Trump’s pardons included healthcare execs behind massive frauds

At the last minute, President Donald Trump granted pardons to several individuals convicted in huge Medicare swindles that prosecutors alleged often harmed or endangered elderly and infirm patients while fleecing taxpayers.

“These aren’t just technical financial crimes. These were major, major crimes,” said Louis Saccoccio, chief executive officer of the National Health Care Anti-Fraud Association, an advocacy group.

The list of some 200 Trump pardons or commutations, most issued as he vacated the White House this week, included at least seven doctors or health care entrepreneurs who ran discredited health care enterprises, from nursing homes to pain clinics. One is a former doctor and California hospital owner embroiled in a massive workers’ compensation kickback scheme that prosecutors alleged prompted more than 14,000 dubious spinal surgeries. Another was in prison after prosecutors accused him of ripping off more than $1 billion from Medicare and Medicaid through nursing homes and other senior care facilities, among the largest frauds in U.S. history.

“All of us are shaking our heads with these insurance fraud criminals just walking free,” said Matthew Smith, executive director of the Coalition Against Insurance Fraud. The White House argued all deserved a second chance. One man was said to have devoted himself to prayer, while another planned to resume charity work or other community service. Others won clemency at the request of prominent Republican ex-attorneys general or others who argued their crimes were victimless or said critical errors by prosecutors had led to improper convictions.

Trump commuted the sentence of former nursing home magnate Philip Esformes in late December. He was serving a 20-year sentence for bilking $1 billion from Medicare and Medicaid. An FBI agent called him “a man driven by almost unbounded greed.” Prosecutors said that Esformes used proceeds from his crimes to make a series of “extravagant purchases, including luxury automobiles and a $360,000 watch.”

Esformes also bribed the basketball coach at the University of Pennsylvania “in exchange for his assistance in gaining admission for his son into the university,” according to prosecutors.

Fraud investigators had cheered the conviction. In 2019, the National Health Care Anti-Fraud Association gave its annual award to the team responsible for making the case. Saccoccio said that such cases are complex and that investigators sometimes spend years and put their “heart and soul” into them. “They get a conviction and then they see this happen. It has to be somewhat demoralizing.”

Tim McCormack, a Maine lawyer who represented a whistleblower in a 2007 kickback case involving Esformes, said these cases “are not just about stealing money.”

“This is about betraying their duty to their patients. This is about using their vulnerable, sick and trusting patients as an ATM to line their already rich pockets,” he said. He added: “These pardons send the message that if you are rich and connected and powerful enough, then you are above the law.”

The Trump White House saw things much differently.

“While in prison, Mr. Esformes, who is 52, has been devoted to prayer and repentance and is in declining health,” the White House pardon statement said.

The White House said the action was backed by former Attorneys General Edwin Meese and Michael Mukasey, while Ken Starr, one of Trump’s lawyers in his first impeachment trial, filed briefs in support of his appeal claiming prosecutorial misconduct related to violating attorney-client privilege.

Trump also commuted the sentence of Salomon Melgen, a Florida eye doctor who had served four years in federal prison for fraud. That case also ensnared U.S. Sen. Robert Menendez (D-N.J.), who was acquitted in the case and helped seek the action for his friend, according to the White House.

Prosecutors had accused Melgen of endangering patients with needless injections to treat macular degeneration and other unnecessary medical care, describing his actions as “truly horrific” and “barbaric and inhumane,” according to a court filing.

Melgen “not only defrauded the Medicare program of tens of millions of dollars, but he abused his patients — who were elderly, infirm, and often disabled — in the process,” prosecutors wrote.

These treatments “involved sticking needles in their eyes, burning their retinas with a laser, and injecting dyes into their bloodstream.”

Prosecutors said the scheme raked in “a staggering amount of money.” Between 2008 and 2013, Medicare paid the solo practitioner about $100 million. He took in an additional $10 million from Medicaid, the government health care program for low-income people, $62 million from private insurance, and approximately $3 million in patients’ payments, prosecutors said.

In commuting Melgen’s sentence, Trump cited support from Menendez and U.S. Rep. Mario Diaz-Balart (R-Fla.). “Numerous patients and friends testify to his generosity in treating all patients, especially those unable to pay or unable to afford healthcare insurance,” the statement said.

In a statement, Melgen, 66, thanked Trump and said his decision ended “a serious miscarriage of justice.”

