Articles Tagged with Medicare Fraud

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Genesis Healthcare Inc. (Genesis) will pay the federal government $53,639,288.04, including interest, to settle six federal lawsuits and investigations alleging that companies and facilities acquired by Genesis violated the False Claims Act by causing the submission of false claims to government health care programs for medically unnecessary therapy and hospice services, and grossly substandard nursing care. Genesis, headquartered in Kennett Square, Pennsylvania, owns and operates through its subsidiaries skilled nursing facilities, assisted/senior living facilities, and a rehabilitation therapy business.

This settlement resolves four sets of allegations. First, the settlement resolves allegations that from April 1, 2010 through March 31, 2013, Skilled Healthcare Group Inc. (SKG) and its subsidiaries, Skilled Healthcare LLC (Skilled LLC) and Creekside Hospice II LLC, knowingly submitted or caused to be submitted false claims to Medicare for services performed at the Creekside Hospice facility in Las Vegas, Nevada by: (1) billing for hospice services for patients who were not terminally ill and so were not eligible for the Medicare hospice benefit and (2) billing inappropriately for certain physician evaluation management services.

Second, this settlement resolves allegations that from Jan. 1, 2005 through Dec. 31, 2013, SKG and its subsidiaries, Skilled LLC and Hallmark Rehabilitation GP LLC, knowingly submitted or caused to be submitted false claims to Medicare, TRICARE, and Medicaid at certain facilities by providing therapy to certain patients longer than medically necessary, and/or billing for more therapy minutes than the patients actually received. The settlement also resolves allegations that those companies fraudulently assigned patients a higher Resource Utilization Group (RUG) level than necessary. Medicare reimburses skilled nursing facilities based on a patient’s RUG level, which is supposed to be determined by the amount of skilled therapy required by the patient.

Life care Centers of America Inc. has been charged by the government with systematically defrauding Medicare of millions of dollars by pressuring therapists to perform expensive and unnecessary treatments. The government complaint, unsealed this week says that the company encouraged therapists to bill higher amounts and  filed false statements and false records to charge the government the highest amounts. The Department of Justice said Life Care set the aggressive targets for “ultra high” therapy which was billed at the highest rates, for physical speech and occupational therapies completely unrelated to the patient conditions or needs. Two former employees of Life Care, a nurse named Glenda Martin in Tennessee and a former occupational therapist in Laderhill Florida, Tammie Taylor, brought separate whistleblower cases against Life Care and if the case settles, they will be entitled to upto 25-30% of the recovery to the government. Jeffrey Newman represents whistleblowers.

Baylor University Medical Center has agreed to pay over $907,000 to settle claims with Uncle Sam, filed by a whistleblower to settle allegations that it submitted false claims to Medicare and TRICARE for various radiation oncology services including intensity modulated radiation therapy. The government says Balor double billed Medicare for several procedures; billed for high reimbursement radiation oncology services when a less expensive service should have been billed;and improperly billed for radiation treatment delivery without the corroboration of physician supervision.Jeffrey Newman represents whistleblowers.

A trial date has been set for March 2012 in the case involving medical device maker Orthofix Inc.  In September the Judge William Young in Boston’s Federal Court rejected a plea arrangement in which the company agreed to pay $42 million in criminal and civil penalties arising from its off-label promotion of bone growth stimulators. Judge Young had earlier told the company lawyers and prosecutors that the company’s conduct may have been egregious enough to warrant a sentence that deprived the company of its patents for products involved. The whistleblower case was originally brought by  Jeffrey Bierman, a Missouris businessman and owner of a company that provided billing services to doctors and hospital. He sued under the federal False Claims Act which allows whistleblowers to file cases on behalf of the government and to share in recoveries. The issues related to the company bone growth stimulators in which the company claimed that patients needed to purchase these devices instead of renting them. They cost around $5,000 but are needed by recovering surgical patients for no longer than six months. The government eventually joined in the case. Five Orthofix employees have pleaded guilty in connection with the probe. If the company patents involved are taken, it would be the first  time that such a penalty would have been imposed on a medical device manufacturer. The trial is expected to last several weeks.

Jeffrey Newman represents whistleblowers. jeffrey.newman1@gmail.com

The Plaintiff, brought a claim on behalf of the United States against a medical supply company allegedly defrauding Medicare by improperly submitting reimbursement claims for various diabetic and nebulizer products. The United States intervened in the case and, ultimately, the United States was able to recover $35,000,000.00

Thousands of doctors and other medical professionals are billing Medicare for increasingly complicated and costly treatments and this signals a rise in Medicare billing abuse. This is according to an investigation by the Center for Public Integrity which shows that between 2001 and 2010 doctors moved to higher paying codes for billing Medicare for office visits while cutting back on lower paying ones. The organization also found no increase in the average age of patients and the data do not indicate that patients are more infirm as a reason for the increase. This suggests that the shift to higher codes is a result of “upcoding” also known as “code creep” a form of bill padding in which doctors bill Medicare for more expensive services than were actually delivered. Doctors, hospitals and many other providers are paid by medicare based on a series of billing codes. Medicare, covering 49 million elderly Americans spent more than $500 billion in 2011. in a report in May 2012, the Department of Health and Human Services inspector general said that the coding system is vulnerable to fraud and abuse and that it is impossible to determine the precise extent of the problem without looking at the records for each of the 370 million claims Medicare pays annually.

