6 latest healthcare industry lawsuits

https://www.beckershospitalreview.com/legal-regulatory-issues/6-latest-healthcare-industry-lawsuits-091018.html

Related image

From national healthcare organizations refiling a lawsuit over 340B drug pricing program cuts to a Georgia physician accused of submitting thousands of false claims to Medicare, here are the latest healthcare industry lawsuits making headlines.  

1. CHS, Quorum say investors weren’t duped into buying stock at inflated prices
Franklin, Tenn.-based Community Health Systems and Brentwood, Tenn.-based Quorum Health urged a federal judge not to grant class certification in a shareholder lawsuit alleging Quorum’s stock was trading at an inflated price after its spinoff from CHS.

2. Georgia physician allegedly submitted 4,500 false claims for unnecessary lead poisoning treatments
Federal investigators allege Charles Adams, MD, a physician in Fort Oglethorpe, Ga., injected thousands of patients with a lead poisoning treatment they didn’t need, and billed the government $1.5 million for medically unnecessary treatments.

3. Premera Blue Cross accused of destroying evidence in data breach case
The plaintiffs in a class-action lawsuit against Premera Blue Cross, which involves a 2014 data security incident, claim the payer “willfully” destroyed evidence that would have provided details of the breach.

4. Hospitals refile lawsuit against CMS over $1.6B in 340B cuts
The American Hospital Association, along with several other national healthcare organizations and hospitals, refiled their lawsuit against HHS to reverse Medicare payment cuts for drugs purchased through CMS’ 340B drug pricing program, the AHA announced Sept. 5.

5. Medical center owners allegedly double billed insurers, altered patient records as part of $80M scheme
Four people were charged in an $80 million Medicare fraud scheme that involved providing unnecessary medical treatment to patients.

6. Physician imposter allegedly diagnosed patient at California hospital
A 23-year-old man is accused of impersonating a physician at California hospitals.

 

 

CHS faces investigation related to EHR incentive program

https://www.beckershospitalreview.com/legal-regulatory-issues/chs-faces-investigation-related-to-ehr-incentive-program.html

Image result for community health systems

Franklin, Tenn.-based Community Health Systems has received a civil investigative demand related to the company’s adoption of EHRs and adherence to the meaningful use program, according to CHS’ latest financial filing.

Under the meaningful use program, now called the promoting interoperability program, CMS distributed incentive payments to eligible providers for installing EHR systems and using them to engage patients and families and to improve care coordination.

In its financial filing, CHS said it is responding to a civil investigative demand related to its “adoption of electronic health records technology and the meaningful use program.”

Federal and state authorities issue these types of demands to collect records and information related to ongoing civil investigations, including False Claims Act cases.

CHS declined to comment on the investigative demand beyond what is included in the financial filing.

EHR incentive payments grabbed the attention of federal regulators after HHS’ Office of Inspector General released a report in 2017 that revealed Medicare made approximately $729.4 million in EHR incentive payments to medical providers who did not comply with federal requirements.

 

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.