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/

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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.

10 thoughts from discussion on 2018 Anti-Kickback and Stark Law issues

https://www.beckershospitalreview.com/legal-regulatory-issues/10-thoughts-from-discussion-on-2018-anti-kickback-and-stark-law-issues.html

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We had a chance to moderate and participate in a webinar with leading colleagues John Harig, Tim Fry, David Pivnick and Brett Barnett regarding key Anti-Kickback Statute and Stark Law issues facing health systems, surgery centers, dialysis providers and other healthcare providers and investors. Below are 10 key thoughts discussed during the webinar as to fraud and abuse issues in play in 2018.

1. The reading and implementation of the “Yates Memo” issued by the U.S. Department of Justice will influence how the government aims to prosecute individuals in addition to companies.

2. The reading of the U.S. Supreme Court’s Escobar decision will influence whether defendants in false claims cases will receive some relief from technical billing violations that are not fundamental or material to the government’s paying of a claim.

3. Regulators and potential buyers are focused on “creative marketing arrangements” by physician practices, often related to laboratory and/or pharmacy arrangements.

4. Government enforcement agencies and potential buyers are focused on physician compensation arrangements, particularly their compliance with the Stark Law.

5. Potential buyers face a challenge in determining how deeply to examine targets’ past practices through billing and coding audits, as well as how to handle the results of billing and coding audits in negotiation of transactions.

6. Private equity buyers face challenges in their evaluation of risk posed by regulatory issues and how to address regulatory risks in a seller’s market.

7. Sellers present the historical legal analysis of fraud and abuse issues during the due diligence process, particularly when the legal analysis is positive, but assumptions underlying the legal analysis do not align with the sellers’ actual operations.

8. The turnover in the U.S. Department of Justice may impact the timing of fraud and abuse prosecutions and settlements.

9. Recoveries by the government resulting from fraud and abuse prosecutions have increased in magnitude. Furthermore, there are more recoveries coming from cases in which the government has not joined in the case with the relator.

10. The wide array of laboratory arrangements and businesses hold implications for fraud and abuse laws.

 

Arrests made in alleged $66 million military medical insurance fraud

http://www.sandiegouniontribune.com/news/courts/sd-me-medical-fraud-20180126-story.html

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A Utah pharmacy and the husband-and-wife owners of a Tennessee medical practice have been indicted on allegations that they used Marines and sailors in San Diego County as pawns in a nearly $66 million medical insurance scheme, according to an indictment unsealed Friday.

Jimmy and Ashley Collins, who own Choice MD in Cleveland, Tenn., made their first court appearance Friday in Chattanooga, a precursor to an upcoming San Diego hearing.

The charges accuse the couple, as well as CFK Inc., owners of a pharmacy in Bountiful, Utah, of defrauding the military’s health insurance system TRICARE.

At the center of the alleged scheme are compound medications — drugs that are custom-made by pharmacists to tailor to a patient’s unique needs and are significantly more expensive than typical prescription drugs. The ingredients are not FDA approved.

Military members in San Diego would be paid to recruit other service members to participate in a fake medical study, according to the allegations. The participants were paid $100 to $300 to speak with a doctor in a telemedicine session and would be prescribed compound medication — some in cream form, according to details in a search warrant affidavit obtained last year by the Union-Tribune.

Many of the compound drugs came from the pharmacy in Utah, which was then known as The Medicine Shoppe but has since changed its name to Bountiful Drug under new ownership, according to the indictment.

The number of compound medications to TRICARE patients from the pharmacy skyrocketed, from 218 such medications in all of 2013 to 4,637 in the first four months of 2015, records say. The batch in 2015 elicited $67.3 million in reimbursement claims, according to court records.

Many of the prescriptions were authorized by physicians working for Choice MD.

Investigators tracked millions of dollars flowing among the office, the pharmacy and alleged recruiters. The Collinses were paid $45 million in kickbacks, according to the indictment. They bought up property around Tennessee, a yacht and luxury cars, including two Aston-Martins, prosecutors said.

The compound prescriptions stopped after a government audit in May 2015 looked into the sudden rise in claims and payment was denied.

 

DOJ recovers $2.4B in healthcare fraud cases: 4 things to know

https://www.beckershospitalreview.com/legal-regulatory-issues/doj-recovers-2-4b-in-healthcare-fraud-cases-4-things-to-know.html

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The Department of Justice obtained $2.4 billion in fraud and false claims settlements and judgments in fiscal year 2017, marking the eighth consecutive year recoveries in the healthcare sector exceeded $2 billion.

Here are four things to know about the DOJ’s false claims and fraud recoveries.

1. The DOJ recovered more than $900 million from the drug and medical device industry in fiscal year 2017. That total includes Shire Pharmaceuticals’ $350 million settlement. The settlement resolved allegations Shire, a multinational pharmaceutical company with its U.S. headquarters in Lexington, Mass., and one of its subsidiaries paid kickbacks and used other unlawful means to induce physicians and clinics to use or overuse Dermagraft, a bioengineered human skin substitute approved by the Food and Drug Administration for the treatment of diabetic foot ulcers. The settlement was the largest False Claims Act recovery by the federal government in a kickback case involving a medical device.