“Throughout this ordeal, I have come to realize the very deep flaws in our justice system and how people are at the complete mercy of prosecutors and judges. As of today, I am committed to fighting for unjustly incarcerated people,” Melgen said. He denied harming any patients.

Faustino Bernadett, a former California anesthesiologist and hospital owner, received a full pardon. He had been sentenced to 15 months in prison in connection with a scheme that paid kickbacks to doctors for admitting patients to Pacific Hospital of Long Beach for spinal surgery and other treatments.

“As a physician himself, defendant knew that exchanging thousands of dollars in kickbacks in return for spinal surgery services was illegal and unethical,” prosecutors wrote.

Many of the spinal surgery patients “were injured workers covered by workers’ compensation insurance. Those patient-victims were often blue-collar workers who were especially vulnerable as a result of their injuries,” according to prosecutors.

The White House said the conviction “was the only major blemish” on the doctor’s record. While Bernadett failed to report the kickback scheme, “he was not part of the underlying scheme itself,” according to the White House.

The White House also said Bernadett was involved in numerous charitable activities, including “helping protect his community from COVID-19.” “President Trump determined that it is in the interests of justice and Dr. Bernadett’s community that he may continue his volunteer and charitable work,” the White House statement read.

Others who received pardons or commutations included Sholam Weiss, who was said to have been issued the longest sentence ever for a white collar crime — 835 years. “Mr. Weiss was convicted of racketeering, wire fraud, money laundering, and obstruction of justice, for which he has already served over 18 years and paid substantial restitution. He is 66 years old and suffers from chronic health conditions,” according to the White House.

John Davis, the former CEO of Comprehensive Pain Specialists, the Tennessee-based chain of pain management clinics, had spent four months in prison. Federal prosecutors charged Davis with accepting more than $750,000 in illegal bribes and kickbacks in a scheme that billed Medicare $4.6 million for durable medical equipment.

Trump’s pardon statement cited support from country singer Luke Bryan, said to be a friend of Davis’.

“Notably, no one suffered financially as a result of his crime and he has no other criminal record,” the White House statement reads.

“Prior to his conviction, Mr. Davis was well known in his community as an active supporter of local charities. He is described as hardworking and deeply committed to his family and country. Mr. Davis and his wife have been married for 15 years, and he is the father of three young children.”

CPS was the subject of a November 2017 investigation by KHN that scrutinized its Medicare billings for urine drug testing. Medicare paid the company at least $11 million for urine screenings and related tests in 2014, when five of CPS’ medical professionals stood among the nation’s top such Medicare billers.

Fired Nurse Faces Board Review for Wearing Hospital Scrubs

Fired Nurse Faces Board Review for Wearing Hospital Scrubs | MedPage Today

In late November, Cliff Willmeng’s wife handed him a sealed envelope at their Minneapolis home “with some trepidation,” he recalled. He looked at the sender printed on the front: “Minnesota Board of Nursing.” Willmeng, a registered nurse, opened the letter and read that the board was investigating his conduct as a nurse at United Hospital in St. Paul, from which he’d been fired in May. Clearly his license was at stake.

Willmeng was disappointed, but not surprised. He believes the review is due to his standing up for his own safety and that of other nurses, and for filing a lawsuit and union grievance against United’s parent company, Allina Health, after his termination.

He also thinks the investigation, like his firing, has been orchestrated to scare other healthcare workers away from reporting safety violations and concerns as the pandemic rages, and to make an example out of the former union steward.

The investigation is being led by a former Allina executive: “It feels meant to intimidate me,” he said.

Taking a Stand for Safety

Willmeng is a 13-year nursing veteran, husband, and father, who began working at United in October 2019.

When the pandemic hit late last winter, managers instructed nurses to use and reuse their own scrubs rather than hospital-issued scrubs. They were asked to launder their scrubs themselves at home.

Willmeng and others worried about bringing the virus home and pressed for the hospital scrubs. These scrubs were available, he said, and healthcare workers were permitted to wear hospital gear at Abbott Northwestern, another Allina hospital in Minneapolis.

In addition, while United managers told staff their laundering co-op could not keep up with demand for all the scrubs, the co-op denied that assertion, said Brittany Livaccari, RN, an ER nurse and union steward at United.

Willmeng addressed his concerns with management, filed state OSHA complaints, and enlisted the Minnesota Nurses Association (MNA). “He was taking action 100% to protect himself and to protect his patients,” Livaccari said.

