Healthcare CEO gets prison time for role in $19.4M kickback scheme

https://www.beckershospitalreview.com/legal-regulatory-issues/healthcare-ceo-gets-prison-time-for-role-in-19-4m-kickback-scheme.html

Image result for prison conviction

The former CEO of American Senior Communities, an Indianapolis-based skilled nursing and rehabilitation provider, was sentenced June 29 to nine and a half years in prison for his role in a fraud, kickback and money laundering conspiracy, according to the Department of Justice.

Federal agents began their investigation into James Burkhart three years ago. In September 2015, agents executed search warrants of his residence and ASC office. About a year later, Mr. Burkhart and three others — Daniel Benson, the former COO of American Senior Communities; Steven Ganote, an associate; and Joshua Burkhart, Mr. Burkhart’s younger brother — were indicted by a federal grand jury. All of the defendants, including Mr. Burkhart, had pleaded guilty to federal felony charges by January 2018.

Mr. Burkhart and his co-conspirators were accused of creating shell companies that would inflate vendors’ bills and submit them to ASC as if the shell companies were the real vendors. He also caused vendors or shell companies to submit false bills to ASC for fictitious services that were never provided, and, in some cases, demanded vendors pay him kickbacks in exchange for allowing them to service ASC’s large number of facilities.

In addition, Mr. Burkhart had vendors inflate their bills to ASC, which he would pay with money from Health & Hospital Corp. of Marion County, the public health department that operates several Indianapolis hospitals. The vendors would allegedly kick the overage back to Mr. Burkhart and his co-conspirators.

According to the DOJ, Mr. Burkhart and his co-conspirators funneled nearly $19.4 million to themselves through the scheme. The majority of the funds came from Health & Hospital Corp. of Marion County.

Mr. Burkhart was sentenced to prison after pleading guilty to three felony offenses: conspiracy to commit fraud, conspiracy to violate the healthcare Anti-Kickback Statute and money laundering.

 

 

DOJ charges more than 600 in historic fraud takedown involving $2B in false claims

https://www.fiercehealthcare.com/payer/doj-jeff-sessions-medicare-strike-force-fraud-takedown-opioids-oig?mkt_tok=eyJpIjoiTXpRelpESTBaVE5tTVRBNSIsInQiOiJmTnBaRmJoVDJaOVZYRkhCd05cL2JXOVNoYU50NlVYN3pIb3ZlRFg1a3RqRWhXbjVMYm5SeEY3Y1ZNdENBb3NQSkZBTXRSR0tDSjZ4R2pJd0RjUFZ2bmRGbnhqXC9pQ2oxaTVCdHN3TUx0b25Ib09rblVuYlJVMW51NlVDcUdzRGNnIn0%3D&mrkid=959610

Related image

Another year, another record-setting healthcare fraud takedown.

This year, the Department of Justice charged 601 individuals involved in fraud schemes totaling $2 billion in losses to the federal government. That’s nearly 200 more people and an additional $700 million than the previous year’s takedown.

There was a clear emphasis on opioid distribution, with 162 individuals charged with illegally prescribing or distributing narcotics. Of those charged for opioid fraud, 76 were physicians.

“Healthcare fraud is a betrayal of vulnerable patients, and often it is theft from the taxpayer,” Attorney General Sessions said in a statement. “In many cases, doctors, nurses, and pharmacists take advantage of people suffering from drug addiction in order to line their pockets. These are despicable crimes.”

Federal enforcement agencies have zeroed in on medical providers as a source of opioid diversion. Last year the DOJ created a new Opioid Fraud and Abuse Detection Unit with 12 dedicated U.S. attorneys and a focus on data analytics. In January, Sessions said the Drug Enforcement Agency (DEA) would direct agents to focus on prescribers and pharmacies and that dispense an unusual amount of drugs.

“This year’s operations, focusing on opioid-related schemes, spotlight the far-reaching impact of health care fraud,” said HHS Deputy Inspector General Gary Cantrell.

In this year’s takedown announcement, the DOJ said “virtually every health care fraud scheme requires a corrupt medical professional to be involved” and “aggressively pursuing” providers has a deterrent effect and ensures they cannot use their license to perpetuate schemes.

