press-releases/2012/baton-rouge-area-residents-sentenced-in-medicare-fraud-scheme
WASHINGTON—Two patient recruiters for several Louisiana durable medical equipment (DME) companies were sentenced today for their roles in Medicare fraud schemes involving false claims and illegal kickback payments for unnecessary DME, announced the Department of Justice, the Department of Health and Human Services (HHS), the FBI, and the Louisiana State Attorney General’s Office.
Stephanie B. Williams and Mary H. Griffin were sentenced by U.S. District Judge James J. Brady of the Middle District of Louisiana to 48 months and 21 months in prison, respectively. Williams was ordered to pay $4 million in restitution, and Griffin was ordered to pay $3.6 million in restitution. In addition, Judge Brady sentenced the defendants to two years of supervised release following their prison terms. Williams pleaded guilty on December 13, 2011, and Griffin pleaded guilty on October 31, 2011.
Williams and Griffin worked as recruiters for Healthcare 1 LLC, Medical 1 Patient Services LLC, and Lifeline Healthcare Services Inc., Louisiana-based companies that fraudulently billed medical equipment to the Medicare program from 2004 to 2009. They and other recruiters were hired to obtain prescriptions for medical equipment such as leg braces, arm braces, power wheelchairs, and wheelchair accessories. Williams and Griffin obtained information from Medicare beneficiaries as well as prescriptions for medical equipment from the beneficiaries’ physicians. These prescriptions were then used to submit fraudulent claims to the Medicare program. In addition, Griffin participated in a similar scheme at McKenzie Healthcare Solutions Inc., where she was paid kickbacks and caused the submission of fraudulent claims for medically unnecessary DME from 2005 to 2010.
According to court documents, from 2004 to 2010, the companies involved in these schemes submitted more than $30 million in fraudulent billing.
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Source- http://www.fbi.gov/washingtondc/press-releases/2012/pennsylvania-based-eusa-pharma-usa-inc.-to-pay-u.s.-180-000-for-allegedly-submitting-inflated-claims-to-medicare
WASHINGTON—EUSA Pharma (USA) Inc. has agreed to pay the United States $180,000 to resolve claims that it violated the False Claims Act by allegedly encouraging doctors to submit inflated claims to Medicare for imaging scans, the Justice Department announced today. EUSA Pharma (USA) is headquartered in Langhorne, Pennsylvania.
The United States alleged that EUSA Pharma, which makes and sells ProstaScint, a radiopharmaceutical, advised health care providers to submit multiple claims for certain imaging scans performed following use of ProstaScint, after the Society of Nuclear Medicine informed the company that only one claim should be submitted for these scans.
“Today’s settlement demonstrates our commitment to ensuring that the Medicare Trust Fund is used to pay for necessary medical care and is not depleted as a result of marketing schemes intended to increase sales by inflating government reimbursements,” said Stuart F. Delery, Acting Assistant Attorney General of the Justice Department’s Civil Division. “We will continue to hold accountable those who abuse public health care programs at the expense of taxpayers.”
Today’s settlement resolves a lawsuit filed by former EUSA Pharma employee Ann-Marie Williams under the qui tam, or whistleblower provisions, of the False Claims Act. Under the False Claims Act, private citizens can bring suit on behalf of the United States and share in any recovery. Williams will receive $30,600 as her share of the government’s recovery.
This resolution is part of the government’s emphasis on combating health care fraud and another step for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced by Attorney General Eric Holder and Kathleen Sebelius, Secretary of the Department of Health and Human Services, in May 2009. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in that effort is the False Claims Act, which the Justice Department has used to recover nearly $6.7 billion since January 2009 in cases involving fraud against federal health care programs. The Justice Department’s total recoveries in False Claims Act cases since January 2009 are over $8.9 billion.
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Source- http://www.fbi.gov/philadelphia/press-releases/2012/multi-million-dollar-hospice-health-care-fraud-alleged
HILADELPHIA—An indictment was unsealed today charging five nurses in a health care fraud conspiracy arising from their employment at Home Care Hospice Inc. (HCH), a hospice care provider in Philadelphia, between 2005 and 2008 that resulted in a multi-million-dollar fraud on Medicare. Patricia McGill, 64, of Philadelphia, was a registered nurse and served as the director of professional services for HCH. She allegedly authorized and supervised the admission of inappropriate and ineligible patients for hospice services, resulting in approximately $9.32 million in fraudulent claims. She is charged, along with Natalya Shvets, 42, of Southhampton, Pennsylvania Giorgi Oqroshidze, 36, of Philadelphia; Yevgeniya Goltman, 42, of Newtown, Pennsylvania; and Alexsandr Koptyakov, 39, of Bensalem, Pennsylvania, with one count of conspiracy to commit health care fraud and numerous counts of health care fraud. All five defendants were arrested this morning.
