Articles Tagged with Healthcare Fraud

A New Jersey man is facing fraud charges after a federal grand jury agreed he took advantage of senior citizens. The man is accused of operating a nonprofit with the intention of defrauding people with unnecessary tests. According to, Seth Rehfuss, 43, of Somerset NJ, used a nonprofit agency called Good Samaritans of America to commit “health care fraud and conspiracy to wrongfully access individually identifiable health information and to pay illegal remunerations to health care professionals.” The fraud lasted from July 2014 through December 2015, while he managed to deceive low-income seniors. The victims were told Good Samaritans of America was a nonprofit that helps seniors understand the federal benefit programs. But, the article says, the organization was a fraud. He actually used the nonprofit to scare victims into genetic testing. The indictment says Rehfuss used fear-based tactics by suggesting the seniors could be at risk for heart attacks, strokes, or cancer and even suicide if they did not have the genetic testing. He told them he was offering “personalized medicine.”

The article says that Rehfuss took DNA swabs from senior citizens in their homes and community rooms during fear-based presentations designed to get their personal information. He apparently tried to recruit healthcare providers on Craigslist. Once they signed a contract the healthcare providers received requisition forms that often included a patient’s personal information, Medicare information, medication lists, and diagnosis codes. The healthcare providers that choose to cooperate were paid to sign-off on requisition forms authorizing testing for patients “they never examined”.

The fraudulent scheme racked up over $1 million in Medicare costs at two laboratories. He also shared his commissions with a co-conspirator, Sheila Kahl. Together authorities say they were planning to expand to Georgia, Delaware, Virginia, Maryland, Pennsylvania, South Carolina, Michigan, Mississippi, Florida, Tennessee, and Arizona. The healthcare fraud conspiracy means he could be put away for a decade and pay a $250,000 fine, or twice the gross gain or loss from the offense. The conspiracy charge carries a possible 5-year sentence and a $250,000 fine, or twice the gross gain or loss from the offense. His co-conspirator, Sheila Kahl pleaded guilty and is awaiting sentencing.

j-300x198Steven M. Butcher, 39, owner of MedMax LLC, which provided marketing services for compounded medications, pleaded guilty before U.S. District Judge John Michael Vazquez in Newark federal Court for conspiracy to commit healthcare fraud and violate the Anti-Kickback Statute.

Butcher used his company, MedMax,  to convince people to obtain unneeded compound medications and then bill the costs to various private and federal healthcare insurance plans.  MedMax was a marketing company for compound medications.  Butcher also paid several kickbacks from 2014 to 2015 for many individuals to fraudulently bill a health care benefit program that primarily serviced military families, called TRICARE, for unnecessary compound medications.

Compounded pharmacies prepare personalized medications based on specific prescriptions that include instructions for exact strength and dosage.

healthcare-fraud-300x180Wyoming Psychologist Will Serve Prison Time for Health Care Fraud

A Wyoming Psychologist has admitted he committed health care fraud by falsely filing Medicaid claims. Gibson Buckley Condie, 57, of Powell, Wyoming has been sentenced to three years in prison and ordered to approximately $2.28 million in restitution, according to

The Scheme

The Justice Department Nets Billions in 2017 Through Healthcare Fraud Caseshealthcare fraud

The Department of Justice announced that in 2017 it recovered $2.4 billion from federal healthcare fraud cases. According to Health Payer Intelligence, this total added up to well over half of all the money recovered by the DOJ fraud investigations.

Healthcare fraud investigations account for 64% of the $3.7 billion recovered by DOJ across all industries, including housing and mortgage sectors, small business contracts, military contracts, and additional areas of oversight that fall under the False Claims Act.

opioid fraudOn November 29, 2017 Charles J. Gartland, D.O., age 59 of Cochranville, PA was indicted by a federal grand jury on charges of opioid diversion and health care fraud.

United States Attorney David J. Freed said the charges of the indictment were handed down based on the belief that Gartland headed up a plan to defraud two health care benefit programs, Wellspan Health of York, PA and Medicare, by writing 221 prescriptions written in the names of three of his family members between the dates of September 2014 and August 2017.  The prescriptions were for the opiates Hydrocodone, Oxycodone, Fentanyl, Morphine and other controlled substances. The majority of the prescriptions were written for Hydrocodone-Ibuprofen.

The indictment notes that the prescriptions were not written for treatment of the family members but rather for the personal use of Dr. Gartland. Because of this, the prescriptions were not written in the realm of professional medical practice and were not used for a medical reason.

According to the Wall Street Journal, emails and other documents reviewed by the paper’s reporters reveal information uncovered by a tipster alleging that Glaxo’s China sales staff provided doctors with speaking fees, cash payments, lavish dinners and all expenses paid trips in return for prescribing the drug company’s products. Glaxo says it is looking into the matter. Like in the U.S., patients in China need a doctor’s prescription to buy regulated drugs and drug sales persons meet frequently with doctors to try to get them to prescribe products. However, unlike the U.S., the government controls all of China’s health care system so any purchased are through government paid physicians. Under the U.S. Foreign Corrupt Practices Act it is illegal for companies with significant U.S. operations to bribe foreign officials or their agents in exchange for business. Whistleblower tipsters are now coming forward to be part of the Securities and Exchange Commission’s new whistleblower program allowing the tipsters a reward of up to 30% of the moneys recovered. The Glaxo whistleblower says that between 2004 through 2010 Glaxo regularly gave cash to its sales staff in China and some of that went directly to doctors at Chinese hospitals in return for prescribing drugs from the company. Recently Glaxo settled a case with the U.S. Department of Justice relating to its drug marketing practices. Under the new SEC program, whistleblowers may come forward anonymously through counsel, thereby protecting themselves. Jeffrey Newman represents whistleblowers.

The Most Common Types of Healthcare Fraud and Abuse are:

1.Billing for treatments never performed: Healthcare providers will often bill for services that were never provided by either using a real patient’s healthcare information or through medical identity theft to create or embellish claims.

2. Upcoding: This is a type of healthcare fraud and abuse where they falsely bill for a service that costs more than the service that was actually provided. In addition to healthcare fraud and abuse, this practice impacts patients by falsifying their medical records which can hinder them from obtaining insurance due to a nonexistent previous condition.

This month the government unveiled a scheme by two companies Omnicare and IVAX, which was uncovered when whistleblowers came forward to file lawsuits.The settlements WHICH RESULTED IN OVER $112 million returned to the givernment are based on five separate whistle blower lawsuits filed by private individuals and consolidated in U.S. District Court in Massachusetts under state and federal false claims statutes. The states and the federal government alleged that Omnicare and IVAX engaged in several unlawful kickback schemes:

* Omnicare solicited and received $8 million for agreeing to purchase $50 million in generic drugs from IVAX Pharmaceuticals and to push nursing home patients to use the drugs.

* Omnicare paid $50 million to certain nursing home chains in exchange for 15-year contracts to refer nursing home patients to Omnicare for the patients’ drug purchases.