2. The DOJ also reported substantial recoveries from healthcare providers, including Cleveland, Tenn.-based Life Care Centers of America, which agreed to pay $145 million to settle allegations it caused skilled nursing facilities to submit fraudulent claims to Medicare for unnecessary rehabilitation services.

3. In another substantial settlement this year, Westborough, Mass.-based eClinicalWorks, an EHR vendor, and some of its executives and employees agreed to pay $155 million to resolve false claims allegations. The government alleged eClinicalWorks falsely obtained certification for its EHR software by withholding information from its certifying entity. Due to eClinicalWorks’ alleged misrepresentations, healthcare organizations using the company’s software submitted false claims for federal incentive payments, according to the DOJ.

4. In 2017, the DOJ continued to pursue physicians and healthcare executives involved in fraud cases to hold them personally responsible. For example, in 2015, Fort Myers, Fla.-based 21st Century Oncology paid $19.75 million to settle allegations it violated the False Claims Act by billing for medically unnecessary laboratory urine tests and paid bonuses to physicians based on the number of tests they referred to its laboratory. This year, the DOJ secured separate settlements with various urologists who allegedly referred unnecessary tests to one of 21st Century Oncology’s labs.

Johns Hopkins favored out-of-state patients over locals to increase revenue, lawsuit claims

http://www.baltimoresun.com/health/bs-hs-hopkins-lawsuit-20171213-story.html

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A former supervisor in the patient appointments department at the Johns Hopkins Health System Corp. has accused the medical system in a lawsuit of prioritizing out-of-state patients over Maryland residents to boost revenue.

Anthony C. Campos said in the lawsuit filed Wednesday in U.S. District Court that his department was directed with the task of “filling the plane” with patients from outside Maryland. The directive to bring in more of these patients came from the highest ranks at the medical system, the lawsuit contends.

In Maryland, hospitals are required under an agreement with the federal government to operate under global budgets assigned to them by the state that limit how much revenue they can make in a given year. The budgets were put in place as part of a broader effort to cut soaring health costs and improve care.

But the budgets only apply to patients who live in Maryland. Any money brought in by treating out-of-state patients is additional revenue for the hospital.

The lawsuit contends that Hopkins is violating a clause in its budget agreement with the state that says hospitals can’t deny services to patients for inappropriate financial reasons. The medical system is also required to provide care that focuses on the community, something the lawsuit contends can’t be done if the emphasis is on patients from elsewhere. The medical system also hid what it was doing from the Centers for Medicare and Medicaid, which oversees payments through public health programsand the Health Services Cost Review Commission, which sets the hospital’s global budgets, according to the lawsuit.

An attorney representing Campos said he was not available for comment.

“I think Maryland residents will find it highly offensive that Hopkins is pushing out-of-state residents to the front of the treatment line while Maryland residents are forced to the back of the line all in the interest of profits,” said the attorney, Lindsey Ann Thomas, with the law firm of Conti Fenn & Lawrence LLC.

In a statement Wednesday night, Johns Hopkins said the “the complaint is without merit. Safe and high quality care for all patients, regardless of where they live, is our number one priority. Our census shows that the majority of our patients are from Maryland and that the number has steadily increased over the past several years.” ​

The medical institution began pushing for more out-of-state patients in 2015, Campos said in the lawsuit. He pushed back and told his bosses his team was getting complaints and concerns from doctors about the preference being given to out-of-state patients. Campos’ supervisors responded that they were following the orders of senior management, according to the lawsuit.

Priority was sometimes given without taking into consideration which patients were sicker, the lawsuit said.

The tactics to attract these patients became more aggressive over time, the lawsuit said. Johns Hopkins USA, a medical concierge service, was enlisted to help prioritize out-of-state appointments. The medical system began targeting the most profitable departments, including neurosurgery, oncology, otolaryngology, pediatrics and surgery. In some departments, a supervisor was ordered to intervene if an out-of-state patient could not get an appointment within 30 days, and those patients were also given priority on wait lists, the lawsuit said.

In May 2016, the Department of Patient Access was told that 250 to 350 additional out-of-state cases were needed that fiscal year to reach profit targets of $5 million to $7 million, according to the suit.

Campos is asking that the government be awarded damages and Johns Hopkins fined under the False Claims Act. He is also asking for a “percentage of any recovery allowed to him.”

