Feds charge 36 in $1.2B healthcare fraud schemes

Thirty-six people across the U.S. were charged for their alleged roles in schemes involving $1.2 billion in fraudulent telemedicine, durable medical equipment, cardiovascular and cancer genetic testing, the Justice Department announced July 20. 

The alleged schemes involved lab owners paying medical professionals illegal kickbacks and bribes in exchange for referring patients. The medical professionals were allegedly working with fraudulent telemedicine and digital medical technology companies. 

“As alleged in court documents, medical professionals made referrals for expensive and medically unnecessary cardiovascular and cancer genetic tests, as well as durable medical equipment,” the Justice Department said. 

Prosecutors allege that in many cases the test results or durable medical equipment were not provided to the patients.

DOJ files False Claims Act case against dialysis giant Fresenius alleging unnecessary vascular procedures

Editor’s Note: This story has been updated with the DOJ’s statement regarding its civil fraud complaint. This story was originally filed June 3.

Updated: July 13, 3:30 p.m.

The federal government filed a civil complaint Tuesday in federal court in Brooklyn against the country’s largest dialysis provider alleging that the company performed unnecessary procedures on dialysis patients.

The Department of Justice has formally intervened and joined the False Claims Act whistleblower lawsuit filed against dialysis giant Fresenius Medical Care, according to court documents filed in U.S. District Court in Brooklyn.

The DOJ’s False Claims Act complaint alleges Fresenius Vascular Care, a business unit of Fresenius Medical Care performed these unnecessary procedures at nine centers across New York City, Long Island and Westchester, and billed the procedures to Medicare, Medicaid, the Federal Health Benefits Program and TRICARE. The complaint seeks damages and penalties under the False Claims Act.

The whistleblower complaint alleges that from about January 1, 2012 through June 30, 2018, Fresenius routinely performed certain procedures on patients with end stage renal disease (ESRD) who were receiving dialysis, without sufficient clinical indication that the patients needed the procedures. Fresenius knowingly subjected ESRD patients—who included elderly, disadvantaged minority, and low-income individuals—to these procedures to increase its revenues, the DOJ complaint states.

A Fresenius spokesperson said the company disputes the allegations contained in both the relators’ complaint and the U.S. government’s complaint and “intends to vigorously defend the litigation.”

“Our network of vascular centers is leading efforts to reduce total healthcare costs and improve patient outcomes by expanding access to innovative and less-invasive procedures. Our policies are intended to result in a high standard of care and compliance with government regulations,” the Fresenius spokesperson said in a statement.

Breon Peace, United States Attorney for the Eastern District of New York, called the company’s alleged conduct “egregious,” claiming that Fresenius “not only defrauded federal healthcare programs but also subjected particularly vulnerable people to medically unnecessary procedures.”

“This Office will hold medical providers accountable for practices that needlessly expose patients to harm for financial gain at taxpayer expense,” Peace said in a statement.


Two doctors allege in a lawsuit that the country’s largest dialysis provider performed potentially thousands of unnecessary, invasive vascular procedures on late-stage kidney disease patients and fraudulently charged Medicare and Medicaid for these procedures.  

The lawsuit, originally filed in 2014 in New York, claims Fresenius Medical Care and its business unit, Azura Vascular Care, violated the federal False Claims Act. The case remained under seal until the court lifted the seal May 9. The federal government has 60 days to file its complaint.

Nineteen states also are included in the lawsuit and potentially could join the case.

The U.S. attorney in the Eastern District of New York will be taking over with respect to federal False Claims Act fraud claims against Fresenius, according to law firm Cohen Milstein Sellers & Toll, which is representing the plaintiffs in the case.

The U.S. attorney’s office declined to comment at the time.

The plaintiffs, two practicing nephrologists, charge in the complaint that Fresenius performed thousands of end-stage renal disease-related treatments that were “not medically reasonable and necessary” and that “exposed patients to undue and unnecessary risks.”

In a statement provided by a spokesperson, Fresenius declined to comment on the lawsuit.

