Articles Tagged with Medicare Fraud

Medical device manufacturer ev3 Inc. has agreed to plead guilty to charges related to its neurovascular medical device, Onyx Liquid Embolic System, and pay $17.9 million, the Department of Justice announced today.  Covidien LP, whose parent acquired ev3, separately paid $13 million to resolve False Claims Act allegations resulting from its alleged payment of kickbacks in connection with another medical device, the Solitaire mechanical thrombectomy device. FDA officials told ev3 executives that a study would be required to gain approval for uses of Onyx outside the brain and to ensure that the benefits of the device outweighed the risks.  Rather than conduct a study to ensure the safety and effectiveness of Onyx for uses outside the brain, ev3’s sales representatives sometimes attended surgical procedures and provided explicit instructions to surgeons regarding how to use Onyx for unapproved surgical procedures outside the brain, including in quantities far larger than what would be used in the brain.  According to the criminal information, ev3’s management also set-up a system of sales quotas and bonuses that incentivized sales representatives to sell Onyx for unapproved uses and trained the sales force how to instruct physicians on unapproved uses of the device.

Pursuant to a criminal information filed today in U.S. District Court for the District of Massachusetts, ev3 will plead guilty to a misdemeanor charge in connection with the company’s distribution of adulterated Onyx, in violation of the Food, Drug and Cosmetic Act.  As part of the criminal resolution, ev3 will pay a criminal fine of $11.9 million and will forfeit $6 million.

According to the plea agreement, Onyx was approved by the U.S. Food and Drug Administration (FDA) as a liquid embolization device that is surgically injected into blood vessels to block blood flow to arteriovenous malformations in the brain.  The FDA has approved Onyx only for use inside the brain.  Despite the FDA’s limited approval of Onyx, from 2005 to 2009, ev3 sales representatives encouraged surgeons to use Onyx in large quantities for unproven and potentially dangerous surgical uses outside the brain.  The company’s sales force continued to tout unapproved and potentially dangerous uses of Onyx even after FDA officials told ev3 executives that they had specific safety concerns regarding uses of Onyx outside the brain at a 2008 meeting.  FDA officials told ev3 executives that a study would be required to gain approval for uses of Onyx outside the brain and to ensure that the benefits of the device outweighed the risks.

Jacklyn Price, the owner of two Detroit health clinics was sentenced to 13 years in prison for her role in an $8.6 million scheme involving fraudulent Medicare claims.  Price owned Patient Choice Internal Medicine and Metro Mobile Physicians, two Detroit-based Medicare providers. Reports say Price and several others had a scheme of falsified claims for home health care and other physician services that were obtained through kickbacks, weren’t medically necessary, provided by an unlicensed physician or weren’t performed. The defendants offered to pay kickbacks and bribes in the form of cash payment and prescription narcotics to Medicare beneficiaries in exchange for the use of their Medicare beneficiary numbers, according to a grand jury indictment. Price specifically would provide prescriptions for medically unnecessary controlled substances, including oxycodone, to Medicare beneficiaries. She then would submit claims for services purportedly provided by Metro Mobile and Patient Choice that were medically unnecessary and not provided to those beneficiaries, according to the federal complaint.

Price pleaded guilty in April 2017 to one count of conspiracy to commit health care fraud and one count of health care fraud. Her  co-defendant, Millicent Traylor, 47, of Detroit, was ordered in September to serve more than 11 years in prison. According to evidence presented at trial, Traylor and co-conspirators worked to defraud the program through fake home health and physician claims from 2011-16. The evidence revealed they conspired to cause Medicare to be billed for services never rendered, but falsified medical records and signed false documents to make it appear they were. Traylor was convicted in May 2018 of one count of conspiracy to commit health care fraud, one count of conspiracy to pay and receive health care kickbacks, and five counts of health

Waveney Blackman, the owner of WaveCare HEalth Services, a company that provided durable medical equipment pleaded guilty today to a federal charge of health care fraud for carrying out a scheme in which she fraudulently obtained more than $9.4 million in District of Columbia Medicaid payments.According to the plea documents, Blackman devised and executed a scheme to submit false and fraudulent claims to Medicaid for durable medical equipment, including incontinence and wound care supplies, which she knew were not purchased or provided to Medicaid beneficiaries.  From January 2010 through approximately June 2016, Blackman sent and caused employees to send false and fraudulent invoices to a biller engaged by the company, which were then submitted to Medicaid.  All told, she submitted and caused the submission of at least $9.8 million in false and fraudulent claims to Medicaid.  Blackman, through WaveCare, fraudulently obtained $9,431,979 from Medicaid.

