Source- http://www.justice.gov/opa/pr/2014/February/14-civ-216.html
Omnicare Inc., an Ohio-based long-term care pharmacy, has agreed to pay the government $4.19 million to settle allegations that it engaged in a kickback scheme in violation of the False Claims Act, the Justice Department announced today. Omnicare provides pharmaceuticals and services to long-term care facilities and residents and other senior populations.
The settlement resolves allegations that Omnicare solicited and received kickbacks from the drug manufacturer Amgen Inc. in return for implementing “therapeutic interchange” programs that were designed to switch Medicaid beneficiaries from a competitor drug to Amgen’s product Aranesp. The government alleged that the kickbacks took the form of performance-based rebates that were tied to market-share or volume thresholds, as well as grants, speaker fees, consulting services, data fees, dinners and travel.
“Kickbacks are designed to influence decisions by health care providers, such as which drugs to prescribe,” said Assistant Attorney General for the Justice Department’s Civil Division Stuart F. Delery. “Americans who rely on federal health care programs, particularly vulnerable patients in skilled nursing facilities, are entitled to feel confident that decisions about their medical care are not tainted by improper financial arrangements.”
“The District of South Carolina has devoted significant resources over the last three years to pursuing claims under the False Claims Act, and this settlement is the latest example of this office’s successful efforts,” said U.S. Attorney for the District of South Carolina William Nettles. “I am very proud of the work this office has done in this area.”
This civil settlement resolves a lawsuit filed under the qui tam, or whistleblower, provision of the False Claims Act, which allows private citizens with knowledge of false claims to bring civil actions on behalf of the government and to share in any recovery. The relator’s share in this case is $397,925.
“Kickbacks corrode our federal health care programs,” said Derrick L. Jackson, Special Agent in Charge of the Office of Inspector General, U.S. Department of Health and Human Services in the region covering South Carolina. “OIG is committed to unveiling these illegal reciprocal relationships, and companies making or receiving such payments can expect serious consequences.”
The settlement with Omnicare Inc. was the result of a coordinated effort among the Civil Division, the U.S. Attorney’s Office for the District of South Carolina and the U.S. Department of Health and Human Services Office of Inspector General.
This settlement illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by Attorney General Eric Holder and Secretary of Health and Human Services Kathleen Sebelius. 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 this effort is the False Claims Act. Since January 2009, the Justice Department has recovered a total of more than $19 billion through False Claims Act cases, with more than $13.4 billion of that amount recovered in cases involving fraud against federal health care programs.
The claims settled by this agreement are allegations only; there has been no determination of liability.
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The owner of two Flint, Mich., adult day care centers was sentenced today for his leadership role in a $3.2 million Medicare fraud scheme.
Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney for the Eastern District of Michigan Barbara L. McQuade, Special Agent in Charge Paul M. Abbate of the FBI’s Detroit Field Office and Special Agent in Charge Lamont Pugh III of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) Chicago Regional Office made the announcement.
Glenn English, 53, was sentenced by United States District Judge Victoria A. Roberts in the Eastern District of Michigan to serve 96 months in prison. In addition to his prison term, English was sentenced to serve three years of supervised release and was ordered to pay $988,529 in restitution.
On Oct. 18, 2013, English and co-defendant Richard Hogan were found guilty by a federal jury for their roles in organizing and directing a psychotherapy fraud scheme through New Century Adult Day Program Services LLC and New Century Adult Day Treatment Inc. (together, New Century). English was convicted of one count of conspiracy to commit health care fraud and seven counts of health care fraud, and Hogan was convicted of one count of conspiracy to commit health care fraud.
Evidence presented at trial showed that from 2009 through 2012, New Century operated as an adult day care center that billed Medicare for psychotherapy services. English was New Century’s owner and chief executive officer. New Century brought in mentally disabled residents of Flint-area adult foster care (AFC) homes, as well as people seeking narcotic drugs, and used their names to bill Medicare for psychotherapy that was not provided. English and his co-conspirators lured drug seekers to New Century with the promise that they could see a doctor there who would prescribe to them the narcotics they wanted if they signed up for the psychotherapy program. New Century used the signatures and Medicare information of these drug seekers and AFC residents to claim that it was providing them psychotherapy, when in fact it was not.
The evidence also showed that English directed New Century employees to fabricate patient records to give the false impression that psychotherapy was being provided. English also instructed New Century clients to pre-sign sign-in sheets for months at a time for dates they were not there, and used these signatures to claim to Medicare that these clients had been provided services.
The evidence at trial showed that in little more than two years, New Century submitted approximately $3.28 million in claims to Medicare for psychotherapy that was not provided. Medicare paid New Century $988,529 on these claims.
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Source- http://www.justice.gov/usao/nj/Press/files/Goldberg,%20Charles%20Plea%20News%20Release.html
NEWARK, N.J. – An internist with a practice in Montclair, N.J., admitted today accepting bribes in exchange for test referrals as part of a long-running scheme operated by Biodiagnostic Laboratory Services LLC (BLS), of Parsippany, N.J., its president and numerous associates, U.S. Attorney Paul J. Fishman announced.
Charles Goldberg, 60, of West Orange, N.J., pleaded guilty before U.S. District Judge Stanley R. Chesler in Newark federal court to an information charging him with one count of accepting bribes.
Including Goldberg, 23 people – 12 of them physicians – have pleaded guilty in connection with the bribery scheme, which its organizers have admitted involved millions of dollars in bribes and resulted in more than $100 million in payments to BLS from Medicare and various private insurance companies.