Fresenius Medical Care North America is the largest dialysis provider in the U.S., operating over 2,600 dialysis units nationwide and treating over 205,000 patients annually. Its business unit, Azura Vascular Care, operates more than 90 vascular care facilities across the country.

Former hospital executive convicted in $1.4B billing scheme

The former leader of a rural hospital chain has been convicted for his role in an elaborate pass-through billing scheme, the Justice Department announced June 27. 

After a 24-day trial, Jorge Perez, 62, of Miami, was convicted of conspiracy to commit healthcare fraud and wire fraud, healthcare fraud and conspiracy to commit money laundering of proceeds greater than $10,000.

Prosecutors said Mr. Perez conspired with others to bill for $1.4 billion of medically unnecessary laboratory testing services. He used rural hospitals as billing shells to submit claims for services that were mostly performed at outside laboratories. 

The evidence presented at trial showed that Mr. Perez and other defendants targeted and obtained control of financially distressed rural hospitals through management agreements and purchases. They targeted rural hospitals because they often get higher reimbursement rates for laboratory testing from private insurers, according to the Justice Department. 

The defendants promised to save the rural hospitals from closure by turning them into laboratory testing sites, but instead billed for fraudulent laboratory testing. Through the scheme, Mr. Perez and others made it appear the laboratory testing was performed at the rural hospitals when, in most cases, it was done by outside testing laboratories owned by defendants, prosecutors said. 

“After private insurance companies began to question the defendants’ billings, they would move on to another rural hospital, leaving the rural hospitals they took over in the same or worse financial status as before,” the Justice Department said. At least three of the hospitals were forced to close. 

Ricardo Perez, 59, of Miami, was also convicted of conspiracy to commit healthcare fraud and wire fraud, healthcare fraud and conspiracy to commit money laundering of proceeds greater than $10,000 on June 27. He is Jorge Perez’s brother, according to Kaiser Health News

Mass General Brigham to cut spending by $70M a year

Boston-based Mass General Brigham submitted a cost-reduction plan to Massachusetts regulators May 16, which includes a promise to cut healthcare spending by $70 million a year. 

The health system was ordered by the Massachusetts Health Policy Commission in January to develop a plan to reduce costs after the watchdog determined it had pushed healthcare spending above acceptable levels in the last few years. Specifically, the commission found that Mass General Brigham had substantially higher-than-average commercial spending from 2014 to 2019. The health system spent $293 million those years, more than any other provider in the state.

To achieve its spending reduction goal, Mass General Brigham said it would focus on four items: cutting prices, reducing utilization, shifting care to lower-cost sites and expanding value-based care. 

A key savings driver in Mass General Brigham’s plan is to lower outpatient and ConnectorCare rates to improve affordability. ConnectorCare is a program of subsidized private health insurance plans for patients whose family income doesn’t exceed 300 percent of the federal poverty level and who are not eligible for MassHealth, Medicare or other affordable health coverage. The health system expects to save about $53.8 million in spending a year through reducing these rates.

“Mass General Brigham is committed to expanding access to consumers, particularly in ambulatory care. To achieve improved access, we are focused on decreasing the price variation between Mass General Brigham pricing and the marketplace,” Mass General Brigham said in the performance improvement plan. 

The health system said it expects to save $10.8 million in spending a year by reducing unnecessary hospitalizations, emergency room visits and post-acute care and reducing use of high-cost outpatient imaging. 

The health system said it expects to save $5.3 million in spending a year by shifting care to lower-cost settings, such as moving to “hospital at home,” expanding telehealth or using other ambulatory sites. 

In addition to reducing utilization, shifting care to lower-cost sites and reducing price, Mass General Brigham said it is committed to expanding value-based care.

Hospitals performed 100,000 unnecessary surgeries in the first year of COVID-19, Lown Institute says

https://www.fiercehealthcare.com/providers/hospitals-performed-100000-surgeries-elderly-2020-lown-institute

U.S. hospitals performed more than 100,000 surgeries on older patients during the first year of the pandemic, according to a new Lown Institute analysis. 

The healthcare think tank relied on Medicare claims data and analyzed eight common low-value procedures. It called the 100,000 procedures unnecessary and potentially harmful in a press release. It found that between March and December 2020, among the most-performed surgeries were coronary stents and back surgeries. 