20 charged in $146M healthcare fraud scheme in Brooklyn

https://www.fiercehealthcare.com/antifraud/healthcare-fraud-scheme-164-million-brooklyn?mkt_tok=eyJpIjoiT1RZNE9HVmhObVZoTW1ReSIsInQiOiJJOVIwamhJUzZScW1XQVhjb09IakYzbWNrWVZcL1gzYlwvMm15RWllNnlxYlJkbzNoT09CblgwMWYrcVdXS2N4Q2tyeHBKa2hQeXBtRDNwQktDK0NSQ3NSOUpzRUV4VG91RjF1Z0lIdjZIK0NCaTY3UURTUHV2VnFxZzRHRjZlalJhIn0%3D&mrkid=959610&utm_medium=nl&utm_source=internal

Money, handcuffs and a stethoscope

Twenty people—four of whom are doctors—are facing charges related to a massive fraud scheme that bilked Medicare, Medicaid and other managed care organizations out of $146 million.

Prosecutors from the Brooklyn District Attorneys Office said the defendants ran an enterprise in which recruiters offered cash to low-income and homeless patients to get them to undergo a series of medically unnecessary tests at participating clinics.

They then allegedly billed publicly funded insurance programs for performing those tests and laundered the fraudulently obtained funds through the bank accounts of a series of shell companies in far-flung countries such as Taiwan and Lithuania.

Once that money reached the defendants, prosecutors said, they used it to buy expensive real estate—such as a $3.25 million apartment in downtown Brooklyn, New York—and fund shopping sprees at high-end stores like Hermes and Bulgari.

“This massive scheme, which provided no patient care at all, wasted millions of taxpayer dollars dedicated to Medicaid and Medicare,” Acting Brooklyn District Attorney Eric Gonzalez said in the announcement.

The investigation began following a referral from the Department of Health and Human Services Office of Inspector General. To uncover the alleged scheme, investigators employed undercover detectives, intercepted communications and conducted surveillance and financial analyses.

The defendants are facing charges including enterprise corruption, healthcare fraud, grand larceny and money laundering. Prosecutors said 35-year-old Kristina Mirbabayeva, of Brooklyn, was the ringleader of the scheme, and 53-year-old New Jersey resident Kevin Custis, M.D., was her business partner.

Another one of the doctors charged, 61-year-old Robert Vaccarino, was also employed as a New York Police Department surgeon, according to The Wall Street Journal. The police department said Tuesday that Vaccarino had been suspended.

At a news conference this week, representatives from the Brooklyn District Attorneys Office said the scheme was the biggest healthcare case in the office’s history, the article added.

In other antifraud news:

Prosecutors insist Florida eye doctor stole $136M from Medicaid

The attorney for Salomon Melgen, M.D., a Florida eye doctor who has been convicted of a $100 million Medicare fraud, argued at a sentencing hearing on Thursday that the government has only proven Melgen stole about $64,000.

Attorney Josh Sheptow said Melgen—who was charged separately with bribing New Jersey Democratic Sen. Bob Menendez—injected patients with then-experimental drugs that are now approved, the Associated Press reported. Sheptow suggested Melgen may have falsified billing statements to get around the fact that Medicare doesn’t pay for experimental treatments—so since the treatments were actually legitimate, the government didn’t lose money on paying for them.

But Assistant U.S. Attorney Alexandra Chase argued that the judge should accept the government’s estimate that Melgen stole $136 million, noting that even if he stole half as much, he would be eligible for a life sentence. Prosecutors are asking for a 30-year sentence.

 

Broward Health counter-sues former CEO: 5 things to know

https://www.beckershospitalreview.com/legal-regulatory-issues/broward-health-counter-sues-former-ceo-5-things-to-know.html

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Fort Lauderdale, Fla.-based Broward Health’s ex-CEO Pauline Grant sued her former employer in December 2016. The health system fired back in a counter-suit filed Dec. 1, alleging Ms. Grant violated the Anti-Kickback Statute.

Here are five things to know about the litigation.

1. North Broward Hospital District, which does business as Broward Health, claims Ms. Grant violated the system’s code of conduct by serving as secretary of the board of directors of a long-term care provider that had contracts with Broward Health, according to the Sun Sentinel.

2. The health system alleges Ms. Grant’s position on the board violated the terms of a corporate integrity agreement the hospital district entered into with the federal government in 2015. The agreement was put into place after Broward Health paid $69.5 million in September 2015 to settle allegations it violated the False Claims Act by holding improper financial relationships with physicians.

3. Broward Health also claims Ms. Grant violated the Anti-Kickback Statute while she was CEO of Broward Health North in Deerfield Beach, Fla., one of the health system’s six hospitals.

4. Broward Health’s board voted 4-1 on Dec. 1, 2016, to fire Ms. Grant. The board voted to remove Ms. Grant from her position after an independent counsel review showed potential violations of the Anti-Kickback Statute. A subsequent independent investigation found Ms. Grant “ran afoul” of federal anti-kickback law when awarding emergency room contracts to orthopedic physicians seeking to participate in Broward Health North’s on-call emergency department rotation.

5. Following her ouster, Ms. Grant sued Broward Health, accusing the system’s general counsel and four board members of violating the Florida open-meetings law to bring about her termination.