According to documents filed in these and related cases and statements made in court:
Goldberg admitted accepting bribes of $1,800 per month through a sham lease agreement with BLS, which identified the waiting room, bathroom and one examination room in Goldberg’s office as being leased.
The bribery count to which Goldberg pleaded guilty carries a maximum potential penalty of five years in prison and a $250,000 fine. He will be sentenced on a date to be determined. As part of his guilty plea, Goldberg agreed to forfeit $58,000, representing the bribes he received from BLS.
The BLS investigation has recovered more than $7 million to date through forfeiture.
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Source- http://www.justice.gov/usao/ut/news/2014/02-26.html
SALT LAKE CITY - A federal grand jury returned an indictment Wednesday charging Charles Fredrick McCusker, age 62, of Salt Lake City, a licensed Utah psychologist, with health care fraud and mail fraud in connection with a health care fraud scheme the indictment alleges caused federal and private benefit programs to pay more than $1.3 million for services not provided to patients. The indictment alleges the conduct occurred from around 2007 to around August 2013.
The indictment, which includes 18 counts of health care fraud and 16 counts of mail fraud, follows a coordinated investigation by the FBI, the U.S. Health and Human Services’ Office of Inspector General, the Utah Insurance Fraud Division, the Utah Attorney General’s Office, and the U.S. Attorney’s Office. The indictment follows a state felony information filed on February 20, 2014, charging McCusker with 25 second degree felonies alleging identity fraud, insurance fraud, and pattern of unlawful conduct.
According to the indictment, McCusker conducted business as Health Balance International and New Life Balance in Salt Lake City.
The indictment alleges McCusker executed a scheme to defraud health care benefit programs by billing private insurers and government health care programs for services not provided to patients, resulting in payments to which he was not entitled.
McCusker, the indictment alleges, obtained health insurance information from patients under the guise that he would bill health care benefit programs only for services actually provided. As further steps in the scheme to defraud, McCusker did not meet at all with some patients nor did he provide any follow up services. Despite that fact, the indictment alleges, McCusker fraudulently billed patients’ health care programs for services he did not provide.
In other instances, McCusker met with a patient only once and provided no follow up services. Despite that fact, the indictment alleges, McCusker falsely billed the patients’ health care benefit programs for follow up services not provided. On other occasions, McCusker provided services to patients on several occasions but fraudulently billed these patients’ health care benefit programs for numerous additional services not provided.
According to the indictment, McCusker fraudulently submitted claims to health care benefit programs seeking reimbursement for services he did not provide. Those claims were processed and paid by health care benefit programs.
A summons will be issued to McCusker to appear in federal court. The potential maximum penalty for each count of health care fraud is 10 years and the penalty for each mail fraud count is 20 years.
Indictments are not findings of guilt. Individuals charged in indictments are presumed innocent unless or until proven guilty in court.
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Source- http://www.justice.gov/usao/ma/news/2014/February/WilkingSpencerpleaPR.html
BOSTON - The former medical director of a Waltham-based home health agency pleaded guilty today for his role in a home health fraud scheme which cost Medicare over $27 million.
Dr. Spencer Wilking, 65, of Concord, pleaded guilty today before U.S. District Judge Joseph L. Tauro to health care fraud. Sentencing is scheduled for May 20, 2014. The statutory maximum penalty for the crime is 10 years in prison, three years of supervised release, a fine of $250,000 or twice the gross loss to the Medicare program or twice the gross gain to Wilking (whichever is greater), restitution to Medicare, forfeiture of any proceeds of the offense, and exclusion from the Medicare program.
From at least April 2011 through March 2012, Wilking was employed as the Medical Director for MJG Management Company, d/b/a At Home VNA (AHVNA), a home health agency located in Waltham. During this period, Wilking signed certifications and recertifications to provide AHVNA home health services to hundreds of Medicare beneficiaries who did not qualify for services under the Medicare program. To qualify for home health services under the Medicare program, the beneficiary had to be: (1) confined to his/her home, (2) in need of skilled nursing services, physical therapy, or speech therapy on an intermittent basis or occupational therapy on a continuing basis, and (3) under the care of the physician who established the plan of care for home health services.
Prior to initially certifying eligibility, Wilking had to document that he, or another qualified health care provider, had a “face-to-face encounter” with the beneficiary, which showed that the patient was homebound and in need of home health services. Despite these legal requirements, Wilking certified hundreds of Medicare beneficiaries for home health services by AHVNA, without conducting a “face-to-face encounter” with the beneficiary, the vast majority of whom were not referred to AHVNA by their primary care physician or another physician who had examined the patient. Instead, Wilking typically certified services after spending a minimal amount of time reviewing patient assessment forms that were prepared by AHVNA nurses and/or participating in brief discussions about the patients with the nurses and/or AHVNA’s Clinical Director, Janice Troisi. Had Wilking reviewed the patient files, he would have discovered that many of the files contained information demonstrating that many of the patients were not homebound because, for example, they worked, took vacations, and spent substantial time outside the home. The patient files also contained information demonstrating that many patients had not requested home health services and/or were not provided with skilled nursing services.
Wilking’s certifications and recertifications allowed AHVNA to bill Medicare Part A for payment for these home health services. In addition, Wilking, billed Medicare Part B for both the certifications and subsequent recertifications. During the relevant time period, Medicare paid AHVNA over $1 million for the services certified by Wilking where the patients had not had the required face to face encounter with a physician. In addition, during the same period, Medicare paid nearly $30,000 to Wilking for certifying and recertifying the patients. Finally, between April 2011 and April 2012, AHVNA paid Wilking approximately $42,000 to serve as the company’s medical director.
