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October 24, 2018

The owners and operators of two community mental health clinics in Pennsylvania and North Carolina have entered into a $3 million consent judgment with the United States to resolve allegations of violating the False Claims Act. In 2000, Melchor Martinez was convicted of Medicaid fraud by the State of Pennsylvania and subsequently banned from owning and operating health clinics or seeking reimbursement from all federally funded healthcare programs. Despite this, he allegedly continued to own and operate three chains of mental health clinics—including Northeast Community Health Centers, Lehigh Valley Community Mental Health Centers, and Carolina Community Mental Health Centers—by enlisting the help of his wife, Melissa Chlebowski, to act as the true owner and operator. In addition, the two allegedly failed to operate according to rules set by Medicare and Medicaid, including seeing patients for only 2-3 minutes and billing for 15, and billing for services provided by unqualified staff. They were eventually outed in a qui tam lawsuit filed by a former employee. USAO EDPA

Tagged in: FCA Federal, Healthcare Fraud, Improper Medical Personnel, Medicaid, Medical Billing Fraud, Medicare, Whistleblower Case,

October 23, 2018

Eye Centers of Florida, owned by Dr. David C. Brown, has agreed to pay $525,000 to settle claims of that it knowingly falsified the medical records of certain Medicare patients in order to submit qualifying reimbursement claims. In violation of the False Claims Act, Eye Centers allegedly altered the paperwork to make it appear that patients had worse vision than they actually did, allowing Eye Centers to bill for cataract surgeries that would ordinarily not have been reimbursable. The case was revealed through a lawsuit filed by two former employees, Patti Nilsson and Joann Smith, who are set to receive $115,500 from the settlement. USAO MDFL

Tagged in: FCA Federal, Healthcare Fraud, Medical Billing Fraud, Medicare, Provider Fraud, Whistleblower Case, Whistleblower Rewards,

October 23, 2018

Vascular Access Centers LP (VAC) and its 20+ related corporations in multiple states have agreed to pay $3.825 million over five years to settle whistleblower-brought allegations that VAC took part in an illegal patient referral kickback scheme and fraudulently billed Medicare for certain non-reimbursable procedures. The alleged fraud violated the Anti-Kickback Statute and False Claims Act and involved regularly scheduling, performing, and billing Medicare for certain vascular access procedures for End Stage Renal Disease (ESRD) beneficiaries that were not routinely necessary. Two whistleblowers will share in the relator's share of $612,000. DOJ; USAO EDLA; USAO SDNY

Tagged in: FCA Federal, Healthcare Fraud, Lack of Medical Necessity, Medicare, Provider Fraud, Whistleblower Case, Whistleblower Rewards,

October 22, 2018

A Kentucky-based medical equipment supplier has agreed to pay $5,254,912 to settle claims based on the False Claims Act that it defrauded many government insurers, including Kentucky Medicaid, Medicare, and CHAMPVA (under the Department of Veterans Affairs), by submitting fraudulent claims relating to certain compounded creams that it produced. According to the DOJ press release, in order to be properly reimbursed, Cooley Medical Equipment, Inc. was required to obtain prior authorization from Kentucky Medicaid and CHAMPVA before using certain powdered ingredients. Instead, Cooley claimed to use cream-based versions of the same ingredients, then submitted thousands of false claims to the insurers, and received millions of dollars in reimbursements. The company eventually came clean and self-disclosed to the US Attorney's Office, allowing it to pay a fine of 1.5 times instead of the usual 3 times loss suffered by the government. USAO EDKY

Tagged in: Compounding Pharmacy Fraud, FCA Federal, Medicaid, Medicare, Other Government Health Programs, Pharma Fraud,

October 18, 2018

Four individuals have pleaded guilty to conspiring to violate the Anti-Kickback Statute for a scheme that made payments to patient recruiters and a medical office assistant to find TRICARE beneficiaries to get prescriptions for compounded prescription pain cream, scar cream, and supplements from a doctor who had never seen the patients.  In less than one year, the scheme generated over $10 million in compound prescriptions for over 100 TRICARE beneficiaries.  E.D. Ark.

