Ex-Florida hospital director gets prison time for role in $1B fraud scheme

https://www.beckershospitalreview.com/legal-regulatory-issues/ex-florida-hospital-director-gets-prison-time-for-role-in-1b-fraud-scheme.html

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The former director of outreach programs at Larkin Community Hospital in South Miami, Fla., was sentenced to 15 months in prison April 3 for her role in a $1 billion healthcare fraud scheme.

Four things to know:

1. The judge handed down the sentence just over two months after Odette Barcha pleaded guilty to conspiring to defraud the federal government and paying and receiving healthcare kickbacks.

2. Ms. Barcha was one of three defendants charged in an indictment unsealed in July 2016. She allegedly had physicians at Larkin Community Hospital discharge patients to skilled nursing homes and other facilities owned by Philip Esformes, who allegedly paid kickbacks for those admissions.

3. Prosecutors allege Mr. Esformes, who operated a network of more than 30 skilled nursing homes and assisted living facilities in Florida, admitted Medicare and Medicaid beneficiaries to the facilities even if they did not qualify for skilled nursing home care or for placement in an assisted living facility. Once admitted, the patients received medically unnecessary care that was billed to Medicare and Medicaid.

4. The seven-week trial of Mr. Esformes wrapped up March 29, according to the Miami Herald. On April 5, a federal jury found Mr. Esformes guilty of various counts, including paying and receiving kickbacks, bribery, money laundering and obstruction of justice, according to Law360

 

 

 

Ex-hospital exec sues DMC for wrongful discharge, retaliation

https://www.detroitnews.com/story/news/local/michigan/2019/04/01/hospital-exec-sues-dmc-wrongful-discharge-retaliation/3337429002/?utm_source=Sailthru&utm_medium=email&utm_campaign=Issue:%202019-04-03%20Healthcare%20Dive%20%5Bissue:20208%5D&utm_term=Healthcare%20Dive

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The former top Detroit Medical Center cardiologist is suing the health system, arguing he was forced out of his job for complaining about alleged fraud at the health system, including unnecessary surgeries billed to Medicare and Medicaid. 

The wrongful discharge and retaliation lawsuit was filed in Detroit U.S. District Court by Dr. Ted Schreiber, who was recruited by the DMC in 2004 and developed a trademarked process to speed life-saving treatment for heart attack patients.  He also was the founding president of the new DMC Heart Hospital that opened with fanfare in 2014.

Schreiber’s accusations are “unsubstantiated,” a DMC spokeswoman said Monday night, and the health system continues to have a “culture of integrity.”

Heart Hospital shares facilities with Harper University Hospital that is poised to be terminated from the federal Medicare program in less than two weeks after failing inspections in October and December. Since Harper and Heart Hospital are considered a single facility by the Centers for Medicare Medicaid Services, both would be barred from the federal health insurance program for the elderly and disabled if Harper fails to pass an unannounced inspection by the April 15 deadline.

Michigan prohibits hospitals barred from receiving Medicare funding from participating in Medicaid, the health insurance program for mostly low-income people that is jointly funded by the state and federal governments. The two programs combined pay for 85 percent of Harper’s inpatient hospital stays, according to Allan Baumgarten, a Minneapolis-based hospital analyst.

The inspections in October and December were prompted by complaints from Schreiber and three other health system cardiologists who said they were forced from their leadership roles in retaliation for complaining about quality of care issues at the DMC. 

Cardiologists Dr. Mahir Elder and Dr. Amir Kaki filed a similar lawsuit last week in Detroit federal court, saying they were forced from leadership posts for complaining to leaders of the DMC about unnecessary surgeries, dirty surgical instruments and other problems. 

In his lawsuit, Schreiber said he brought concerns about physician competency and unnecessary and/or dangerous procedures to DMC peer review meetings in a bid to ensure that they were investigated. But his concerns were ignored by DMC and its for-profit owner, Tenet Healthcare of Dallas, according to Schreiber’s lawsuit.

“(T)he profitability of physicians was being weighed more heavily by DMC and Tenet executives than the physicians’ ability to provide services to patients within the standard of care,” Schreiber alledged in his lawsuit. “This policy resulted in an increase in unnecessary and/or risky procedures conducted by some physicians leading to bad patient outcomes and even patient deaths.”

The DMC continues to argue that Schreiber and the other cardiologists violated the company’s conduct code. The health system’s top priority is delivering “safe, high quality care to the people of Detroit,” said spokeswoman Tonita Cheatham.