In September 2013, the owner of AHVNA Michael Galatis, 62, of Natick and the Clinical Director, Janice Troisi, 64, of Revere, were charged with conspiracy to commit health care fraud and 11 counts of health care fraud. Galatis was also charged with seven counts of money laundering. According to the indictment, between 2007 and 2012, Galatis and Troisi conspired to fraudulently induce the Medicare program to pay for home health care services that, by and large, the Medicare beneficiaries did not need nor want. They trained AHVNA nurses to recruit Medicare beneficiaries who lived in residential facilities for senior citizens by asking if they were insured by Medicare, and if so, if they would like to have a nurse visit them in their home. The indictment also alleges that they trained the nurses to manipulate the patients’ initial assessments to make it appear as though the patients qualified for home health services pursuant to Medicare’s guidelines, when that was often not the case. The home health certifications and plans of care were then signed by Wilking, who certified that the patients were homebound and in need of skilled services, when, in fact, the overwhelming majority of AHVNA’s patients were not homebound and did not need home health services. During the course of the conspiracy, AHVNA submitted more than $27 million in false and fraudulent claims to Medicare, and Medicare paid AHVNA more than $20 million.
Both Galatis and Troisi have entered not guilty pleas. If convicted, they each face up to 10 years in prison, three years of supervised release, a $250,000 fine or twice the gross loss to the Medicare program or twice the gross gain to the defendant (whichever is greater), restitution to Medicare, forfeiture of any proceeds of the offenses, and exclusion from the Medicare program.
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Source- http://www.justice.gov/opa/pr/2014/February/14-civ-200.html
Diagnostic Imaging Group (DIG) has agreed to pay a total of $15.5 million to resolve allegations that its diagnostic testing facility falsely billed federal and state health care programs for tests that were not performed or not medically necessary and by paying kickbacks to physicians. Assistant Attorney General for the Justice Department’s Civil Division Stuart F. Delery, U.S. Attorney for the District of New Jersey Paul J. Fishman and U.S. Attorney for the Eastern District of New York Loretta E. Lynch announced the settlement today.
DIG has agreed to pay $13.65 million to the federal government and an additional total of $1.85 million to New York and New Jersey. DIG operates a chain of diagnostic testing facilities through its subsidiary, Doshi Diagnostic Imaging Services, which is headquartered in Hicksville, N.Y. DIG previously operated chains in New Jersey and Florida through subsidiaries Doshi Diagnostic Imaging Services of New Jersey and Signet Diagnostic Imaging Services.
“When health care providers pay kickbacks and submit false claims to Medicare, they not only deplete the Medicare Trust Fund, they undermine the integrity of the health care system,” said Assistant Attorney General Delery. “The Justice Department will relentlessly pursue those who misuse federal health care funds for their own profit.”
“Health care providers who make decisions based on profit instead of medical need compromise patient safety and confidence,” said U.S. Attorney Fishman. “Unnecessary tests and the payment of kickbacks also siphon precious resources from our health care system. The settlement we’re announcing today is an appropriate response to these unacceptable practices.”
The settlement announced today resolves allegations that DIG submitted claims to Medicare, as well as the New Jersey and New York Medicaid Programs, for 3D reconstructions of CT scans that were never performed or interpreted. Additionally, DIG allegedly bundled certain tests on its order forms so that physicians could not order other tests without ordering the additional bundled tests, which were not medically necessary. Today’s settlement also resolves allegations that DIG paid kickbacks to physicians for the referral of diagnostic tests. According to the government, the kickbacks were in the form of payments that DIG made to physicians ostensibly to supervise patients who underwent nuclear stress testing. These payments allegedly exceeded fair market value and were, in fact, intended to reward physicians for their referrals.
“Patients deserve testing decisions based solely on medical need, not doctors’ pocketbooks,” said U.S. Attorney Lynch. “We will continue to work with our federal and state law enforcement partners to investigate vigorously allegations of fraud on federal programs like Medicare and to pursue those who seek to fraudulently deplete the Medicare Trust Fund.”
“Paying physicians for their referrals and submitting false claims to increase Medicare and Medicaid reimbursements – as was alleged in this case – simply cannot be tolerated,” said Inspector General of the U.S. Department of Health and Human Services Daniel R. Levinson. “Besides levying a hefty penalty, the settlement requires an independent organization to review Diagnostic Imaging Group’s claims for five years and to send reports to the government.”
The allegations resolved by today’s settlement were raised in three lawsuits filed under the qui tam, or whistleblower, provisions of the False Claims Act. The Act allows private citizens with knowledge of fraud to bring civil actions on behalf of the government and to share in any recovery. The three whistleblowers, Mark Novick, M.D., Rey Solano and Richard Steinman, M.D., will receive $ 1.5 million , $ 1.07 million and $ 209,250 , respectively, as part of today’s settlement.
This settlement illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by Attorney General Eric Holder and Secretary of Health and Human Services Kathleen Sebelius. 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 this effort is the False Claims Act. Since January 2009, the Justice Department has recovered a total of more than $19 billion through False Claims Act cases, with more than $13.4 billion of that amount recovered in cases involving fraud against federal health care programs.
This case was handled by the Civil Division of the Department of Justice, the U.S. Attorney’s Office for the District of New Jersey and the U.S. Attorney’s Office for the Eastern District of New York. The settlement is the culmination of an investigation conducted jointly by special agents of the Department of Health and Human Services Office of Inspector General and the FBI with contributions from the Railroad Retirement Board.
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Source- http://www.justice.gov/usao/flm/press/2014/Feb/20140225_Chun.html
Tampa, Florida – United States Attorney A. Lee Bentley, III announced today that a Florida-based physician, Dr. Steven Chun, has agreed to pay $750,000 to resolve allegations that he and his clinic billed Medicare for physician office visits that he did not perform.