HCH was co-owned by Matthew Kolodesh, who is charged separately in an indictment unsealed October 12, 2011, and “A.P.,” the Hospice Director for HCH. HCH was a for-profit business at 1810 Grant Avenue, and later 2801 Grant Avenue, in Philadelphia that provided hospice services for patients at nursing homes, hospitals, and private residences. According to the indictment, announced by United States Attorney Zane David Memeger, McGill authorized nursing staff and supervisors, including her co-defendants, to fabricate and falsify documents in support of hospice care for patients who were not eligible for hospice care, or for a higher, more costly level of care than was actually provided to the patients. Between January 2005 and December 2008, approximately $9,328,000 in fraudulent claims for inappropriate patients were submitted to Medicare as authorized by AP and McGill. Defendants Shvets, Oqroshidze, Goltman, and Koptyakov created fraudulent nursing notes for approximately 150 patients indicating hospice services were provided for patients, when, in reality, they were not.
In February 2007, HCH was notified that it was subject to a claims review audit. According to the indictment, in anticipation of this audit, McGill assisted A.P. in reviewing patient charts, sanctioning false documentation by the nursing staff, and authorizing the alteration of charts. In September 2007, HCH was notified that it had exceeded its cap for Medicare reimbursement and would have to repay $2,625,047 to the government program. At that point, A.P. and McGill directed staff to review patient files and discharge hospice patients. This resulted in a mass discharge of patients. In one month, 79 hospice patients were discharged in October 2007 and a total of 128 discharged by January 2008, some of whom had been ineligible for hospice or inappropriately maintained on hospice service in excess of six months. Some of the patients discharged were shifted to another hospice business owned by Kolodesh. In the spring of 2008, approximately 20 percent of the discharged patients were placed back on hospice service at HCH with McGill’s knowledge. McGill is charged in 14 counts; Shvets is charged in eight counts; Oqroshidze is charged in seven counts; Goltman is charged in four counts; and Koptykov is charged in eight counts.
If convicted of all charges, McGill faces a potential advisory sentencing guideline range of 108 to 135 months in prison, a fine of up to $150,000, and a $1400 special assessment; Shvets, Goltman, and Koptykov each face a potential advisory sentencing guideline range of 27 to 33 months in prison, a fine of up to $60,000, and an $800 special assessment; Oqroshidze faces a potential advisory sentencing guideline range of 21 to 27 months in prison, a fine of up to $50,000, and a $700 special assessment.
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Source- http://www.fbi.gov/richmond/press-releases/2012/mental-health-service-provider-indicted-for-health-care-fraud
RICHMOND, VA—Joseph T. Hackett, 31, of Asheville, North Carolina, was indicted by a federal grand jury today on four counts of health care fraud and one count of conspiracy to pay health care kickbacks.
Neil H. MacBride, United States Attorney for the Eastern District of Virginia; and Kenneth T. Cuccinelli, Attorney General of Virginia, made the announcement after the indictment was returned. Hackett faces a maximum penalty of 10 years in prison for each health care fraud count and five years in prison for the conspiracy count.
According to the indictment, Hackett owned and operated Access Regional Taskforce (ART), a Richmond-based Medicaid contracted provider of intensive in-home therapy services for children and adolescents. Intensive in-home therapy services, one of the many mental health services offered by Medicaid in Virginia, are designed to assist youth and adolescents who are at risk of being removed from their homes or are being returned to their homes after removal because of significant mental health, behavioral, or emotional issues. Medicaid requires that intensive in-home therapy providers employ qualified mental health workers to provide a medically necessary service to at-risk children and adolescents.
The indictment alleges that Hackett, through ART, billed Medicaid for services that were not reimbursable because the services did not address a child’s specific mental health issues, were not provided by qualified mental health workers, and were not provided to children who were in actual need of the offered services. It is alleged that Medicaid paid ART at least $1,570,041 that it was not entitled to receive. In addition, the indictment alleges that Hackett paid Creed Xtreme Marketing Concepts, aka Creed Extreme Marketing, $545,410 in illegal kickbacks for patient referrals. The owner of Creed, Lorie T. Monroe, pled guilty to conspiracy to receive illegal kickbacks on January 24, 2012.
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