The agency highlighted one particular scheme in which a pain management specialist in New York and New Jersey was accused of taking cash from patients in exchanges for oxycodone and Subsys. He was also charged with second-degree murder after a patient died from an overdose.

Other areas of the country included equally egregious schemes:

  • In Texas a pharmacy owner and pharmacists were charged with using fraudulent prescriptions to fill more than 1 million hydrocodone and oxycodone pills and distributed them to drug dealers.
  • In California, an attorney was accused of offering prostitutes and expensive meals to two podiatrists in exchange for preprinted prescription pads.
  • In Michigan and Illinois, individuals were charged with home health fraud schemes totaling $44 million.
  • In Southern Florida, a hotbed for healthcare fraud, the owner and director of a sober home were charged for a scheme involving widespread fraudulent urine testing and $106 million in claims for substance abuse treatment.

Fraud takedowns of this size and scale have become an annual event, dating back nearly a decade. Both the number of individuals and the amount of money involved in the schemes have gradually increased over the years as the DOJ and the Office of Inspector General (OIG) have emphasized the use of analytics as an investigative tool.

Federal enforcers have also relied on a collaborative approach to enforcement. Like last year, this week’s takedown involved multiple federal agencies, including the Department of Health and Human Services, the OIG, the Centers for Medicare & Medicaid Services (CMS) and the Medicare Fraud Strike Force.

Since 2016, federal agencies have charged more than 1,300 individuals tied to $4.2 billion in fraudulent billing schemes.

 

Healogics to Pay Up to $22.5M in False Claims Settlement

https://www.healthleadersmedia.com/finance/healogics-pay-225m-false-claims-settlement

Image result for hyperbaric chamber

Whistleblower lawsuits had alleged that the Florida-based wound care specialist knowingly filed bogus claims to Medicare for services that weren’t needed.

Healogics, Inc. will pay up to $22.51 million to settle whistleblower allegations that billed Medicare for medically unnecessary and unreasonable hyperbaric oxygen therapy, the Department of Justice said.

Jacksonville, FL-based Healogics manages nearly 700 hospital-based wound care centers across the nation.

The settlement resolves allegations that from 2010 through 2015, Healogics knowingly submitted false claims to Medicare for medically unnecessary or unreasonable HBO therapy, DOJ said.

Healogics will pay $17.5 million, plus an additional $5 million if certain financial contingencies occur within the next five years, for a total potential payment of up to $22.51 million. The company has also has entered into a five-year Corporate Integrity Agreement with the Department of Health and Human Services Office of Inspector General.

“When greed is the primary factor in performing medically unnecessary health care procedures on Medicare beneficiaries, both patient well-being and taxpayer funds are compromised,” said HHS OIG Special Agent in Charge Shimon R. Richmond.

The settlement came as the result of whistleblower lawsuits filed by a former executive at Healogics, and a separate suit filed by two doctors and a former program director who worked at Healogics-affiliated wound care centers. The four whistleblowers are expected to share $4.2 million of the settlement.

 

 

Healthcare CEO sentenced to 19 years for $18M physical therapy fraud scheme

https://www.beckershospitalreview.com/legal-regulatory-issues/healthcare-ceo-sentenced-to-19-years-for-18m-physical-therapy-fraud-scheme.html

Image result for dept of justice

The former CEO of Team Work Ready, a Houston-based physical therapy chain, was sentenced June 1 to more than 19 years in prison for his role in an $18 million healthcare fraud scheme, according to the Department of Justice.

The sentencing came after a federal jury convicted Jeffrey Eugene Rose Sr. of healthcare fraud, conspiracy, wire fraud and money laundering in October 2016. Mr. Rose was one of three Team Work Ready executives convicted in the scheme.

According to federal prosecutors, Mr. Rose and his co-conspirators submitted $18.3 million in fraudulent claims for physical therapy services that were never provided through Mr. Rose’s 10 Team Work Ready clinics in Texas, Louisiana, Georgia, Tennessee and Alabama. The claims were submitted under the Federal Employees Compensation Act, which is administered by the Department of Labor’s Office of Workers’ Compensation Program.