Tagged in: Anti-Kickback and Stark, Compounding Pharmacy Fraud, Other Government Health Programs,

October 18, 2018

Dr. Felmor Agatep, a Florida-based doctor, has plead guilty to receiving kickbacks and defrauding TRICARE over prescriptions to outrageously expensive and medically unnecessary pain and scar creams. According to the DOJ press release, a one month supply of the creams in question cost more than $16,000 when made by a compounding pharmacy. At some point in late 2014, Agatep agreed to receive kickbacks from a marketing group of $100 per TRICARE patient in exchange for writing prescriptions for these creams. In just a month and a half, Agatep allegedly wrote a total of 265 prescriptions, which amounted to a bill of $4.4 million for TRICARE. He now faces a maximum penalty of 10 years in prison. USAO MDFL

Tagged in: Criminal Proceedings, Healthcare Fraud, Lack of Medical Necessity, Other Government Health Programs,

October 16, 2018

A Medicaid transportation provider, its president, and a driver have been sentenced to pay a $10,000 fine and serve 2-4 years in prison for stealing a total of $1.2 million from New York's Medicaid program. The driver who was sentenced, Haimid Thompson, was accused of paying a Medicaid recipient to enroll in services from his employer and submitting falsified logs showing daily trips on behalf of the recipient. He was ordered to pay $23,598. The company, 716 Transportation, Inc., was sentenced to a fine of $10,000, and the president, Wossen Ambaye was ordered to pay restitution of $900,497, for knowing the services billed were not actually provided. NY AG

Tagged in: Ambulance, Criminal Proceedings, Healthcare Fraud, Medicaid, Medical Billing Fraud,

October 1, 2018

HealthCare Partners Holdings LLC, a DaVita entity, will pay $270 million to settle allegations arising from DaVita's collection and submission of diagnosis data for Medicare Advantage beneficiaries to whom DaVita provided healthcare services.  HealthCare Partners, an independent physician association, allegedly instituted practices that caused the submission of incorrect diagnosis codes - diagnosis codes that increased payments from CMS to the MAOs, and then from the MAOs to DaVita/HealthCare Partners.  DaVita had voluntarily disclosed some practices, including improper medical coding guidance provided to physicians.  In addition, a whistleblower, James Swoben, alleged in a False Claims Act qui tam case that HealthCare Partners had engaged in improper "one-way chart reviews," which added diagnosis codes identified from the review of patient charts, but did not delete previously-submitted diagnosis codes that were not supported by the patient charts. Swoben will receive a whistleblower reward of $10,199,100. DOJ

Tagged in: FCA Federal, Managed Care, Medicare, Risk Adjustment Fraud, Upcoding, Whistleblower Case, Whistleblower Rewards,

September 28, 2018

RS Compounding, Inc, and its owner, Renier Gobea, have agreed to pay $1.2 million to settle a False Claims Act-based lawsuit by whistleblower McKenzie Stepe that the now defunct compounding pharmacy had overcharged TRICARE, at times by as much as 10,000% more than it charged members of the general public. The alleged fraud occurred between 2012 and 2014. According to the DOJ, TRICARE's costs for compounded drugs have ballooned from $5 million to over $500 million in the span of ten years, then increased by over 150% between 2014 and 2015 alone. Tragically, the whistleblower passed away before the settlement was finalized, so her estate will receive her relator's share of $264,000. DOJ

Tagged in: FCA Federal, Healthcare Fraud, Other Government Health Programs, Whistleblower Rewards,

September 27, 2018

Millicent Traylor, M.D., of Detroit, Michigan was sentenced to over 11 years in prison today for her part in a health care scheme against Medicare from 2011 to 2016. Traylor and her co-conspirators defrauded Medicare of an estimated $8.9 million during that period. They submitted fraudulent claims for home health care services and other services which were not provided or not medically necessary. At times, the physician services which were provided were provided by Dr. Traylor, though she was unlicensed during that period. Furthermore, evidence presented during the four-day trial showed that Traylor forged the signature of licensed physicians on prescriptions for opioid medications, oxycodone for instance, as a way to encourage patient participation in the scheme. Traylor’s three co-conspirators will also serve time in prison.  DOJ  

Tagged in: Criminal Proceedings, Healthcare Fraud, Home Health and Hospice, Improper Medical Personnel, Lack of Medical Necessity, Medical Billing Fraud, Medicare,

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