But management did not change its policy, which was devised before the pandemic, and pointed to early-pandemic CDC and Minnesota Department of Health (MDH) guidelines — even when Willmeng shared emerging reports suggesting the policy was jeopardizing safety.

“It did feel like a pissing match,” Livaccari said. “We didn’t feel like we were being protected. … We weren’t being valued.”

Managers repeatedly wrote up Willmeng and colleagues who wore the hospital scrubs despite the policy. “It definitely felt like an intimidation tactic — ‘You’re going to do this, you’re going to follow these policies,'” Livaccari said. “A lot of staff chose to stop wearing those scrubs because they needed their job, they have families to pay for, they were afraid.”

Willmeng continued to wear the hospital scrubs. “I had to decide whether that policy was most important, or the safety of my workplace and public health and my family,” he said.

On May 8, the hospital terminated Willmeng. He said its stated cause was violating hospital policies regarding uniform code and a respectful workplace.

Two weeks later, the local nurses’ union held a rally that drew hundreds of supporters for Willmeng and blasted the hospital’s scrub policy.

‘I’m Not a Bad Nurse’

In June, Willmeng sued Allina for whistleblower retaliation and wrongful termination. The case is scheduled to be heard next August.

His union grievance is set to be arbitrated in January. He maintains his firing was not for “just cause” because United’s uniform code policy violated standard nursing practices.

Willmeng has been running the website WeDoTheWork, which describes itself as “worker-run journalism.” It’s an independent but union-affiliated publication that “unflinchingly tells our side of the story, and takes the fight to management.”

He’s been publicizing his case on that website. In his Twitter account he notes, “I believe in the working class, democratically run economy, socialism, and revolution.”

Willmeng is applying for jobs, but despite his experience, a national nursing shortage, and reports of severe understaffing as hospitalizations surge again, Willmeng has not even been interviewed by any of the roughly 20 medical centers he has applied to.

He thinks he is being blackballed. “I’m not a bad nurse,” he said.

The board letter cited these concerns: “On April 16, 2020, you received a written warning for not following the uniform policy,” reads one item, citing a report shared with the board. “On May 5, 2020, you were issued a final written warning for repeatedly violating policy. … On May 8, 2020, you were terminated from employment based on violating hospital policies, behavioral expectations, code of conduct, and not following the directions of your manager.” The letter asks Willmeng to respond to eight questions.

“This looks like it was taken right out of my HR file,” he said. The board will not reveal who reported him, citing confidentiality policies. But he is certain — given the detail in the letter — that it was Allina/United management.

The nursing board cannot comment on Willmeng’s review to protect confidentiality, said executive director Shirley Brekken, MS, RN. The board receives about 1,200 complaints annually and first determines whether a complaint would merit disciplinary action if true. If so, it launches a review.

Allina declined to answer questions via a spokesperson, citing the lawsuit. “We cannot appropriately retain employees who willfully and repeatedly choose to violate hospital policies,” according to an emailed statement. Throughout the pandemic Allina has been following CDC and MDH guidelines, “which do not consider hospital issued scrubs as PPE [personal protective equipment].”

“In the early days of the pandemic, our local and national supply chain was extremely stressed,” the statement continues. “Our practices are aligned with other local and national hospitals … and have enabled us to allocate the appropriate supplies for daily patient care and ongoing care for COVID-19 patients.”

But United healthcare workers still lack hospital scrubs and enough N95 masks, Livaccari said, and the hospital is severely understaffed as the patient load increases. “We hear, ‘It’s a pandemic. You have to do more with less,'” she said. “It’s a really bad situation.”

Retaliation and Intimidation

Some think Willmeng’s review was initiated primarily to retaliate against him, not to protect public health and safety.

“Hospitals, they want a docile workforce, they want a workforce they can control,” said John Kauchick, RN, a retired 37-year nursing veteran who advocates for workplace rights. They do so “by fear and intimidation,” he added. “A nurse’s number one fear is to be turned in to a board of nursing for anything.”

“If you’re a whistleblower and you speak truth to power, that will get you a disciplinary hearing even more so than if there is patient harm.”

The letter was drafted more than six months after Willmeng was fired, and after he filed the lawsuit and union grievance. Just before he received the letter, he was elected to the MNA board. The timing strikes Willmeng and Kauchick as significant.

“If you think there’s been a violation, you are supposed to report that in a much shorter time period,” Kauchick said. Kauchick thinks Allina filed the complaint as leverage, to persuade Willmeng to drop the grievance and lawsuit.