The United States alleges that, between 2006 and 2011, Dr. Chun owned and operated a clinic, first in Sarasota and then in Bradenton, called Sarasota Pain Associates. The United States alleges that, beginning in 2006, Dr. Chun billed Medicare for office visits at the highest levels possible, falsely claiming to have conducted comprehensive examinations of patients with complex problems. In fact, those patients visited Sarasota Pain Associates for scheduled procedures for which Dr. Chun was paid. In addition to getting paid for those procedures, Dr. Chun billed and was paid by Medicare for examinations that he did not in fact perform.
"This settlement is a significant achievement by our Civil Division, which showed great determination in pursuing a troubling pattern of billing fraud," said U.S. Attorney A. Lee Bentley, III. "This case should send a message that we will not tolerate this kind of health care fraud in the Middle District of Florida."
"Count on my agency to aggressively pursue cases whether the target is a large corporation or a single provider," said Christopher B. Dennis, Special Agent in Charge of the U.S. Department of Health and Human Services Office of Inspector General Miami region. "Besides a significant payment, Dr. Chun has agreed to let an independent organization review his claims for three years and then report to the government."
The allegations covered by the settlement were raised in a lawsuit filed by Cathia Gavin and Penelope Thomas, who both formerly worked as nurses for Dr. Chun. The suit was filed under the qui tam or whistleblower provisions of the False Claims Act, which permit private parties to sue on behalf of the United States for the submission of false claims and to receive a share of any recovery. The False Claims Act authorizes the United States to intervene in such lawsuits and take over primary responsibility for settling or litigating them.
In addition to the $750,000 payment, Dr. Chun will enter into a three-year Integrity Agreement with the U.S. Department of Health and Human Services, Office of Inspector General. The agreement requires Dr. Chun to attend training courses provided by the Centers for Medicare and Medicaid Services and to conduct an independent external review of his coding, billing, and claims submission to federal health care programs.
This settlement illustrates the government’s emphasis on combating health care fraud. One of the most powerful tools in this effort is the False Claims Act. Since January 2009, the Justice Department has recovered a total of more than $17 billion through False Claims Act cases, with more than $12.2 billion of that amount recovered in cases involving fraud against federal health care programs.
The investigation of this matter reflects a coordinated effort among the Commercial Litigation Branch of the Justice Department’s Civil Division, the U.S. Attorney’s Office for the Middle District of Florida, and the U.S. Department of Health and Human Services’ Office of Inspector General.
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Source- http://www.justice.gov/usao/ias/news/2014/Twyner%20-%20Guilty%202-21-2014.html
DES MOINES, IA - The United States Attorney for the Southern District of Iowa, Nicholas A. Klinefeldt, announces that Lafayette James Twyner, Jr., age 64, a former doctor in Newton, Iowa, pleaded guilty in United States District Court on February 21, 2014, to one count of health care fraud and one count of illegal distribution of a schedule III controlled substance resulting in death, announced United States Attorney Nicholas A. Klinefeldt. If approved by the district court at sentencing, the plea agreement calls for Twyner to serve a total of 8 years of incarceration, which will include 5 years in prison and 3 years of home and/or community confinement.
“The illegal distribution and abuse of prescription drugs is a significant problem,” explained Klinefeldt. “Our office, and the federal, state, and local law enforcement agencies that assisted with this prosecution, take seriously our duty to protect the public from such practices,” he added.
Federal law permits doctors, pharmacists, and other health care professionals with U.S. Drug Enforcement Administration registrations to lawfully dispense controlled substances if they are doing so in the usual course of their professional practices and for a legitimate medical purpose, but makes it illegal for them to knowingly issue a prescription to someone who is abusing or diverting a drug.
The indictment, filed October 23, 2012, charges Twyner with prescribing controlled substances in a manner likely to cause, and that did cause, dependence, addiction, and in one case, death, as well as failing to change his prescribing practices, even after being made aware of obvious signs of patient drug abuse and diversion. Additionally, the indictment alleges he caused various insurance companies to be billed for prescriptions and services that were not for a legitimate medical purpose.
Twyner surrendered his registration to prescribe controlled substances to the U.S. Drug Enforcement Administration in April 2011, shortly after a federal search warrant was executed at the location of now-defunct Urgent Care Clinic in Newton, where he then practiced medicine. According to public records from the Iowa Board of Medicine, Twyner, who was first licensed in Iowa in 1976, surrendered his license to practice medicine in 2012, and agreed to pay a $10,000 fine. Twyner was cited by the Iowa Board of Medicine for “engaging in a pattern of willful and repeated violation of the laws and rules governing the practice of medicine in Iowa, placing patients at risk of serious harm, when he prescribed excessive controlled substances to numerous patients, including patients with known drug histories.”
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Source- http://www.justice.gov/opa/pr/2014/February/14-civ-187.html
Pharmaceutical company Endo Health Solutions Inc. and its subsidiary Endo Pharmaceuticals Inc. (Endo) have agreed to pay $192.7 million to resolve criminal and civil liability arising from Endo’s marketing of the prescription drug Lidoderm for uses not approved as safe and effective by the Food and Drug Administration (FDA), the Justice Department announced today. The resolution includes a deferred prosecution agreement and forfeiture totaling $20.8 million and civil false claims settlements with the federal government and the states and the District of Columbia totaling $171.9 million. Endo Pharmaceuticals Inc. is a Delaware corporation headquartered in Malvern, Pa.