“We have a culture of integrity, which means we don’t look the other way, we don’t condone inappropriate behavior of any kind, and we don’t compromise on our priorities,” Cheatham said in a statement.

“That also means we expect physicians to uphold our Standards of Conduct, including treating fellow physicians, nurses and staff members with respect and dignity.  We welcome the opportunity to present the facts underlying the claims made in the complaint.”

In the lawsuit, Schreiber indicated he also complained to Tenet and DMC leaders that some cardiologists were away from the hospital during times they were required to be on-site as members of Cardio Team One’s 24-hour on-call team. He also said he raised concerns about staffing cuts that resulted in poor nursing care for cardiac patients. 

Tenet Healthcare signed a three-year “corporate integrity agreement” as part of a $513 million settlement with the U.S. Department of Justice over allegations of a kick-back scheme involving involving four Tenet hospital subsidiaries in the South, according to Schreiber’s suit. The agreement required Tenet and all of its hospitals to self-report all complaints to the federal Justice Department.

“Senior management, including these Defendants, failed to do so and blatantly allowed legal violations to occur in order to generate more income by cutting medically necessary support and allowing unnecessary medical procedures, among other things,” the former cardiologist executive said in his lawsuit.

Schreiber referred a request for comment on the lawsuit to his attorney, David Ottenwess of Detroit.

“Tenet Healthcare, the current for-profit owner of the DMC, has been continually cited by the federal government for placing profits over people,” Ottenwess said. “Tenet has continued that course with its retaliation against Dr. Schreiber and others at the Heart Hospital who had the courage to question Tenet’s practices of profits over safety.”

 

Health Care Valuations: The New, the Old and the Ugly

https://www.wipfli.com/insights/blogs/health-care-perspectives-blog/health-care-valuations-the-new-the-old-and-the-ugly?

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The shift in health care from volume-based, fee-for-service to value-based reimbursement (VBR) continues to push forward. In its wake, unintended consequences and new challenges have emerged — not only in aspects of delivery but also when determining fair market value (FMV) and remaining compliant with the federal Anti-Kickback Statute and the Stark Law. Below we touch on those consequences and how they’ve emerged from both new and old regulations.

The New: MACRA

Now in play, the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) promises to fundamentally change the way the country evaluates and pays for health care. Its new payment schedules, however, have created ramifications that not only tangle the hospital-physician relationship but also create implications for VBR transactions and valuations.

As part of the transition to value-based medicine, four new MACRA elements in particular represent significant changes:

1. Pay for Performance (P4P) Arrangements: The remuneration system makes part of payment dependent on performance, measured against a defined set of criteria, and creates measurements and performance standards for establishing target criteria.

2. Shared Savings Arrangements: The new approach incentivizes providers to reduce health care spending for a defined patient population by offering a percentage of net savings realized as a result of their efforts.

3. Episodic Payments: An episode payment system offers a single price for all the services needed by a patient for an entire episode of care; for example, all the inpatient and outpatient care needed following a heart attack. The intent is to reduce the incentive to overuse unnecessary services within the episode. It also gives health care providers the flexibility to decide what services should be delivered rather than constraining them by fee codes and amounts.

4. Global Budget: With a fixed prepayment made to a group of providers or to a health care system (as opposed to a health care plan), this arrangement covers most or all of a patient’s care during a specified time period.

Clearly the value equation is shifting. Value is defined no longer solely by how much revenue a physician generates but rather by solving problems for patients and patient experience. Value can also be derived not by revenue per patient, but by how many patient lives a physician directs, and with that comes control over how some payments are allocated for patient related services.

As the value dynamics change, hospitals have sought to establish closer relationships with physicians. Acquisitions of physician practices by hospitals have continued at dramatic rates alongside the move toward direct physician employment and provider service agreements. New players in the market and marketplace forces have also emerged as competition to hospitals. Private equity groups and insurance companies are pursuing the acquisition of physicians and clinics for control of patient lives, and therefore revenue.

While the trend toward hospital-physician alignment is intended to improve health care delivery, it has come under scrutiny for potential fraud and abuse violations due in part to established laws that now appear at odds with the new VBR movement.

The Old: Anti-Kickback Statute and Stark Law

Health care organizations, providers and their counsels are well aware of the laws in place they must abide by, namely the Anti-Kickback Statute (AKS) and the Stark Law, which have been in force for more than three decades.