But Livaccari noted the process can take up to six months, and that every firing is supposed to be reported to the board.

Like Kauchick, she takes umbrage with the review’s leader: Stephanie Cook, MSN, RN, a board nursing practice specialist who spent 24 years as a director with Allina. She was a member of multiple Allina committees, including its ethics committee, according to reports. She was with Allina as recently as 2018. Brekken confirmed her employment with Allina, noting that it’s “a very large system.”

Regardless, that’s a conflict of interest, Kauchick and Livaccari said, arguing that Cook should not be part of the review. “It’s just so blatantly obvious. How are you going to look at this with an unbiased lens when you worked for the organization that says Cliff was in the wrong?” Livaccari said. “It’s so inappropriate.”

This is not uncommon, Kauchick said, noting state nursing board reviews are “really just designed to get rid of whistleblowers. It’s like a buddy system. They hire higher-ups from big hospital systems. It’s just incestuous.”

Brekken was aware of Cook’s background before a colleague assigned this review to Cook, she said, noting the board vets staff for personal involvement in cases. Brekken “might consider” removing Cook from the review given her connection to Allina, she said, but added: “Many individuals on our staff may have worked for a particular health system throughout their career.”

The board could throw out the complaint or take action. Such actions typically range from a reprimand to revoking a nurse’s license, Brekken said. A staff member and board member together will review the report and Willmeng’s response, but she said the board itself makes final decisions.

Willmeng is also focused on the grievance, which asks Allina to provide full back pay and reinstate him.

“I would not feel comfortable; I’d feel very anxious” going back, he said. “But I’m an ER nurse. I belong in the ER…. It’s important for a frontline healthcare worker to demonstrate that when they stand up and speak truthfully and assertively about working conditions and patient safety, that they can’t just be triangulated.”

His salary — about twice his current unemployment benefits — is also a draw, he acknowledged.

Meanwhile, he continues applying for other jobs. His life insurance cost doubled and his family switched to his wife’s lesser health insurance plan, he said. A fourth-grade teacher with a local public school system, her salary is the primary support for themselves and their two children.

Willmeng also just hired an attorney at $250 an hour to help him respond to the board letter. “It’s not something I take lightly,” he said. “There’s cause for real concern. That’s my nursing license, that’s everything.

Chicago hospital defeats allegations of ‘ghost payroll’ scheme

https://www.beckershospitalreview.com/finance/chicago-hospital-defeats-allegations-of-ghost-payroll-scheme.html?utm_medium=email

False Claims Act & Physicians - Basic Primer

An Illinois federal court has dismissed a whistleblower lawsuit alleging University of Chicago Medical Center, Medical Business Office and Trustmark Recovery Services violated the False Claims Act, according to Bloomberg Law

MBO and Trustmark provided medical billing and debt collection services for UCMC. The whistleblowers, Kenya Sibley, Jasmeka Collins and Jessica Lopez, alleged MBO and Trustmark engaged in a “ghost payroll” scheme that involved regularly falsifying UCMC invoices, listing employes who didn’t work on the hospital’s collections and time charges from people who were not employees.

The whistleblowers, former employees of MBO and Trademark, alleged the companies and UCMC knew about the “ghost payroll” scheme, and that the allegedly falsified invoices caused the hospital to report overstated wages to the federal government, triggering a larger Medicare reimbursement than it was entitled to.

The complaint further alleged that MBO and Trustmark engaged in a “bad debt” scheme. “MBO would regularly write-off Medicare bad debts for amounts a Medicare beneficiary owed without conducting a reasonable collection effort, when Medicare beneficiaries were still paying on the debts, or when Medicare beneficiaries did not actually owe a debt,” the amended complaint states.

After writing off the bad debt, MBO would allegedly send the bad debt to Trustmark or another collection agency for further collection efforts.

On Sept. 14, Judge Harry Leinenweber of the U.S. District Court for the Northern District of Illinois dismissed the amended complaint, saying the whistleblowers failed to adequately allege the defendants engaged in a scheme to inflate bad debts and falsify invoices in University of Chicago’s cost reports. 

The allegations of a “ghost payroll” scheme fail because the whistleblowers failed to allege that defendants certified compliance with any regulation, which is required when filing a false claims case, the judge said in the decision. The amended complaint also fails to establish sufficiently UCMC’s knowledge of the alleged scheme.