“FDA’s drug approval process is designed to ensure that companies market their products for uses that are proven to be safe and effective,” said Assistant Attorney General for the Justice Department’s Civil Division Stuart F. Delery. “We will hold accountable those who circumvent that process in pursuit of financial gain.”
In a criminal information filed today in the Northern District of New York, the government charged that, between 2002 and 2006, Endo Pharmaceuticals Inc. introduced into interstate commerce Lidoderm that was misbranded under the Federal Food, Drug and Cosmetic Act (FDCA). The FDCA requires a company, such as Endo Pharmaceuticals Inc., to specify the intended uses of a product in its new drug application to the FDA. Once approved, a drug may not be introduced into interstate commerce for unapproved or “off-label” uses until the company receives FDA approval for the new intended uses. During the period of 2002 to 2006, Lidoderm was approved by the FDA only for the relief of pain associated with post-herpetic neuralgia (PHN), a complication of shingles. The information alleges that, during the relevant time period, the Lidoderm distributed nationwide by Endo Pharmaceuticals Inc. was misbranded because its labeling lacked adequate directions for use in the treatment of non-PHN related pain, including low back pain, diabetic neuropathy and carpal tunnel syndrome. These uses were intended by Endo Pharmaceuticals Inc. but never approved by the FDA. The information further alleges that certain Endo Pharmaceuticals Inc. sales managers provided instruction to certain sales representatives concerning how to expand sales conversations with doctors beyond PHN and encouraged promotion of Lidoderm in workers’ compensation clinics.
In a deferred prosecution agreement to resolve the charge, Endo Pharmaceuticals Inc. admitted that it intended that Lidoderm be used for unapproved indications and that it promoted Lidoderm to health care providers for those unapproved indications. Under the terms of the deferred prosecution agreement, Endo Pharmaceuticals Inc. will pay a total of $20.8 million in monetary penalties and forfeiture. Endo Pharmaceuticals Inc. further agreed to implement and maintain a number of enhanced compliance measures, including making publicly available the results of certain clinical trials and requiring an annual review and certification of its compliance efforts by the Chief Executive Officer of its parent company, Endo Health Solutions. The deferred prosecution agreement will not be final until accepted by the U.S. District Court for the Northern District of New York.
“The safety and efficacy of drugs must be shown by science, not sales pitches,” said U.S. Attorney for the Northern District of New York Richard S. Hartunian. “Drugs marketed for intended uses not approved by the FDA are misbranded because their labeling lacks adequate directions for those uses. This settlement emphasizes that public health is protected by labeling based on product performance, rather than profitability, and promotes enhanced efforts to ensure compliance with all requirements.”
In addition, Endo agreed to settle its potential civil liability in connection with its marketing of Lidoderm. The government alleged that, from March 1999 through December 2007, Endo caused false claims to be submitted to federal health care programs, including Medicaid, a jointly funded federal and state program, by promoting Lidoderm for unapproved uses, some of which were not medically accepted indications and, therefore, were not covered by the federal health care programs. Of the $171.9 million Endo has agreed to pay to resolve these civil claims, Endo will pay $137.7 million to the federal government and $34.2 million to the states and the District of Columbia.
“Off-label marketing can undermine the doctor-patient relationship and adversely influence the clear and honest judgment of doctors that their patients rely on and trust,” said U.S. Attorney for the Eastern District of Pennsylvania Zane D. Memeger. “Pharmaceutical companies have a legal obligation to promote their drugs for only FDA-approved uses. This obligation takes precedence over the company’s bottom line.”
“The settlement announced today demonstrates the government’s continued scrutiny of pharmaceutical companies that interfere with FDA’s mission of ensuring that drugs are safe and effective for the American public,” said Special Agent in Charge of the FDA’s Office of Criminal Investigations’ New York Field Office Mark Dragonetti. “We will continue to work with our law enforcement partners to investigate and prosecute pharmaceutical companies that disregard the drug approval process and jeopardize the public health by engaging in the nationwide distribution of misbranded products.”
“Endo Pharmaceutical enriched themselves at the expense of the public,” said Special Agent in Charge Andrew W. Vale of the Albany Division of the Federal Bureau of Investigation. “Patients will search for drug therapies to assist in pain management, and they deserve the right to drugs approved for such use. The FBI will continue to work with our federal partners to investigate companies such as Endo Pharmaceuticals to ensure patients are safe.”
Also as part of the settlement, Endo Pharmaceuticals Inc. has agreed to enter into a Corporate Integrity Agreement (CIA) with the Department of Health and Human Services Office of Inspector General that requires Endo to implement measures designed to avoid or promptly detect conduct similar to that which gave rise to this resolution. Among other things, the CIA requires Endo to implement an internal risk assessment and mitigation program and requires numerous internal and external reviews of promotional and other practices. The CIA also requires key executives and individual board members to sign certifications about compliance, and it requires the company to publicly report information about its financial arrangements with physicians.
“By marketing Lidoderm for uses not covered by federal health care programs, Endo profited at the expense of taxpayers and could have put patients at risk,” said Inspector General of the U.S. Department of Health and Human Services Daniel R. Levinson. “Under our CIA, Endo agrees to promote its products legally, while board members and top executives are specifically held accountable for compliance.”
The civil settlement resolves three lawsuits pending in federal court in the Eastern District of Pennsylvania under the qui tam, or whistleblower, provisions of the False Claims Act, which allow private citizens to bring civil actions on behalf of the government and to share in any recovery. The actions were filed by Peggy Ryan, a former Lidoderm sales representative, Max Weathersby, another former Lidoderm sales representative and Gursheel S. Dhillon, a physician. The whistleblowers’ share of the settlement has not been determined.