In addition to the prison term, Mr. Rose was ordered to pay $14.5 million in restitution to the DOL’s Office of Workers’ Compensation Program.

 

 

Court Slaps $114M Judgment in Lab Kickback Scheme

http://www.healthleadersmedia.com/health-plans/court-slaps-114m-judgment-lab-kickback-scheme?utm_source=silverpop&utm_medium=email&utm_campaign=20180530_HLM_Daily_resend%20(1)&spMailingID=13608756&spUserID=MTY3ODg4NTg1MzQ4S0&spJobID=1402748019&spReportId=MTQwMjc0ODAxOQS2

Image result for fraud and abuse

 

A U.S. District judge in South Carolina trebled the False Claims Act liability of three defendants who submitted nearly 39,000 false claims to Medicare and other government health programs.

The CEO of a medical testing lab and two affiliated sales executives have been hit with a civil judgement totaling $114 million for paying kickbacks to physicians for referrals.

The defendants are: Tonya Mallory, the former CEO of Richmond, Virginia-based Health Diagnostic Laboratory; and Floyd Calhoun Dent III, and Robert Bradford Johnson, co-owners of Alabama-based BlueWave Healthcare Consultants Inc., a third-party sales firm that contracted with HDL.

The facts:

  • The three defendants were found guilty of civil fraud in three whistleblower suits that were heard by federal jury in Charleston, South Carolina in January.
  • The defendants disguised payments to physicians as processing and handling fees of between $10 and $17 for each patient they referred to blood testing labs: HDL, and Singulex Inc., of Alameda, California.
  • Physicians referred patients to HDL and Singulex for medically unnecessary tests, which were then billed to federal healthcare programs.
  • The three defendants were found liable for submitting 35,074 false claims, worth $16.6 million submitted to Medicare and TRICARE by HDL, and 3,813 false claims, worth $467,935, submitted by Singulex.
  • Under the False Claims Act, the court trebled damages, offset settlement payments received from HDL and Singulex for the same claims, and awarded $63.8 million in penalties requested by the United States, for a total judgment of $114.1 million.

 

Anthem Fraud Investigator Arrested in Fraud Investigation

http://www.healthleadersmedia.com/health-plans/anthem-fraud-investigator-arrested-fraud-investigation?utm_source=silverpop&utm_medium=email&utm_campaign=20180530_HLM_HP_resend%20(1)&spMailingID=13610938&spUserID=MTY3ODg4NTg1MzQ4S0&spJobID=1402769496&spReportId=MTQwMjc2OTQ5NgS2

Image result for false claims act

 

A federal indictment alleges that a former fraud investigator for Anthem Blue Cross took bribes and provided coconspirators with billing codes that would bypass the insurer’s fraud protection firewalls.

Five Californians—including a physician and a former fraud investigator—have been arrested and charged in a scheme that submitted bogus claims to health insurers and used some of the proceeds to provide patients with “free” cosmetic procedures, the Department of Justice said.

The arrest follows the unsealing of a federal indictment this week that details a multi-year scheme that lured patients into two San Fernando Valley clinics to receive free cosmetic procedures—including facials, laser hair removal and Botox injections—which were not covered by insurance.

The conspirators allegedly submitted at least $20 million in claims to the insurance companies, which paid approximately $8 million on those claims, the indictment said.

The scam used the patients’ insurance information to fraudulently billed insurers for unnecessary medical services or for services that were never provided. In exchange, the alleged scammers calculated a “credit” that patients could use to receive “free” or discounted cosmetic procedures, the indictment said.

One of the coconspirators, Gary Jizmejian, 44, of Santa Clarita, was a former senior investigator at the Anthem Special Investigations Unit, the anti-fraud unit within Anthem.

The indictment alleges that Jizmejian took bribes in exchange for providing his coconspirators with confidential Anthem information that helped them submit fraudulent bills to Anthem.


In September 2012, Jizmejian gave his coconspirators insurance billing codes—CPT Codes—that Jizmejian knew could be used to submit fraudulent claims to Anthem without Anthem detecting the fraudulent claims, the indictment said.