The procedures either offered little to no clinical benefit, according to the institute, or were more likely to harm patients than help them. 

“You couldn’t go into your local coffee shop, but hospitals brought people in for all kinds of unnecessary procedures,” Vikas Saini, M.D., president of the Lown Institute, said in a statement. “The fact that a pandemic barely slowed things down shows just how deeply entrenched overuse is in American healthcare.”
 
Here is the volume of each procedure analyzed, for a total of 106,474 procedures identified:

1. Stents for stable coronary disease: 45,176
2. Vertebroplasty for osteoporosis: 16,553
3. Hysterectomy for benign disease: 14,455
4. Spinal fusion for back pain: 13,541
5. Inferior vena cava filter: 9,595
6. Carotid endarterectomy: 3,667
7. Renal stent: 1,891
8. Knee arthroscopy: 1,596

Among the “U.S. News & World Report” 20 top-ranked hospitals, all had rates of coronary stent procedures above the national average in what the Lown Institute called “overuse.” Four had at least double the national average, including the Cleveland Clinic, Houston Methodist Hospital, Mt. Sinai and Barnes Jewish Hospital. The procedures and overuse criteria were based on previous Lown research.

“We’ve known for over a decade that we shouldn’t be putting so many stents into patients with stable coronary disease, but we do it anyway,” Saini said. “As a cardiologist, it’s frustrating to see this behavior continue at such high levels, especially during the pandemic.”

In response to the Lown analysis, the American Hospital Association said in a statement Tuesday that delays or cancelations in non-emergency care may have negative outcomes on patients. “Lown may define these services as ‘low value,‘ but they can be of tremendous value to the patients who receive them,” the statement read.

It also pointed to its response to last year’s Lown analysis, which it criticized as being based “on data that are not only incomplete, but also not current.” The organization argued the services surveyed only represent a portion of the care hospitals provide. It added that procedures are determined by physicians based on an evaluation of the patient’s medical needs. 

Justice Department adds CEO to $120M Medicare fraud case

The Justice Department has intervened in a whistleblower lawsuit accusing former executives of San Antonio-based Merida Health Care Group of violating the False Claims Act, according to Law360

The Justice Department is intervening in the action, which dates back to 2015, alleging the former executives submitted more than $120 million in false claims to Medicare for medically unnecessary home health services and hospice care. The Justice Department is also adding Merida Health Group’s former CEO Henry McInnis to the complaint, according to the report. 

The Justice Department alleges Mr. McInnis and Rodney Mesquias, the former owner of Merida Health Care Group, violated the False Claims Act, and the government is also seeking damages under the common law and equitable theories of fraud and payment by mistake, according to court documents filed April 7 in the U.S. District Court for the Southern District of Texas. 

Mr. McInnis was sentenced to 15 years in prison in February 2021 for his role in a healthcare fraud and money laundering scheme. Mr. Mesquias was sentenced to 20 years in prison in late 2020. 

Florida physician convicted of $110M fraud

Report from the Department of Justice Fraud & Abuse Control for 2017 sheds  light upon the importance of compliance - The Coding Network

A Florida physician was convicted Feb. 10 for his role in a healthcare fraud scheme that involved billing health insurance companies for $110 million in medically unnecessary services, according to the Justice Department

Mark Agresti, MD, of Palm Beach, Fla., unlawfully billed insurers for $110 million of drug testing services that were medically unnecessary. The patients who received the unnecessary drug tests were residents of Good Decisions Sober Living in West Palm Beach. Dr. Agresti was the medical director of the facility, according to the Justice Department. 

“Patients at GDSL were required to submit to excessive, medically unnecessary urine drug tests as a condition of residency approximately three or four times per week,” the Justice Department said. “These [urinalysis] drug tests cost as much as $6,000 to $9,000 per test.”

According to evidence presented at trial, Dr. Agresti also had Good Decisions Sober Living patients sent to his own medical practice to fraudulently bill for services. 

Dr. Agresti was convicted of 11 counts of healthcare fraud and one count each of conspiracy to commit healthcare fraud and wire fraud. He is scheduled to be sentenced April 21. 