This settlement illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by Attorney General Eric Holder and Secretary of Health and Human Services Kathleen Sebelius. 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 this effort is the False Claims Act. Since January 2009, the Justice Department has recovered a total of more than $19 billion through False Claims Act cases, with more than $13.4 billion of that amount recovered in cases involving fraud against federal health care programs.
The civil settlement was handled by the U.S. Attorney’s Office for the Eastern District of Pennsylvania and the Civil Division’s Commercial Litigation Branch. The criminal case was handled by the U.S. Attorney’s Office for the Northern District of New York and the Civil Division’s Consumer Protection Branch. These matters were investigated by the Federal Bureau of Investigation, the Food and Drug Administration Office of Criminal Investigation, the Department of Health and Human Services Office of Inspector General Office of Investigations, the Defense Criminal Investigative Service of the Department of Defense, the U.S. Postal Service Office of Inspector General and the Office of Personnel Management Office of Inspector General with assistance from the Department of Health and Human Services Office of Counsel to the Inspector General and Office of General Counsel and Center for Medicare and Medicaid Services, the Food and Drug Administration’s Office of Chief Counsel and the National Association of Medicaid Fraud Control Units.
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Dr. Chang Ho Lee, 68, of Palisades Park, N.J., pleaded guilty today to health care fraud and agreed to forfeit more than $3.4 million in fraud proceeds.
Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney Loretta Lynch of the Eastern District of New York, Assistant Director in Charge George Venizelos of the FBI’s New York Field Office and Special Agent in Charge Thomas O’Donnell of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) made the announcement.
According to court documents, Lee, who is a medical doctor, and two others recruited patients by offering free lunches and recreational classes and provided them with spa services, such as massages and facials, then falsely billed Medicare for more than $13 million using those patients’ Medicare numbers. Lee and the others billed Medicare for physical therapy, lesion removals and other services that were neither medically necessary nor provided. The scheme took place at three clinics: URI Medical Center and Sarang Medical PC in Flushing, N.Y., and 999 Medical Clinic in Brooklyn, N.Y. Lee received more than $3.4 million through the submission of the fraudulent claims.
Lee is scheduled to be sentenced by United States District Judge Raymond J. Dearie of the Eastern District of New York on June 13, 2014. At sentencing, he faces a maximum sentence of 10 years in prison and approximately $3.4 million in mandatory restitution.
The case was investigated by the FBI and HHS-OIG and brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of New York. The case is being prosecuted by Senior Trial Attorney Nicholas Acker and Trial Attorney Bryan D. Fields from the Criminal Division’s Fraud Section.
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Report Medicare & Medicaid Fraud by Calling 1-888-985-9844 or by visiting
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Source- http://www.justice.gov/usao/gan/press/2014/02-20-14.html
ATLANTA – Lawrence Eppelbaum has been sentenced to 50 months in prison and fined $3.5 million following his trial conviction on health care fraud, tax fraud and money laundering charges.
“Our Medicare system is premised on the ability of patients to make a choice about their doctor and their treatment without undue interference, and our tax system is based on each taxpayer paying his or her fair share,” said United States Attorney Sally Quillian Yates. “The defendant cheated both systems by illegally enticing his patients with gifts and then evading paying taxes on the substantial income he earned from treating those patients. His choice to practice fraud along with medicine has earned him substantial time in federal prison.”
“Those who swindle and deceive the Medicare program should expect to pay dearly for their crimes,” said Derrick L. Jackson, Special Agent in Charge of the Office of the Inspector General for the U.S. Department of Health and Human Services Atlanta Region. “Having been outsmarted by federal law enforcement, Eppelbaum was aggressively prosecuted and will now do years of hard time.”
Ricky Maxwell, Acting Special Agent in Charge, FBI Atlanta Field Office, stated: “Today’s sentencing of Dr. Eppelbaum should serve as a reminder to others considering similar such fraudulent and criminal activities targeting our publicly funded health care programs that federal agencies, including the FBI, are prepared to investigate them and hold them accountable for those criminal actions.”
“In addition to abusing the Medicare system, Eppelbaum committed tax fraud by claiming contributions to charitable organizations that he did not make,” stated Veronica F. Hyman-Pillot, Special Agent in Charge with IRS Criminal Investigation. “The sentence announced today reinforces the commitment by law enforcement and the United States Attorney’s Office that individuals who steal from the government will be held accountable.”
According to United States Attorney Yates, the charges and other information presented in court: Eppelbaum is a physician who is licensed to practice medicine in Georgia and operates the “Atlanta Institute of Medicine and Rehabilitation” (“AIMR”) and the “Pain Clinic of AIMR” in Atlanta. In 2004, Eppelbaum created the “Back Pain Fund,” a purported charitable organization that he controlled both directly and indirectly. Eppelbaum, through the Back Pain Fund, paid for Medicare patients to travel to Atlanta to receive medical treatment from his practice, then travel to Florida to visit a local hot spring for approximately four days, before returning to Atlanta to receive additional treatment.
Eppelbaum was the primary donor to the Back Pain Fund and paid the vast majority of its operating expenses. Eppelbaum tried to disguise his financial control over the Back Pain Fund by entering into an arrangement with the Torah Day School, a Jewish Day School in Atlanta, whereby the parents of students attending the Torah Day School were instructed to make their tuition checks payable to the Back Pain Fund instead of to the school, and in turn, Eppelbaum repaid the Torah Day School for the amount of the tuition, plus an additional 25 percent. Eppelbaum entered into similar arrangements with other organizations, and even caused patients who were treated at his medical practice to make their checks payable to the Back Pain Fund. Between 2004 and 2009, Eppelbaum treated hundreds of Back Pain Fund patients and received approximately $16 million for their treatment from Medicare.