Such regulatory considerations related to fraud and abuse have long had significant impact on the value attributable to each property interest and on the valuation process itself. There are in fact several distinct meanings of fraud within the context of the health care regulatory framework, and they affect a property’s profitability and sustainability, creating significant risk and uncertainty for business entities.

What constitutes fraud, however, is now under the microscope and creating potential liability under the False Claims Act. The new direction of collaborative relationships on behalf of the patient and patient outcomes can make some arrangements suspect. How do physicians refer patients in the new MACRA environment without it being considered a conflict of interest or fraudulent? How will payments made to physicians not exceed the range of FMV and be deemed commercially reasonable? How can alignment strategies be constructed to provide a full continuum of care under VBR reforms?

While there have been no changes to the longstanding regulations, discord between the old laws and the new VBR direction is necessitating a different approach to compliance. The American Hospital, in a letter to the U.S. Senate Finance Committee in a hearing on the Stark law, said, “As interpreted today, the two ‘hallmarks’ of acceptability under the Stark law — fair market value and commercial reasonableness — are not suited to the collaborative models that reward value and outcomes.”

The Ugly: The Push and Pull of the New and the Old

The friction between the enforcement of fraud and abuse laws by the Department of Justice and the Office of the Inspector General, and the VBR models being implemented by Health and Human Services is warranting a review of MACRA and the threshold and definition of commercial reasonableness. With no one clear definition of commercial reasonableness, its analysis is ripe for distortion.

Many regulators’ arguments are centered around Practice Loss Postulate (PLP) — that the acquisition of a physician practice that then operates at a “book financial loss” is dispositive evidence of the hospital’s payment of consideration based on the volume and/or value of referrals.

The problem? In maintaining the economic delineation between physicians and hospitals, the PLP focuses exclusively on immediate and direct financial (cash) returns on, and returns of, investments by health care organizations related to vertical integration transactions. The PLP ignores other economic benefits associated with vertical integration, such as social benefits, qualitative gains, efficiency gains and avoiding costs.

As a consequence, such a vertical integration move could be viewed by regulators as evidence of legally impermissible referrals under the Stark law. However, it would prevent vertically integrated health systems from withstanding fraud and abuse scrutiny. And it would create barriers to satisfying the threshold of commercial reasonableness.

More “New” Is in the Future Forecast

Active industry input and congressional committee discussion is underway in hopes of generating workable strategies to reduce the law’s burden. And although the actual outcomes are uncertain, changes are clearly ahead.

Walgreens settles False Claims suits for $270 million

https://www.healthcarefinancenews.com/news/walgreens-settles-false-claims-suits-270-million?mkt_tok=eyJpIjoiT0RrNVpXSmpZV1UzTTJVdyIsInQiOiJNNFh6MElhd0lmVE5Zc09kZTl5d3BPc1h3ZkRpZGNIbWhHSE9RNVp5NkN1MFwvXC9kK3h6WHh5KzRHTWdsQTlWZ203aitRRnhUYWZ5QTVScVZcL01HaTkyUm5LNDRvanVuY0NUdVN4Y0czMzRkMzdNZzMrdVp6WjlmV2N5WHYxMEkrNCJ9

Two cases emerged from whistleblower claims about improper billing related to discounted drug prices and insulin pens.

Pharmacy giant Walgreens will pay nearly $270 million dollars as part of two major settlements, one that alleged the company had improperly billed federal healthcare programs for insulin pens it distributed to beneficiaries who didn’t need them and another that alleged Walgreens failed to disclose and charge lower drug prices offered through a discount program.

Both settlements were approved in mid-January and unsealed Tuesday. Walgreens must pay the United States and state governments a total of $269.2 million. Both cases arose from lawsuits filed by whistleblowers under the False Claims Act. Walgreens did not admit any wrongdoing as part of either settlement.

THE IMPACT

The DOJ said as a result of the conduct alleged in both cases, federal programs were inappropriately taxed. The alleged inappropriate disbursement of insulin resulted in the waste of valuable medication and created the potential for misuse “such as the improper resale of insulin pens on the Internet.” Because the company did properly disclose its discounted drug prices, federal healthcare programs paid out higher reimbursements than were actually warranted.