The annual estimate of annual health care fraud in the U.S. is $80 billion and some think it is twice that amount. The Inspector General’s Office at Health and Human Services reports that the types of fraud are becoming more diverse. Some bill Medicare for physical therapy, electronic stimulation treatment, chiropractic services, laser surgeries and were also offering patients massages, facials, lunches and dancing classes. These were unnecessary services which are not covered by Medicare but hidden in other bills which are covered. In a report issued to Congress in march the Medicare Payment Advisory Commission said high payments in the home health care arena may also encourage the entry of marginal or fraudulent providers who are motivated by the financial returns by excessive payments. In February, authories uncovered what they said was the largest health care fraud scheme in our history. The Medistat Group Associates were arrested in Dallas on charges of participating in nearly $375 million health care fraud scheme. According to allegations there were cash payments in exchange for ensuring documents containing signatures of physicians and giving Medicare beneficiaries cash and groceries to get them to signup for home health care services and paying recruiters $50 for bringing homeless beneficiaries to a defendant’s car for treatment while parked outside the homeless shelter.Under the Centers for Medicare and Medicaid Systems, home health services are billed under Part A, physician services are billed under Part B and equipment claims are billed under yet a different part of the program. In past years, Cantrell says, keeping track of those payments was done in separate places, which made the task of keeping up with the fraudsters that much harder.

26 people have been charged with massive health cre fraud in a 34 count indictment. The charges also include fraudulent Medicare and Medicaid billing schemes, kickbacks to doctors to induce writing prescriptions for patients without consideraton of medical necessity. Patients were recruited by patient recruiters who would pay bribes in exchange for the patients permitting the pharmacies to bill their insurance for meds that were medically unecessary. According to the indictment issued in Michigan, the Patel Pharmacies billed Medicare not less than $37.7 million for medications purportedly provided to Medicare beneficiaries over the course of the scheme and not less than $20.8 million to Medicaid.

Ven-A-Care, a small Key West Fla. company is fighting a campaign against drug companies that overcharge the government and since starting has collected over $2 billion dollars for state and federal governments. In addition, it has won over $380 million for itself in the form of whistleblower awards. The most recent victory was a $170 million verdict against generic drug maker Actavis which was charged with overcharging Medicaid for drugs.Pharmacies and drug providers buy medicines from drug companies and distribute them to Medicaid recipients. Medicaid then reimburses the pharmacies for the cost of the drugs, plus a markup for the cost. But Ven-A-Care owners observed that some companies were routinely charging the pharmacies one price but told Medicaid and Medicare that the price was much higher. Then when the government reimbursed the pharmacies this resulted in a windfall profit. Ven-A-Care sued under a law called the False Claims Act, which allowed it to recover a reward of a percentage of moneys the government collected. This is considered the most successful case for the whistleblower, even brought and is exemplary of a trend in which companies are becoming whistleblowers as opposed to individuals.

U.S. Secretary of Health and Human Services Kathleen Sebelius and Attorney General of the United States Eric Holder today sent a letter to state attorneys general urging them to work with HHS and federal, state, and local law enforcement officials to mount a substantial outreach campaign to educate seniors and other Medicare beneficiaries about how to prevent scams and fraud beginning this summer. The outreach campaign is another step in the ongoing work of the Health Care Fraud Prevention Enforcement Action Team (HEAT), a cabinet-level initiative launch by HHS and DOJ in May 2009.

“We are heading into the week when our first tax-free $250 donut hole rebate checks will be mailed out to Medicare beneficiaries who have fallen into the coverage gap. Accordingly, we are especially concerned about fraud and increased activity by criminals seeking to defraud seniors – and we are seeking your help to stop it,” said Secretary Sebelius and Attorney General Holder in the letter. “Building on our record of aggressive action, we will use the new tools and resources provided by the Affordable Care Act to further crack down on fraud.”

In the letter, the Secretary and Attorney General outline education and outreach efforts where state attorneys general could make a big difference. These include efforts to cut the improper payment rate, which tracks fraud, waste and abuse in the Medicare Fee for Service program, in half by 2012; a series of regional fraud prevention summits around the country over the next few months; regular health care fraud task force meetings to facilitate the exchange of information with partners in the public and private sector, and to help coordinate anti-fraud effort; HHS’s plans to double the size of the Senior Medicare Patrol and to put more boots on the ground in the fight against Medicare fraud; and a new educational media campaign this summer to educate Medicare beneficiaries about how to protect themselves against fraud.