Eppelbaum also utilized the Back Pain Fund as a vehicle for committing tax fraud. Between 2006 through 2008, Eppelbaum deducted as charitable donations all the payments he made to the Back Pain Fund, the Torah Day School, and other organizations with which he had a financial arrangement, even though Eppelbaum derived substantial personal income from treating Back Pain Fund patients. Eppelbaum evaded approximately $1 million in federal income taxes through his scheme.
Eppelbaum, 54, of Roswell, Georgia, was sentenced by United States District Judge Amy Totenberg. He was charged with 27 counts of healthcare fraud, tax fraud and money laundering. Following a two-week trial in June 2013, the jury found him guilty of all 27 counts.
Source- http://www.justice.gov/usao/cac/Pressroom/2014/023.html
LOS ANGELES – Three people linked to a Glendale medical clinic – including a doctor who took money to let his name be used thousands times on bogus prescriptions – were found guilty today of federal fraud charges related to a $20 million scheme to defraud Medicare and Medi-Cal by, among other things, fraudulently prescribing expensive anti-psychotic medications and then re-billing the government for those drugs over and over.
Today’s convictions stem from the first case in the nation alleging an organized scheme to defraud government health care programs through fraudulent claims for anti-psychotic medications. The evidence presented at trial showed how the operators of Manor Medical Imaging in Glendale operated a clinic authorized to make claims to Medicare and Medi-Cal, employed an unlicensed medical practitioner to write bogus prescriptions using an American doctor’s name and license number, and had close relationships with pharmacies and a fraudulent drug wholesale company that were used to funnel prescription drugs back to the pharmacies participating in the scheme.
In the largest case of its kind in Southern California brought against defendants who bilked Medicare Part D, prosecutors showed a federal jury how employees of Manor Medical generated thousands of prescriptions for identify theft victims – such as elderly Vietnamese beneficiaries of Medicare or Medi-Cal, military veterans who were recruited from drug rehab programs, and denizens of Skid Row. Members of the conspiracy created or doctored patient files to make it falsely appear the drugs were necessary and the patients were legitimately treated. After the prescriptions were filled at pharmacies and paid for by Medicare and Medi-Cal, they were sold on the black market and redistributed to pharmacies, where the drugs would be subject to new claims made to Medicare and Medi-Cal as though they were new bottles of drugs.
The scheme generated fraudulent billings of more than $20 million dollars, of which Medi-Cal and Medicare actually paid more than $8 million.
“The defendants took advantage of this nation’s most vulnerable citizens and took millions of dollars from public health care programs that are designed to help the disadvantaged,” said United States Attorney André Birotte Jr. “Members of this scheme caused thousands of bottles of dangerous prescription drugs to be diverted to the black market. This case is an example of how operators of health care fraud schemes will be brought to justice, whether they be doctors who enable the fraud or those on the street who recruit patients and divert prescription drugs to the black market.”
The three defendants convicted today are:
Dr. Kenneth Johnson, 47, of Ladera Heights, who served as the face of Manor with pharmacists and auditors from Medicare and Medi-Cal, and who pre-signed thousands of blank prescriptions that were filled out by co-conspirators;
Nuritsa Grigoryan, 49, of Glendale, who holds an Armenian medical license and who pretended to be an American doctor when she saw homeless “patients” at the clinic and filled out the bogus prescriptions pre-signed by Dr. Johnson; and
Artak Ovsepian, 32, of Tujunga, one of the leaders of the conspiracy who oversaw the acquisition of drugs at pharmacies using the bogus prescriptions.
The three defendants were convicted of health care fraud conspiracy, aggravated identity theft, conspiracy to misbrand pharmaceutical drugs, false statements to the federal government, and conspiracy to use other persons’ identification documents in furtherance of fraud.
Following the reading of the verdicts, United States District Judge S. James Otero, who presided over the three-week trial, said, “The scope of the fraud was breathtaking.” Judge Otero said the defendants “preyed upon the poor [and] used them as pawns.”
Judge Otero is scheduled to sentence Grigoryan and Ovsepian on June 9. Johnson is scheduled to be sentenced on June 30. At sentencing, all three defendants will face a mandatory sentence of two years in federal prison for committing aggravated identity theft. In addition to the two-year terms, Johnson and Grigoryan statutory maximum sentences of 30 years in federal prison, while Ovsepian will face an additional sentence of up to 35 years.
A fourth defendant who went to trial – Artyom Yeghiazaryan, a driver who took beneficiaries to pharmacies – was acquitted by the jury.
With today’s verdicts, a total of 16 defendants charged in 2011 (see:http://www.justice.gov/usao/cac/Pressroom/2011/157.html) have now been convicted of various charges related to the health care fraud scheme. A total of 18 defendants were indicted in relation to the scheme centering on Manor Medical, but also involving pharmacies in and around the San Gabriel Valley. The conspiracy was essentially a “prescription harvesting” scheme in which Medicare and Medi-Cal beneficiaries were recruited or had their identities stolen, the beneficiary information was used to bill Medicare and Medi-Cal for millions of dollars of illegitimate medical services and prescriptions, and the drugs that were dispensed by the pharmacies were diverted to black market wholesalers and back to the pharmacies so the drugs could be used to submit new bills to Medicare and/or Medi-Cal as though the drugs had never been dispensed.
“This scheme to defraud federal and state governments endangered the public’s health by putting adulterated medicines onto the U.S. market,” said John Roth, Director, FDA’s Office of Criminal Investigations. “We will continue to bring to justice those who put profits above health and safety.”