MORE ON THE CASES

The first settlement resolved allegations that Walgreens improperly billed Medicare and other federal healthcare programs for “hundreds of thousands” of insulin pens dispensed to beneficiaries who didn’t need them. According to a statement from the Department of Justice, it was alleged that Walgreens programmed its electronic pharmacy management system to prevent its pharmacists from dispensing less than a full box of five insulin pens, whether the patient needed that amount or not. It also said Walgreens falsely stated that they had not exceeded limits set on total days of supply in its reimbursement claims. This settlement totaled $209.2 million.

In this case, the DOJ said Walgreens admitted that when a federal health program denied a claim because the reported days of supply for a full carton of five insulin pens exceeded the federal program’s days-of-supply limit, the company dispensed and billed for the full carton and reduced the reported days of supply to conform to the program’s days-of-supply limit. Walgreens also admitted that it “repeatedly” reported days-of-supply data to federal health programs that differed from the days-of-supply calculated according to the standard pharmacy billing formula.

The company will pay $60 million as part of a second settlement to resolve allegations it overbilled Medicaid by failing to disclose and charge Medicaid the lower drug prices that it offered the public through a discount program called the Prescription Savings Club. Legally, the company must seek reimbursement only for the “the lowest of certain drug price points, including the ‘usual and customary price'” namely the price offered through such programs as the PSC. Those prices were not disclosed, causing overpayment from Medicaid to Walgreens, the DOJ said. The agency also said that Walgreens admitted it did not identify its PSC program prices as its U&C prices for the drugs on the PSC program formulary, resulting in overpayments.

ON THE RECORD

“Walgreens is pleased to have resolved these matters with the Department of Justice. The company fully cooperated with the government and has admitted no wrongdoing. Walgreens is a company of pharmacists living and working in the communities we serve, and we have always taken the safety and reliability of the medicines our patients need very seriously. We are resolving these matters because we believe it is in the best interest of our customers, patients and other stakeholders to move forward…In relation to these matters, Walgreens has entered into a Corporate Integrity Agreement (CIA) with the Office of the Inspector General of the Department of Health and Human Services. The CIA builds upon the company’s already existing comprehensive compliance program,” Walgreens said in a statement.

“In both settlements, Walgreens admitted and accepted responsibility for conduct the Government alleged in its complaints under the False Claims Act,” the DOJ said in a statement.

DOJ recovered $2.5 billion in 2018 healthcare false claim cases

https://medcitynews.com/2018/12/doj-recovered-2-5-billion-in-2018-healthcare-false-claim-cases/?utm_campaign=MCN%20Daily%20Top%20Stories&utm_source=hs_email&utm_medium=email&utm_content=68616131&_hsenc=p2ANqtz–fq1sdxIB88xY-ain-FJhljI6XCajKx4jjImF-6g7OJCDVEtx0Bo9c1pP788k3hLe6ehxSYBoP-w51DLgGo5izH2qh5g&_hsmi=68616131

 

 

 

 

 

 

 

 

 

 

According to the DOJ, this is the ninth consecutive year that the organizations’ civil healthcare fraud settlements and judgments have exceeded $2 billion.

As part of the federal government’s increasing focus on issues of healthcare fraud, particularly in the Medicare space, the U.S. Department of Justice recovered $2.5 billion in settlements and judgments from False Claims Act Cases over the past year.

According to the DOJ, this is the ninth consecutive year that the organizations’ civil health care fraud settlements and judgments have exceeded $2 billion.

While the $2.5 billion number represents federal losses, the DOJ also said it also helped recover significant funds for state Medicaid programs

“Every year, the submission of false claims to the government cheats the American taxpayer out of billions of dollars,” Principal Deputy Associate Attorney General Jesse Panuccio said in a statement.

“In some cases, unscrupulous actors undermine federal healthcare programs or circumvent safeguards meant to protect the public health … The nearly three billion dollars recovered by the Civil Division represents the Department’s continued commitment to fighting fraudsters and cheats on behalf of the American taxpayer.”

The False Claims Act has its roots in groups trying to defraud the military during and after the Civil War and was significantly strengthened since 1986 when Congress increased incentives for whistleblowers to file lawsuits alleging false claims.

In healthcare, organizations across the industry were hit with False Claims cases including drug companies, medical device manufacturers, payer organizations and healthcare providers.

The single largest recovery over the past year was a $625 million settlement paid by drug wholesaler AmerisourceBergen to resolve a number of claims including that the company illegally repackaged injectable cancer drugs into pre-filled syringes and billing multiple doctors for individual drug vials.