The judge also ruled that the amended complaint failed to adequately allege a “bad debt” scheme. Allegations related to MBO’s and Trustmark’s bad debt reports to clients cannot satisfy the requirements to show that companies or their clients submitted improper claims for bad debt reimbursements to the government, reads the decision.

 

 

 

 

CVS long-term care pharmacy sued by DOJ over fraudulent prescribing practices

https://www.healthcaredive.com/news/cvs-long-term-pharmacy-sued-by-doj-over-fraudulent-prescribing-practices/569268/

Dive Brief:

  • CVS Health and its Omnicare business are being sued by the Department of Justice over alleged fraudulent billing of Medicare and other government programs for outdated prescriptions for elderly and disabled people.
  • The DOJ suit, filed Tuesday in New York, joins whistleblower ligitation accusing Omnicare of billing federal healthcare programs for hundreds of thousands of drugs based on out-of-date prescriptions for individuals in assisted living facilities, group homes, independent living communities and other long-term care facilities between 2010 and 2018. The lawsuit seeks civil penalties and other damages.
  • “We do not believe there is merit to these claims and we intend to vigorously defend the matter in court,” CVS spokesperson Joe Goode told Healthcare Dive. “We are confident that Omnicare’s dispensing practices will be found to be consistent with state requirements and industry-accepted practices.”

Dive Insight:

The suit alleges Omnicare, the nation’s largest long-term care pharmacy, kept dispensing antipsychotics, anticonvulsants, antidepressants and other drugs based off invalid prescriptions for months, and sometimes years, without obtaining fresh scripts from patients’ doctors.

Managers at the long-term care business allegedly ignored prescription refill limitations and expiration dates and forced staff to fill prescriptions quickly, pressuring some facilities to process and dispense thousands of orders daily. When prescriptions expired, Omnicare “rolled over” the scripts, assigning them a new number, allowing the pharmacy to dispense the drug indefinitely without need for doctor involvement.

This practice allowed Omnicare to continually dispenses drugs for seniors and disabled occupants in more than 3,000 residential long-term care facilities, at an ongoing risk to their health, according to DOJ. Many of the prescription drugs were meant to treat serious conditions like dementia, depression or heart disease and have side effects when not closely monitored by a physician — particularly when taken in tandem with other medications.

The pharmacy then submitted knowingly false claims to Medicare, Medicaid and TRICARE, which serves military personnel, for the illegally dispensed drugs over an eight-year period; and lied to the government about the status of the prescriptions. CVS Health senior management was also aware of the scheme, according to DOJ.

“A pharmacy’s fundamental obligation is to ensure that drugs are dispensed only under the supervision of treating doctors who monitor patients’ drug therapies,” Manhattan U.S. Attorney Geoffrey Berman said in a statement. “Omnicare blatantly ignored this obligation in favor drugs out the door as quickly as possible to make more money.”

The government joined the lawsuit originally brought by Uri Bassan, an Albuquerque, New Mexico pharmacist for Omnicare, filed in June 2015. The original whistleblower suit said Omnicare’s compliance department was aware of the “rolling over” process, but did nothing to stop it.

This is by no means the first time the CVS subsidiary, established in 1981 and acquired in 2015 for about $12.7 billion, has been under the federal microscope for fraud.

Omnicare has a history of friction with the DOJ
  • 2006Omnicare pays almost $50 million over improper Medicaid claims

  • 2009Omnicare shells out $98 million to settle kickback allegations

  • 2012Omnicare enters into a $50 million settlement following a DOJ investigation finding its pharmacies dispensed drugs to long-term care facility residents without valid prescriptions

  • Feb. 2014Omnicare pays the government more than $4 million to settle kickback allegations

In the May 16, 2017 suit, the government accused Omnicare of designing an automated label verification system that purposefully inflated profits by submitting claims for generic drugs different than those given to patients. CVS said that all happened before it acquired Omnicare.

​Omnicare provides pharmacy benefits for post-acute care and senior living care, including in skilled nursing facilities, hospitals and health systems and assisted living communities.

Despite the lucrative market in an aging U.S. population with complicated drug needs, Omnicare is an underperforming business in otherwise healthy times for CVS. The unit triggered a $2.2 billion goodwill impairment charge following a late 2018 test, according to CVS’ fourth quarter filing last year.

Omnicare operates 160 pharmacies in 47 states. During the eight years under investigation, Omnicare submitted more than 35 million claims for drugs dispensed to Medicare beneficiaries in assisted living facilities alone, DOJ says.