IRS Criminal Investigation Special Agent in Charge Joel P. Garland said, “Using the identities of the most vulnerable members of society to defraud government health care programs is a despicable crime. It depletes scarce taxpayer dollars and will not be tolerated. Law enforcement officers will respond to it using every legal resource at our disposal. Let this conviction serve as a warning to those who are considering similar conduct.”
The primary pharmacy involved in the case, Huntington Pharmacy in San Marino, was operated by a Pasadena couple whose business grew dramatically due its affiliation with Manor Medical, including Medi-Cal claims that jumped from $50,000 in 2009 to approximately $1.5 million in 2010. One of the owners of the pharmacy, Phic Lim, is scheduled for trial on August 19. His wife, Theana Khou, previously pleaded guilty as part of a joint resolution with another case filed against her and her husband.
“As today's verdicts make clear, federal and state law enforcement will crack down hard on these organized Medicare and Medi-Cal drug benefit fraud schemes,” said Glenn R. Ferry, Special Agent in Charge of the U.S. Department of Health and Human Services Office of Inspector General Los Angeles region. “This case, involving very expensive brand name anti-psychotic drugs, is the largest of its kind here in Southern California.”
Source- http://www.justice.gov/usao/md/news/2014/ThreeMedicalGroupsAndAMedicalBillingCompanyAgreeToPay3340979ToResolveInvestigationInto.html
Baltimore, Maryland B Medical billing company Engage Medical, Inc., its owner Sanjay Puri and three medical practices that were its clients have agreed to pay a total of $3,340,979 to resolve claims that Engage Medical overbilled for nuclear stress tests. Engage Medical and Sanjay Puri have agreed to pay $544,500; Advanced Cardiology Center and its owners Pankaj Lal, M.D., Mubashar Choudry, M.D. and Moshin Ijaz, M.D. agreed to pay $1,894,549.50; Reva Gill, M.D. and Kenilworth Internists, P.A. agreed to pay $242,204; and Sureshkumar Muttath, M.D. agreed to pay $659,726.
The settlement was announced by United States Attorney for the District of Maryland Rod J. Rosenstein and Special Agent in Charge Nicholas DiGiulio, Office of Investigations, Office of Inspector General of the Department of Health and Human Services.
“When medical providers can enrich themselves at taxpayers’ expense by falsely representing that they provided expensive procedures, the government must be vigilant in pursuing fraudulent claims,” said U.S. Attorney Rod J. Rosenstein. “Anyone who knowingly reports false medical billing codes to induce the government to pay more money is lying, cheating and stealing.”
The allegations resolved in the settlement agreement involve overbilling of nuclear stress tests between July 31, 2007 and March 8, 2011. Engage Medical operated in Virginia, Washington, D.C. and Maryland. During this time, Engage Medical contracted with physicians and physician practices, holding itself out as having expertise in medical billing. Engage Medical staff would obtain records from physician clients related to the medical services provided, and transmit that information to staff in India, where medical coders would apply the relevant Current Procedural Terminology (“CPT”) codes and bill applicable insurance, including Medicare and other federally funded health insurance programs.
The billings at issue involved nuclear stress tests which are designed to assess cardiac function. Engage Medical marketed these tests to general practitioners, persuading them that instead of referring the patients to cardiologists for these tests, Engage could arrange to have the testing service performed in the general practitioner’s offices and bill for the tests, all of which would increase the general practitioners’ incomes. Dr. Muttath and Dr. Gill, two internists, agreed to allow Engage to provide this service.
Engage Medical’s billing of these tests, however, was false and in direct contradiction to published materials about such medical billing. Engage Medical systematically billed for each service twice, using a CPT code modifier intended to be used when the service had been repeated by the same physician or when a distinct service was performed on the same day. In fact, none of the tests were repeated and none of the tests was a distinct procedural service.
Engage Medical also included with its billing a CPT code that was intended to be used for interpreting and reporting images, even though proper CPT coding for a nuclear stress test already compensated the physician for interpreting and reporting the tests results. This is called “unbundling” and occurs when a medical biller falsely adds additional CPT codes for services – such as interpreting the test – that are already encompassed by the CPT code for the nuclear stress test itself. In unbundling in this way, however, Engage Medical ignored the plain language in the applicable CPT coding manuals that specifically told coders not to use the reporting and interpretation CPT codes when billing for nuclear stress tests. Billing staff at Engage Medical learned that by merely adding these codes it could increase the amount Medicare and other federally insured medical programs would pay to the medical provider clients.
In 2009, Engage Medical contracted with Advanced Cardiology Center and its three physician owners: Pankaj Lal, M.D., Mubashar Choudry, M.D. and Moshin Ijaz, M.D. Advanced Cardiology hired Engage Medical to re-bill claims for nuclear stress tests that Advanced Cardiology had already performed, billed and been paid for, in some cases years before. Advanced Cardiology gave Engage Medical access to Advanced Cardiology’s billing files and Engage Medical isolated the instances where Advanced Cardiology had performed and been paid for nuclear stress tests. Using its false billing model, Engage Medical resubmitted the nuclear stress tests for payment a second time, using the CPT codes that reflected a distinct or repeat service, and also added the unbundled code for interpretation. Unlike the internists, however, Advanced Cardiology did not retain Engage Medical to bill claims after February 2010 and thus Advanced Cardiology did not give Engage Medical access to Advanced Cardiology medical records of its patients beyond that time. Rather, Advanced Cardiology employed the Engage Medical model itself, with its own billers applying the false CPT codes to new tests that the cardiologists at Advanced Cardiology performed.