The DOJ also brought cases against drug companies who increased drug prices by funding Medicare co-payments meant to serve as a check on healthcare costs.

In one instance, United Therapeutics Corporation paid $210 million over allegations that it illegally used a foundation to funnel co-pay obligations for Medicare patients taking its drugs. Pfizer paid nearly $24 million in a similar case, with the government alleging that the company raised the price of a cardiac drug called Tikosy by 40 percent over three months

One major case against Massachusetts-based medical device company Alere resulted in a $33.2 million settlement over allegations that it sold unreliable diagnostic devices meant to detect acute coronary syndromes, heart failure, drug overdose and other serious conditions.

On the provider side, the DOJ recovered $270 million from DaVita subsidiary HealthCare Partners Holdings for upcoding and providing inaccurate information to inflate Medicare Advantage payments.

Another major case was against former health system Health Management Associates which allegedly engaged in major Medicare fraud including illegal kickbacks to physicians for referrals, incorrect billing for observation and outpatient services and inflated facility fees.

When it comes to health plans, the government’s case against UnitedHealth Group over allegations that it knowingly obtained inflated risk adjustment payments for its Medicare Advantage beneficiaries is still ongoing.

 

 

Pennsylvania health system, CEO will pay $12.5M to resolve billing probe

https://www.beckershospitalreview.com/legal-regulatory-issues/pennsylvania-health-system-ceo-will-pay-12-5m-to-resolve-billing-probe.html?origin=cfoe&utm_source=cfoe

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Allentown, Pa.-based Coordinated Health and its founder and CEO Emil DiIorio, MD, have entered into an agreement with the federal government to settle False Claims Act allegations, according to the Department of Justice.

The settlement resolves allegations that Coordinated Health inflated payments from federal payers by unbundling claims for reimbursement for orthopedic surgeries, including many for total joint replacement, from 2007 through mid-2014.

Instead of stopping the illegal unbundling, Dr. DiIorio changed how he wrote operative reports to enable Coordinated Health billers to maximize improperly unbundled reimbursements, according to the Justice Department.

Two outside coding consultants identified the improper unbundling during audits in 2011 and 2013 and told top Coordinated Health executives about the problem. “Motivated by its bottom line, Coordinated Health simply ignored the consultants’ recommendations and continued abusing Modifier 59 to improperly unbundle orthopedic surgery claims until mid-2014,” states a Justice Department press release.

Coordinated Health will pay $11.25 million and Dr. DiIorio will pay $1.25 million to settle the allegations. In addition to the monetary settlement, Coordinated Health entered into a corporate integrity agreement with HHS that will require monitoring of its billing practices for five years.

Regarding the settlement, Coordinated Health released the following statement: “We are pleased to have come to a resolution with the federal government regarding allegations of our past use of a specific Medicare billing modifier, involving a complex Centers for Medicare and Medicaid Services rule, which does not relate to the quality of patient care. We have already updated our billing practice to resolve the issue in question, and have taken a number of decisive actions to reduce the potential for issues in the future. Our focus has been and always will be providing the best possible patient care in the communities we serve.”

 

6 Michigan physicians charged in $464M billing fraud scheme

https://www.beckershospitalreview.com/legal-regulatory-issues/6-michigan-physicians-charged-in-464m-billing-fraud-scheme.html?origin=rcme&utm_source=rcme

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A grand jury in Michigan returned a 56-count indictment Dec. 4 that charges six physicians in a $464 million healthcare fraud scheme, according to the Department of Justice.

Rajendra Bothra, MD, owner and operator of a pain clinic in Warren, Mich., and five physicians who worked at the clinic are accused of prescribing patients opioid pain medication to get them to come in for office visits. During the office visits, the physicians allegedly subjected the patients to unnecessary treatment, including facet joint injections. The physicians “sought to bill insurance companies for the maximum number of services and procedures possible with no regard to the patients’ needs,” the Justice Department said in a press release.

The fraud scheme, which occurred between 2013 and November 2018, allegedly involved more than 13 million unlawfully prescribed opioid prescription drugs.

“The damage that opioid distribution has done to our community and to the United States as a whole has been devastating,” said U.S. Attorney Matthew Schneider. “Healthcare professionals who prey on patients who are addicted to opioids in order to line their pockets is particularly egregious. We will continue to prosecute such individuals who choose to violate federal law and their ethical oaths.