Waveney Blackman, 71, of Bowie, Maryland, pleaded guilty in the U.S. District Court for the District of Columbia.  Her sentencing is scheduled on Oct. 18 before the Honorable Thomas F. Hogan.

Blackman was the sole owner and chief executive officer of WaveCare Health Services LLC, also known as WaveCare Healthcare Services LLC.  The company, based in the District of Columbia, was a provider of durable medical equipment, including wound care and incontinence supplies, to Medicaid beneficiaries and others.  It became a Medicaid provider in 2008.

Medicare-fraud-300x200Fake Treatments and Paperwork Lead to Arrest in Medicare Fraud Case

A physician has been indicted for stealing nearly $1 million in Medicare fraud scheme that also included private insurance. Dr. Pranav Patel, of the Chicago area, allegedly submitted fake insurance claims for medical tests and exams that were never conducted.

The Scam

pharmacy-fraud-300x200Massive Pharmacy Fraud Scheme Involved Bribes for Patient Information

A Florida man was sentenced to 15 years in prison for pharmacy fraud that involved $100 million in scams. The wide-reaching scheme impacted private insurance companies, and Medicare and TRICARE.

The Pharmacy Fraud

Ambulance company employeeAharon Aron Krkasharyan, 54, of Los Angeles, California, was sentenced by U.S. District Judge George H. Wu of the Central District of California, who also ordered Krkasharyan to pay $484,556 in restitution to Medicare, jointly and severally with his co-conspirators, who await sentencing.  On Nov. 27, 2017, Krkasharyan pleaded guilty to one count of conspiracy to commit health care fraud. According to court documents, during the course of the conspiracy, Mauran submitted over $28 million in claims to Medicare.  Krkasharyan’s co-defendants admitted that at least $6.6 million of those claims were false and fraudulent claims for medically unnecessary transportation services.  Medicare paid at least $3.1 million on those false and fraudulent claims.

Krkasharyan was employed as the Quality Improvement Coordinator for Mauran Ambulance Inc. (Mauran) of San Fernando, California, an ambulance transportation company operating in the greater Los Angeles area that provided non-emergency services to Medicare beneficiaries, many of whom were dialysis patients.  As part of his plea, Krkasharyan admitted that between June 2011 and April 2012, he conspired with other Mauran employees to submit claims to Medicare for ambulance transportation services for individuals who did not need such services.  Krkasharyan also admitted that he and his co-conspirators instructed Mauran emergency medical technicians to conceal the patients’ true medical conditions by altering paperwork and creating fraudulent reasons to justify the ambulance services.

Krkasharyan was charged along with Toros Onik Yeranosian, 55, the former owner of Mauran; Oxana Loutseiko, 57, the former general manager of Mauran; and Maria Espinoza, 47, a former employee of a Los Angeles dialysis treatment center.  Yeranosian, Loutseiko and Espinoza each pleaded guilty and are pending sentencing.  The former dispatch supervisor at Mauran, Christian Hernandez, 37, who was previously charged in the case, has also pleaded guilty and awaits sentencing.

New Oaklawn Investments, LLC, d/b/a Oaklawn Health and Rehabilitation Center and Elmcroft Senior Living, Inc., a Louisville based skilled nursing facility, agreed to pay $5,191,470 to resolve allegations that it violated the False Claims Act by submitting false claims for payment to the Medicare Program, announced United States Attorney Russell M. Coleman.

“Today’s settlement is the result of this office working in a coordinated effort with Medicare’s Unified Program Integrity Contractor, AdvanceMed, to ensure that taxpayer dollars are not misspent – especially when providing vital services to our senior community,” stated United States Attorney Russell Coleman. “The more than 5 million dollar settlement underscores our continued commitment to uncovering health care fraud.” Oaklawn is a for-profit skilled nursing facility with 128 beds located in eastern Jefferson County, Kentucky, that was managed by Elmcroft.