Jizmejian also allegedly gave his coconspirators the billing code for an allergy-related lab test and told them to submit to Anthem large numbers of bills with this CPT code. The coconspirators used this billing code to submit approximately $1 million in fraudulent claims to Anthem, according to the indictment.

Jizmejian allegedly helped mask the fraud at the clinics by helping coconspirators avoid responding to inquiries from fraud investigators, diverting attention of other Anthem SIU investigators away from the clinics, and closing Anthem investigations into fraud at the clinics, the indictment said.

When reached for comment, Anthem Blue Cross issued the following response:

  • Mr. Jizmejian is no longer an Anthem employee.
  • Anthem fully cooperated with the government’s investigation.
  • We have no further comment on pending government charges or activity.

The indicted coconspirators were identified as:

  • Roshanak Khadem, aka “Roxanne” and “Roxy” Khadem, 50, of Sherman Oaks. Khadem owned and operated the two clinics at the center of the alleged scheme—R&R Med Spa, which was located in Valley Village until early 2016, and its successor company, Nu-Me Aesthetic and Anti-Aging Center, which operated in Woodland Hills.
  • Roberto Mariano, MD, 59, of Rancho Cucamonga, a physician who helped operate the clinics;
  • Marina Sarkisyan, 49, of Panorama City, who was the office manager at the clinics;
  • Lucine Ilangezyan, 38, of North Hills, an employee and insurance biller for the clinics.

All five defendants are charged with one count of conspiracy to commit healthcare fraud and 13 counts of healthcare fraud. Each count charged in the indictment carries a statutory maximum sentence of 10 years in prison.

 

 

Banner Health settles whistleblower case for $18 million

https://www.azcentral.com/story/money/business/health/2018/04/12/banner-health-settles-whistleblower-case-18-million/511848002/

Image result for Banner Health settles whistleblower case for $18 million

 

Banner Health has agreed to pay more than $18 million to settle whistleblower claims that the Phoenix-based health system admitted patients who could have been treated less expensively at outpatient facilities.

The settlement resolves a whistleblower case brought by a former Banner Health employee who claimed one dozen hospitals in Arizona and Colorado overcharged Medicare for brief, inpatient procedures that should have been billed on a less costly outpatient basis, the U.S. Attorney’s Office in Arizona said.

The settlement resolves allegations that Arizona’s largest health provider “inflated in reports to Medicare the number of hours for which patients received outpatient observation care during this time period,” according to a statement from the federal prosecutors.

The settlement involved Medicare billing at one dozen hospitals from November 2007 through December 2016.

The case was brought by former Banner Health employee Cecilia Guardiola under the federal False Claims Act, which allows individuals to bring lawsuits on behalf of the government and collect a portion of any settlement. Under terms of the settlement, Guardiola will be paid $3.3 million.

Banner Health said in a statement that the settlement does not include any findings of wrongdoing and allows the system to avoid the costs and disruption of ongoing litigation.

“Banner Health is fully committed to adhering to all legal and regulatory requirements and providing patients with the highest quality of care,” the statement read. “Although the rules that dictate when a hospital can accommodate a physician’s request to admit a Medicare patient are complex and evolving, our policy has always been to make those decisions in accordance with government guidelines.”

Guardiola, a registered nurse and a law school graduate, was hired by Banner Health in October 2012 as a director overseeing clinical documentation. She resigned three months later after she determined her efforts to bring “ethical compliance” would be ineffective, according to a statement issued by Kreindler & Associates, a law firm representing Guardiola.

During her brief stint at Banner, Guardiola evaluated Banner’s clinical documentation as well as short-stay inpatient claims.

She discovered that Banner hospitals billed an “inordinate and improper number of short-stay claims, particularly those for expensive cardiac procedures,” according to the statement.

In all, she discovered more than 650 examples of Banner billing Medicare for an inpatient claim even though the patient was admitted and discharged the same day, the statement said.

She also discovered that two hospitals, Banner Boswell and Banner Del Webb, identified some cardiac procedures as urgent rather than elective to prevent claims from being denied, the statement said.