Articles Posted in Medicare Fraud

Memorial Hermann Endoscopy and Surgery Center physicians agreed to pay more than $1.5 million to settle Medicare fraud allegations. Gurunath Thota Reddy, MD, and other surgery center physicians allegedly performed colonoscopies for 7.5 years that Medicare deemed “essentially worthless.” United Surgical Partners International operates the center, while the physicians are part of Houston-based Digestive & Liver Disease Consultants PA. Houston-based Memorial Hermann Health System is a minority owner.

A former nurse claimed center physicians were spending as little as two minutes on a colonoscopy, while not examining the entire colon. The nurse also claimed Dr. Reddy allegedly reused surgical gowns to save money. The nurse was fired the day after she brought the issues to the attention of USPI’s regional vice president. The practice’s lawyer Gene Besen disputed the timing and reason behind her dismissal.

Mr. Besen said in a statement the practice settled, “to avoid the cost of defending allegations and to continue to serve the community with the highest quality of care and standards as they have done for the last three decades.” Mr. Besen said the physicians have repeatedly denied the allegations.

The Macon-based Medical Center of Central Georgia, the second largest hospital in the state, will pay $20 million to settle allegations that it violated the False Claims Act by billing Medicare for more expensive inpatient services instead of less costly outpatient or observation services.

The feds alleged that from 2004 to 2008 the hospital knowingly charged Medicare for medically unnecessary inpatient admissions when the care provided should have been billed as less costly outpatient or observation services.

Since January 2009, the U.S. Justice Department has recovered more than $24 billion through False Claims Act cases, with more than $15.3 billion of that from cases involving fraud against federal health care programs.

ManorCare, one of the nation’s largest healthcare providers with 281 skilled nursing facilities (SNF’s) in 30 states has been sued under the False Claims Act in a whistleblower action now joined by The Justice Department (DOJ). The DOJ intervened in a  consolidated complaint against HCR ManorCare alleging that ManorCare knowingly and routinely submitted false claims to Medicare and Tricare for rehabilitation therapy services that were not medically reasonable and necessary.

The Government says that ManorCare, owned by The Carlyle Group, exerted pressure on SNF administrators and rehabilitation therapists to meet unrealistic financial goals that resulted in the provision of medically unreasonable and unnecessary services to Medicare and Tricare patients.

ManorCare allegedly set prospective billing goals designed to significantly increase revenues without regard to patients’ actual clinical needs and threatened to terminate SNF managers and therapists if they did not administer the additional treatments necessary to qualify for the highest Medicare payments.

Federal prosecutors in Florida are pursuing an unusual criminal fraud case  taking aim at billing practices of Medicare Advantage plans, which are popular with seniors because out-of-pocket costs are lower and they provide more benefits than traditional Medicare.The case centers on a South Florida doctor affiliated with Humana Inc., one of the industry’s biggest players.

A federal grand jury in West Palm Beach, Fla., indicted the doctor, Isaac Kojo Anakwah Thompson, on eight counts of health care fraud on Feb. 4. He’s accused of cheating Medicare out of about $2.1 million by claiming his Humana-enrolled patients were sicker than they actually were. Thompson, 55, was arrested and is free on a $1 million bond. Through his lawyer, he declined comment.

The indictment does not accuse Humana of wrongdoing and the company has repaid the Government.

Cardinal Health Inc. said in a regulatory filing that it has been sued by the government for fraud and violating health care laws for its marking and sale of continence and ostomy products.  The complaint in the case was apparently filed against Cardinal Health at Home division last year in the U.S. District Court in Massachusetts.

The Department of Justice has not yet determined if it will intervene in the case and is conducting an investigation, according to Cardinal, which is providing information to DOJ .

Jeffrey Newman represents whistleblowers. He does not represent whistleblowers in this case.

The Department of Justice is investigating 21st Century Oncology Holdings Inc. on allegations that it knowing billed for services that were not medically necessary and for services not rendered, according to the Wall Street Journal. Subpoenas issued to the company relate to a radiation therapy which the company asserts is used only for medical reasons and not profits. Continue reading

Bostwick Laboratories, Inc., an anatomic and pathology lab based in Uniondale, New York, has agreed to pay the United States$6,048,000 to resolve allegations regarding violations of the False Claims Act.

The qui tam complaint was filed in May 2008. It alleges that Bostwick Laboratories improperly billed Medicare and Medicaid for tests and services referred in violation of the Anti-Kickback Statute and for tests performed without a doctor’s order or consent. The Justice Department decided in June 2011 not to intervene in the case. In 2012, Senior District Judge S. Arthur Spiegel issued a well- reasoned order denying the defendants’ motions to dismiss. U.S. ex rel. Daugherty v. Bostwick Laboratories, et al., 2012 U.S. Dist. LEXIS 178641 (S.D. Ohio Dec. 18, 2012).

The case against Bostwick Laboratories settled after the company entered into settlement discussions with Mr. Daugherty and the United States based on its inability to pay the full value of the damages sought in the qui tam action.

Two managers and operators of three medical clinics with Medicare fraud and conspiracy to pay illegal kickbacks for medical procedures that were never actually provided.

Hovik Simitian, 47 and Anahit Shatvoryan, 49,  were each charged in with one count of conspiracy to commit health care fraud, six counts of health care fraud and one count of conspiracy to pay health care kickbacks.

According to allegations in the indictment, Simitian and and Shatvoryan managed and operated three medical clinics-Columbia Medical Group Inc., Life Care Medical Clinic and Safe Health Medical Clinic-out of two suites in the same Los Angeles office building. From February 2010 through June 2014, Simitian and Shatvoryan paid marketers illegal kickbacks to recruit Medicare beneficiaries to the clinics. They then submitted false claims to Medicare for services-including procedures such as anorectal manometry and nerve conduction tests-that were not medically necessary and never actually provided.

Atlantic Health System health system has been charged by a whistleblower that it designated Medicare beneficiaries as inpatients and prolonged their hospital stay to qualify them for skilled nursing care. In the case, filed in federal court, a Judge has ruled that this case may proceed and denied a Motion To Dismiss by the Atlantic Healthcare System. The whistleblower contends that the defendants improperly billed for inpatient rather than observation care to inflate their reimbursements, and that they “essentially stated” that they had full discretion to classify patients “as they pleased,” according to court documents

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 CHS agreed to pay $98.15 million to settle false claims allegations over its billing for inpatient admissions that should have been outpatient or observation services from 2005 through 2010, said DOJ, which intervened in the complaints.