The government contends that during the period from February 26, 2007 through February 26, 2010, Oaklawn improperly billed Medicare for patient rehabilitation services at the resource utilization (“RUG”) Code Series Rehabilitation Ultra High and Rehabilitation Very High, for certain services that were not reasonably or medically necessary.

SightLine Health LLC (SightLine), which operates radiation therapy centers throughout the United States, will pay $11.5 million to settle a False Claims Act lawsuit alleging that it knowingly submitted claims to the Medicare program that violated the Anti‑Kickback Statute.  Together with Integrated Oncology Network Holdings LLC (ION), which acquired SightLine in 2011, SightLine has agreed to pay the government up to $11.5 million. The Anti-Kickback Statute is intended to ensure that a physician’s medical judgment is not compromised by improper financial incentives and instead is based on the best interests of the patient.  It prohibits anyone from offering, paying, soliciting, or receiving remuneration to induce referrals of items or services covered by Medicare, Medicaid, and other federally funded programs.  Claims submitted in violation of the Anti-Kickback Statute may subject the claimant to liability under the False Claims Act.

The settlement  resolves allegations that SightLine violated the Anti-Kickback Statute and the False Claims Act by targeting physicians that were able to refer patients to its cancer treatment centers, and paid those physicians a share of its profits pursuant to investment arrangements that were set up to allow physicians to profit from their referrals.  Specifically, the United States alleged that SightLine formed a series of leasing companies in which referring physicians were permitted to invest, and through which SightLine allegedly distributed the profits that its physician-investors generated by referring cancer patients for radiation therapy.The allegations resolved by the settlement were brought in a lawsuit filed under the qui tam, or whistleblower, provisions of the False Claims Act. The whistleblower was represented by the firm Morgan Verkamp. The act permits private parties to sue on behalf of the government when they believe that defendants submitted false claims for government funds and to share in any recovery.  The act also allows the Government to take over the case, as it did here in part.  The whistleblower will receive up to $1.725 million.   “Investment arrangements that are structured to improperly compensate physicians for referrals can encourage physicians to make decisions based on financial gain rather than the best interest of their patients,” said Acting Assistant Attorney General Chad A. Readler of the Justice Department’s Civil Division.  “The Department of Justice is committed to preventing illegal inducements, in whatever form, that undermine the integrity of our public health programs.”

“As the professionals charged with recommending and referring medical procedures for our community, physicians’ primary motivation must remain the well-being of their patients,” said U.S. Attorney Erin Nealy Cox.  “Today’s settlement demonstrates our determination to eliminate complex business ventures that improperly interpose financial considerations into our physicians’ medical judgment.” In addition to resolving their alleged False Claims Act liability, ION, SightLine, and their related entities have entered into a five-year Corporate Integrity Agreement with the HHS-OIG.  This agreement is intended to increase accountability and transparency and to deter future misconduct.  The Corporate Integrity Agreement includes internal and external monitoring of the relationships between the ION and SightLine entities and referring physician investors.

 
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 Tapinto.net, 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.

The Brattleboro Memorial Hospital will $1,655,000 to the United States and the state of Vermont  to settle claims that it “knowingly”  presented “false claims for payment to Medicare and Medicaid.” The U.S. Attorney’s Office alleged that between January 2012 through September 2014, “BMH knowingly submitted or caused to be submitted a number of outpatient laboratory claims lacking documentation necessary to support reimbursement by Medicare and Medicaid.” According to a press release, a whistleblower Amy Beth Main filed a complaint against the hospital under the federal False Claims Act. Qui tam lawsuits are a type of whistleblower lawsuit that rewards whistleblowers in successful cases where the government recovers funds lost to fraud. According to Norman Watts, of Watts Law Firm, in Woodstock, Main will receive between 15 and 20 percent of the settlement, from which he will recover his attorney fees. Ms. Main worked for the hospital in an administrative role in the financial services department.

The case was investigated by the United States Attorney’s Office for the District of Vermont, with assistance from the Office of the Inspector General of the Department of Health and Human Services, and by the Medicaid Fraud and Residential Abuse Unit of the Vermont Attorney General’s Office.