20 hospitals, health systems that provide the most ‘unnecessary’ care: Johns Hopkins

Johns Hopkins study names health systems that provide the most 'unnecessary'  care | Modern Healthcare

Health systems that employed fewer primary care physicians, have higher bed counts or are investor owned were more likely to provide more unnecessary or low-value care, a study published Jan. 14 in JAMA found.

For the study, researchers from Baltimore-based Johns Hopkins University analyzed Medicare claims data at 3,745 hospitals for 17 low-value services. The low-value services were previously identified as unnecessary and included services such as pap smears for women older than 65, an abdominal CT scan with and without contrast and spinal fusions for back pain, according to the study.  

The researchers then rated the hospitals using an overuse index, which was based on the Medicare claims for the low-value healthcare services. Health systems rated at least 1.5 standard deviations or more above the average in the overuse index were considered over-users of low-value services.

Below is a breakdown of the 20 hospitals that provided the most unnecessary care based on the overuse index.

1. St. Dominic Health Services (Jackson, Miss.)

2. USMD Health System (Irving, Texas)

3. Community Medical Centers (Clovis, Calif.)

4. Care New England Health System (Providence, R.I.)

5. East Alabama Medical Center (Opelika)

6. Pocono Health System (East Stroudsburg, Pa.)

7. University Health Care System (Augusta, Ga.)

8. Deaconess Health System (Evansville, Ind.)

9. Congregation of the Sisters of St Joseph of Peace (Englewood Cliffs, N.J.)

10. Iredell Health System (Statesville, N.C.)

11. Sacred Heart HealthCare System (Allentown, Pa.)

12. Southeast Health (Dothan, Ala.)

13. Chesapeake (Va.) Regional Medical Center

14. Butler (Pa.) Health System

15. CarolinaEast Health System (New Bern, N.C.)

16. Ohio Valley Health Services and Education Corp. (Wheeling, W.Va.)

17. Slidell (La.) Memorial Hospital

18. Lakeland (Fla.) Regional Health System

19. North Kansas City (Mo.) Hospital

20. Temple University Health System (Philadelphia)

Read more here

The Pitfalls of Cost Sharing in Healthcare

The Pitfalls of Cost Sharing in Healthcare – Health Econ Bot

Cost-sharing is the practice of making individuals responsible for part of their health insurance costs beyond the monthly premiums they pay for health insurance – think things like deductibles and copayments. The practice is meant to inspire more thoughtful choices among consumers when it comes to healthcare decisions. However, the choices it inspires can often be more harmful than good.

Virginia physician gets 59-year sentence for unneeded patient surgeries, $20M fraud

A Virginia OB-GYN was sentenced May 18 to 59 years in prison for a fraud scheme that caused insurance programs to lose more than $20 million, according to the U.S. Justice Department

Javaid Perwaiz, MD, was sentenced after being convicted last November of 52 counts of healthcare fraud and false statements related to a scheme in which he performed medically unnecessary surgeries, including hysterectomies and improper sterilizations, on his patients. 

From about 2010 to 2019, Dr. Perwaiz often falsely told his patients that they needed the surgeries because they had cancer or could avoid cancer, prosecutors said. Additionally, evidence showed Dr. Perwaiz falsified records for his obstetric patients to induce labor early to ensure he was reimbursed for the deliveries and violated Medicaid’s required 30-day waiting period for elective sterilization procedures by backdating records to make it appear that he had complied with the waiting period. Dr. Perwaiz also billed insurance companies for diagnostic procedures that he only pretended to perform at his office, prosecutors said. 

“Motivated by his insatiable and reprehensible greed, Perwaiz used an arsenal of horrifying tactics to manipulate and deceive patients into undergoing invasive, unnecessary and devastating medical procedures,” Raj Parekh, acting U.S. attorney in the Eastern District of Virginia, stated. “In many instances, the defendant shattered their ability to have children by using fear to remove organs from their bodies that he had no right to take.”

A lawyer representing Dr. Perwaiz told The New York Times that Dr. Perwaiz is appealing the conviction.